Jake Snelson - Vyde

How to Offer Health Insurance as a Small Business Owner

When it comes to running your own business – the sky is the limit. You’re in charge of your hours, the size of your business, how much you bring in as profit and whether or not you bring on employees. But even though the list of perks is long, there are parts to running your own small business that seem difficult , time consuming, and complex. Offering health insurance to your employees or even making sure you have your own health insurance because you self-employed can seem daunting. Even though it takes some time to complete, offering health insurance as a small business owner brings benefits in many ways and is well worth the effort.

Do You Need to Provide Health Insurance as a Small Business Owner?

When it comes right down to it, offering health insurance to your employees is required by law if the size of your company meets the laws specifications. At the point of this writing, whether you feel like you’re a big company or not, you are required to provide health insurance to your employees if you have 50 or more full-time employees or the equivalent. You can search for a company to provide health insurance for your small business on your own or work with a broker. Using a broker can save you time and they can help you complete the paperwork required and provide you with all the ins and outs of the plans you’re considering. however, brokers earn their living by making a commission and you’ll be footing that bill – it’s well worth it if you’re looking to make the process as easy and painless as possible but worth considering going it alone if you’re working on a budget.

Finding insurance for your business will take some money in addition to time and effort but there are benefits that come by offering health insurance to your employees.

What You’ll Need to Apply for Health Insurance Coverage Plans

Apply for a health insurance plan for your small business is similar to applying for a business loan -the company requires documents and paperwork to complete the process. Gathering these items up in advance will make the application process easier, so here’s what we suggest you gather to get started:

employer name
business address (needs to be a physical street address, not a PO Box)
list of employees to be covered (if you’re covering one full-time employee, you’re required to cover them all)
Tax ID or Employer Identification Number (EIN)
Business start date
Payroll records (this will prove that you pay out salaries over $50,000 as stated in the law and also will help come tax time)
Industry Code (SIC)

You’ll also want to pull together information on your employees because you’re looking for group coverage. The health insurance company uses this information to decide on premiums and other costs to match your employee risk levels. Information to include here are:

names
ages
number of dependents
zip codes

How to Figure Out How Much Coverage You Need

Once you’ve decided if you need to legally offer health insurance, whether or not to use a broker, and have gathered up the necessary documents and information, you’ll also want to spend a few minutes looking at your financials to be sure you know how much you can spend. Now is a great time to check in with your accountant or bookkeeper if you’re not sure how much money you’ve got available for this. If you’re going it alone, you’ll need to consider the number of employees you have, how much you pay them, and how much you can afford to pay per employee each month for health insurance. The answer varies based on company but if you’ve got more questions, we’re more than happy to answer them.

How Offering Health Insurance Coverage Benefits You as a Small Business Owner

We’ve given you the details of why and how and now it’s time to let you know how offering health insurance as a small business owner can bring you big benefits. Here’s our list:

you can qualify for a tax credit(up to 50% of your contributions based on the specifics of your business) – to do so you need:
- fewer than 25 full-time employees or the equivalent based on working hours ( this is where paying attention to those that work part-time comes into play
- pay salaries of less than $50,000 per full-time employee, on average, each year
- front at least 50% of the premium cost of the small business health insurance
you can write-off health insurance premiums you pay as tax deductions – saving even more money
with a little bit more paperwork, you can set up your small business health insurance so that your employee can pay their portions of the premium with pre-tax money – that means they save cash and are more satisfied making it a win-win!
employees that have health insurance are more likely to go to the doctor when they’re sick and get yearly checkups – they’re healthier and that means less sick days and more productive employees

Now it’s time to start shopping for health insurance plans!

5 Ways to Attract Your Niche Market

If you’re running a small business or are looking to jump in and start your own venture, understanding how and why you need to attract your niche market will help make your business a success. Sure there are lots of moving parts to a successful small business, but without a clear picture of your potential client and how your product or service will help them, you’ll find it hard to make many sales. Today we’re covering the 5 top ways to attract your niche market and why it’s so important to do so.

First, lets talk about what a niche market actually is. A niche market is a subset or smaller group of a market with it’s own particular needs or preferences. You can define your niche in many ways but doing so makes the marketing process far easier and much more effective because you’re tactics should should speak to the needs and wants of your market and help them solve a problem. Here’s an example:

Lets say that you’ve got a great idea for a window cleaning business. Because your business is fairly new and you’re working on building your clientele, you’re willing to clean anybody’s windows, but that’s a huge market. So lets break it down based on the types of windows you might be willing to clean – residential, office buildings (this can be broken down into 2 categories or more – skyscrapers downtown, smaller office complexes, or even strip malls, etc.), restaurants, interior windows like in a mall or larger office complex, and so on. To break it down further, you might also want to define a geographical area – your small business is based in your hometown, so picking up a client that wants their windows cleaned in the neighboring state or even 3 states over isn’t your ideal audience, at least at first. Once you’ve narrowed down your niche, you’ll be able to figure out their needs, wants, and problems to be solved and can then market and cater your services and products to them, here’s how:

Pick a Unique Group

There are plenty of niche markets out there for everyone, but you’ll want to make sure you’re selecting one that doesn’t already have too many players offering your product or service. For example, you may have a dream to open up your own snow cone shack. It’s a great idea and could be rather profitable, but take a look around first. If you reside in a hotter climate or a beach town you may already have quite a few snow cone shacks in the market. That’s not really a problem, just look to see how else you can define your niche – maybe it’s by looking at the geography of it all and finding the one spot in town that needs a snow cones but doesn’t have them, or maybe your product quality is something that differs – you offer umbrellas, fancy straws, color changing spoons, and a variety of creams toppings with your snow cones.

Whatever you do, make sure you’re not just jumping into the “me too” niche because if there are too many players already the odds of being successful aren’t as high.

Address a Problem

It seems like defining a niche should be enough when it comes to marketing, but streamlining your message is going to help in growing your sales as well. Once you’ve defined the group you’re hoping to sell to, it’s time to look at how your product or service can help solve a problem that group has. You may not have a huge budget (or any budget at all!) for market research to start. Don’t worry, figuring out the needs, wants or problems to be solved for niche groups isn’t as bad as it sounds. If you can find a couple of people that fit your niche to talk to you’re off to a great start. But even sitting down and brainstorming for a few minutes on possible needs will do the trick. You can start by asking yourself questions like these:

what type of problems do people in my niche market have? (We’ll use the window cleaning example – they may have limited budget, need their windows cleaned after business hours, have hard to reach windows, or have a security system that previous window cleaners have set off)
how will/can my product or service help? ( You offer a 3 month package or monthly deal for a lower price, your hours are extended and you work on weekends, you have equipment that allows you to reach high places, your window cleaners are trained on how to clean without setting off alarms, etc.)
which of the problems to be solved seem to be the most common? (you’ll want to choose these because they’ll speak to the largest group within your niche and attract the most clients)

Communicate Through Established Channels

This one seems to go without saying, but we’ve found that often times small businesses are so excited about marketing their products they don’t stop to think about finding out which channels or mediums for communication are best. Before you start getting your product or service out there, you’ll want to find out how those within your niche communicate or consume information. There’s no reason to pay for a TV spot if your niche market isn’t watching much TV. For the window cleaning business – a TV spot might be the right choice if you’re looking to really drill down and attract home owners, but dropping off a flyer at the local chamber of commerce, attending the next meeting of local business owners, or even stopping by local businesses might be the better choice if you’re looking to clean windows for local businesses and office complexes.

If you’re not sure what channels your niche market is using, do a little market research. It might be as simple as searching the internet or it may require that you find a few people that fit your niche and ask them for ideas.

Ask Questions, Listen & Generate New Ideas

Once you’ve got your business up and running and attracting clients from your niche market it’s time to start asking questions. You’ve done quite a bit of work already to understand your niche market, but asking questions and listening to the answers will help you generate new ideas for products and services or even come up with a way to better your existing offerings and attract more clients within your niche. Not sure how to start? Here are a few ideas on how to start asking questions of your clients:

offer a bonus for existing clients or a coupon for discounted services if they’re willing to answer a few questions
make giving feedback easy – follow up calls after a job, an email with a link to a survey, a website link at the bottom of your invoice where they can go and make comments and suggestions
periodically poll a handful of clients – tell them you’re looking to improve your service, offer new products, or expand and then tell them you value their advice and their business – you might be surprised at all the good info you get

Once you’ve gotten your feedback, make sure you sort through it and start brainstorming. You may even want to give those that provided you feedback a chance to try out the service first or a special discount for helping you.

Help Them Grow or Provide Them With Education

This seems like a stretch but we know that it’s a great way to attract your niche because we’ve used it ourselves. In our own business, we write a blog where we offer accounting advice and even explain quite a bit about what we do so that others can DIY their small business taxes and bookkeeping. That might seem like we’re giving it away for free, but we’ve found that it usually builds a relationship with potential customers before they even buy, which makes working with them even easier. We’ve also found that providing information and education our niche markets establishes us as an expert – those that give it a try and DIY it on their own have learned some new skills and they come back for more and might even buy later on. More often than not, we find that many of our niche market clients consume our blog posts and then decide to buy even if it does seem to stretch their budget a little. But lets say that a blog doesn’t work for your business or service, who’s ever heard or read of a window washing blog (we’ll use our own example), right? You could:

leave a flier or send an email about how to extend what you’ve just provided them with – for the window washer, we’d suggest a flier that gives a few ways they can keep their windows cleaner for longer, etc.)
teach a class – this can be online or even on a special day
sell your products – it might seem like you’re giving up a job but if you offered special microfiber clothes and your cleaner that helps repel dust for clients to use between visits you’d be making more cash with selling your products and still be keeping the job to do the deep cleaning
ask your clients what they’d like to learn or how you can help
create a social media account that offers helpful tips and let your clients know

What other ways are you attracting clients? We’d love to hear about it in the comments below.

Frequently Asked Questions

1. What is a niche market, and why is it important for my small business?

A niche market is a specific, smaller segment of a larger market that has distinct needs, preferences, or interests. Identifying and targeting a niche market is crucial because it allows you to tailor your marketing efforts to address the unique needs of that group, making your campaigns more effective and efficient. By focusing on a niche, you can better understand your potential clients, improve your product or service offerings, and reduce competition by catering to a specific audience.

2. How can I determine if a niche market is too competitive for my business?

To assess the competitiveness of a niche market, start by researching existing businesses that offer similar products or services. Look for the number and size of competitors, and evaluate their market presence and offerings. If the market is saturated with many established players, consider finding a unique angle or differentiator for your business, such as a specific geographical area, unique product features, or exceptional customer service. This can help you stand out and increase your chances of success.

3. What are some effective ways to identify the problems or needs of my niche market?

Identifying problems or needs within your niche market involves several strategies:

Conduct Direct Research: Talk to potential clients within your niche to understand their challenges and requirements.
Survey Existing Data: Look at industry reports, online forums, and reviews to gather insights into common issues faced by your target audience.
Brainstorm Solutions: Think about how your product or service can address these problems and prioritize the most common or pressing needs to appeal to a broader segment within your niche.

4. How do I find the best communication channels to reach my niche market?

To find the most effective communication channels for your niche market:

Conduct Market Research: Determine where your target audience spends their time, whether online or offline. This might include social media platforms, industry-specific websites, local community boards, or trade shows.
Engage with Your Audience: Directly ask current or potential clients about their preferred communication methods.
Monitor Competitors: Observe how other businesses in your niche market are successfully reaching their audience and consider using similar channels.

5. What are some ways to gather feedback from clients and use it to improve my business?

Gathering and utilizing client feedback involves:

Offering Incentives: Provide discounts or bonuses to clients who complete surveys or give detailed feedback.
Simplifying Feedback Mechanisms: Use follow-up emails, online surveys, or feedback forms to make it easy for clients to share their opinions.
Regular Polls: Periodically ask for feedback on services or products to stay updated on client needs and preferences.
Implementing Changes: Analyze the feedback to identify common themes and make improvements based on client suggestions. Consider acknowledging and rewarding clients who contribute valuable insights to foster loyalty and engagement.

How to Define A Niche Market & Why It’s the Best Thing for Your Small Business

Odds are that even though you run a small business, you’re not a professional marketer or some type of marketing guru – unless, your business is marketing and then this post probably doesn’t apply to you. But for the rest of us hustlers and small business owners, learning everything we can about marketing is going to make growing and promoting our small business that much easier and that’s a win in our book. Today we’re talking about niche markets – what a niche market is, why you might want one and how to define a niche market for your business.

Lets get started.

What is a Niche Market?

A niche market is a subset of a larger market with it’s own particular needs and preferences. Often times you’ll hear marketers talk about market segments and although that’s similar to a niche market it’s usually more generic in purpose meaning that we segment by age, gender and so on. These same segmenting tactics are used in defining a niche market but they help us to pinpoint a group of people who are not only similar in general but also in specific details. For example:

Segmenting a market – we sell to women with young children between the ages of 0 months and 3 years because our product is diaper bags

Defining a niche market – we sell to women with young children between the ages of 0 months and 3 years because our product is diaper bags AND they also want a stylish boutique-level diaper bag that keeps them highly organized and falls within a moderate price point.

Basically, defining a niche market is drilling down until the particulars are highly defined making it a super-powered version of segmenting.

How Do You Define a Niche Market?

Defining a niche market really isn’t as difficult as it may sound or look. To do so, you’ll take any current market segments you have and then take it one step further. Some of the most common ways to define a niche include:

geographic (the buyer’s precise location – this can be a physical location or it can be a way to purchase – big box store, farmer’s market, craft fairs, holiday boutiques, etc.)
price (high, moderate, discount)
demographic (gender, age, income level, education level, employment, etc)
quality of goods (premium, high, moderate, low, cheap)
psychographics (values, interests, attitudes)

Remember a niche market is a subset of a larger market or market segment that has particular needs and preferences. While you’re looking to drill down to your niche market with the items bulleted above, you should also be asking yourself what the needs and preferences of this particular group are. You want to figure out what problem you can solve for them, or what need doesn’t seem to be being met by other products that are out on the market. This will help you target your niche market and outline the ways you’ll promote your product or service to them – by helping them with a problem or fulfilling a need!

Tip: Once you’re drilled down and gotten the specifics on your niche, the best way to define a niche is to basically write up a potential buyer profile. It sounds a little intense to make up a bio for an ideal customer, but we’ve seen it work dozens of times. An example would be:

Heather is a young mom who works part time. She has 2 small children – Sarah (2) and Aiden (6 mos). She’s at work a few hours every day so she drops her kids at a babysitter in the morning. She loves working out, so the kids also get to hang out with friends athlete gym play place why she works out 4 times a week. In addition, Grandma watches the kiddos on Friday mornings while Heather is at work, because that’s her babysitter’s day off. Heather is extremely organized and she’s a great mom because her diaper bag always has a change of clothes for each child, extra diapers, snacks, any medications they may need, and a variety of small toys or educational activities in case the kiddos need a change of pace. In addition, Heather loves high style, and because she’s often out and about with the kids she’d like a diaper bag that displays a sophisticated look but still is made of child-friendly fabrics so that it’s safe and effective for the kids. She’s looking for a superhero diaper bag – stylish for mom, organized so that everything has it’s place, not to big, not to small, easy to clean, and cost effective.

Why a Niche Market Can be Good for Your Business

We’ll cut straight to the point on this one and you don’t have to look far to see why a niche market can be good for your business. Here are just a few:

it’s a great way to attract new business
great way to increase in sales
simplifies the process of promoting, pricing and distributing your product or service
lowers the cost of promotion, pricing and distribution of your product or service

What niche markets are you going to serve? We’d love to hear about them in the comments.

What to Do if Your Business is Operating at a Loss

It happens to everyone. Small businesses, entrepreneurs, and even giant corporations have products that fail, launches that never happen and spreadsheets that show tanking finances and little to no cash flows. It’s important to make smart choices but a savvy businessperson knows that even the best decision making can still sometimes lead to operating at a loss.

The important thing is to know how to come back from it.

So what do you do if your business is operating at a loss? We’ll, we’ve got 3 simple answers – but first lets talk about what operating at a loss really means.

How do I know if my business really isn’t making money?

Simply put, your business is operating at a loss if you’re spending more money than your business is bringing in. Most businesses, especially small businesses fall into this category at the beginning and many do so during periods of growth. Operating at a loss for a short period of time, really isn’t a problem if you’ve got enough cash flow to cover your expenses until your income starts to grow.

In fact, you’ve probably heard experts or even other entrepreneurs talk about cash flow problems – which is just a business-like way of saying they’re short on cash or that their money is tied up in product, office space, and equipment. The real issue comes when you operate at a loss for too long – but how is a small business owner or entrepreneur supposed to know when that is?

Well, if you projected start-up costs as you started out there shouldn’t have been many surprises on what your business was going to cost. If you did project start-up costs, you hopefully also put together a cost analysis that includes the general cost of rolling out your product/service or starting your business. In that same line of thinking you should be looking to estimate or project the number of sales you’ll be making. Where those 2 lines cross will be your break even point (where the income from additional sales is profit as opposed to covering the costs you incurred while setting up your business).

Understanding the technical side of things is good, but focusing on how you can bring in more cash flow is the best thing you can do.

So what do you do if your business is operating at a loss? We’ve got 3 simple answers.

No. 1 – Reduce Your Expenses

All businesses, even those that are strictly service-based or online, have some business expenses. One way to help free up some cash is to go back through your operating costs and see if there are places you can eliminate the expense or at least cut back significantly. Keep in mind that while cutting costs is an effective way to loosen up your cash flow, you won’t want to cut back so far that it’s difficult to do business or handicaps your abilities to provide quality service and marketing of your product.

No. 2 – Increase Your Sales

Before we talked about that line on your start-up projects that estimated the number of sales (and the associated revenue) you thought you’d bring in. When you’re tight on funds, looking to increase your sales is always a surefire way to increase your bottom line. Taking a hard look at your projected sales numbers will help you decide a couple of things:

whether or not you can do a promotion to drum up sales an still bring in more cash
if you’re hitting your sales goals and if those goals need to be raised to insure a steady cash flow
if you need to adjust the price of your product or service

If you’ve got employees, it might be the right time to introduce a little friendly competition and award the winner with the most sales a special prize – which may even be the bragging rights of having the top numbers or a coveted parking space.

No. 3 – Seek Advice from an Expert

We live in a world where the DIY approach is becoming more and more common. But there are times when seeking expert advice will make things simpler in addition to making sure they’re the best long term strategy. When it comes to operating a business at a loss, seeking expert advice from your accountant will ensure you’ve got all the financial answers you need. In addition, they’ll be able to help you turn your finances around so you’ve got more cash flow and even help you figure out what deductions you can take come tax time.

Remember, it’s normal to have cash flows be slow or even non-existent at first. Just keep up the good work and make sure you’ve got a handle on your sales numbers, your operating costs, and how they effect your bottomline.

Have more questions about operating your business on a loss? Send us a note – our experts are more than willing to answer your questions!

FAQs for Operating at a Loss in Business

1. How do I determine if my business is operating at a loss? Your business operates at a loss when expenditures exceed income. It’s common initially or during growth phases, manageable with sufficient cash flow until income increases.

2. How can I gauge when operating at a loss becomes problematic for my business? Monitor your start-up costs, project expenses, and sales estimates. Recognize your break-even point where additional sales generate profit, not just cover initial costs.

3. What strategies can help a business dealing with a loss? Reduce Expenses: Assess and cut non-essential expenses without hindering operations or service quality. Increase Sales: Revisit sales projections, consider promotions, adjust prices, and foster healthy competition among employees to boost sales. Seek Expert Advice: Consult with an accountant or financial expert to strategize, manage cash flow, and identify potential tax deductions.

4. How vital is it to focus on increasing cash flow during a loss? Increasing cash flow is paramount. Balancing operating costs and sales figures aids in ensuring financial stability and sustained business growth.

5. What should I do if my business continues to experience slow cash flow? Persistently manage sales figures, operating costs, and seek expert guidance to optimize finances. Maintaining vigilance helps weather initial challenges in business operations.

How to Calculate Start Up Costs for Your Small Business

Running a business takes work, but it’s not always as hard as it looks. We find that most new business owners are often hesitant because they’re not sure what start up costs will be, not to mention how to figure out when they might break even or what’s all involved in making sure their business is profitable.

Today we’re sharing the same info we provide clients who are starting a new venture. They’re general rules of thumb but they’re a great start to figuring out what the start up costs will be for your small business.

Why knowing what it will cost helps you in the long run?

It seems like calculating start up costs is only for those that are risk adverse, but we’ve seen time and time again that those that figure out these start up costs, rather than those who just grab their business loan and start running, are more likely to be successful.

Totaling up the start up costs of your business helps you have a handle on your finances (and as accountants we think that’s a pretty good idea). Here’s how knowing your start up costs will help you:

you’re better able to estimate profits
you can secure loans – banks want to know the nuts and bolts of how your business will run
save money with tax deductions – knowing your costs will help your accountant (or you!) come tax time
you’ll be able to figure out when your business will break even and project profits

So what all goes into calculating your start up costs? We’re glad you asked.

Define Your Business Type

This sounds like something that you should be doing to figure out what licenses and permits you need. But it also plays into your overall business costs. When it comes to business type there are essentially 3 different categories. What category you fall under helps you figure out what expenses you’ll need to consider. The 3 general categories are:

Brick and mortar
Online
Service

And the general expenses you’ll need to consider are:

office space
equipment and supplies
communications
utilities
licenses and permits
insurance
lawyer and accountant
inventory
employee salaries
advertising and marketing
market research
printed marketing materials
making a website

Start Shopping Around

Once you’ve decided what business type your side hustle fits under and you’ve made your list of possible expenses, it’s time to start shopping around. You won’t be buying anything just yet, but it’s good to start pricing out what it all will cost. Check into plans for utilities, estimate rental payments for office space and equipment, and check into the cost of internet, phone, and printing your marketing materials.

Tip: A hidden cost includes hiring the individuals to help you with marketing, design, finances, legal, etc. It’s possible to do these tasks on your own, but it may not be worth your time. If you’ve got friends who already run small businesses ask them for advice – they may have some great recommendations on who to hire or even suggestions on how you can decrease your costs with DIY options.

Grab Your Calculator

If you’re into planning, you might want to sit down at a computer and work up a spreadsheet that shows costs by month. If not, you can leave that to your accountant or bookkeeper and just grab your calculator or put pen to paper. Here’s where we start totaling up numbers to provide you with a general estimate of your start up costs.

Tip: To keep things organized, split your expenses into 2 groups – monthly expenses and one-time expenses. One-time expenses are things that are only needed once, like buying equipment or hiring a designer to create your logo and business cards. These expenses can usually be deducted for tax purposes – SO SAVE YOUR RECEIPTS! Monthly expenses are employee salaries, utility bills and rent on your space. Count at least 1 year of monthly expenses when you’re tallying up your start up costs ( if you can afford to add in more than a year – all the better).

Making Connections To Start Your Business

If you’re taking on a larger venture, just dipping into your savings or taking out a personal or business loan probably isn’t going to cover your start up costs. Here’s where you’ll use your business savvy to make connections with investors or secure a loan with the bank. Having your projected start up costs organized will make you look professional and on top of your game, not to mention it’s proof that you’ve got your ducks in a row and that makes investors feel comfortable.

Tip: Create a formal presentation of your start up costs as well as include the spreadsheets to those that you’re hoping will invest. Keep things clear and simple. Most investors and loan officers want to see start up costs and then compare those to projected revenue before making their decision.

Now that you’ve got a general idea on how to calculate start up costs you’re ready to start planning. Happy small business starting!

FAQs about Calculating Startup Costs for Small Businesses:

Why is knowing startup costs important for long-term business success?

Understanding startup costs provides clarity on financial obligations and helps in estimating profits, securing loans, maximizing tax deductions, projecting break-even points, and planning for profitability, contributing to overall business stability and success.

What factors should small business owners consider when calculating startup costs?

Business owners should consider expenses related to office space, equipment, utilities, licenses, insurance, legal services, inventory, salaries, advertising, marketing, market research, and website development based on their business type (brick-and-mortar, online, or service).

How can small business owners obtain accurate cost estimates for startup expenses?

By researching and obtaining quotes from vendors, service providers, and suppliers for various expenses like office space rental, equipment purchase, utilities, communication services, and marketing materials, business owners can compile accurate estimates of startup costs.

What’s the significance of organizing startup costs into monthly and one-time expenses?

Categorizing expenses into monthly and one-time helps in budgeting and tax planning. One-time expenses, like equipment purchases, can be deducted for tax purposes, while monthly expenses, such as salaries and utilities, provide insights into ongoing operational costs.

How can having well-organized startup cost projections benefit small business owners seeking funding?

Well-organized startup cost projections demonstrate professionalism and preparedness to potential investors or lenders, instilling confidence in the business’s viability. Clear presentations of startup costs and revenue projections enable investors and loan officers to make informed decisions regarding funding.

LIVE WITH BEN – Basic Financial Questions to Ask Yourself Each Month

Want to grow your business? Don’t know what financial questions you should be asking yourself to do so? Being fiscally fit is more than just making MORE money – it’s knowing what your money is doing and having a plan.

Ben Sutton, CPA and co-found of Vyde, gives his expert advice on being fiscally fit, in this episode of Live With Ben. Grab a pen, paper, and your favorite beverage and get ready for these useful tips!

Have questions? We’d love to answer them and talk to you about setting up a strategy for bookkeeping and taxes for your business. Contact us here.

3 Ways to Boost Your Client Load

Business Owners have good times and bad times. It’s important to test your idea out, have a good support team, and work really hard–consistently. If you are doing that and feel like you need a little boost or are experiencing a slight down time, consider thinking of your down time as an opportunity to prepare for future business. One of my clients runs a successful restaurant in a college town. Their lag time used to get them down. It’s hard to be okay with less money when everything is stretched thin already! They learned that the summer was a great time to focus efforts on their catering business which they hadn’t had time for during the school year. After one summer of doing that and being “patiently consistent” (my term), their next year was record income!

Here are some ideas for your business:

Organization

Focus on: All the projects you haven’t spent time on. 🙂 Some ideas: CRM, email segmentations, automations, software, clean up timecards, processes, taxes, hold the quarterly meeting you’ve never held (you can call it a bi-annual meeting 😉 ), work on negotiating lower rates as your purchases have risen to deserve a discount for bulk rate.

This may seem daunting but re-visit a project here with fresh eyes. Do a little new research to bring it back up to speed, and get working on it as quick as you can before you talk yourself out of it. Twenty minute increments can get an amazing amount of work done! If it’s a project like a CRM, you may be able to do a simple version of it right away and then have an assistant trained to do the tedious steps after you’ve figured out how you’d like it to work best.

Follow up

Focus on: Email subscribers, prospective clients, past clients, clients who have slowed down in purchases, comment in different social media groups, admin work that’s been put off, etc.

We all know there are those prospective clients/customers who have signed up for something but never reached out to us when we responded (or maybe we never responded). Take some time to reach out to them personally and offer them a freebie for taking interest in your company. They may not remember signing up but a freebie will put them on the positive side and then they’ll remember the product they were interested in buying from your company. **Extra mile: Personal touch for current clients-arrange to share an additional product with current clients at a special “current client discount.” This could be a free treat or discount off of a product you know they can use. Think of something that’s not a big deal for you to give away and use it as a marketing tactic to remind customers that you are thinking about them.

New Ideas

Focus on: Marketing new products, test marketing, sponsoring events, attending events, signing up for events, advertising, collaborating with other companies, gaining more knowledge/research for your trade/industry, etc.

If there’s something you’ve been curious about creating, take time to market test it during the slow time. Sign up for outdoor fairs to share your new idea, or your current ones, give small gifts/freebies for filling out a survey about it. This is the right timing to test out adding onto your business too, not when it’s brand new but when it’s been established and you happen to have a lull. Re-examine your marketing and targeting approach too. Are you sending the right message to the right people that will actually buy your product (sometimes this is a different group than the people you want to sell to).

All in all, don’t give up. Whether times are slow or good, a boost will come if you take care of these 3 areas and keep consistent with your marketing and social presence. Before you know it, prospective clients will be reaching out to you nationwide, and you’d be surprised at how many past clients are happy to hear from you and were just trying to get to their follow up list as well.

Best of Business to you!!

Do You Have What it Takes to Be an Entrepreneur?

We work with a lot of entrepreneurs. Online sellers, professional bloggers, traditional mom n’ pop shops, rapidly growing brick and mortar specialty stores, and a host of professionals that provide a variety of services (everything from window cleaning to marketing and graphic design) to their customers, just to name a few.

Despite the vast differences in their business types, strategies, and personalities, we’ve found that there are quite a few things they have in common – we’re calling them entrepreneur traits.

And they seem to be the cause of much of our client’s success.

If you’re looking to be an entrepreneur, and are wondering if you have what it takes… read on. if you’re excited about what you’re reading then entrepreneurship is probably for you.

You maybe an entrepreneur if…

You dream big.

You have no hesitation when it comes to coming up with an idea and creating it into a full-fledged corporation overnight. You’ve got ideas that are scalable and your dreams of achievement and success include growing a business that will not only help your bottom line but will help your customers, and the world, as well.

You’re a problem solver.

Some people shy away from problems, you seem to run towards them. In fact, there’s nothing more exciting to you than a problem that you can wrestle with and come out on top. You’re constantly looking for new ways to do things, are interested in efficiency and processes. Most importantly, you’re looking at the world around you and finding real life problems that you can create feasible solutions to.

You don’t mind failure.

Being ok with failure doesn’t mean that you wallow in defeat. Instead you’re quicker than most to jump up and try again. You take notes of your failures and you’re almost systematic in how you fail – making adjustments and trying again and again in order to improve your process.

You’re a mover.

As a kid you more than likely had a hard time sitting still. As an adult, you’re constantly looking to learn new things. Movers and shakers are often entrepreneurs because they’re comfortable with keeping busy and they thrive on trying new things and executing new ideas. They’ve got a running list of things to do and they’re energized by it.

You’re hungry.

Every day you’re waking up hungry to get to work on your most recent project or idea. Instead of losing energy thinking and working on your big ideas you seem to be energized by it.

You’re all about the little things.

You never seem to be short on consistency to do the little things. In fact, you’re 100% sure that it’s the little things that make up the big successes (and just for the record… you’re completely right!)

You’re confident.

You’ve never lacked confidence in your ability to accomplish something. You’ve got plenty of skills, but you know that you’ll figure out and foster whatever skills you may be lacking if they’re needed to accomplish your goal.

You’re insecure.

With every bit of confidence you have, you have equal parts insecurity. You know that you have to be constantly learning new things and using your skills or you’ll find yourself behind the power curve. There might even be a little voice that tells you if you don’t keep learning and moving, you’ll never reach success and it’s that thought that spurs you on.

What other traits do you think entrepreneurs should have? How do you work to build these skills? Tell us in the comments.

Motor Vehicle Expenses That Can Be Deducted for Small Business

It’s fairly common knowledge that some auto expenses can be used as tax write-offs, but today we’re giving you some of the common questions we hear about auto expenses and the finer points that go with them so you can make sure you’re making smart choices for you and your small business.

Question: Which is better – standard mileage rate or actual expenses incurred for your deduction on a vehicle used for business?

Answer: It really just comes down to the numbers.

Our standard rule of thumb – if the vehicle is smaller and has lower operating costs and maintenance expenses, it’s safe to say that the standard mileage rate is the better choice. If you’re driving larger vehicles, with higher gas mileage and expenses you’re more than likely better off with the actual expenses incurred method.

The numbers you’ll need to determine the number of miles driven for your business:

Total number of miles driven during the year
Total number of miles driven just for business

Question: Ownership – should the business, business owner or the employee have ownership of the vehicle?

Answer: One of the simplest ways to manage ownership is to simply have the employee own the vehicle and then have the employer reimburse for business expenses. This is great for sole-proprietorships and the IRS is fairly fussy about write-offs on business vehicles so it’s important to follow the rules for your business type and keep detailed logs.

Typically, when the vehicle is employee-owned, the business reimburses for business mileage incurred at the standard mileage rate. The amount received for documented business miles isn’t taxable to the employee and the vehicle expenses are therefore deducted by the employer. If you’re a single-member LLC and file a Schedule C with your personal tax return, you’re considered self-employed for tax purposes.

Make sure to ask your accountant, or read up on the IRS requirements, if you’re looking to purchase vehicles that will be owned by the company or business owner or manage a fleet of cars for a business that provides them to employees.

Question: Does it matter what type of car it is?

Answer: You bet. Congress decided quite a few years ago that taxpayers should not be able to subsidize extravagant vehicles used by business. So what type of car is acceptable?

business vehicles are cars, SUVs and pickup trucks that are used for business activities

Things that don’t qualify:

vehicles used as equipment such as dump trucks
vehicles used for hire such as airport transports, limos, and taxis

Question: I’m new to the business vehicle concept, what do I absolutely have to know?

Answer: Glad you asked. Here’s what we tell all our clients no matter the details of their particular situation.

keep detailed records – the IRS is fussy about auto write-offs, so you’ll want to track mileage and expenses meticulously and keep the records for the appropriate amount of time
if you drive a lot for business, you’ll more than likely want to use the standard mileage rate to figure your deduction
business use is a legitimate deduction and should be claimed by the taxpayer – don’t miss out on this opportunity just because it seems scary or confusing!
if you have questions, read up on the IRS website, ask your accountant or someone that consults small business

Question: How do I know which miles I should track for business?

Answer: If you’re asking this question, you’re probably already tracking and have realized that “business miles” might be trickier than you thought. Don’t worry.

To begin, write down your odometer reading on the day you start using a vehicle for business and on the day the year ends. Business miles are those actually drive for business reasons – to visit a customer, meet a client, pick up supplies, etc. Miles driven to the bank, office supply store, computer repair shop, or to meet with your accountant or attorney (if it’s for your business of course) can also count as part of your mileage deduction.

Some driving might seem business related but isn’t a viable tax write-off:

Commuting to and from work from your residence isn’t deductible on your business or personal return
if you stop at the store on your way home from a business trip, the remaining miles from the store to your home can’t be included as business miles. If you’re a multi-tasker and try to combine your business and personal errands make sure you know the difference and note it in your log

Question: What are vehicle expenses?

Answer: Here’s our list.

gas and oil
tires
general maintenance and repairs on the vehicle
registration fees and taxes
licenses
vehicle loan interest
insurance
rental or lease agreements
depreciation
large rental
tolls and parking fees

Sometimes questions arise while you’re on the road. We recommend tracking the mileage and expenses and then making a note to ask about these particular items as soon as you can. Once you have your answers you’ll be able to go back and adjust your log as needed and that way you’ll make sure to have accurate records and not miss out on any possible expenses.

What other questions do you have about vehicle expenses? We’d love to hear and answer your questions!

How to Figure Out & File Sales Tax for Your Small Business

There is a lot to manage when you’re running a small business, but one of the most important things to take care of is managing the books. In addition to understanding what money is coming in and out of the business on a day to day basis, you’ve also got to be sure you’ve got things set up correctly for collecting and paying taxes.

Sales tax is probably one of the most confusing transactions that occurs, mainly because there’s a lot of gray area for those that run small businesses or sell online.

Sales Tax Defined

Sales tax is money collected at a retail’s point-of-purchase and is imposed by both state and local governments. It’s paid by the individual that is making the purchase, but that means as a small business owner you’re responsible for the following:

Figuring out the amount of sales tax that should be paid

Collecting the sales tax from the person purchasing from you

Turning over sales tax to the appropriate authority by the deadline outlined

Sales tax rates vary from state to state, which can lead to some confusion if you sell in more than one state or if you sell online.

Do You Need a Permit?

It depends on what your state requires. The best way to answer this question and many more for your specific state is to access state tax resources.

Not sure where to find your state requirements. You can look them up here.

How To Collect & When to Pay

You’ll need to check with your specific state for all the details but the general process of collecting and paying sales tax is as follows:

You’ll record and report all sales, whether they are taxable or exempt, and the amount of tax due.
You’ll submit a special tax return for sales taxes – usually states require small businesses and online shops to pay sales taxes quarterly and sometimes even monthly.
Not paying on time means that you’ll be subject to late fees. Checking out the requirements for your specific state and/or consulting with a tax specialist or CPA is the best bet for making sure your system for collecting sales tax is in compliance with government requirements.

Sales that are Tax Exempt

You may have noticed that we mentioned in section above exempt sales and you may be wondering what all that involves. Although there may be exceptions, the general rules for tax exempt sales is as follows:

Resold items – retailers don’t typically have to pay sales tax on wholesale purchases since it’s assumed that the end consumer will pay sales tax on them at the end point-of-purchase. That said, many states require that you have a wholesale license, so you’ll need to check into the requirements and how to apply for one for your specific state.

Non-profits – sales made to non-profit organizations are also exempt

Raw materials – if you selling goods that will be made into other goods, they’re most likely considered raw materials and are typically tax exempt as well.

Selling Online & In More Than One State

This is where things can get a little tricky. If you sell online, your customers can live virtually anywhere and what state exactly is the sale made in? And what state’s rules do you’re follow – your state, or the state that you’re buyer lives in?

The first thing you need to determine is where your business has a physical presence. Wherever your store, office, warehouse, employees, etc. are you most likely have physical presence, also known as nexus.

You MUST collect sales tax for your nexus.

If you do not have a presence in a state then you are not required to collect sales taxes. To make sure you’re applying the rules for nexus correctly, make sure you check the requirements for the states that you have physical presence in.

Sales Tax Rates for Selling Online or Out-Of-State

Once you know that you need to charge sales tax, it’s time to determine what rate you should charge. It sounds a little overwhelming to manage due to the thousands of sales tax jurisdictions in the United States.

Our best advice for those that sell online or have a large volume of out-of-state sales is to invest in online shopping cart and sale transaction software because many automatically calculate sales tax rates for you.

Now that you’ve got the details on sales tax, what questions do you have for us? We’d love to hear them in the comments.

Resources

Author: Jake Snelson