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Category: Personal Finances

future profitability to investors

How to Write a Killer Business Plan in 5 Easy Steps!

 

Business Plan

Whether you are braving the pitch world to find a financer on Shark Tank, or you are striving to get your team organized, you need a KILLER business plan.  What exactly does that mean? Is it just an outline? Is it a letter to a bank? Is it a report? I’m sure it has trendy business graphs!!…What else do you need? What EXACTLY are the “powers that be” looking for in a confident and solvent business?

There are 5 main parts business professionals (financial tycoons) are looking for and they really aren’t that hard!

  1. What does the playing field look like in comparison with your business/product? There are 2 high-level ways to do this: SWOT and Porter’s 5 Analysis of your business.  This basically is the business world’s way of asking: What is your business good at?, bad at?, what is the rest of the industry good at?, and how can your business create opportunities in the industry?
  2. What is your company’s Mission, Vision, and Strategy?  This seems simple, but the business world is looking for how your company messaging, purpose, organization, and plan of action are intertwined with the plan that you have to move forward.  This shows your business will be able to follow through with the plan, make changes along the way, and work hard to achieve the plan you are proposing. They feel that if you are committed to something, it will show through the lifeblood and purpose of the company.
  3. What does it mean to them?  The mentality of a 5 year old definitely applies here, in a good way!  When preparing to fund a business venture you need to think selflessly about your dream business.  It’s hard. This is a time that is easy to become offended, brings up emotional memories, and takes strides of courage.  Just remember, they need to know why it’s important to them and why people should care about your best invention ever.
  4. What’s the Plan?  You’ve buttered them up, explained the business, explained why they should care, now you need to bring the organizing PIZZAZZ!  (Not JOKING) When investing in a company/idea, people need to see that your business has thought through contingencies and clearly and concisely can get from point 1 to point 10 and all you need is a little boost from them.  This should have general steps that show you know your weaknesses and how to overcome them, test groups, adjusting and re-adjusting the plan, specific dates and milestones, prep prior to and post product launch.
  5. Where’s the After Party?  Why would they want more?  They didn’t ask for more…but you need to show them you are prepared.  Give them pre-launch survey results, a chart outlining the key milestones with dates assigned, and another simple chart that shows and how long it will take until the business is profitable and then what the profit will look like after breakeven and on into the next quarter/year. Sample flyers and mock ups of what they can expect and that show what success looks like are never overboard but just help to build the vision you are hoping they’ll catch.

That’s pretty easy!  Make sure to go through your data and get it right, practice what you’ll say, their names and titles, etc.  If you are just doing this for your company, it is a GREAT place to build team vision for the future. Rally your group around you, share the plan, hand it out to everyone that needs one, and say a few inspirational words, a GO TEAM, and then get to work with the follow through!  I know your business will be successful as you are prepared. Don’t be afraid to make a bold move. You have amazing ideas and the world needs more amazing ideas these days!

Killer Business Plan

In conclusion, if you’re facing challenges managing your business accountancy and tax, don’t hesitate to reach out. With Vyde Your Own Accounting Department, you get all the services you need in one place. Remember, preparation is key! Gather your data, practice your message, and inspire your team with a shared vision for the future. Bold moves lead to great successes, so embrace your innovative ideas. The world is ready for them! Let’s work together to make your business thrive—contact us today!

1. What are the essential components of a killer business plan?

A killer business plan typically includes five key parts: a competitive analysis (using tools like SWOT and Porter’s Five Forces), a clear mission, vision, and strategy, an explanation of why your business matters to potential investors, a detailed plan of action with milestones, and projections for profitability and growth.

2. How can I conduct a competitive analysis for my business?

You can conduct a competitive analysis using methods like SWOT (Strengths, Weaknesses, Opportunities, Threats) and Porter’s Five Forces. These frameworks help you assess your business’s strengths and weaknesses compared to industry competitors, identify market opportunities, and understand external threats.

3. Why is it important to explain the mission and vision of my company?

Clearly defining your company’s mission and vision helps convey your purpose and long-term goals. Investors want to see how your messaging aligns with your strategy and how committed you are to achieving those goals. A strong mission and vision demonstrate that your business is driven and focused.

4. What should I include in my action plan for potential investors?

Your action plan should outline clear, organized steps from the initial concept to execution. Include specific milestones, contingencies for potential challenges, timelines, and methods for testing and adjusting your approach. This shows investors that you have thoroughly considered the path to success

5. How can I demonstrate future profitability to investors?

To demonstrate future profitability, provide detailed projections, including breakeven analysis and profit forecasts over the next few quarters or years. Use charts and visuals to illustrate key milestones and expected growth, and consider sharing survey results or mockups that visualize your success.

 

Why You Should Create Passive Income Streams

Why You Should Create Passive Income Streams & How to Do It

Create Passive Income Streams

Financial security is something everyone is working towards. Whether you know it or not, the mere fact that you have a job means that you’re interested in being able to put food on the table and keep that roof over your head. But what would happen if you lost your job and weren’t able to find another fairly quickly? How long would it take before there was no cash to pay the bills and you’d have to start drastically changing your lifestyle. For those that have multiple income streams, the threat of losing a job isn’t as terrible as those who rely on one source of income. Yes, they may have to make some adjustments in their spending habits, but they could easily rely on the other income streams to cover the bills while they look for another job. That sounds a lot more pleasant than frantically looking to find a job so you can keep a roof over your head.

If juggling multiple jobs seems over the top to you, don’t worry. Having more than one job isn’t the only way to create multiple income streams. Multiple income streams aren’t just for the hustlers, the online biz guys, or those that don’t like working for the man (big business or the typical 9-5 job). Multiple income streams are becoming more and more popular and are a great way to provide financial stability for anyone.

Ideas for Passive Income Streams

  • Interest from the bank ( look for high interest savings accounts, i.e. if you’re not getting at least 1% interest from your savings account, it’s time to start shopping around)
  • rental income on an investment properties
  • freelance income
  • extra shifts at a local store during the holidays
  • a side business
  • services you render to neighbors ( dog sitting, house sitting, yard services, etc)
  • dividends from stocks
  • something related to a hobby or passion – umpire for city league games, or teaching a pottery or gardening class at the rec center
  • marketing  your skills – fixing computers, bikes, cars or massage therapy, hair cuts, etc.
  • participate in surveys and paid studies
  • flea markets (sell your stuff, or collect other’s people stuff and sell that)

type of income stream

How to get started

It really depends on what type of income stream you’re lookin to add to your setup, but these general rules ought to get you thinking on how to add a side business or even get you started investing.

  1. Don’t quit your full time job or whatever you’re currently doing…just yet. You may want to cut back on your hours at your current job if you’re starting a side hustle or taking on ana additional part time job. You may even want to cut back the amount you’re investing in yoru current stock choices or funds, but whatever you do, the first step requires that you don’t move all your eggs to one basket (especially the new one).
  2. Take advantage of your hobbies and skills.  This is incredibly important if you’re looking to start a small business, sell online, or offer some type of service to friends, family, and potential customers. We recommend making al list of all the skills you have that might be of use to others. Do a little research online to see if there are licenses or advanced training you need to be able to offer these skills legally. Check out the going rates and pricing structures that others offering these services are using. If you’ve already got a side hustle, consider what products or additional services you could offer to increase your income. You might also want to consider what locations, events, or places you could market and sell your products and promote your business.
  3. Set a plan on how you’ll start and grow your income stream. It seems simple enough, but we find that all too many people start something and don’t ever get far enough into the process to really see the fruits of their labor. Once you know how you want to get a income stream going, outline a plan for growing your income stream. Plans for growing your own business are vital to your success, but they also come in handy as you set out to start investing in rental properties or even the stock market. Knowing how much you’re going to invest, or how you’re going to build your customer base are necessary to make sure your additional income stream will be a success.
  4. Integrating online casino winnings can be an additional passive income stream. By playing at safe and reliable online casinos like Ignition Casino or Neospin, players can potentially earn consistent returns. These casinos offer secure payment methods and regulated environments, ensuring a safe gambling experience.

Set a plan on how you'll start and grow your income stream

In conclusion, whether you’re looking to add a side business or start investing, these general rules can help you create effective passive income streams. If you’re having trouble managing your own tax or business tax, don’t hesitate to reach out. With Vyde Your Own Accounting Department, you’ll get all the services you need in one place. Take the next step toward financial freedom and let us help you navigate the complexities of your finances—contact us today!

 

Frequently Asked Questions:

1. Why is financial security important?

Answer: Financial security is crucial because it allows you to cover essential living expenses, like food and housing, without the constant stress of job loss. Multiple income streams can provide a safety net, making it easier to navigate financial challenges.

2. What are some examples of passive income streams?

Examples of passive income streams include rental income from investment properties, dividends from stocks, freelance work, interest from high-yield savings accounts, and income from hobbies like teaching classes or providing services.

3. How can I get started with creating additional income streams?

Start by assessing your skills and hobbies to identify potential income opportunities. Research market rates, outline a plan for growth, and gradually explore new ventures while maintaining your current job until you’re ready to expand further.

4. Is it necessary to quit my full-time job to pursue multiple income streams?

No, it’s not necessary to quit your full-time job immediately. Start small by taking on side gigs or freelance work in your spare time. This allows you to build your income streams without losing your primary source of income.

Live Paycheck

Just Because You’re A Creative Entrepreneur Doesn’t Mean You Have to Live Paycheck to Paycheck

Taking the plunge into entrepreneurship, especially creative entrepreneurship, is intimidating. One of the scariest parts of entrepreneurship, is never knowing where your next paycheck is coming from. Which means most creative entrepreneurs live paycheck to paycheck.

But, what if you didn’t have to live paycheck to paycheck. What if you could be a creative entrepreneur without living on a fixed income. There are ways to stretch your paycheck so that you can stop living paycheck to paycheck and start building financial stability. We want to help you break the paycheck to paycheck cycle.

Start Saving

When you live paycheck to paycheck, you typically aren’t saving a lot of money. However, if you want to stop living paycheck to paycheck, building a savings is the first step.

Having three to six months worth of savings will help you stay out of future debt. Even if you have a great debt reduction plan you never know when you’ll have an emergency and need to make a payment that is outside of your budget. If you don’t have savings then you’ll end up creating more debt to cover the emergency expenses.

It may seem impossible to save money when you live paycheck to paycheck, but there are ways to make it happen. We’ll suggest a few as we go along.

Reduce Debt

Most people who live paycheck to paycheck are swimming in debt. They rely on credit cards to get through their monthly expenses. Like we mentioned before, unknown expenses can really hurt, especially when you rely on credit cards to cover those expenses.

We know what you’re thinking right now. “How am I supposed to pay off any debt when I live paycheck to paycheck?” There are ways to reduce your debt even when you don’t have an influx of cash.

If you have bigger loans, like a car loan or mortgage, see if you can restructure your loan and roll your debts into one payment instead of many payments.

Loan restructuring works because car loans or mortgages typically have lower interest rates than credit cards. If you have the equity in your car or home, you can get the money to pay off the credit cards. You can then make a bigger payment, at a lower interest rate, on the newly restructured loan.

This method can be complex, so speak with an accountant before you jump right into restructuring your loans. You should always understand what you’re doing with your money before you make a big decision such as this.

Build Wealth

There are two ways to increase your cash flow: reduce your expenses or bring in more money. Both options can help you break the paycheck to paycheck cycle.

You can determine what expenses you can reduce within your own budget. We want to talk about how you can bring in more money.

As a creative entrepreneur, this is easier said than done. You have to either find new clients and put in more hours or find a way to use your skills to create a passive income.

Work on Getting Consistent Clients

The hardest part of being a creative entrepreneur is that your clientele is not consistent. You usually work with someone once and then don’t hear from them again until they need your services. This cycle is what keeps you in the paycheck to paycheck predicament.

If you want to break that cycle, you need to change how you run your business. Try setting up packages that will commit clients to more than one service. Or you can use an email list to reach out to your clients and see if they are interested in other services you offer.

Whatever strategy you choose, try to generate new sales from your current clients so that you don’t have to work as hard to bring in more revenue.

Create Passive Income Streams

Passive income streams are a great option for creative entrepreneurs. With a passive income stream you create a product that you can sell to multiple people. Passive income streams are helpful in generating new revenue. It’s also great when you don’t have time to devote to individual projects.

As a creative entrepreneur you can sell photographs, printables, pre-made products. The main point is that you don’t have to spend a lot of time producing each individual product.

Ultimately, you can choose if you want to stop living paycheck to paycheck. you just have to make decisions that will lead you towards a financially free life.

 

Budgeting App

6 Best Budgeting Apps for Personal Finances

Everyone knows that budgeting is a good practice, but for most people it’s hard to stick to. Most budgeting methods are outdated and make it too hard to keep track of all your expenses.

Luckily, nothing makes budgeting easier than a good app. These 6 budgeting apps will help you keep track of your personal finances so that you can reach your financial goals.

Pocket Guard

In a day and age where we use a card to pay for everything instead of cash, it’s hard to determine how much money we have “left in our pocket.” That’s where Pocket Guard comes in. Pocket Guard tracks daily spending, bank accounts and bills.

Pocket Guard can help with budgeting by telling you how much you have left to spend for each month. It sets aside the money you need to pay for your monthly bills and any purchases made on credit cards so that you don’t over spend. Pocket Guard will let you know when you need to slow your spending down. It can even help you find savings on your monthly bills! They also use the same 128-SSL bit security that banks use, so you know your information will be secure.

Pocket Guard is a free app for iOS and Andriod.

Mint

Mint is more than just a budgeting app, it focuses on your entire financial life. Like most budgeting apps, Mint helps you keep track of your income and expenses. It alerts you when you have bills to pay, so you don’t miss a payment.

However, it goes beyond basic budgeting and gives you more features. It keeps track of your retirement accounts and your investments. And, it shows your credit score so that you can keep track of your overall financial health.

Mint is free for iOS and Andriod, and it’s available on your desktop too.

Wally

Wally hopes to provide high-level financial tracking to the everyday man. They focus on savings, expenses and budgets so that you can meet your financial goals. Wally also allows you to take photos of your receipts for your records.

A unique aspect of Wally is that it isn’t just for the United States. It can be used in almost every country and they plan to add currency conversion, which will make it a great traveling tool.

Wally has separate versions for iOS and Andriod, but both versions are free. Wally, is the iOS version and Wally+, is the Andriod version.

Level Money

Level Money is a great tool for budgeting because it can help connect to all of your different bank accounts. It also can predict your balances based on recurring income and payments.

The best part of Level Money is that counts your money like your Fitbit counts steps, showing you how much money you’ve spent and how much you have left to go. It gives you a monthly spending budget (after deducting your bills) and levels off where you should be at each day in your spending. Another great feature is it’s financial tracking. It can show you what you’ve spend on different categories throughout the year so you can find ways to cut expenses.

Level Money is free for iOS and Andriod.

Mvelopes

Mvelopes takes the traditional envelope budgeting systems and makes it high-tech. When you make your budget you put money for each category in an “envelope” then when you make purchases Mvelopes subtracts the money from each envelope so that you know how much you have left to spend.

Mvelopes boosts the fact that they’re more than just a budgeting app. They have other tools that can help you manage your debt and save money.

Mvelopes is free for iOS and Andriod.

Prosper Daily

Prosper Daily, formerly known as BillGuard, helps to keep track of your expenses, but it also helps you manage your credit and identity. Prosper Daily’s unique feature is that it has you approve your spending. It flags any purchases that look out of the ordinary and has you approve them or you can mark it as fraudulent. If a charge is fraudulent it allows you to file a claim from the app.

Prosper Daily is free for iOS and Andriod.

 

Who Can I Claim as Dependents on my Taxes

Who Can I Claim as Dependents on my Taxes?

 

Claiming dependents on your taxes

Claiming dependents on your taxes helps to lower your taxes. It’s a great way to get money back for the expenses of caring for children or other adults.

Each qualifying dependent can reduce your taxable income by $4,050. In order to take that deduction, you have to understand who qualifies as a dependent. That’s what we’re here for!

Is My Spouse a Dependent?

Simply put, you should never claim your spouse as a dependent. It doesn’t matter if your spouse is employed or not, spouses aren’t dependents.

Instead of claiming your spouse as a dependent you should file jointly. When you file jointly you get the exemptions, which would be the same as claiming a dependent.

Are My Children Dependents?

Children can be claimed as dependents. In order for a child to qualify as a dependent they must meet the following requirements:

  • The child must be related to you. They don’t have to be a biological child, but they must be related. Step-children, adopted children, nieces, nephews, brothers or sisters all qualify.
  • Be under the age of 19; there are two exemptions to this. The first exemption is that a dependent can be claimed as child if they are permanently and totally disabled. The second exemption, is if a child is under the age of 24 and going to school for at least 5 months out of the year they can be claimed as a dependent.
  • The child must live with you. Again there are two exemptions. If a child is living with another parent, in the case of divorce, you can still claim them.
  • The child cannot be self-supporting. They must be dependent on you, obviously.

Is My Spouse a Dependent

Are My Parents Dependents?

If you are taking care of your parents, then you can claim them as dependents. Your parent don’t have to be living with you in order to be claimed as dependents. If you are financially supporting them then you can claim them.

In order to qualify as a dependent you must pay for at least half your parent’s expenses. If more than one party is supporting the dependents, then you all must decide who is going to claim your parents.

Another requirement is that the dependent’s taxable income must be less than $4,00.

If you are taking care of your in-laws you can claim them as dependents, but only as long as the marriage exists. If the marriage ends by divorce or death then you cannot claim your in-laws.

Can I Claim My Pet as a Dependent?

It doesn’t matter if your dog is your best friend, or a loved member of your family, the tax man doesn’t consider your dog as a dependent.

Despite the fact that your pet is completely dependent on you, the IRS doesn’t allow taxpayers to claim pets as dependents. The rationale behind this rule is that human dependents will eventually become taxpayers, while animals will not.

 

IRS changes policy

IRS Changes Policy on Health Insurance Tax Declarations

 

In response to President Trump’s executive order regarding Obamacare, the IRS won’t reject tax returns without health insurance declarations this year.

IRS Changes Policy on Health Insurance Tax

Trump issues executive order

The 2016 tax season was supposed to be the first year that the IRS automatically rejected tax returns that omitted health insurance coverage. However, the Trump administration is taking actions to repeal or at least, lessen the influence of Obamacare. In an attempt to do that, President Trump issued an executive order to “waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the Act that would impose a fiscal burden” on taxpayers.

Trump signed the executive order, Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal, on January 20, 2017.

Trump’s executive order did not repeal the Affordable Care Act. However, it directed agencies on how they should implement the law. Congress is the only governmental body that can change or repeal the law.

The law still states that tax payers must have health coverage or pay a fine. The IRS is still responsible to hold tax payers accountable to have health care coverage.

“Legislative provisions of the ACA law are still in force until changed by the Congress, and taxpayers remain required to follow the law and pay what they may owe‎,” the IRS said.

IRS changes returns policy

The IRS was planning to systematically reject any tax returns that omitted health insurance coverage starting this year. However, on February 6 the IRS removed those initiatives to comply with the executive order.

This means that tax payers can submit tax returns without declaring if they have insurance. The IRS calls returns without health insurance status silent returns. 

According to the IRS ACA Information Center for Tax Professionals, “Processing silent returns means that taxpayer returns are not systemically rejected by the IRS at the time of filing, allowing the returns to be processed and minimizing burden on taxpayers, including those expecting a refund.”

The IRS only changed their policy on accepting silent returns. Taxpayers who submit silent returns are not exempt from the law. The IRS may investigate silent returns to determine if taxpayers had insurance.

IRS recommendations regarding Obamacare

The IRS recommends that taxpayers state their insurance coverage on tax returns. This will help the IRS process refunds quickly. It will also help tax payers avoid further scrutiny.

“When the IRS has questions about a tax return, taxpayers may receive follow-up questions and correspondence at a future date, after the filing process is completed‎. This is similar to how we handled this in previous years, and this reflects the normal IRS post-filing compliance procedures that we follow,” the IRS said.

IRS recommendations regarding Obamacare

Frequently Asked Questions

What does President Trump’s executive order regarding Obamacare mean for taxpayers?

President Trump’s executive order directed agencies to reduce the economic burden of the Affordable Care Act (Obamacare) on taxpayers. While it did not repeal the law, it allowed the IRS to change how it enforces certain provisions, such as the requirement to declare health insurance coverage on tax returns.

Will my tax return be rejected if I don’t declare health insurance coverage this year?

No, for the 2016 tax year, the IRS will not automatically reject tax returns that omit health insurance coverage, following the executive order. However, taxpayers are still required by law to have health coverage or pay a fine.

What are “silent returns” and how do they affect my tax filing?

“Silent returns” are tax returns submitted without declaring health insurance coverage. The IRS will process these returns without automatic rejection, but they may be subject to further scrutiny or investigation at a later date.

Am I exempt from the health insurance requirement if I submit a silent return?

No, submitting a silent return does not exempt you from the health insurance requirement. The law still requires taxpayers to have health coverage or pay a penalty, and the IRS may follow up to ensure compliance.

What does the IRS recommend regarding health insurance declarations on tax returns?

 The IRS recommends that taxpayers declare their health insurance coverage on their tax returns to expedite processing and reduce the likelihood of future scrutiny or follow-up correspondence. This helps ensure a smoother and faster refund process.

Raise Your Credit Score

How to Raise Your Credit Score in 5 Easy Steps

A great credit score is desirable for all and achievable for anyone who is willing to work for it. As you know, a good credit doesn’t happen overnight, and damaged scores take time to repair.

First, what is a credit score exactly? Everyone has one, but they can be confusing to understand. A credit score is a number assigned to an individual based on their financial behavior. Financial institutions use this score to determine whether you’d be a good borrower. Scores range from 300 to 850. Very few people have a perfect score; however, anything in the mid to upper 700s is considered great. A high credit score opens up opportunities for you to borrow money and do business with lenders.

Here are a few ways to raise your credit score and improve your financial standing, regardless of where you stand right now.

  1. Check your credit report. You should start by checking your score and seeing where you’re at. Your initial score might surprise you. Late payments, using too much of your allowed amount and having too many lines of credit can all effect your credit score. If you have any negative dings on your credit, you’ll need to work to repair it. If your credit report contains false information, contact the financial institution involved and resolve it with them. The financial institution can work with you to straighten the problem out and increase your score.
  2. Pay down your debt. Without any debt at all, you’d never have a credit score. Your ability to pay back your borrowed money, or debt, is what generates your credit score. That being said, you don’t need to accrue a lot of debt to have a good score. In fact, quite the contrary. Improve your score by paying down your debt and keep your balance under 30% of the credit limit. If your score is low, slow your credit card spending for a while, pay down your debts, and watch your credit climb.
  3. Be on time, every time. One late payment affects your credit score negatively, so that’s the worst thing you can do as you’re trying to improve your credit. Pay early or on time every time and your score will slowly but surely climb.
  4. Stop opening new lines of credit. Despite popular opinion, having a lot of open lines of credit doesn’t give you a great credit score. It’s best to have a few lines of credit that you can manage responsibly, rather than multiple accounts that can get out of hand in a hurry.
  5. Most importantly, be patient. No matter what you do, your credit score won’t jump 100 points overnight, or even in a week. There is no instant gratification when building or repairing a credit score, but with slow, steady, and consistent efforts on your part, your score is sure to improve.

 

9 Ways to Negotiate Better

Good negotiators know it’s not all about winning. Great negotiators understand that the best case scenario almost always involves a win for each party. The goal of any worthwhile negotiation is to leave both sides with a feeling of value and a mutual benefit. Successful negotiations require a bit of planning, prep work, and compromise.

Here are 9 quick tips to help you negotiate better.

  1. Clearly define your goal(s). Don’t turn a good negotiation into a battle of pride. You can do this by deciding beforehand what terms absolutely have to be met, and which are optional. Do your homework to see at what point continuing to negotiate begins to cost you or your business too much time or money. It doesn’t hurt to write the non-negotiables out on paper for a quick reference and reminder.
  2. Determine the value of everything that is at stake. Decide beforehand what is of value to you, and what you’d be willing to budge on. If you’re negotiating the terms of a promotion, for example, you may decide that accepting a slightly lower salary with a full range of benefits is more beneficial than a higher salary with lesser benefits.
  3. Establish ground rules. It’s a good idea to set some ground rules before entering the negotiation with a quick email or phone call. This is especially true if you feel that the person you’re going to be negotiating with is less than honest or may have difficulty communicating with you.
  4. Don’t make the first move. Avoid giving away more than you need to by holding back a bit and allowing the other party to speak first. You don’t know what their aspirations are and it’s best to get those out on the table before you begin to define yours. Talking too much could leave you worse off than talking too little.
  5. Don’t give up something without getting something. Negotiating is a give-and-take process, and the key to any successful negotiation is a foundation of trust and communication. When a party asks for a concession, respond with “what will you give in return?” before you make your decision.
  6. Give a little, but not too much. Again, successful negotiations benefit both parties. Avoid giving away too much in order to impress or keep a client/vendor/customer on the line. If you feel that too much is being asked of you in the negotiation without any benefit on your part, it’s okay to take the time to reconsider or even walk away.
  7. Don’t overreach. It’s never a good idea to go into a negotiation with wild aspirations and far-fetched demands. Keep in mind what you’re realistically going to gain in the negotiation, and shoot for that. Put yourself in the opposite party’s situation and consider what you’d do if you were being asked the same.
  8. Focus on what you will do. Keep the conversation positive and shed light on the will-do’s and can-do’s rather than the negatives. Try to avoid saying “no” outright, but rather wording it as “I will do this, if you will do that.”
  9. Don’t be afraid to walk away. Remember the bottom line and stick to it. It’s not much different from buying a car. No matter how good of a deal the salesman says he’s making you, no matter how many extras he throws in, if he won’t come down to the price you want, it’s a losing deal on your end.

negotiate better

Let us know how these tips have helped you negotiate better. Do you have any other tips that can help in negotiations?

Frequently Asked Questions:

Why is it important to clearly define negotiation goals?
Clear goals prevent negotiations from becoming adversarial, helping both parties understand what’s essential for a successful outcome.
How do I determine the value of what’s at stake in a negotiation?
Evaluate priorities and alternatives to determine what concessions are acceptable, ensuring a balanced and beneficial outcome.
Why should ground rules be established before negotiations?
Ground rules foster transparency and facilitate productive discussions, especially in potentially challenging or dishonest interactions.
Why avoid making the first move in negotiations?
Allowing the other party to reveal their aspirations first provides valuable insight and prevents overcommitting or revealing too much too soon.
Is it advisable to walk away from a negotiation?
Yes, knowing your bottom line and being willing to walk away reinforces your position and ensures you don’t settle for unfavorable terms.

Accounting Terms Every Small Business Owner Should Know

Top 10 Accounting Terms Every Small Business Owner Should Know

Accounting Terms Every Small Business

As a small business owner, you’re not expected to know the ins and outs of accounting…until you are. It isn’t until some kind of financial crisis happens that many small business owners are hit with the hard reality of what they don’t know when it comes to their books. We don’t expect you to know every definition in the accounting dictionary, but here are the top 10 accounting terms every small business owner should be aware of:

  1. Net Income: (AKA profit!) This term is sometimes referred to as ‘net profit’ or ‘earnings,’ but no matter what you call it, your net income is what’s left after your all of business expenses are subtracted from your earnings.
  2. Balance Sheet: A statement of the company’s financial position shown in terms of assets, liabilities and ownership equity for a specific period of time. This is a snapshot of the small business’ current financial position. The difference between the total assets and total liabilities is known as the company’s net worth. Basic accounting rules tell us that a company’s net worth must be equal to the assets minus the liabilities. We talked about balance sheets a bit more in this video.
  3. Income Statement: We also call this a profit and loss statement. An income statement is a summary of the company’s profits and losses during a period of time, usually a month. Income statements show all money earned during the month, as well as the operating expenses. Learn more about profit and loss statements in this video.
  4. Deduction: If you’ve been running a small business for any length of time, you’ve heard the hype about deductions. Basically, a deduction is any money spent to run the business, which in turn reduces your year-end taxable income. Deductions are great for lowering tax bills for small business owners.
  5. Asset: An asset is any item owned by the business that is expected to last several years. Assets normally refer to larger or more expensive items like cars, office furniture or computer equipment. If you are going to lease or rent property to tenants, it can include rental houses or improvements made to business property. General office supplies are not considered assets, but can be used as deductions.
  6. Liability: A business liability is an obligation that came about from a prior transaction done by the business. In accounting, a liability is assigned a dollar value and the business is responsible for repayment of that amount in the future.
  7. Revenue: Refers to all the money made by a company doing what a company does–whether they’re selling products or services, revenue is the total amount of money made. Sometimes you’ll see revenue referred to as “gross income.”
  8. Accounts Receivable: When you’ve sold products or services to a person or company that have not been paid, this is considered your accounts receivable. Your accounts receivable can be listed as assets on your balance sheet.
  9. Accounts Payable: This includes any bills you have yet to pay for your small business. The sum of all your accounts payables are listed as a current liability on your balance sheet.
  10. Tax Credit: this number is subtracted from the final amount of taxes you owe the IRS come tax season. If you have $1,000 worth of tax credits and you owe $8,000 in taxes, you’ll only pay $7,000.

Brush up on these quick need-to-know accounting terms and stay in the know about the basics of your small business bookkeeping and accounting.

Taking Stock Annually

Taking Stock Annually: Being Prepared for an Accident, Emergency, or Death

Tax season is not only a great time to get your finances in order, but it’s also an opportunity to update other important information about yourself in the event of an accident, emergency, or death. While of course you hope nothing of the sort happens to you, it is always a possibility. Being prepared for the worst can help your friends and loved ones cope if difficult times were to beset you.

Taking Stock Annually

Here are a few quick tips on taking stock annually and being prepared for the unexpected:

  • Review (or write) your will. Take the time to update your will if you’ve gained any new assets, if your executor or plans for guardianship for children or property have changed, or if you’d like to change your arrangements for money or property. If you haven’t written a will yet, it’s best to get that done as soon as possible.
  • Go over your estate planning and power of attorney. Setting up your estate to minimize costs and taxes helps you and your beneficiaries.  Talk to your accountant or attorney about this step.  Power of attorney can bring peace of mind knowing that someone you trust and who you have acquainted with your wishes will be handling your affairs in case of an impairment or death.  Complete the forms, either with your attorney or off the internet, and include them with your documents.  You may also want to give your POA a copy.
  • Make known any medical requests in the event of an accident or death. Give your specified DNR order, decide whether you’d like to be an organ donor, and make known any other medical requests you may have.
  • Update a file of usernames and passwords for all of your accounts. You may not want your social media accounts going on long after you die, let alone your subscription-based services. Leave login info for all online accounts and instructions on what you’d like done with them in the event of your death.
  • Include a balance sheet and income statement of your personal and business bank accounts. You’ll want your executor to know where these accounts are located and how to access them.
  • Create a contact information sheet that includes people you work with, friends, and other acquaintances that your close family may not know about but who should be contacted in the event of an emergency.
  • Store all of this information in a safe place. Some may feel comfortable with it in their homes, while others may choose to store it in a bank security box. Regardless of where it is stored, make sure it is safe, that someone you trust knows about it, and that it is accessible to the right person at the right time.
  • Update your family emergency plan. This should include how the family will communicate with each other in case of a disaster, where everyone will meet, along with a phone tree, updated contact information for everyone, plans as to who will check on whom, and the like. It’s also helpful to have a code word known amongst the family to let one another know there is trouble, without letting the bad guy know.
  • While you’re at it, go the extra mile for disaster planning. Refresh your 24 or 72-hour emergency kits in your home and car, and gather water storage or empty, clean, and refill existing water storage.

Prepared for an Accident

While this list may feel a bit overwhelming, it really doesn’t take very long to accomplish. Tackle it all at once, or take it one task at a time, but get it done. Having all of your important information updated and in once place will help you feel secure and ensure that you won’t leave a headache for anyone in the event of death or emergency.

Frequently Asked Questions

1. Why should I update my will during tax season?

Tax season is an excellent time to review and update your will because you’re already organizing your financial documents. If you’ve gained new assets, changed your executor, or want to adjust your guardianship or financial plans, updating your will ensures your wishes are accurately reflected and will save your loved ones from confusion later.

2. What is the benefit of reviewing estate planning and power of attorney annually?

Reviewing your estate planning and power of attorney ensures that your assets are managed efficiently, minimizing taxes and costs. Assigning a trusted person as your power of attorney gives peace of mind that someone familiar with your wishes will handle your affairs if you become incapacitated. Regular updates ensure that your plans remain in line with your current situation.

3. Why is it important to keep a record of usernames and passwords for all my accounts?

Having a record of your usernames and passwords allows your loved ones or executor to manage or close your online accounts in the event of your death. Without this information, managing digital assets, like social media and subscription services, can be time-consuming and challenging for your family.

4. How can I make my medical requests known in the event of an emergency or death?

To ensure your medical requests are honored, clearly document any specific wishes, such as a Do Not Resuscitate (DNR) order or organ donor status. Inform your family and healthcare provider about these decisions, so they are aware of your preferences in case of an accident or emergency.

5. Where should I store my important documents and emergency information?

Store all vital documents, including your will, estate plans, and emergency contact lists, in a secure location like a home safe or a bank security box. Ensure that someone you trust knows where they are and can access them in an emergency. Keeping these documents safe but accessible is essential for ensuring they are used when needed

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Vyde is a licensed accounting firm (CPA) based in Provo, Utah, and members of the AICPA. We provide professional accounting services to businesses and individuals, with a focus on small business bookkeeping and taxes.

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