November 22, 2010 |
Dear Karen: How much cash should a small business set aside as a reserve fund? Answer: Because economic recessions are cyclical, having an adequate capital reserve is imperative for small businesses. It's also important to hedge against seasonal downturns and family emergencies or health problems. Just as individuals are advised to save enough to meet personal expenses for three to six months, companies should do the same, said Jim Sharvin, a CPA in Torrance. "Put that savings in a money market fund or a short-term CD. Don't put it at risk at all," he said.
May 9, 2010 |
Dear Karen: How can we improve sales? Answer: Track sales performance. See where your sales leads originate and which ones are most effective. You can't identify what's working if you're not monitoring it closely. "Identify the real drivers of your business, and stop throwing away money on what's not working," said Jeff Solomon of Leads360, a Los Angeles software firm. "Chances are, one or two sources generate the bulk of your revenue." Instruct your sales staff to respond to inquiries within five minutes, send follow-up e-mail and stay in touch with potential customers.
December 15, 2009 |
Dear Karen: I am writing a screenplay and plan to shoot the film next fall. When should I open the LLC? Answer: Unless you are seeking private investment, there's no need to form a business entity immediately, said Jeffrey Unger, founder of EMinutes, a law firm that focuses on small-business and entity formation. "We have so many situations where the LLC is formed, the plans fall apart, and then the entrepreneur is stuck with the LLC. This is particularly true in entertainment," Unger said.
December 27, 2010 |
Dear Karen: Is the tax credit for hiring formerly unemployed people going to stay in effect for 2011? Answer: The Hiring Incentives to Restore Employment Act, or HIRE Act, was signed in March as part of President Obama's $18-billion jobs bill, but it expires at the end of this year, said Brandon Edwards, chief executive of the Tax Credit Co. in Los Angeles. The act provides businesses with an exemption from Social Security payroll taxes for every worker hired this year who had been unemployed for at least 60 days before the hiring.
February 13, 2011 |
Dear Karen: I don't know who can build my website. Suggestions? Answer: Start right and hire a professional rather than a moonlighting student, said Erin Presseau of New England digital marketing agency SilverTech. "Think about what website you envision for your new company and put your initial requirements on a list," she said. If you'll rely on the Web company to formulate business concepts, look for a "digital or interactive agency," Presseau said. If you simply want someone to build a website to your specifications, look for website design and development firms.
April 18, 2011 |
Dear Karen: I have an accountant who keeps good financial records for my company. Do I need a chief financial officer? Answer: An accountant records business transactions and produces financial documents, which is adequate for many small companies. As you grow, you may consider a CFO, who will not only crunch the numbers, but interpret them strategically. "While an accounting manager may be proficient at accurately recording the daily business transactions, a CFO will analyze that data to help you direct your efforts to your most profitable business segments," said Jess Meyers, project manager of Lyndon Group, an accounting and technology outsourcing firm in Orange County.