February 7, 2011 |
Dear Karen: Will I be audited if I claim tax deductions for my new business? Answer: Audit risk rises when taxpayers file a Schedule C, which reports business income and expenses, along with their Form 1040, according to IRS statistics. It's unlikely that simply including a Schedule C will trigger an audit, however. Audit risk for Schedule C returns was 1.9% when income was less than $100,000 but 4.2% for income between $100,000 and $200,000, IRS data for 2009 show.
January 31, 2011 |
Dear Karen: I'm 20, and no one takes my business seriously. What can I do? Answer: Overcome negative perceptions about your youth by running your company in a professional and serious manner. Don't cut corners on things such as licensing or legal agreements. You may be tempted to design your own website to save money, but unless you can produce high quality, don't. "I would say it's twice as hard, at least, to be considered a legitimate and stable business" when you are a young entrepreneur, said Andi Enns, a college student and marketing consultant in Kansas City, Mo. She recommended that you present your youth as an advantage by including compelling stories about your journey into entrepreneurship in your marketing campaign and on your website.
January 20, 2011 |
In a sign of economic recovery, sales of large pickup trucks and cargo vans ? the types of vehicles used by construction companies and small businesses ? are at their highest level in more than two years. The economy has improved to the point where small-business owner Mark Dalessi of Sunwest Air Conditioning in Costa Mesa felt comfortable enough to spend nearly $50,000 on two new Chevrolet Silverado trucks. For much of the last two years, Dalessi said, he "cut back on all unnecessary expenses.
January 13, 2011 |
More than $360 million in small-business tax credits meant to spur hiring in California has been left on the table, raising concerns that the program wasn't working and that the appropriation will be grabbed back by the cash-strapped state. The funds were set aside nearly two years ago as a way to reward small businesses for bringing on new workers. But by the end of 2010, less than 10% of the money had been claimed. Tax officials were flummoxed by the low response, but small-business owners said the economy had been so poor that few were able to hire, even with the $3,000 that the credit would have provided.
January 3, 2011 |
Dear Karen: I want to make more overseas sales in 2011. Do I need a foreign distributor? Answer: It certainly helps, said Kathleen Brush, an international business consultant based in Seattle. "Finding a good local partner in the country you're targeting will help you understand business and legal details you would have tripped over," she said. Brush recommended using the Gold Key Matching Service offered by the U.S. Commercial Service. "They do credit checks, criminal checks, they walk you through the distribution process and advise you about what you need to look for" in any country where you want to start selling, she 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.
December 20, 2010 |
Dear Karen: I'm not good at negotiating contracts. Do you have any advice? Answer: Follow these techniques from Roger Dawson, author of "Secrets of Power Negotiating," and see whether your skills improve. If you're soliciting bids, never accept an initial offer: It makes the other party think it could have done better. If you're bidding, make your initial offer higher than what you expect to get. If the party across the table agrees to your offer, you'll come out way ahead.
December 13, 2010 |
Dear Karen: My business is struggling. Must I do performance appraisals this year? Answer: Most small businesses don't perform employee appraisals often enough. "It seems like a lot of work, but employees want to know how they are doing. It would be smart to have a verbal appraisal every three months and a more formal written appraisal at least once a year," said Ken Keller, president of Business Owner Coaching in Valencia. "Companies that don't hold people accountable tend to underperform.
December 6, 2010 |
Dear Karen: I have a small family business that sells earthquake-preparedness devices. We want newspaper and television exposure. Suggestions? Answer: Position yourself as a disaster preparedness expert, said Michael Olguin, president of Formula, a public relations firm in San Diego. "Pitch yourself as a third-party expert that electronic and print media can call on during annual drills and preparedness events and after there's a quake anywhere in the world," Olguin said.
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.