Accounting, Bookkeeping, and QuickBooks Tips for Small Businesses

Posts tagged small business

Top 7 Tips to be a Successful Entrepreneur

The Key to Entrepreneurial Success

Let’s face it, being an entrepreneur is tough. It’s a risky endeavor, but comes with the dream of big rewards. Below are seven tips to be a successful entrepreneur. I can’t guarantee your success, but I can help steer you in the right direction. The rest is up to you!


1. Get the Cash Flowing


We all know that cash is king. Without cash flow, your business will not be successful. The first step to generating income is to sell a product or service that people want to purchase. Entrepreneurs are known for being dreamers and trying to sell their new big ideas. However, if there’s no market for your product or service, you will not be able to generate the cash flow your business needs to survive.


2. You Need a Profitable Business Model


Great, you have a product or service that people want to buy. Now it’s time to figure out a business model that works. Can you make a profit? Will the income you generate selling your product or service be more than the costs of running a business? If not, your business won’t survive for long. When running these projections, a good rule of thumb is to always overestimate your costs and underestimate your income.


3. Marketing is More Important than Mastering


You have a product or service that people want to buy and a successful business model. Now get out there and market yourself! I’m guilty of this one, spending too much time planning. Fear settles in and I spend lots of time trying to feel more qualified. Be confident, get out there, and sell your product. Funny thing, you actually learn more while you work on a customer’s engagement and interact with your clients. Not to mention, this helps get the cash flowing sooner than later.


4. Spend Time on Revenue Generating Tasks


If you’re coming from Corporate America, you’re used to being paid for sitting at a desk from 9-5. Let’s face it, your paycheck was deposited into your bank account regardless of how much you created or the results of your work. Entrepreneurs need to change this mindset. Now, your paycheck is directly related to the value you add to your customers lives. Wasting Time = No Paycheck. You need to be focused and spend your time doing revenue generating tasks.


5. Continually Look For Ways to Keep Costs Low


You have your marketing strategy down, are closing more deals, and spending your time wisely doing revenue generating tasks. Congrats, you have cash is coming in the door. Don’t forget to keep track of where your money is going. Keep track of what you spend, where you spend it, and see if there are ways you can cut these costs. The more entrepreneurs make, the less frugal they tend to become. Keep in mind, the more money that goes out the door means less money in your pocket. So keep a close eye on those pennies!


6. Measure Your Results


Unless you measure and track the results, there is no way to tell if what you are doing is actually working. As business grows, you might add a new department, change your product line, try a new advertising campaign, etc. Did this new department increase your profit margin? Did the new product line help convert more leads to buyers? Did the new advertising campaign bring in new customers? Without tracking and measuring the results of these changes, you have no idea if these programs or strategies actually worked. Meaning you could be wasting money and not even know it. Or on the flip side, you could have stepped into a gold mine and not even know it!


7. Learn From Other Successful Entrepreneurs


Surround yourself with people who are where you want to be. No need to spend your time reinventing the wheel. You can learn from their mistakes and from their successes. Take that knowledge and move forward with your own business! Consider hiring a business coach or find a mentor. Find someone who has done what you want to do. They can give you tips and hold you accountable for your own goals.

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Michelle Edwards, CPA - QuickBooks Consultant Written by Michelle Edwards, CPA
Certified QuickBooks ProAdvisor

Michelle Edwards, CPA is the owner of Trailhead Accounting Solutions CPA, LLC, an Erie, CO based CPA firm focused on providing small and mid-sized businesses with day-to-day accounting, bookkeeping, and Virtual CFO solutions. Michelle is a CFO turned consultant who loves working with small businesses and entrepreneurs. When she’s not crunching numbers, she can be found hiking, remote camping, gardening, home brewing, quilting, and hanging out with her family.


FreshBooks – Video Review

Here’s my first attempt to offer my readers a visual test drive of FreshBooks, via video. I was super excited about how it came out, expect the full screen view gets blurry. I’ll keep playing with my screen cast software and try to figure this out so my next video will be easier to see in the full screen version. Bear with me, I’m a video and screen sharing newbie.



http://www.youtube.com/watch?v=reeGy1GmsKo&context=C330d1deADOEgsToPDskK_DOZyx2hw-kJ88GSngXFm


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Michelle Edwards, CPA - QuickBooks Consultant Written by Michelle Edwards, CPA
Certified QuickBooks ProAdvisor

Michelle Edwards, CPA is the owner of Trailhead Accounting Solutions CPA, LLC, an Erie, CO based CPA firm focused on providing small and mid-sized businesses with day-to-day accounting, bookkeeping, and business solutions. Michelle is a CFO turned consultant who loves working with small businesses and entrepreneurs. When she’s not crunching numbers, she can be found hiking, remote camping, gardening, quilting, and hanging out with her family.


Top 8 Things You Need to Do When Starting A Business

Starting A Business

Entrepreneurship is reaching record highs these days. A combination of people wanting to create their own destiny, people desiring a flexible schedule, and the unemployed that need to start working again fuels this entrepreneurship growth. If you are thinking about becoming an entrepreneur, here are the top 10 things you need to do when starting a business.

  1. Create a Business Plan
    Business plans are a great way to organize your ideas and put your dreams on paper. Business plans force you to evaluate every angle of your business, helping you decide whether or not your business ideas might work. Business plans help you research your competition, price your product, create a marketing strategy, generate a budget, and think about an exit strategy. They are also required if your business is going to need outside funding. Don’t get me wrong, a business plan will not guarantee success, but it will lead you in the right direction and will alert you to potential troubles once your business is up and running.

    Tip: a good business plan grows and changes with your business. Once your business is up and running, make a habit of reviewing your business plan on a monthly, quarterly, or annual basis. See if you are on track to reach your initial goals and update areas where you business took a different direction.

  2. Decide on a Business Structure
    You will need to decide the type of business entity you would like to create. Your business structure choices are: Sole Proprietorship, Limited Liability Company (LLC), Partnership, Corporation, or an S Corporation. Choosing a business structure is not a task to be taken lightly. It is important that you understand the pros and cons to each structure. Some structures offer better tax benefits, while others are much more simpler to operate. Some structures are better for individuals while other structures offer better benefits for business partners. The IRS has lots of information on their website about the various business structures. Individual states also have their own requirements and conditions for business structures. I advise you to contact your CPA to assist in helping you decide on a business structure that best fits your specific and unique needs.
  3. Employer Identification Number (EIN)
    Contact the IRS to obtain your EIN (Employer Identification Number). You will need to fill out Form SS-4, Application for Employer Identification Number, which can easily be done at IRS.gov. Even if you plan to operate as a sole proprietor, I recommend obtaining an EIN so you don’t have to use your Social Security Number on your business transactions.

    If you plan to hire employees, you will need to register with your state(s) to obtain an Employer Unemployment Insurance Tax ID and a state wage withholding ID. Check with your state’s Department of Labor and Department of Revenue for information about your state’s employer identification number requirements.

  4. Register Your Business with the State
    Corporations, s corps, limited liability companies (LLC), partnerships, sole proprietors, and non-profits need to be registered with the state(s) you plan to operate in. You can register your Trade Name and Doing Business As (DBA) with your State’s Secretary of State’s office as well.
  5. Sales and Use Tax License
    Businesses that sell products, goods, food, etc. need to apply for a sales tax license from the state(s) in which you plan to operate. Some states even tax services. You can check with the state’s Department of Revenue for specific information pertaining your individual business. Contrary to popular belief, internet businesses are required to collect and submit sales tax as well. With the state governments strapped for cash, many states are starting to enforce collection of sales tax on internet transactions. Sales tax can be a tricky subject and gets complicated quickly when nexus comes into place. I recommend you contact your CPA to help figuring out what state(s) your business is required to collect and submit sales tax.

    Use Tax – Depending on the state(s) and county(s) in which you live and/or operate a business, consumer use tax can be required to be paid by businesses and residents on purchases that were not taxed when purchased. Some examples include Internet, mail, and/or phone orders. Check with your CPA or your state to determine whether you owe use tax.

  6. Local Business License and Permits
    Many cities, towns, and counties require businesses to register and obtain general business licenses. In addition, building permits, liquor licenses, contractor licenses, professional licenses, home occupational licenses, special event permits, etc. may be required by your state, city, town, and/or county as well. Don’t forget to look into these additional licenses and permits to ensure your business is operating legally.
  7. Insurance
    Business insurance is a necessity to help protect you and your assets. In general, you will want to carry a general business liability insurance policy. If you have employees or hire subcontractors, you will also be required to carry a Workman’s Compensation Insurance policy. An insurance broker is a great resource and can help you get your business insurance set up.
  8. Set Up a Bookkeeping System
    As your business starts making and spending money, you will want to have a system in place to track your income, expenses, bills to be paid, receivables, loan payments, cash, etc. With today’s technology, there are several great and inexpensive bookkeeping software options available. Check out QuickBooks, Sage Peachtree, Outright, FreshBooks, and Wave Accounting.

Keep in mind this list of the top 8 things you need to do when starting a business is a general list. Every business is unique and has individual needs. Please consult with professional advisors regarding your individual business. Most importantly, have fun and enjoy your entrepreneurial adventure!

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Michelle Edwards, CPA - QuickBooks Consultant Written by Michelle Edwards, CPA
Certified QuickBooks ProAdvisor

Michelle is the owner of Trailhead Accounting Solutions CPA, LLC, an Erie, CO based CPA firm focused on providing small and mid-sized businesses with day-to-day accounting, bookkeeping, and business solutions. Michelle is a CFO turned consultant who loves working with small businesses and entrepreneurs. When she’s not crunching numbers, she can be found hiking, remote camping, gardening, quilting, and hanging out with her family.


Small Business Health Care Tax Credits

Small Business Health Care Tax Credit

Did you know that your small business could be eligible to receive tax credits for offering health insurance benefits to your employees? The Small Business Health Care Affordability Tax Credits are made possible by the Affordable Care Act passed in 2010. Hopefully your tax preparer checked to see if your small business qualified for the tax credit in 2010. If you missed out in 2010, there are more opportunities to earn the tax credit through 2013. It was estimated that about 4 million small businesses would qualify for the health care tax credit in 2010.

History
The Small Business Health Care Tax Credits were created to help small businesses and small tax-exempt organizations offer health insurance benefits to their employees. The credit is designed to encourage small businesses to offer health benefits for the first time or to help them maintain the current benefit plans they already have in place. The credit specifically targets small employers that employ low-income and moderate-income workers.

Amount of the Tax Credit

  • 2010 – 2013:
    • Small Businesses: Eligible employers can receive a tax credit of up to 35% of the business’ annual health insurance premium costs.
    • Tax-Exempt Organizations: Eligible tax-exempt organizations can receive a tax credit of up to 25% of the organization’s annual health insurance premium costs.
  • 2014 – Beyond:
    • Small Businesses: Eligible employers who purchase insurance through the new Health Insurance Exchanges can receive a tax credit for 2 years of up to 50% of the business’ annual health insurance premium costs.
    • Tax-Exempt Organizations: Eligible tax-exempt organizations that purchase insurance through the new Health Insurance Exchanges can can receive a tax credit for 2 years of up to 35% of the organization’s annual health insurance premium costs.
  • Phase Out: The tax credits phase out when your small business employs between 10-25 full time employees and when you pay your employees average annual wages between $25,000-$50,000.

Employer Eligibility Rules

  • Employ fewer than 25 full time employees
  • Pay average annual wages below $50,000
  • Employer must cover at least 50% of the cost of the health insurance premiums
  • Both for profit businesses (taxable) and non-taxable organizations can be eligible
  • Household Employers may also qualify for the tax credit in 2010-2013.

Receive the Tax Credit
To calculate your small business or tax-exempt organization’s health insurance tax credit, fill out Form 8941, Credit for Small Employer Health Insurance Premiums. Then you will include the tax credit on your annual business tax return.

Resources
The White House Health Reform Information Center
IRS – Health Insurance Tax Credit FAQ’s
IRS Form 8941

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Michelle Edwards, CPA - QuickBooks Consultant Written by Michelle Edwards, CPA
Certified QuickBooks ProAdvisor

Michelle is the owner of Trailhead Accounting Solutions CPA, LLC, an Erie, CO based CPA firm focused on providing small and mid-sized businesses with day-to-day accounting, bookkeeping, and business solutions. Michelle is a CFO turned consultant who loves working with small businesses and entrepreneurs. When she’s not crunching numbers, she can be found hiking, remote camping, gardening, quilting, and hanging out with her family.


Health Care Reform and Your Small Business

Health Care Reform and Small Business
Small businesses are trying to figure out what the health care reform (the Patient Protection and Affordable Care Act) means for their business. Watching the news and reading articles online, I get confused to! Is it better to start implementing some of these health care reform changes to our small business benefits plan or should we wait until the dust settles and things become more clear? A handful of States are taking the health care reform to court. Some district courts have ruled the individual mandate is not legal while other district courts have ruled the reform laws are constitutional. What does this mean for small businesses? What should entrepreneurs and small businesses owners do?

I recommend implementing the newest changes that are already in affect. These are minor changes in coverage and will ensure your small business benefit plan is up-to-date and in compliance with current laws. Make sure your small business benefit plan has been updated to:

  • Extend coverage for employee’s children, up to the age of 26.
  • Eliminate certain lifetime dollar limits on essential benefits.
  • Eliminate certain annual limits.
  • Eliminate coverage for nonprescription over-the-counter drugs through flexible spending accounts (FSA’s).
  • Check with your accountant and/or CPA to see if your small business qualifies for the Small Business Health Care Tax Credits.

A majority of the other health reform laws go into affect in 2014. Therefore, your small business has plenty of time to implement the future benefit changes. Not to mention, a lot can change between now and 2014.

Resources:
whitehouse.gov

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Michelle Edwards, CPA - QuickBooks Consultant Written by Michelle Edwards, CPA
Certified QuickBooks ProAdvisor

Michelle is the owner of Trailhead Accounting Solutions CPA, LLC, an Erie, CO based CPA firm focused on providing small and mid-sized businesses with day-to-day accounting, bookkeeping, and business solutions. Michelle is a CFO turned consultant who loves working with small businesses and entrepreneurs. When she’s not crunching numbers, she can be found hiking, remote camping, gardening, quilting, and hanging out with her family.


Senate Repeals the 1099 Expanded Reporting Requirements!

Senate Repeals the 1099 Expanded Reporting Requirements

Great news for small businesses and rental property owners, the senate voted today to repeal the 1099 expanded reporting requirements. The 1099 repeal passed with a landslide vote of 87-12. The 1099 repeal (H.R. Bill 4 ) is expected to be signed by President Obama.

Under the previous expanded reporting requirements, small businesses and owners of rental real estate would have been required to file a 1099 with the IRS for any services, contractors, or vendors paid more than $600. This would have included payments to Office Max, Costco, Target, etc. Even though the 1099 expanded reporting requirements were supposed to bring in billions of dollars to help cover the cost of Obama’s Health Insurance laws passed in 2010, the reporting requirements put too much paperwork burdon on small busiensses and owners of rental real estate.

Congress has been working hard this year to come up with new legislation to repeal the expanded 1099 reporting requirements. However, neither side could agree on terms as to where spending should be cut or ways to generate additional income to help fund the Small Business Jobs and Credit Act of 2010 AND the H.R. 3590 Patient Protection and Affordable Care Act.

What does this mean for you and your business? The old 1099 reporting requirements go back into affect. Therefore, if you’re a business owner and have issued 1099’s in the past, you can probably keep doing what you are doing. If your business has never filed a 1099 and you are wondering what the hype is about, please contact your CPA to learn more about the 1099 reporting requirements.

Check out my 1099 Update on CafeTax.

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Michelle Edwards, CPA - QuickBooks Consultant Written by Michelle Edwards, CPA
Certified QuickBooks ProAdvisor

Michelle is the owner of Trailhead Accounting Solutions CPA, LLC, an Erie, CO based CPA firm focused on providing small and mid-sized businesses with day-to-day accounting, bookkeeping, and business solutions. Michelle is a CFO turned consultant who loves working with small businesses and entrepreneurs. When she’s not crunching numbers, she can be found hiking, remote camping, gardening, quilting, and hanging out with her family.


FREE Webinar Offered by the IRS

Tax Help for Entrepreneurs

Calling all entrepreneurs, mompreneurs, soloprenerus, homepreneurs, self employed, and small businesses! The IRS is offering a FREE webinar to teach small business owners about the tax aspects of running a business. The topics that will be discussed include:


  • Reporting profit or loss from a business or profession
  • Self employment tax and estimated tax payments
  • Schedule C and C-EZ
  • Deducting business expenses
  • Husband and wife businesses
  • Recordkeeping
  • Click here to sign up for the FREE IRS webinar scheduled for March 29, 2011.

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    Michelle Edwards, CPA - QuickBooks Consultant Written by Michelle Edwards, CPA
    Certified QuickBooks ProAdvisor

    Michelle is the owner of Trailhead Accounting Solutions CPA, LLC, an Erie, CO based CPA firm focused on providing small and mid-sized businesses with day-to-day accounting, bookkeeping, and business solutions. Michelle is a CFO turned consultant who loves working with small businesses and entrepreneurs. When she’s not crunching numbers, she can be found hiking, remote camping, gardening, quilting, and hanging out with her family.


    Coupon – Small Business Budget

    The past few weeks we have discussed the importance of having a budget, how to create a budget, and how to set up a budget in QuickBooks. Budgets can be intimidating or maybe you just don’t have the time to create your own. No worries, let me help you!

    Mention this blog coupon and I will create a customized 2011 Profit & Loss Budget for your Small Business for only $300!

    It gets better, order your 2011 Small Business Profit & Loss Budget by November 12, 2010 and get a $50 discount! That’s right, you can get a personalized 2011 Profit & Loss Budget for your Small Business for only $250!

    You must mention this blog coupon when ordering your Small Business Profit & Loss Budget to receive this special discount. $300 Small Business Budget offer expires 12/31/2010.



    Michelle Edwards, CPA
    Trailhead Accounting Solutions CPA, LLC
    720-295-4CPA (4272)
    info (at) TrailheadAccounting (dot) com


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