How to Improve Your Business Feasibility

In this article I would like to share my thoughts about how you can boost your business feasibility even in a sluggish economy. A lot of new businesses go under even in the best economic climate and the recent global financial crisis has not helped to make that better. I do believe though, that with the right approach, most small businesses can still survive.

There are a growing number of small business owners who are struggling to survive in today’s economic climate. There is an abundance of sales in almost any retail business to attract customers but sales eat into already meager profit margins. The days of plenty have gone for now and small business feasibility is waning.

So why are you struggling while others are thriving despite the downturn? You’ve maintained product quality since starting your own business and you are still there every day to service your customers. It’s not as if there are no customers. If anything, there are more people coming through the front door to browse than ever before. So why then is your profit margin slipping week after week, month after month?

It’s all a matter of knowing your customers and their needs and planning to stay ahead of the competition.

Today your customers are a lot more discerning when it comes to making their purchase decisions.

Take buying fresh food for example. Previously your best customers would have bought what they liked regardless of price. Put the biggest shiniest apples or the most exotic vegetables on display and your customers would often buy on impulse simply because it looked tempting.

Now instead of just buying on impulse your customers are much more likely to window shop before making a purchase decision. So why is it then that while so many small business owners are struggling, some others are doing very well if not better than before? Their secret is that they have learnt to plan to succeed. They follow a blueprint to lead them up the ladder of business success. This blueprint is a measurable plan for what they want to achieve and how to go about it. It often is no more than a simple business plan but by following it they are literally planning to succeed.

Do you know how to plan to succeed?

You should!

Because it is critical for your business survival. Many small businesses fail because of shortcomings in their business planning and lack of follow-up.

It’s no longer a matter if simply running your own business without much of a thought about tomorrow’s challenges. It’s now all about laying a solid foundation for ongoing business success. Even the best business ideas could well fail if there is no measurable plan for your business direction.

So what does this mean to your business? It means that you should make learning how to plan to succeed to boost your business feasibility your #1 priority. Doing so will put you in a position where you can create and grow a profitable business even in difficult economic times. If you’re not sure how to go about it than more information on how to plan to succeed in business can often be found in a well planned small business course.

Small Business Accounting: How to Choose an Accountant

A small business is an enterprise that is usually small in scale in terms of number of employees and/or sales revenues. A large majority of the businesses in the United State are small business. These businesses are usually registered as sole proprietor, meaning one individual owns it, or partnership, meaning 2 or more people owns the business.

One of the problems facing a small business is in terms of accounting. With the limitation in funds, some accounting is done by the business owner. The entrepreneur is tasked to run the business and at the same time handles the day-to-day accounting requirements of the company. Because of this, the company is often penalized by the government for late payment of taxes, late submission of tax documents and at times, non-submission of tax forms. Also, the business can also be penalized for erroneous computations of tax dues. The business owner has his/her hands full with running the business that handling the accounting requirements can be turned over to another person.

A business owner can hire an in-house accountant or he/she can outsource the small business accounting work to a CPA firm like Desert Rose Tax & Accounting. An outsourced accountant can sometimes be more beneficial than hiring an employee because it is less expensive to outsource than to hire. Also, the outsourced accountant doesn’t need a designated space while an in-house needs his/her own space in the office.

In choosing an accountant to handle small business accounting for the company, some tips can be useful. Before opening a business, the business owner must have a ready accountant. Since a CPA requires a license before he/she can practice the profession, one has to make sure that he/she has a license. The accountant must have experience in the kind of industry the business is in.

Also in a small business accounting setup, before hiring an outside CPA make sure that one knows how much the accountant charges. Fees charged by CPA firms can vary widely. It is good practice to compare the accountant fees with industry standards. The accountant must be able to fill the needs of the company. Before hiring an accountant, one has to interview at least 3 or more prospective accountants so one can compare which among the three will best serve the company’s purpose.

In handling the accounting needs of the company, the business owner must ask the prospective accountant about other possible services he/she can offer to the company like sales tax and payroll tax reporting services. Some Certified Public Accountants offer business advice to help the enterprise grow.

Also, the accountant best fitted to handle the small business accounting is the CPA whose accounting firm is also small. Accountants who own small firms understand how small businesses are run. They also have the time and resources to share with the business owner. It’s one thing to have a fancy degree in business and another to have practical experience running a small business. In the event that the business owner sells the business, the accountant must be good enough to discuss with the owner how to go about with the sale so that tax liabilities are minimized.

Prior to signing up an accountant for the small business accounting, the business owner must ask the accountant for client references so that the owner can investigate. One must also make sure that the accountant establishes a business relationship with the owner, meaning the accountant has time to visit the company every now and then rather than just seeing him/her only when it’s tax filing season.

3 Ways To Mix Personal Resources With Your Business

Most new (newer) business owners will struggle in accessing money to grow their business.

In fact, nearly 90% of all small businesses in this country have self finance their operations in some way or another.

The problem is, as we are told, using personal assets or personal loans in your business is a no-no.

Every business guru on the planet will tell you to never mix your personal assets with your business – that you should always keep your personal income and expenses separate from your business.

The question though is why? Most will tell you that it is for personal liability protection as well as your tax liabilities.

Let’s say that you mix your personal assets with your business and your business gets sued. If a judge cannot make a distinction between you and your business – then that judge might just conclude that you are the business and vice versa – thus, even though your business is being sued, your personal assets could be at risk to the lawsuit – regardless of your form of business entity!

Or, in completing your taxes, if the IRS or state taxing authority cannot distinguish between your personal and business income and expenses, they may just conclude that they are one and the same and tax you twice on both – or not allow true business deductions.

Therefore, most everyone who thinks they understand business will tell you to keep your personal transaction (income and expense) separate from your business.

I am not one of those people. I understand that for many businesses, there are times that you have to use personal assets (part of your home, your car, your savings, etc) in your business. It just might be the only way you can run your business and satisfy your customers.

So, let’s look at three ways that you can use your own personal resources to finance your company.

1) Let’s say you need a small line of credit to purchase supplies that you will use to complete a job for a customer. Then, when the job is done, you get paid and pay down the line of credit. This is a very typical business situation.

However, you can’t get a bank to give you a business line of credit. In fact, you can’t even get one of the many credit card companies to give you a business credit card.

Yet, you still have to complete the job for your customer and need that small line of credit to do it.

This is a great instance where using a personal credit card or finding a credit union or community bank to give you a small (say $10,000) personal line of credit – to meet your short-term business needs.

The goal – and you will see this throughout – is to keep them separate. Thus, even though you used your personal credit and maybe even personal collateral to secure this personal credit line – you should only use it for your business needs.

Thus, all transactions that happen in this account can be specifically traced to your business only. Therefore, no one looking at this account will see where you took your kids to the local water park or bought groceries for a family cookout. Instead they will see very legitimate business expenses – only.

2) Let’s say you just personally came into some money and you want to use those funds to grow your small business. If you just start to spend that money for business transactions, you could begin to blur the lines here.

Instead, treat those funds as a loan to your business. This includes drawing up and signing loan documents (could be a single page agreement, notarized) as well as a real, relevant interest rate. Then, to show others that this transaction is an ongoing legal business matter make sure that you pay yourself (from your business) regular payment. No skipping them – even if it hurts your business. You have to treat your business just like a third party (say a bank) would and create a solid paper trail that keeps the line between your person and your business separate.

3) Lastly, taking money from friends and family. There may come a time when a spouse or parent will provide you money for your business. Again, put everything in writing and live by that contract. If you are getting money for personal needs as well as for your business – make two separate documents.

Further, for a business investment, ensure that the person giving you the money knows that it will be used only in your business. Just in case you have a falling out, they cannot come back on you later and try to take your personal assets to recoup their losses.

The goal here is simple. If you can’t separate your personal income and expenses from your business – then do all that you can to treat them separately.

Thus, should you ever find yourself in a situation (like those mentioned above), you should have no problem detailing what was actually used for your business.