Category Archives: Money Management

11 Changes to Make Your Business Better

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same old thinking same old results

How often do you make changes in your business?
Like most entrepreneurs, I love “shaking things up.”

Here are 11 changes you can make in your life and your business for a more exciting, enriching and profitable future.

1. Update your business technology.

Tech tools enable small businesses to run as productively as big ones. Are you taking full advantage of them? Assess which technologies would help you do business more effectively in the coming year, whether that’s new computer hardware, switching to more sophisticated business apps, or using cloud storage and collaboration tools to streamline your workload.

2. Get organized.

If you’re feeling overwhelmed, lighten the load by cleaning out your office. You’ve probably gone digital in many aspects of your business, but you might still have old folders or file cabinets full of paper documents. Purging those piles and files of paper will make you feel more focused. Shred what you no longer need; scan important documents you still need to save and store them in the cloud instead. If they contain sensitive financial or personal data, make sure they’re encrypted and protected from access except by employees who need them.

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Measure it to improve it.

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by Kelly Deis of SoundPoint Consulting

As with many things in life – where we place our attention is what will change. But, if you try to focus on too many things at once, nothing gets done. The same is true for monitoring your business’ financial performance.

Monitor and focus your attention on those few key metrics that drive your business’ health through a dashboard tailored to your needs.

A good dashboard – often no more than one page, is a powerful visual of graphs and other data that provide a snapshot of the key components of your business. It monitors trends and tracks performance against goals, providing the ability to course-correct mid-year.

A customized monthly dashboard should focus on the key drivers of your business and help you quickly and easily assess the health and trajectory of your company. Here’s how: Continue reading →

The End of Credit Card Signatures

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What Does It Mean for Your Small Business?

By Andrey Bobrovskiy, smallbizdaily.com

Have you noticed something different about your in-store transactions recently? If so, that’s likely because the end of the signature requirement announced by Visa, Mastercard, American Express and Discover is finally coming into effect. Although it affects just one step in the payment process, it means a lot more for your small business in the long run.

It Makes Checkouts More Convenient

The payment card industry has been moving toward simplicity and convenience for years. Customers want seamless and secure methods of paying for goods and services, while merchants seek reliable and flexible ways to process these payments across a variety of channels. This paved the way to innovative forms of payments, including those using near-field communication and virtual reality.

However, convenience isn’t always about adding new features. Oftentimes less is more, and this happens to be the case with credit card signatures. By now, they’ve simply outlived their usefulness, a fact supported by Mastercard’s revelation that it already didn’t require signatures for 80 percent of its transactions even before the changes went into effect. Continue reading →

Self-Employment Tax 101 for Small Business Owners

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When you’ve made the transition from working for someone else to being your own boss, you gain the freedom to create your own professional path. You also get additional responsibilities, like paying self-employment tax.  

Self-employed individuals are required to not only submit the income tax they owe to the federal, state, and local governments, they must also submit self-employment tax to the IRS. 

Who Is a “Self-Employed Individual”?

The IRS defines a self-employed individual as someone who conducts business as a sole proprietor, independent contractor, member of a partnership, or as someone who otherwise is in business for herself or himself. 

What is Self-Employment Tax?

According to IRS.gov, “Self-employment tax is a tax consisting of Social Security and Medicare taxes primarily for individuals who work for themselves. It is similar to the Social Security and Medicare taxes withheld from the pay of most wage earners.”

Employees of a company pay half of their Social Security and Medicare taxes (usually withheld from their wages) and the employer pays the other half. However, as a self-employed individual, a business owner must remit the entire amount.   Continue reading →

How much cash should a small business keep in reserve?

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piggy bank cashCash is the fuel that makes a business run. It is needed to pay salaries including your own, fund marketing programs to acquire and retain new customers, invest in equipment and facilities, pay rent, supplies and many more day-to-day activities. Most financial experts recommend three to six months of operating expenses, but using this for every business in every situation is misleading.

To determine how much cash you need, you must look at the following key areas.

How Much Cash Have You Been Using?

If you’re an established business owner, look at your monthly cash flow report (or go to the next paragraph if you’re a start-up). This report will provide an historical and seasonal perspective. Note the cash received from sales and the cash spent. The net of these two is often referred to as the “net burn rate.” For example, if you have $50,000 in sales and $30,000 in expenses, then your net burn is +$20,000

Your “gross burn rate” only takes cash expenditures into account; in our example, that’s $30,000 and is the more conservative amount, since it does not assume any sales are made. Historical spending patterns are a good starting point in considering future spending plans.  Continue reading →

Washington’s Paid Family and Medical Leave Program.

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PFML_Employer_OverviewWashington is soon to be the fifth state to offer paid family and medical leave benefits. All workers will no longer have to choose between caring for their loved ones and making ends meet. They can dedicate their time away from work to be the best caretaker they can be. In return employers have access to an inexpensive benefit, save on payroll costs while the worker is on leave, and reduced employee turnover costs.

Workers can begin taking leave in 2020, but next year employers will have some actions to take.

First, employers need to withhold premiums from paychecks starting with the first check in 2019. These premiums are split between employers and workers. Workers foot most of the bill, but employers with 50 or more employees have a portion to pay also. (Employers with fewer than 50 employees don’t have to pay premiums but are still responsible for collecting and remitting the workers share.) Premiums are paid to the Employment Security Department by employers quarterly, starting in 2019. Learn more about premiums on the Premiums page.  Continue reading →

Selling your business? Timing is everything.

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by Kelly Deis of SoundPoint Consulting

Owners want to sell their businesses for for a variety of reasons – some want to retire and others are ready to move on to something else. Most owners ask – “is now a good time to sell?” Not surprisingly, the answer is, “it depends”.

Here are three factors to consider when timing the sale of your business. Of course, it is best when all three are optimally aligned, but that is not always possible.

The State of the Owner

The owner is critical to the success and ultimate value of a business. Typically, once the owner is beyond his or her prime, the business value will begin to falter.

It is best to sell when the owner is engaged, still excited about the business and perhaps wiling to stay on after the sale. Likewise, the more youthful and healthy the owner the less they will appear eager to sell.

You want to be the owner that wants to sell, not one that has to sell.  Continue reading →