8 Habits of Successful Business Owners

Last week the Roni Deutch Tax Center had another guest blog entry published on FranchiseBusinessReview.com. The new article explains 8 common habits of successful business owners. You can find a few items from the list below, or check out the full blog entry at FranchiseBusinessReview.com.

1. Always Motivated

Everyone knows that you need motivation and drive to be successful in life. However, it is important to remember that when you’re running a small business you need to be able to not only motivate yourself, but motivate your employees as well.

2. Goal Oriented

Successful business owners are goal oriented, they know what they want to achieve and how long it will take them to get there. Additionally, having clear goals for both yourself and your employees will help keep everyone motivated.

3. Time Management

When you own a small business, time equals money. If you want your business to be a success you will need to understand time management, and be able to plan how to best utilize your own time and the time your employees are on the clock.

4. Money Management

In addition to managing time, as a small business owner you also need to be able to properly manage your money. Although money should not be the only reason you open a business, you do need to be able to judge what is profitable and what is not. Fortunately, there are tons of accounting programs that can make money management a lot easier.

How to Keep your Staff Motivated

The Roni Deutch Tax Center recently became a guest blogger for Franchise Business Review. The first entry discussed the most common mistakes made by prospective franchises, and now our second entry explains how to keep your staff motivated. Read a snippet of the post below or head on over to FranchiseBusinessReview.com for the full entry.

If you open a franchised business, and have never managed employees before, then you may find it difficult to keep your staff motivated. However, you need to remember that a hard working team is essential for a successful business. To help the readers of the Franchise Business Review blog who might be worried about keeping a team motivated, we have put together the following list of tips.

Employee Appreciation

Every now and then it is a good idea to do something nice to show appreciation for your team by throwing a party or social event outside of the office. Your crew will feel great to know you were thinking of them, and they will be even more impressed that you went to the effort of throwing a party to show your appreciation.

Company Charity Day

Team-building seminars and events help your staff bond and learn to work together in different situations. One way to do so is by organizing a community service day for you and your staff, as a paid day of work. Whether you plant trees or run a marathon, it will make your team see your human side, and your fun side.

Well-Deserved Promotions

You do not need to give raise to or promote an employee every time an employee does something great, but when they do go above and beyond to get a job done, it is important to show that you noticed and appreciate their hard work.

Company Lunches

Take your team out – or order in – for lunch every now and then. You can use the opportunity to throw an impromptu lunch meeting where you can get feedback and ideas from your employees in a non-formal setting.

Exclusion of Gain on the Sale of Certain Small Business Stock

Good news for individuals who invest in small businesses; you can now get an extra tax incentive!

As part of the American Recovery and Reinvestment Act (ARRA), investors in qualified small business stock can exclude 75 percent of the gain when they sell their stock. You usually can exclude up to 50% of your gain from your income from the sale or trade of qualified small business stock. See http://www.irs.gov/pub/irs-pdf/p550.pdf for more. This exclusion applies only if the qualified small business stock is acquired after Feb. 17, 2009 and before Jan. 1, 2011, and held for more than five years. In most cases, the exclusion rate for previously-acquired stock remains at 50 percent. The remaining gain will be taxed at a lower rate than what generally applies to one’s income. These lower rates are called the maximum capital gain rates.

So, how do you know if you are eligible for the tax incentive? In order to know whether it applies to you, you need to understand how the IRS defines small business and small business stock.

Description of qualified "small business": To qualify as a small business for the exclusion

1. The stock must be in a C corporation
2. The corporation’s gross assets cannot have exceeded $50 million when the stock was issued
3. The corporation, including all “over 50-percent-owned” subsidiaries, cannot have gross assets that exceed $50 million. This includes cash, the value of contributed property, and the bases of other assets, without regard for short-term debt.

As an eligible corporation, you must submit information regarding your corporation’s aggregate gross assets to the Secretary of the Treasury and to your stockholders.

If you are an investor, talk to your CPA or tax attorney to make sure you qualify for this tax break. Hopefully this new incentive will help you out next tax season. I wish everyone success in their investing adventures!

Business Owners Look to Extend Tax Time

All Americans know that filing a tax return is important, but for many business owners it is even more important to keep their business thriving. Therefore, some business owners like Sabina Gault of Los Angeles have decided to request a tax deadline extension in order to focus on operating her business. The Wall Street Journal wrote a great piece on some great reasons to file an extension, and the precautions to take when doing so. I have included a segment of their helpful article below.

At Sabina Gault's Los Angeles communications firm, Konnect PR Corp., the business day never ends. Ms. Gault and her staff of four regularly work nights, weekends—anytime—promoting the firm's 13 clients. With her mind so occupied, filing taxes for her company gets pushed to the end of her to-do list.

"Payroll and insurance and all of the legal bills—those go out every month," Ms. Galut says. "But with taxes…the next thing you know, it's April 10."

Recognizing she'd have to tackle a significant amount of paperwork before she could send Konnect's tax documents to her accountant, Ms. Gault decided to file for an extension. "We need to go through all expenses and it will take two or three weeks to get that together," Ms. Gault explains. The extension, which took less than two hours to file, will give Ms. Gault an additional six months.

Filing for an extension is a common way for business owners to buy some time during tax season. While extensions do not defer payment to a later date, they permit business owners to estimate what they owe and pay based on that estimate. Then, they can use the additional time to gather and organize all necessary paperwork for their actual tax return, which they file along with a check for the remainder of what they still owe—if their bill is more than they estimated.

Small business owners can receive an extension by filing IRS form 4868 for sole proprietorships or form 7004 for C-Corps, S-Corps and partnerships. These forms grant an automatic six-month extension for all entities except partnerships and corporations, which are granted a five-month extension.

Continue reading at WJS.com…

Why a $14/hour Employee Costs $20

Although we all hear about how expensive it is to be a business owner, most people rarely consider how costly it can be to hire new employees. CNN Money posted a very interesting article on why an employee making $14 per hour can really cost their employer as much as $20 an hour.

You probably cost your boss a lot more than you think you do.

For Jim Garland, who owns a corporate aircraft cleaning and support services company, a $14 per hour worker has a true cost of $19.63 per hour, or about 40% more than base pay. This so-called "loaded rate" includes fixed expenses -- federal and state taxes, health insurance, workman's compensation, uniforms, and paid time off -- along with soft costs like the time spent training a new hire.

Washington's lawmakers are throwing a lot of ammo at reducing the jobless rate, including a new tax break for hiring the unemployed. But no matter what incentives the government offers, it's hard to convince business owners to hire until they're absolutely certain they need to. Employees are often the most expensive investment a business makes.

"Our entire existence revolves around two numbers: revenue and payroll," Garland said of Sharp Details, in Dulles, Va., which he launched out of his car trunk in 1991. Payroll for 60 workers accounts for around 70% of his firm's operating costs.

Garland outsources his entire human resource department. Joe Sherrier, director of human resources for Employment Enterprises -- the company that manages Garland's HR -- said that as a general rule, business owners should to expect an employee to cost an additional 25% to 30% on top of base salary each year.

Continue reading at CNN Money.com…

The Jobless Stimulus: It's still not too late for business tax cuts

From the Wall Street Journal:

The recession may be over on Wall Street and Silicon Valley, but on Working Family Avenue it still has a ways to run. That's the lesson of yesterday's August jobs report that showed losses of 216,000, which believe it or not is the slowest monthly decline in a year and caused the White House to praise with the faint damn that the "trajectory is in the right direction." That's the good news.

On the other hand, the jobless rate popped up to 9.7%, the highest rate in 26 years, from 9.4%, reflecting an increase in the size of the labor force. The main concern we see going forward is the slow pace of new job creation to soak up the 7.4 million workers who have lost jobs since 2007.

There are now 26 million Americans who can't find a full-time job. Average weekly hours remained at an abysmally low 33.1—which is putting a strain on family budgets. And the jobless rate including so-called discouraged workers, or those who have stopped looking, leapt to 16.8% from 16.3% in July. Meanwhile, the number of Americans working part-time who want full-time work increased by 278,000 to 9.1 million, which as a share of the workforce is larger than at any time since the recession of 1982. These are the workers that employers will tend to hire first as a recovery unfolds, so it is worrisome that this cohort remains so large.

None of this does much for the credibility of the Obama Administration's stimulus spending plan, which was sold with the promise of a jobless rate this year of "below 8%" if the stimulus were passed. That was off by some three million jobs in a mere seven months. The same economists who fretted in February that $780 billion in stimulus was too small now claim that the $300 billion or so that has been spent has somehow ignited the recovery.

“Should You Be the Face of Your Business?”

Earlier in the week Business Wizard published an article on whether business owners should be the face of their business or not. The author interviewed me weeks ago, and I am even quoted at the end of the article. You can read a short segment of the story below, or go to BuWiz.com for the full version.

Further, having the company so open at so many points gives the company an edge in the competitive field of enterprise software. “The bigger you get, the more faceless you become,” Simpson says. “If you had a problem at IBM, who would you call? There are too many gates at a big company. We have all these little pieces of evidence that we are incredibly available to you.”

Many entrepreneurs choose not to self-brand out of fear that doing so could hinder or prevent selling the company. Vietia says that a self-branded firm can be sold with careful planning. For 18 years, Roni Deutch has been the face and voice of her tax law firm, making regular appearances on network news, TV commercials, blogs and online videos. While she has no plans to sell, she imagines her persona would be an asset to potential buyers. “Colonel Sanders later sold his business, and they continued to use his face to promote it,” she said. When reminded that Sanders was a caricature to begin with–one that was further simplified post mortem, Deutch says: “If I had to change to become a caricature I absolutely would.”

Business Leery Of Obama’s Tax Plans

From MSNBC.com:

The nation’s most successful small business owners could pay higher taxes under President Obama’s budget plan.

The income of most small businesses is taxed at the individual level. The budget plan calls for increasing the top two tax rates to 36 percent and 39.6 percent in 2011, up from the current rates of 33 percent and 35 percent.

These higher-income taxpayers also would not receive the full value of their itemized deductions, and they would see their capital gains and dividends taxed at a 20 percent rate instead of 15 percent.

That’s bad news for small business owners who report more than $200,000 in income as individuals or more than $250,000 as joint filers.

Only 9 percent of taxpayers who report small business income make this much money, however, according to the Center on Budget and Policy Priorities. Plus many of these taxpayers are passive investors in small businesses, not owner/operators.

Most small business owners are middle-income individuals who would receive tax cuts under Obama’s budget and would benefit from his proposal for health care reform, said Robert Greenstein, the center’s executive director.

“In fact, small businesses would win under this budget,” Greenstein said.

Small business owners who make the most money, however, also are the most likely to invest in their businesses and hire additional workers, according to the U.S. Chamber of Commerce.

Top 10 Tips for New Entrepreneurs

As most of you may know, I am the founder and CEO of both a nationwide tax resolution law firm, and a tax preparation franchise. I opened my law firm from a one-bedroom apartment and built it up into a large corporation that allowed me to also open the tax preparation franchise.

People always ask me what advice I would give to new entrepreneurs looking to achieve success. Although everyone is different, and every business will require it’s own plan, below are the top 10 tips I have found helpful in my entrepreneurial experiences.

1. Do something you are passionate about
When you are deciding on the type and style of business you aspire to run, make sure it is something you are truly passionate about. Starting up a company can require long hours, 7-day workweeks, and a ton of energy. If you are not passionate about it then you can lose your drive quickly.

2. Always be original
Do something that will set your business apart from the competitors. There is no use in competing against a well-established competitor with a carbon copy of their products or services. In order to get interest in your business you need to set it apart from the competition and offer additional benefits.

3. Prepare a business plan & write it down
Even if you do not plan to get a business loan, you should still prepare a well-written business plan. Think about it – would you want to invest your hard-earned money in a new company that does not even have a written business plan?

4. Triple your anticipated startup costs
One of the biggest problems new entrepreneurs encounter is not properly anticipating start-up costs. It can take weeks, even months to begin generating revenue and you need to make sure you have ample funds to establish your company.

5. Do not even think about profits
When you think about opening a business, do not even begin to think about profits. When you prepare your business plan you obviously want to create a structure that produces a profit, but it should not be the main reason you open a business. You need to focus on generating capital for your business, not adding money to your personal bank account.

6. Live & learn, live & lean
Everyone makes mistakes, but it is important turn these into opportunities to learn. Do not spend time being depressed because your business is slow to take off, or you lose your first major client. Learn your lesson and move on.

7. Set goals and work towards them
It is one of my strongest opinions that in order to achieve success you need to have goals. You need to look forward to the future, and envision where you want your business to be in 3, 5, or even 10 years. Then you will have something to work towards.

8. Build professional relationships
Networking with other business owners is important as it can help your form professional relationships that can generate business for both parties. These alliances, such as exchanges of work or services, client referral systems, etc., can be highly valuable to new business owners with a tight budget.

9. Get help from others
You cannot try to do everything on your own. There are only 24 hours in a day, and only so much work you can complete in that time. If you have too much business then you should consider hiring employees to help or seeking help from a professional service.

10. Continue to educate yourself
You can never know everything about running a business, so continually educate yourself by reading books or business blogs. You may even consider writing a blog of your own, as writing entries on topics you are not familiar with can present excellent learning opportunities.