Latest Good Reads

Dealing with the Sunset of the Bush Tax Cuts (Part I)

Famous Student Entrepreneurs

What Happens to your Debts After you Die?

5 Tips to Get that Promotion, Raise, or New Job

Play Your Cards Right

Entrepreneur.com posted a great article earlier this week explaining that although financing a business on credit may be risky, it can also be very rewarding. The author interviewed me a few months ago and I am even quoted in the beginning of the article. Check out the except with my quote below, or read the full article on Entrepreneur.com.

Many entrepreneurs are prepared to swap sweat equity and personal savings for a successful start. But what if all that is not quite enough

Shannon Cumberland ran out of options but still needed money to pour into her handmade botanical candles. "We all know it's very hard for a new business to get a loan," says Cumberland, who started Rosy Rings in her kitchen with financing that came from maxing out five personal credit cards. It was a risk that paid off. The company now manufactures approximately 250,000 candles per year with anticipated revenue of more than $2 million for 2009.

Roni Deutch, better known as the "Tax Lady," took a similar gamble when she started her practice in the garage of her one-bedroom condo and maxed out all her credit cards for advertising on local television. "Spending money on marketing your business is not optional. The exponential growth my law firm experienced from using my credit cards to pay for advertising made it all well worth it," she says.

With 75,000 inquiries for service per year, Deutch's card-hopping bootstrapping days are long over, while Rosy Rings' success still depends--to some extent--on plastic. "We're a seasonal business, and given the current lending environment we're still utilizing credit cards to build inventory," Cumberland says.

Continued at Entrepreneur.com…

Five Tips to Help You Become a Transparent Leader

The Glass Hammer, one of my favorite blogs, recently published an entry explaining how to become a transparent leader in today’s business world. According to their article “Transparency is the ability to clearly see the relationship between oneself and one’s environment. Transparent leaders know their strengths and weakness but, above all, know who they are and how their actions impact the actions of others.” I have included a few of their tips below, but I highly recommend checking out the full article here.

1. Share Information

If you want the people who report to you to be engaged and working for the good of the organization, you must share information and expertise that would be most appropriate and effective to build the trust and commitment needed for positive change in the organization.

2. Convey Your Principles and Beliefs

Convey your principles and beliefs to others to increase the value those people can promote within the organization.

3. Be Trustworthy and Reliable

People’s expectations of leaders are usually rooted in the basic interpersonal operation of the leader-follower relationship, where personal connections are made through trust, reliability, care, and appreciation.

Roni Deutch Franchisee Reinvents Himself

One of our Roni Deutch Tax Center franchisees, Paul Nuti of New Jersey, was featured in a NJ.com story on former financial executives reinventing themselves. You can find the clip about Paul below, and the full story can be read here.

Paul Nuti was laid off from Morgan Stanley at the end of 2007, after working there 26 years.

The Wyckoff resident was chief financial officer for Morgan Stanley's global private wealth management business, which focused on high net worth investors.

Nuti, 49, is now opening five Roni Deutch Tax Centers in Bergen County.

"I initially began looking for a similar job with a Wall Street firm," he said. "I had many interviews and was close on a few occasions to finding another position, but in the end it didn't work out for one reason or another."

A franchise consultant steered him to Roni Deutch Tax Centers in 2008. "At Morgan Stanley, the business unit that I ran used to lend to franchises, and I thought this might be a good investment for the future."

Roni Deutch, named for a television personality, provides tax preparation, legal and debt resolution services for individuals and small businesses. It cost about $45,000 to buy a franchise, and another $40,000 to $60,000 to get up and running.

He figures it will take two years for his stores to generate consistent cash flow so he can approach his previous Wall Street salary of between $400,000 to $600,000 a year.

"When I have all five open for at least two years, I should come close to what I was making at Morgan Stanley," he said. "Until then, I will probably look for a job in the financial services sector after tax season."

A 2009 Tax-Time Interview with Roni Deutch

I recently did an interview with The Agony Column’s Rick Kleffel, and provided tax tips for people who used to work in corporate jobs, and are now working as part-time artists and/or entrepreneurs. You can listen to the full MP3 here, or find the author’s summary below:

As an interviewer, I try to avoid agendas when getting ready to speak with an interviewee. If someone wants to know in advance what questions I'm going to ask, I'll inform them that they'll hear them when I speak them in the interview. I research the work, write up the questions and present them on the spot. But for Roni Deutch, I took a different approach.

It's tax time and I didn't want to have an interview that was as long as the tax law books and just as boring and unfocused. I told Roni that when we spoke, I'd be asking her about a very specific situation — I wanted tax information for those of us who had heretofore worked in pretty much simple, corporate jobs but had ended up working as part-time artists and entrepreneurs. It's pretty much a shock to go from handing over a couple of W-2s — or entering them into some horrific tax program — to keeping track of expenses, knowing what you can deduct and even just preparing to collect all the crap you need to present to person qualified to complete the paperwork for you. Deutch nails every bit of advice you need in about 20 hard-driving minutes, which you can hear via this linked MP3 file.

American Bar Association offers Woman Lawyers “Blueprint” for Success

From the American Bar Association:

Lawyers, whether law firm practitioners or in-house counsel, are working hard to improve the status of women in the profession. Law students had been an untapped, competitive pressure point to improve the retention and promotion of women in the profession. But, in 2006, that changed when Flex-Time Lawyers LLC co-sponsored a forum with the New York City Bar Committee on Women in the Profession that focused on educating women law students on how to select women-friendly employers and the key ingredients for success. Attendees left the forum with “The Cheat Sheet,” a guide to selecting, creating, and ensuring a women-friendly employer (view “The Cheat Sheet online at www.abanet.org/yld/publications/home.shtml).

When we introduced The Cheat Sheet, we had a number of goals in mind: First, educate women law students on how to avoid the traditional stumbling blocks of their female predecessors before those same patterns repeat themselves. Second, capitalize on the power in numbers as a means to shape how law firms and other legal employers refocus their women-friendly efforts and programs. Third, create a venue for information-sharing by inviting all of the interested parties to the forum and having them in the same room to brainstorm and play a role. Fourth, create an open dialogue and external motivation among legal employers and law schools to compete on these issues to attract, retain, and promote the most talented women students and practitioners. Fifth, initiate a reverberating effect across the country.

The Cheat Sheet provides questions for women law students to consider as indicia of a legal employer’s commitment to the retention and advancement of women. The questions are not meant as a script but as a guide to enable women law students to decipher an employer’s attention to such issues as female representation, partnership and advancement, mentoring, leadership, workplace flexibility, and business development. It also offers suggestions for additional steps women law students could take once an offer is in hand. For legal employers, those same questions have been used as a checklist to determine employers’ strengths and weaknesses to improve the future role of women. Additionally, The Cheat Sheet provides tips for legal employers and law schools and a resources section that lists key Web sites providing information on work/life balance and women’s issues in the law.

How to Do Your Taxes If You've Been Laid Off

Entrepreneur.com provided some useful tips recently to individuals who have recently been laid off, and how to go about doing their taxes. Check out a snippet of the post below, or you can read the full article by clicking here.

Around 2.6 million people lost their jobs in 2008.

Close to 600,000 more jobs disappeared in January 2009.

Horrible.

But there is a little good news. Believe it or not, Uncle Sam offers some tax breaks to folks in this unfortunate position.

So whether you lost your job in 2008 or 2009, listen up. You deserve these perks.

First, your income.

If you were a salaried employee, you’ll have your normal W-2 income and withholdings to report on your 2008 tax return.

If you received any severance pay, you should see that too on your W-2, also subject to federal income tax withholding.

Now let’s talk about your unemployment benefits. Remember, that’s taxable income too. So if you starting receiving benefits in 2008, hopefully you elected to have federal tax withheld. Now unfortunately, the government will only withhold up to 10%, so if you’re in a higher tax bracket, you will be underwithheld. But it’s certainly better than nothing.

If you are still on unemployment in 2009 and haven’t had any federal tax withheld yet -- stop what you’re doing! Go file Form W-4V -- Voluntary Withholding Request right now and request to have 10% withheld for federal taxes.

Again, this may not cover your whole federal tax bill -- and it doesn’t even touch your state tax bill -- but it’s better than nothing.

You should still be conservative and set a little bit of that unemployment check aside each week. Put that money in a little savings account and hold it till tax time so you’re not totally floored with a big tax bill.

10 Ways to Get Free Money from the Government

One of my favorite business blogs, GetEntrepreneural.com, posted this very informative entry titled “How to Get Free Government Money 101.” In the entry the blogger gives advice on how business owners can get money form the government to help make ends meet during times of economic uncertainty. Listed below is the author’s advice broken down into 10 tips.

1) Only 12% of Gov't Money goes to the poor

Most Americans think that government money programs are for everyone else... for instance only the poor, minorities or friends of the president.

But, only 12% of Government Handouts go to the poor. And only 25% of Government Programs have income requirements

The rich and famous, including Donald Trump, H. Ross Perot, Dick Cheney and George W. Bush, all made millions as private citizens with the help of government money programs. If they're eligible, you certainly should be too.

2) Only 20% of Free Money is called "Grants"

Most free money programs are not called “grants” by the government, they’re called “direct payments.” It is very easy for someone not to know all about government jargon, but just a little research can clear up quite a few misconceptions. Don't discourage yourself by focusing only on "grants" and dismissing the other 80%.

3) 50 Million people don't even know they're eligible

This is one of the most important points to keep in mind: The Government cannot and does not advertise programs that offer free money. But it's out there, lots of it. You just have to invest time finding the programs.

4) You can't make one phone call and just get a check in the mail

Getting government money is like looking for a job. When you knock on one door and ask about a job, and they tell you that you are not qualified, you don’t go home and wait for them to change their mind.

No Way. You would never hear back. You have to be persistent and go from one office to the next until you find a good fit.

5) Free Money keeps growing no matter who is sitting in the White House

We constantly hear about government budget cuts and that makes people believe that government money is going away or will soon be gone. But every year for the past 30 years the amount of free government money given out to individuals keeps growing. It keeps increasing no matter if it’s the republicans or the democrats who are in charge. With the new Obama administration especially, we will be seeing more offered to small business and entrepreneurs in the form of government money programs.

6) You certainly don't need a professional grant writer

Nine out of ten times you will not need help in filling out an application. Most free money programs to pay for your bills, education, health care, housing and even business require just a few pages of blanks to fill in.

If you have trouble filling out an application for money, don’t hire a consultant. Go to the office that is handing out the money. The are obligated to help you fill out your application and they are in the best position to know what should be included.

7) You can apply for as many programs as you like

Don’t worry about how many programs you can apply for. If you see a program that you think might work for you, apply to it. Sure there are some programs that give money for specific reasons and if you get accepted from 2 separate places you will have to refuse one of the offers, but that's still a nice position to be in.

8) It doesn't always matter if it sounds like you don't qualify

Here's an example: “All the money is given out by August 30th”: The end of the accounting year for most government agencies September 30, but the agency can start giving out more money beginning October 1, and you can be the first in line.

In all likelihood, you can wait another 30 days for your money.

9) Information can often times be out-of-date

Every day programs come and go. Every day people change their address, phone number and websites. It is just a fact that these things happen in our modern society.

But remember, if a listing leads you to a non-working number or website, it does not necessarily mean that the program is gone. Call the agency listed in the program description and ask.

10) Don't be intimidated by the idea that the applications are all long and confusing

Getting an application that is only one-page long is not unreasonable at all. Many of the government programs that give our grants really don’t need a lot of financial information because unlike a bank they are not worried if you don’t pay the money back. They don’t want it back. It’s free money.

Housing Bill to Hurt Small Business Owners?

Although everyone seems to be talking about how much the new American Housing Rescue and Foreclosure Prevention Act is going to help American homeowners, it will to make life harder for thousands of small business owners. According to Sharon McLoone's business blog on WashingtonPost.com, the bill will force credit card processing companies to collect more information from merchants, and will even impose a 28% fee on those who do not comply. Below is a quote from McLoone's blog, but you can read the full thing at Housing Bill Includes Sweeping Data Reporting Provision.

"The housing bill includes a sweeping provision requiring credit and debit card firms to report the transactions of certain businesses to the IRS, sparking privacy concerns and stirring the ire of the small business community.

Small business lobbyists plan to aggressively push back on the language requiring firms like MasterCard and Visa to give the IRS data on businesses that have made at least 200 transactions annually that together total $20,000 or more.

The provision says that any company that processes electronic payment transactions will have to report to the IRS the annual gross receipts of those transactions for each merchant beginning in 2010.

The soon-to-be law 'will have a significant, negative effect on the small business community,' said Kristie Darien, executive director with the National Association for the Self-Employed.

The provision is part of a greater effort to increase business and consumer tax compliance and narrow the 'tax gap,' which the IRS defines as the difference between the amount of tax that taxpayers should pay for a given year and the amount that is paid voluntarily and on time.

The proposal, which originally was included in President Bush's fiscal 2009 budget request, will raise an estimated $9.5 billion over 10 years, according to a summary of the bill by the House Ways and Means Committee."

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.