How to Interview Potential Employees

A new guest blog authored by the Roni Deutch Tax Center team explaining how to interview potential employees has been posted on FranchiseBusinessReview.com. You can find a few of the tips below, or click here for the full list.

1. Prepare

Schedule the interview for at least a couple days after you have decided to review the applicant. Take the time to prepare the questions you want to ask, and make sure you ask questions related to the specific position you are hiring for.

2. Phone Interview

If you are hiring for a specific position then you may want to have a phone interview before an in-person interview. This will help you make sure the applicants are qualified, and get a good sense of their personality. If you decide during the phone call that you like the applicant, setup a time for them to have an in-person interview.

3. Stick to the Rules

Before holding any interviews, make sure that you have reviewed all of your state laws on which questions you are not allowed to ask during an interview—having someone experienced with Human Resources give you the run down is optimal. Different states have different restrictions in addition to federally protected rights that you may not know about.

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What a Recession Means for Your Business

I know many small business owners are feeling the effects of the recession. Business is most likely slow or perhaps even non-existent. It’s difficult, but I want to congratulate you for doing what it takes to own your own business in the first place and for taking the risk of capturing your piece of the American Dream. Here are a few ways the recession may be affecting your business and some measures you can take right now to help keep your business afloat.

Maybe your sales are down, and once that happens, then it doesn’t take long for profits follow. Well, one way to stay afloat is to lower your profits in an attempt to achieve higher sales figures. The other way would be to spend more on marketing and advertising while keeping your profit margins. Yes, your profit figures will lower, however, you would be increasing your presence in the market which could make you the first to reap the benefits as soon as the economy emerges from the recession.

So just because you need to cut expenses, cutting marketing would be the worst idea. Have you tried marketing within social media websites? Many sites that allow you to post status updates such as Facebook, Twitter, LinkedIn and Myspace are free way to advertise! Create a Fan Page for your business within Facebook and let people know what you do. You only need to spend a few minutes a day updating your status, inviting people to “fan” you or perhaps offer a coupon for followers. Go to business chamber events or other networking events to find more people to “follow” you. By meeting people and gaining their friendship and trust, they will know who to call when someone is looking for your type of business.

Your monthly expenses are probably increasing when a recession accompanies high inflation. This could eat into your savings and you may start to face financial problems.
Avoid unnecessary expenses and attend only to those expenses related to your business, evaluating them on a priority basis.

More business advice, some adapted from Business Recession: What a Recession Means for Your Small Business, an article on MoreBusniess.com:

Learn to rotate your inventory faster so your profits can increase instead of maintaining a large inventory. Use the latest technology available to keep track of your inventory. Dispose of all your slow moving products through “fire sales” if necessary. A fire sale is the sale of goods at extremely discounted prices, typically when the seller faces bankruptcy or other impending distress.

Get familiar with “Just in Time” methods to maintain your stock and delivery schedules. And last, but not least, don’t make the mistake of assuming demand for everything in a recession goes down. Maybe you have to switch a product out for one this is selling now.

Ivanka Trump's Business Advice for Women

Ivanka Trump, daughter of famed entrepreneur Donald Trump, was on Good Morning America today and offered useful business advice to women across the country. ABCnews.com did a write up of her advice and posted the video of her interview on their site. Check out a few of her tips below, or head over to ABCnews.com to watch the informative video.

Trump, 27, the author of "The Trump Card: Playing to Win in Work and Life," sat down with ABC News' Cynthia McFadden and a roundtable of four businesswomen spanning three decades of experience.

The participants were Larisa Terkeltaub, a 26-year-old first-year business student at New York University's Stern School of Business; Joanna Billings, 25, a structural engineer; Gai Spann, a 41-year-old travel agency owner; and Tracey Andrews, a natural specialty foods saleswoman in her 30s.

From how to make it as an assertive woman in business to how to gain financial backing in a tough economic climate to how to get the message out, the women talked candidly about what has changed since their parents' generation and how all can have their own "trump card," even if their father isn't Donald Trump.

The first topic up for discussion was business experience. Terkeltaub asked Trump what experience is necessary to become a successful entrepreneur.

While Trump first acknowledged that experience is obviously still very important, and "you can't fake it," she then explained that the best thing the inexperienced can do to help themselves is to ask intelligent questions of those around them.

Even though Trump concedes "there's a fear that it exposes that inexperience," in reality asking advice and learning from coworkers prevents young people from making more serious mistakes.

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.

10 Tips for Anyone Hoping to Open a Business in Today's Economy

Starting up your own business is stressful enough with out having to worry about the poor economy. However, you should not let a bad economy stop you from going after your dreams. With the right guidance and preparation, your dreams of being an entrepreneur can still become reality.

I opened my law firm 18 years ago and my franchising business 3 years ago. My franchising business, the Roni Deutch Tax Center, has helped Americans successfully open and operate their own tax preparation businesses since opening its own doors. Everywhere I go people always ask me advice on how they too can become an entrepreneur, and to help all of you looking for some advice on the topic I have put together the following list of tips for any one hoping to open a business in today’s economy.

1. Business Plan

No matter what sort of business you are starting, even if it is a franchise concept, a well-written business plan is a must. It should outline the details of your start-up plan, and contain a detailed outline of your projected first year or two in business. It should include estimates of all costs related to your business, and how you plan to turn a profit. Preparing an in-depth business plan is one of the most important first steps you can take on your journey, but putting one together is much easier said then done. If you are new to business then you might want to check out a few books on the topic, or even take a business class at a local community college.

2. Know your Market

Before you begin looking at locations for your business, you need to make sure you research the industry thoroughly. Are other similar concepts thriving or failing in the current economy? What are the average success rates? How can you make sure your business stands apart from the competition? These are all questions you should ask your self while researching your industry.

3. Put in the Time

Opening and growing a new business is no easy task, and once you commit to the concept you need to remember that it is going to take a lot of effort on your part. If you are used to working a regular eight-hour shift at your job, then you are going to be in for a big surprise. Even to this day, I still put in the occasional 12-hour workday. When it’s your business there is no time card to punch, and you need to be able to commit to putting in tons of time if you want your business to be a success.

4. Properly Calculate Costs

Before you purchase any expensive new equipment for your new business, you need to make sure you estimate all of the costs you are going to need to get your business off the ground. If you over spend in the first few weeks, then you may find yourself without enough money for rent a few months down the line.

5. Start at Home

If you are hoping to open a business that does not require your clients to come in to your store or office, then consider starting a home business. Without having to pay rent for an office you can save money, and you might also be able to qualify to claim a home office deduction. It may not be as grand as renting out a high-rise office, but it will help cut costs and allow you to expand in the future. Eighteen years ago I started my law firm as a home based business and today it is the largest law firm in the nation of it’s kind.

6. Take your Time with Loans

Getting a small start-up loan is not uncommon, but you want to be sure and take your time before signing any papers. You will want to wait until you have a complete business plan so that you do not underestimate your total costs. Additionally, you might even qualify for a small business grant that can help reduce the amount you need to borrow.

7. Hire in Steps

Hiring a full work force before you even open your front door is almost always a bad idea. Although you do not want to get caught off guard with an insufficient working force, having to pay employees who have nothing to do can quickly drain your bank account. Hire slowly to avoid taking on too much too soon. You could even hire independent contractors to help out until you have the need for a part or full time employee.

8. Pamper First Clients

Your first few customers are very important, and you will want to be sure to take extra special care of them. You should also feel free to ask them for feedback, and if they seem interested you can even request a testimonial about your product and/or services.

9. Wait to Incorporate

In getting your business off the ground, you need to make sure to never get ahead of yourself. Incorporating your business can be exciting, but it might not always be the best financial move for you. Stay small as long as you can, and before deciding to change your business structure make absolutely sure it will benefit you in the long run.

10. Always Look for Ways to Cut Costs

Opening a business in today’s economy is likely to be difficult, and my best advice for new entrepreneurs is to always be on the look out for ways to save money. When you book a hotel or business related travel, always ask for a discount. When you are looking to hire a contractor or make a large purchase, always do your research and get multiple estimates. If you commit to being frugal now, then it will help you expand and grow your business in the future.

“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.”

Tax Tips: Married to Your Business Partner?

From The Wall Street Journal.com:

Some husband/wife teams commit to more than just loving each other forever. They also choose to become business partners — taking the whole "for richer or poorer" thing to a whole new level. Luckily, a little tax savvy could definitely help tip that scale toward "richer."

But before I titillate you with the gritty details, let me say upfront that this tip only applies to couples living in the nine community property states (Arizona, California, Idaho, Louisiana, New Mexico, Nevada, Texas, Washington or Wisconsin), who run their small business as a husband-wife partnership. If that's the case, then you've probably been filing Form 1065 (U.S. Return of Partnership Income) with the IRS each year to report your business income and expenses. These business tax items are then split between you and your spouse and shown on separate Schedules K-1 from the partnership (one for you and one for your spouse). Eventually, all the numbers from both of your Schedules K-1s are recombined and included on your joint Form 1040. (Anyone who's done this previously will tell you it's about as much fun as a root canal.)

But here's the good news: The IRS says you can treat your husband-wife business as a sole proprietorship for federal-tax-filing purposes. This is thanks to little-known IRS Revenue Procedure 2002-69. The upshot is you can choose to report all your business income and expenses on simple-and-easy sole proprietorship Schedule C (Profit or Loss From Business) which you then include with your Form 1040. Then you can (mercifully) forget about that ultracomplicated Form 1065 and those nightmarish Schedules K-1.

And wait — there's more! Treating your husband-wife business as a sole proprietorship instead of a partnership could potentially save you thousands in self-employment (SE) taxes every year. Here's why.

With a husband-wife partnership, both you and your spouse must each file separate Schedules SE for your respective shares of partnership income. Then you must each pay 15.3% SE tax on the first $102,000 of your share of 2008 partnership SE income. If your share of SE income exceeds $102,000, the SE tax rate drops to 2.9%. So if you have a profitable husband-wife partnership, both you and your spouse can each get hit with the maximum 15.3% SE tax rate on up to $102,000 of SE income (total of $204,000). Remember: This is on top of your federal and state income taxes. Ouch.

In contrast, if you treat your husband-wife business as a sole proprietorship, you only have to file one Schedule SE — for the spouse considered to be the proprietor — with your joint return. That means no more than $102,000 of SE income gets hit with the maximum 15.3% rate (any remaining SE income gets taxed at the much-easier-to-swallow rate of only 2.9%).

So which would you prefer: up to $204,000 taxed at 15.3% or no more than $102,000 taxed at 15.3%? Assuming you prefer the latter, simply treat your husband-wife business as a sole proprietorship instead of a partnership — starting with your 2008 return. Do this by filing Schedule C with your 2008 Form 1040 and by ceasing to file a separate partnership tax return on Form 1065. This simple drill could save you thousands in SE tax for 2008 and similar amounts each year in the future.

Roni Offers Expertise On Ms. CEO Show

Last Tuesday, I appeared on the Ms. CEO radio show and provided practical advice for businesswomen across the country. I also gave advice on what businesses will likely flourish under the new Obama administration, and even took questions from listeners. Check out the link below to an mp3 of my segment and learn how you leverage Obama's tax policies to work in your favor!

Roni Deutch on the Ms. CEO Show