Posts Tagged ‘larry Slusser’
How To Sell Your Business Loan
Wednesday, April 9th, 2008
After you build your business up and are successful you might be tempted to consider selling. The problem many business owners run into is that finding someone to buy their business is difficult. Many times people are interested in purchasing the business but they lack the cash to make the purchase, or have credit that isn’t quite good enough for standard financing. Although everyone dreams of a quality business person with cash and financing to walk in that doesn’t happen very often.
The bank is going to check on the history of the potential owner to see what their financial situation is. Unless they have outstanding credit and a strong track record of successfully running businesses the chances are they will be unable to obtain a loan to buy your equipment, customers, buildings, or other assets.
If you have succeeded in business the chances are you possess a good amount of the entrepreneurial spirit. That spirit gives you a can do attitude and where there’s a will there’s a way so you most likely will find a way to get your business sold.
A prospective buyer who has enough cash for a down payment and some decent collateral can many times work with the owner of the company and talk them into carrying the loan. It works just like carrying a loan on a house or property. And one advantage is you know exactly what the collateral is worth because it was your business!
Selling a business is difficult and banks won’t just automatically allow the person who wants to buy your business to take over your loan even if they do have enough for the down payment. In fact, they may not even consider the success of your company due to the fact that it will be run by a new owner.
Carrying the loan when you sell your business can work for many people, except in a couple of glaring exceptions. If the future owners of your business decide to stop paying you are suddenly back in business as you will have to repossess you company. Repossessing a business is difficult and not an easy position to be in. Make sure you conduct due diligence on the people you are considering carrying the note on your company for.
The second instance where selling your company and carrying the debt won’t work is if you need the money out of the business quickly. But what do you do if you can’t find a cash buyer or someone who can qualify to buy the business? You carry the loan yourself and then look for an alternate buyer to purchase the debt.
Start with banks and local firms who purchase debt just be aware they are going to discount the loan, which means they will buy it for less than it is worth. This is the cost you will pay for cashing out the debt, but remember, when you sell the debt it is no longer yours to carry and you can take your proceeds and do with them what you want.
Ensure you consult a business law attorney prior to selling your debt and ensure you are aware of all of the tax implications from the sale of the debt as well.
Tags: advice, Finance, Finance and Accounting, larry Slusser, loans, selling a loan, selling your business loan, tips
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Tax Deductions for the Self Employed
Wednesday, April 9th, 2008
There are many benefits of being self employed. Independence, flexibility in work schedule, getting to do what you love, and enjoying some nice deductions from the IRS that lower the amount of tax you pay. Lowering your tax means increasing your income and your net cash flow so make sure you take advantage of every legal deduction you can take.
It is important to know that while seeking the help of professionals is advisable, you always want to make sure to do your own research and check for deductions on your own. Make sure that if there is any ambiguity in an IRS regulation that you check with a tax professional or with the IRS before you take a questionable deduction. No matter how great the deduction may be it is not worth getting audited over.
A great place to start is at IRS.gov where there are several publications written in a readable style to help you learn what expenses are considered tax deductible for the self employed. Form 1518, IRS Tax Calendar for Small Businesses and Self-Employed and form 535, Business Expenses, are two excellent informative publications to help you get started learning about deductions.
Making sure you follow the IRS instructions is very important and you need to be aware there are several keys that can lead to your getting audited. Claiming your house as a deduction is the number one alert to the IRS that can lead to an audit. That is not to say that you cannot deduct the correct portion of your house, just make sure that you do it within the guidelines of what the IRS allows.
Travel is another area you want to be very careful about when deducting as a business expense. The IRS has very specific guidelines regarding what is considered business travel and what traveling expenses are eligible for deductions according to the regulations.
Supplies and equipment for your business are deductible and health insurance also may be deducted. If only one member of your family is self employed be aware that you may only be eligible to deduct the self-employed family member’s healthcare costs. If the other family member is eligible for benefits through their employer then you cannot claim the cost of those benefits as a deduction.
Clothing can be deductible but only if it is usable for the business purpose exclusively. If you have a coat that can be worn when you aren’t working then it would not be considered deductible. If however, it is something like a specific fire proof jacket is needed and it isn’t possible or pragmatic to wear it when you aren’t working then that fireproof jacket would be considered tax deductible.
Studying the forms and guides provided by the IRS is a great place to start but also include a visit to your CPA who can take what you have learned and apply their knowledge and experience to maximize your deductions for the upcoming year’s tax liability you face as a self-employed business person.
Tags: Accounting, Finance and Accounting, larry Slusser, self-employed, small business, tax deductions, tax write-offs, taxes
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Growing Without Franchising
Wednesday, April 9th, 2008
You have a great business idea and you put it into action. The result is a nice little opportunity that your friends and business colleagues tell you would be a great franchise. The decision to franchise is not one to take lightly. First you need to understand what a franchise is and what other alternatives you have available to you.
The federal government defines a franchise as a business relationship that has 3 specific characteristics. Number one there is a common trademark. Number two, there is a level of operational support or help and training and one company has significant operating control over another company where in decision making or operational policies and procedures. Third, the franchisee pays a minimum of $500 in the first six much for any fees, royalties, shared advertising costs, training fees, or equipment fees.
Being classified as a franchise means that your business is subject to State and Federal laws which spell out specific operating guidelines for disclosure, time periods for buying and selling franchises, and other regulatory requirements. If your business only has 2 of the 3 characteristics of a franchise then you are not considered a franchise and not subject to the stipulated regulations. Before you go trying to not incorporate one of the three main features of a franchise think carefully about how this characteristic will impact your business.
* Common Trademark is a difficult piece to circumvent. One of the advantages of a franchise is the marketing synergy you gain when you have franchises. Brand name and recognition all increase when you have the same name of business. Trying to circumvent this and having companies with separate names causes you to lose the branding you gain through franchising.
* Operational Support & Control is one of the key advantages of a franchise. McDonald’s is perhaps the most famous example of this. Because of Ray Kroc’s fanatical insistence on standardization a McDonald’s cheeseburger is the same in California as it is in Rhode Island. Growing your market segment through similar businesses you have no control over is a difficult proposition.
* $500 in charges in the first 6 months seems easy enough to get around, just delay the payments. This work around has been tried literally and in a court of law. While laws vary from State to State cases have been brought before the court regarding the delaying of franchising fees and the bottom line is if it looks like a franchise, operates like a franchise, but delays fees and royalties for however long it is still a franchise. Additionally, you would have to be very very comfortable with someone to let them operate under your trademark, with your policies and procedures, for at least 6 months at no charge for anything or essentially no charge(less than $500).
While it is possible to grow your business without franchising you need to be very careful and pay particular attention to all applicable laws. Before considering stepping out in this direction check with your attorney and tax professional to ensure you are compliant with all State and Federal Laws.
Tags: advice, Growing Your Business, growth options, larry Slusser, tips
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Making Home Office Life Easier - Shared Office Spaces
Wednesday, April 9th, 2008
Working from home is a great option for many different professionals in many different lines of work. Some companies are even encouraging workers to become virtual workers when possible, saving on commuting cost and the cost of office space.
While staying home and having a home office may seem ideal to you, believe it or not there can be some issues when working from your home. Distractions are more prevalent at home although the argument can be made that there are plenty of distractions when working on-site as well. Losing your internet can be a real drag and also the fact that you lose social interaction in the workplace is an important factor.
What if your job requires you to meet with a client? You can’t always meet at a coffee shop, particularly if you want to be seen as a seasoned professional in your field. Where do you have the meeting? And when you work at home do you use your personal address as your business address? That works fine until the junk mail starts to pile up or you go to sell your home and the underwriter doesn’t like the fact that there was a business there previously.
When you get a little stir crazy at home you can just run out to the coffee shop right? Most have wireless internet and you can get a good cup of espresso as well. But what if the chairs aren’t all that comfortable or they turn the music up too loud? You just find a new coffee shop right? Easier said than done and there is a new alternative for people who freelance or work from home.
Shared Office Space
Shared office space is a business concept that rents office space to a host of individuals. Although offerings vary depending on your market most all of them offer a place to put your desk, several conference rooms which you can schedule for meetings, internet access, the potential for a phone line, and a business address you can use for your business.
There are different levels of membership from monthly renters that cost several hundred dollars a month to daily users who pay as much as $20 per day to use a community desk and link to the internet. You can get discounts for quarterly or annual memberships and some shared office spaces offer referral bonuses for friends and colleagues you are able to sign up.
While you can run into the same distractions you would in a regular office one advantage is you might find you are able to network with other freelance or home based businesses. You also don’t have to go into the office; you can use your home office or go in to your shared office space. Having a business address separate from your home address is a bonus and depending on the type of business you have access to a private conference room is an excellent idea.
If your city’s shared office space offers a daily rate it is recommended you try it for at least 2 months on a pay as you go arrangement and see how many days you go to “your new office”. This will allow you to evaluate if the move will be cost effective in the long run.
Tags: advice, home based business, home office, larry Slusser, shared office space, tips
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What Entrepreneurs Can Learn From Tai Chi
Wednesday, April 9th, 2008
Entrepreneurs have been described as many things over the years in a variety of mediums. Aggressive, type A, intelligent, calculating, assertive, savvy, and many other terms and descriptions have been used.
Tai Chi is often called a passive martial art form, and “whole body and mind” form of exercise. Known throughout the world as a form of exercise to help with stress, how can Tai Chi be compared to being an entrepreneur? After all, one of the more famous quotes in Tai Chi is action through inaction which would seem to run counterintuitive to the entrepreneurial spirit.
Dig deeper in to Tai Chi and those entrepreneurs who succeed in business and you will find many similarities. In fact, on a value and conceptual level, it is striking how much the entrepreneurial spirit and this form of martial arts has in common.
* It Starts Simply , with warm up exercises and breathing to gain focus. Even the most coordinated expert in Tai Chi starts their lessons with warms ups and breathing exercises to gain focus. No entrepreneur succeeds without focus. Think about that tough problem you had to solve. What was the first thing you did? The chances are you focused on coming up with a game plan, and then decided where to start first.
* There is no Substitute for Experience or Time. In Tai Chi, there are no short cuts. To learn the sequences it takes repetition which requires time. A good instructor helps, but the individual must work hard to succeed. The same is true in business. Even if you have a fantastic mentor, you learn by making decisions, gaining experience, and by practicing. Study the world’s most successful athletes, entertainers, and business people, and you will find they are nearly maniacal in their practice regime. Think about what you should be practicing for your success, are you?
* Take Time to Meditate and to Focus beyond just warming up. Built into Tai Chi is time for meditation and focus. To achieve success in Tai Chi you must be able to focus and take that focus and apply it to you physical achievements to attain mastery. The same can be said of your efforts in business. If you are too busy working running your business to focus, you will forever be overwhelmed by tasks. Take time to focus, to plan, to do root cause analysis and you will succeed. To become a successful entrepreneur you must work “on the business” not just “in the business”.
* Push Yourself Beyond Where You are Comfortable is a catch phrase for many areas of life. This saying, however overused is true in Tai Chi and in business. You simply must push yourself beyond where you are comfortable if you are going to grow. Taking risks can come naturally to the entrepreneur but it is still not an easy thing to do on a regular basis. Recognizing when it is time to step beyond where you are comfortable is a skill you find in people who are able to achieve the pinnacle of success in their endeavors.
In Tai Chi there are many similarities that can be taken and applied to success in business. As an entrepreneur, make sure you are studying and applying these fundamentals in all the areas of your life to find what true success means to you.
Tags: entrepreneurs, Growing Your Business, larry Slusser, management
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Startup Financing During the Credit Crunch
Tuesday, April 8th, 2008
Consumer loans and small business financing has become incredibly difficult to obtain. What started with the mortgage industry has crept into the small business arena where lenders have tightened up the criteria for lending. This is creating a need for business owners to look somewhere else for financing. With rising defaults in revolving credit, the fees are higher and underwriting is tougher, making it more difficult for small business owners to obtain any sort of financing-even more difficult than in a normal market. Looking for alternatives for financing is where small business owners must look rather than using their credit card debt or home equity lines of credit.
Borrowing from your retirement plan is usually the last thing most advisors would recommend. If at all possible, consider liquidating some stock and lending it to your company, which is better and can be paid back sometime down the line provided the loan has been properly documented.
Another source for obtaining funds would be from family and friends, and are usually cheaper than a regular loan. Parents may even be willing to give a no-interest loan, while friends and business associates may agree on a rate that is a bit better than their high-yield savings account, which would make the loan worthwhile to them. It is typical for business loans from friends and family to be approximately one to two percent higher than a high-yield savings account, yet two to three percent lower than the market rates. Even though taking the money in the form of equity is preferable, it is better to take it in the form of debt, unless you are certain that your business will be able to give them a return on their equity.
Before venturing into an agreement with family or friends, it is important to note that the same patient repayment structure of equity can be arranged by creating a long-term grace period on debt with professional investors, which will seem more like an equity investment rather than debt. Plus these professional investors will not usually like the business owner to repay other investors before them.
One of the up and coming opportunities that are available now, is borrowing from strangers online. Looking for a person to person loan can be easy, enabling borrowers to seek loans from individual lenders who receive a good return for making a private loan online. These interest rates are usually higher, but during the credit crunch, can help the business owner to get started, or to survive.
Loans that are guaranteed by the Small Business Association are still available, at least for this year. Provided that the underwriting has not drastically changed in response to the credit crunch, lenders may still be willing to award small business loans. It is highly recommended to check out the SBA’s website for the current lending requirements prior to visiting the local bank.
Tags: advice, credit crunch, larry Slusser, startup capital, startup loans, tips
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How to Handle Bounced Checks
Tuesday, April 8th, 2008
In the information age your company can have added protection against bad check writers besides just putting up a sign saying how much you would charge in case of a returned check. You might not be aware of the fact that in some states it isn’t even legal for your company to charge for a returned check.
While writing checks that bounce is illegal it is unlikely the police will be arresting your bad check writer unless they are a habitual offender. So how are you supposed to collect if you deposit a check in the bank that is returned to you and labeled Non sufficient funds?
The key to collecting on NSF checks is to catch the bad check writers before the check gets accepted into your accounting system. While it is possible for you to collect your money through small claims court, the time you will have to spend going to small claims court then enforcing your award and collecting on it can be worth more than the check was worth in the first place.
A better option than small claims court is to ask your credit card processing company, or any credit card processing company, about their checking service programs which will allow you access to a national bank checking database. In doing this, you will be able to know virtually right away if the check is good or if you will be stuck paying the bill.
All you or your employees have to do is put the check into the scanner and you will be advised if the individual has a history of bouncing checks. If the scanner approves the check then the service will guarantee the money it is written for. Even if the check bounces, the servicing company will stand behind the check you deposit.
Some companies actually put a hold on the funds the check has committed. What this means to you is that your company doesn’t have to rush down to the bank every night to get the checks deposited in a certain amount of time. Many companies guarantee the check even if the writer puts a stop payment on the check for some reason.
A general rule of thumb is that you will pay two percent of the check amount for the screening service and access to the database, along with other services provided. There are many different options available to you for your check screening, so make sure that you do your homework and cost out the different choices available to your company.
While it may not seem like the service may be worth two percent of your check receivables, particularly when you count in the time you will need to spend chasing bad checks, the two percent cost is well worth it. The other option really is to take your chances with checks that may or may not have sufficient funds. The chances are you can get an add on package through your current credit card provider that will cover checks and the fee will wind up being less than 2%.
Tags: advice, bad checks, bounced checks, larry Slusser, tips
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What to do When Clients/Customers Won’t Pay
Tuesday, April 8th, 2008
One of the most difficult parts of owning and running a business is collecting on accounts receivable. While nobody likes to be the bad guy, you need to have an established procedure to collect the money your company is owed.
The first and most important part of your accounts receivable process is to decide just who you want to extend credit to. With credit cards, debit cards, and EFTs, the customer who needs to have credit really must demonstrate a need for you to establish a line of credit for them.
While you want your company easy to do business with you also are in business to make money and if someone has questionable credit the chances are everyone they try to do business with is going to make sure they can collect the money they are owed.
There are many different agencies you can use to establish credit and usually you can do it online within the same day they apply. Again, the best policy is to collect from you customer at the time you ship goods to them, just like when you buy groceries or have your car worked on. Payment is expected at the time of service.
If you do elect to extend credit make sure you have a credit policy that is signed by your customer prior to extending them credit. Spell out all of the terms including when amounts are due, how much of a finance charge you will levy on balances past due, and under what circumstances you will revoke the credit you have given them.
Ensure that in your credit policy you discuss the collection process and how you will proceed should they become seriously overdue. You don’t want to have surprises when you get to the point of having to collect.
When a customer begins to fall behind in payments it is important not to procrastinate. You need to get all over accounts receivable asap and as the owner or manager of a business make sure you are intimately involved in the details of accounts receivable, it is profit sitting there waiting to be collected or written off.
If a good paying customer falls behind just give them a call and see how things are going. It’s possible they made a mistake and misplaced an invoice or have had a change in bookkeeper or some other legitimate reason. It is also possible they had a bad month and are struggling and the chances are if they have been a good customer they will be very honest with you.
While you don’t want to carry a customer if you jump on the receivable early you can have the opportunity to be a hero and gain a customer for life. If you work with a customer who is having a rough patch, when good times return the chances are they will repay your loyalty and remain loyal to you.
Be careful however to not place your business at risk based on trying to work with a customer, you are in business to make money, you aren’t a bank. While the analogy may be old, try buying groceries and telling the checker you’ll pay tomorrow after you sell a couple of your products. The chances are pretty small they will carry you even for a day so be very careful who you choose to “carry” in your business.
Tags: Accounting, advice, collecting payment, Finance, Finance and Accounting, Generating More Sales, larry Slusser, non-paying customers, Sales, tips
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How to Thank Your Customers
Tuesday, April 8th, 2008
When you have made a major purchase whether it was a car or living room furniture chances are you received some sort of thank you from the company you made the purchase from. Usually at a high quality dealership for cars or furniture the salesperson will be given the responsibility to write the thank you note but often times the note will be signed by anyone who you came in contact with during your purchasing experience.
Thank you cards are a nice touch, particularly if they are hand written. Giving a small gift can even be appropriate if the purchase is large enough to justify the expenditure. A nice quality travel mug for coffee, a bouquet of flowers, or a gift card to a favorite place are some of the more commonly given thank you gifts businesses give to customers.
How do you incorporate this customer appreciation into your online purchase where often times you will never see your customer? While the appreciation may not be as easy to show, it will definitely be worth it if you can find an appropriate, repeatable way of thanking your customers for their business.
The first decision you need to make is which customers you are going to recognize. Will you base your decision on number of orders or on the amount spent with your company in a given period of time? It is possible to give gifts monthly even though quarterly or annually seems to make the most sense?
Once you have decided which customers you are going to recognize you need to have a process to identify those customers. Make sure your process is easily repeatable. It’s best if you have one customer service agent or other person in your company whose job it is to recognize the customers.
You can identify this person with a title such as customer relationship manager, customer fulfillment manager, or perhaps customer care manager would fit better with your business. The person you select needs to have regular contact with your customers. Additionally, it is important that this individual have enough authority to solve any problems that may be brought to their attention by the customers they are coming into contact with regularly.
The level of reward you give to your customers needs to be commensurate with your industry and with their volume of purchases with your company. Whether you sell buggy whips or blow guns, make sure the customers you are spending effort on to reward are worth the effort. You want to do the right thing and take care of all of your customers but only go the extra mile for those who have earned it.
What should you give you customers? Try to give away things that are thoughtful and useful. Cheap trinkets don’t usually build loyalty but well thought out gifts do. Talk with the people in your company who deal with the customers the most. If a quality travel mug is appropriate then have their company logo and yours put onto the cup. If a windbreaker or other type of garment makes sense, then consider that. Find something that your customer will appreciate that is unique to your business relationship.
Perhaps a holiday basket would be best with a card signed by everyone on your team. The handwritten note or card is a classy touch every customer will appreciate, no matter how far their physical location is from your company. It still is a very personal touch and one that will make your company unique.
Tags: advice, customer appreciation, customer service, Generating More Sales, larry Slusser, Sales, tips
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Tips for Setting up Shop in the City
Tuesday, April 8th, 2008
Setting up shop in the inner city can have a lot of benefits including an accessible location, not to mention lower turnover of a workforce which is more diverse and underutilized than the national average. The real estate may be lower cost as well. However, before you set up shop, there are a few things to keep in mind.
First, ensure to tell the local city officials of your plans for moving into the neighborhood. One of the best places to start is the city or state department in charge of economic development. They can assist with applications and to get settled. Another thing to do is to introduce yourself to the chamber of commerce. This will help you get to know the business owners around the area where you want to set up shop, which could prove to be a positive move.
Next, ask about the designations in the area. This information is best obtained from the local department of economic development. There is likely to be a list of historically underutilized business zone (HUBZone), an enterprise zone or an empowerment zone which may offer special incentives for up shop in the inner city. There also may be some tax abatements, or other tax credits and incentives available. However, the process may take a while, so it is highly recommended to be patient.
Joining private civic groups such as the local development group is a great resource. These development groups are interested in fostering the positive development of the businesses in the inner city, plus they also have knowledge of how the city works, the types of property that is available and the going rates, etc. These groups can be one of your greatest allies.
There is such a strong focus on increasing the positive development of the inner city that there are different groups who are willing to invest in distressed communities. The government may also use the budget to help finance inner city companies, such as through the Treasury Department’s Community Development Financial Institutions (CDFI) Fund. These types of organizations are interested in ensuring that the inner city businesses succeed, which helps to bring around the economy in the inner city.
An important resource to ensure is available is the proximity to public transportation, since this is how a lot of workers will commute to the downtown areas. If their work location is easily accessible from the public transportation, as well as the interstate, this will make the business more attractive to potential employees.
When recruiting, knowing the type of employees you are looking for will help in the recruiting process. The different resources include nearby colleges and universities, religious organizations, workforce development programs and community centers.
One other thing to keep in mind is what your future growth plans will be. This will be important when choosing a location, particularly when growth also means expansion of the physical location of the business. Talking with the city officials ahead of time and having an idea of how much more space will be necessary helps tremendously when the time comes, particularly if the space is limited for expansion or even parking.
Bringing in a business also means creating jobs and taxable income, not to mention employing voters. This can give you leverage with city officials, particularly if the economic development needs to have space occupied where large organizations used to occupy but are now empty. This could mean receiving permits easier or even receiving a needed tax relief. You will have good leverage with the economic development team in the city.
Last, you have received the tax abatements and other perks for conducting your business in the inner city, don’t forget to be a good neighbor and lobby the city to help your business by making the neighborhood a better place, such as improvements and renovations that some residents may not be able to get on their own. Each business in the neighborhood is an asset and the city knows it is mutually beneficial to help, together with the business owners, to keep the area safe and clean. Get to know the people in the neighborhood-they will help take care of you.
Tags: advice, brick and mortar stores, business location, larry Slusser, Starting a Business, startups, tips
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