Recently in Running Your Business Category

June 7, 2011

Business in the Cloud

The talk of clouds in business is everywhere--mostly recently with the unveiling of iClouds for iTunes music storage. What is it? Simply put, with cloud computing, you pay to access an Internet-based service which hosts the software, hardware, and other resources you need to run your business. This eliminates the need for you to run software or other applications on your own computers; the cloud network handles everything. You use your own computers simply to access the system, and all your files and information are stored and managed and accessible through the cloud network.

The President and CEO of The Small Business Authority, Barry Sloane predicts that cloud computing will be the next big trend in the business community. "There is no doubt that business owners will embrace the cloud concept and over time gravitate towards its massive benefits. . . . Business owners will need to understand what the cloud is and what it can do for their businesses in the areas of cost control, data security, data protection, accessibility, efficiency and productivity to facilitate a smooth running technological platform for their business."

There is certainly a lot of cost saving and work efficiency potential for small businesses with cloud computing. Users would have access to their files anytime and from anywhere and it features shared usability. It is also designed to be scalable so that businesses can purchase only what they need, at the scale they need, and then the services can grow as the business and its needs grow. Fees for these services are usually charged on a month-to-month or annual basis.
May 10, 2011

Secrets of Chinese Business Owners' Success

Unless you've been living in a cave for the past few months, you've probably heard of Amy Chua's infamous book, Battle Hymn of the Tiger Mother. After reading the book, small business owner and mother Barbara Taylor wondered if there were parallels between how the Chinese raise their children and how they run their businesses. For her article, Battle Hymn of the Small-Business Tiger Mother, Taylor talked to a number of Chinese business owners in the U.S. What did she learn? In essence, successful Chinese businesses are steered by two principles. The first, avoid debt and manage expenses. Second, expect and demand excellence.

More detail is offered in the following pithy five-point motto:
  1. Every penny matters.
  2. Everyone has to earn his or her keep and add value.
  3. Appreciation of the asset is the driver.
  4. No excuses for failure.
  5. Set goals high and achieve them.
Print those five points out and stick them on your refrigerator. Now go forth and prosper!
May 4, 2011

Woman-owned Businesses: Uncle Sam Wants You

If your small business is woman-owned, the federal government wants to do business with you. After ten years and countless revisions, the U.S. Small Business Administration recently adopted a final rule creating the Women-Owned Small Business Program, offering special incentives for women-owned companies to participate in the $500 billion federal marketplace. Later this year, federal agencies are expected to begin setting aside up to 5% of procurement dollars--more than $20 billion annually--exclusively for competition among woman-owned small businesses.

To qualify as a woman-owned small business for federal contracting purposes, your company must meet three primary criteria:

  1. It must be "small" under the North American Industrial Classification System ("NAICS") code applicable to the procurement. For more on calculating your company's size, see Nolo's article Federal Small Business Contract Eligibility: Is Your Business 'Small'?
  2. It must be at least 51% unconditionally "owned" by one or more women who are U.S. citizens. If, for instance, ownership of a company is split 50/50 between a husband and wife, the company will not qualify.
  3. One or more women who are U.S. citizens must "control" the company's management and daily business operations. To satisfy this requirement, a woman must hold the company's highest officer position, have sufficient experience to effectively manage the company, and work for the company full-time during normal working hours of companies in the same line of work.
If you decide to participate in the Women-Owned Small Business Program, you should carefully review and, if necessary, amend your business's governing documents (such as bylaws, operating agreements, and shareholders' agreements) to ensure that women unconditionally own and control the company. Supermajority voting requirements, for instance, might cause your business to be ineligible.

Despite the red tape, the Women-Owned Small Business program promises to provide substantial contracting benefits to woman-owned companies in the federal marketplace. If your company is woman-owned, now might be a good time to think about adding Uncle Sam to your customer list.

By: Guest blogger Steven Koprince, an attorney with PilieroMazza PLLC in Washington D.C. Mr. Koprince's practice emphasizes government contracts and small business law.
May 3, 2011

7th Annual SF Small Business Week

The 7th annual San Francisco Small Business Week is scheduled for May 16th through 21st. It is part of a national celebration of small businesses and entrepreneurs. The event is free and consists of a series of educational workshops, seminars, and networking opportunities designed to educate and connect the business community.

Most of the educational offerings will take place at the downtown campus of SF State University at the Westfield Center on Market Street between 4th & 5th Streets. There are dozens of seminars and workshops including Marketing & PR: Strategies, Plans, Tactics; Do You Have an Effective Website for Your Business? and Hiring Smart - The Right People, in the Right Seats, Doing the Right Things. For more information, go to the SF Small Business website at www.sfsmallbusinessweek.com.

May 2, 2011

Managing Your Social Media Presence on the Internet

Small businesses used to market primarily through print ads in newspapers, radio, and the spoken word of mouth. No longer. Social media and the Internet have taken over as the most powerful, far reaching, and accessible marketing tools for small businesses. The most popular social media sites include Twitter, LinkedIn, and Facebook--but there are many other ways to market and promote your business online.

With the ability to reach out so widely and effectively online comes the burden of having to monitor and manage this open communication about your business. To help with this, a new crop of social media management technologies has emerged. These technologies troll the Internet and sort, consolidate, streamline, and store information about your business found on social media sites. Not only can this save precious time, it can be crucial for helping to monitor and manage your online branding and marketing.

People are also starting to appreciate the possible legal significance of sorting and saving this information.  As stated in a recent New York Times article by Tanzina Vega, "Someone may get sued for the content of their social media or the information in the social media may be relevant to the suit . . . If you haven't preserved it, you've lost it."


April 27, 2011

"Disability" Under ADA to Cover More Workers

Does your small business employ individuals who are disabled within the meaning of the Americans with Disabilities Act? The answer is more likely to be "yes" today than it was earlier this year, thanks to the U.S. Equal Employment Opportunity Commission's recent adoption of regulations implementing the ADA Amendments Act of 2008.

The ADA defines "disability" as a "physical or mental impairment that substantially limits a major life activity." The new regulations do not change the definition itself, but make it clear that the government will interpret the ADA more broadly than in the past.

For instance, the new regulations provide that, in almost every case, disabled status is to be evaluated without consideration of ameliorative measures, such as medication, even if the employee can function without limitations with appropriate medication or other mitigating measures. The only exception is that an employee is not considered disabled on the basis of a vision impairment, so long as the impairment can be corrected with ordinary eyeglasses or contact lenses.

Similarly, the new regulations state that an impairment that is episodic or in remission nevertheless qualifies as a disability if it would substantially limit a major life activity when active. For example, an employee with lung cancer might be considered disabled even if the cancer has been in remission for years.

In addition, the EEOC has taken the guesswork out of determining whether certain employees are disabled. The amendments provide that in most cases, employees with the following conditions are covered by the ADA: deafness, blindness, intellectual disabilities, partially or completely missing limbs, mobility impairments requiring the use of a wheelchair, autism, diabetes, epilepsy, HIV, multiple sclerosis, muscular dystrophy, major depressive disorder, bipolar disorder, post-traumatic stress disorder, obsessive compulsive disorder, and schizophrenia.

If your small business has 15 or more employees, it is covered by the ADA. You should take note of the new regulations and consider training your officers and managers to ensure that all of the company's decision-makers know that your employees might be considered disabled under the ADA, even if the disability is not immediately obvious.

By: Guest blogger Steven Koprince, an attorney with PilieroMazza PLLC in Washington D.C. Mr. Koprince's practice emphasizes government contracts and small business law.

April 12, 2011

Calling all Women Entrepreneurs

If you're an outstanding female entrepreneur, Ernst & Young is looking for you. The consulting firm is holding its fourth annual Entrepreneurial Winning Women contest and is seeking ten high-potential female business owners to participate in a customized executive leadership program. Candidates must be female founders of privately held U.S. companies that are less than ten years old. Their businesses must also have reported at least $1 million in sales for each of the last two fiscal years.

The application can be found here. The deadline to enter or nominate an outstanding woman entrepreneur is June 30, 2011.
March 31, 2011

What to do When a Client Won't Pay

The problem of clients refusing to pay their bills on time--or ever--is one that plagues all businesses. And the problem has only gotten worse with the downturn in the economy. When clients don't pay their bills--making it difficult for you to pay your own bills--what is a small business like yours to do?

One option for cash-strapped businesses has always been factoring, or selling outstanding invoices to a third-party investor. But there are downsides. Invoices are often sold for a sharp discount. And the collections process is taken over by the purchaser of the invoice, who most likely doesn't care about retaining good customer relations with your clients.

A company called The Receivables Exchange now offers a twist to the age-old process of factoring, largely remedying those downsides. According to the article "How Small Businesses Can Beat Deadbeats," by Dyan Machan in SmartMoney Magazine, The Receivables Exchange works as follows: You list your unpaid invoices on the exchange, and financial institutions bid on those invoices. The winner of the bid sends you a cash advance (usually 80% to 90% of the value of the invoice, although businesses new to the exchange may receive much less) in return for a monthly payment of one to two percent. You get an immediate infusion of cash--allowing you to pay your bills and keep your business afloat--and the bidder gets what amounts to an 18% annual return on its investment. Businesses who have listed on The Receivables Exchange say they raise more cash through the exchange than with traditional factors, and they retain control over customer contact.

Unlike traditional factoring, the risk of the invoice never getting paid stays with you, the small business owner. You still need to go through the collections process with your client. And if your client never pays up, you'd be on the hook to repay your bidder. But still, The Receivables Exchange can be an attractive option for some small businesses--particularly if they're at risk of becoming deadbeat clients themselves.

April 19, 2010

What If You Don't Have Proper Tax Records?

Because you're human, you may not have kept all the records required to back up your tax deductions. Don't despair, all is not lost--you may be able to fall back on the so-called Cohan rule. This rule (named after the Broadway entertainer George M. Cohan involved in a tax case in the 1930s) is the taxpayer's best friend.

The Cohan rule recognizes that all business people must spend at least some money to stay in business, and so must have had at least some deductible expenses, even if they don't have adequate records to back them up. If you're audited and lack adequate records for a claimed deduction, the IRS can use the Cohan rule to make an estimate of how much you must have spent, and allow you to deduct that amount. However, you must provide at least some credible evidence on which to base this estimate, such as receipts, canceled checks, notes in your appointment book, or other records. Moreover, the IRS will only allow you to deduct the least amount you must have spent, based on the records you provide. In addition, the Cohan rule cannot be used for travel, meal, entertainment, or gift expenses; or for listed property.

If an auditor claims you lack sufficient records to back up a deduction, you should always bring up the Cohan rule and argue that you should still get the deduction based on the records you do have. At best, you'll probably get only part of your claimed deductions. If the IRS auditor disallows your deductions entirely or doesn't give you as much as you think you deserve, you can appeal in court and bring up the Cohan rule again there. You might have more success with a judge. However, you can't compel an IRS auditor or a court to apply the Cohan rule in your favor. Whether to apply the rule and how large a deduction to give you, is within their discretion.

For more information, see Deduct It! Lower Your Small Business Taxes, by Stephen Fishman.

April 14, 2010

How Long Should You Keep Records?

You should keep your business and tax records for as long as the IRS has to audit you after you file your returns for the year. These statutes of limitation range from three years to forever. To be on the safe side, keep your tax returns indefinitely. They don't take up much space, so this is not a big hardship. Your supporting documents probably take up more space. You should keep these for at least six years after you file your return. Keeping your records this long ensures that you'll have them available if the IRS decides to audit you.You might also need them for other purposes--for example, to get a loan, mortgage, or insurance. Keep your long-term asset records for three years after the depreciable life of the asset ends. For example, keep records for five-year property (such as computers) for eight years. You should keep your ledger sheets for as long as you're in business because a potential buyer of your business might want to see them. For more information, Deduct It! Lower Your Small Business Taxes, by Stephen Fishman.