Avoiding Fraud

18 May

For every hard working Joe out there, there is a non-working John that wants to take advantage, scam, and defraud Joe worker. Unfortunate as it may be, it is one of the oldest ways to make a few ends meet.

There are actually plenty of people interested in scamming you out of your entire life’s savings, your retirement, your newly obtained business loan, and any other source of income or excess cash you may have lying around. So what do you do to work around this?

The most important thing you can do is think clearly about the choices you will make with your business’s cash flow. Really? Thinking is your best weapon? Ummmm, yes, it is actually. I know there are plenty of people out there who do not think about anything but what the next generation iPad will do for them, but really, thinking is the best weapon you have against fraud.

The old saying of ‘if it’s too good to be true, it probably is,’ is correct. If you have a vendor who is quoting you prices for less than half of what another vendor is charging for the very same items, chances are good there’s something missing. Possibly they don’t include delivery charges, or their products are actually knock offs of the brand you’ve requested. Maybe they are uninsured, and if there is a disaster and your shipment is lost, you’ll be stuck holding the bag. There are any number of things that can factor into the prices a vendor is charging you, but the point is that you have think about what they are offering. This is never more relevant than when you are dealing with people overseas. Unfortunately, because of international trade regulations, and the difficulty in enforcing them, if someone overseas is scamming you, you’ll have little to no affordable recourse to recoup your losses. So you have to think about your dealings very carefully.

In addition to just thinking about something, and asking yourself if the deal seems too good to be true, research is extremely important. If references are required in order to obtain a new employee, why would they not be required within new business deals? If you’ve never heard of someone, ask around about them. Google their name or business name. The Internet is a massive record keeper. Google wants to be the biggest search engine available to you, so they rarely clean their file cabinets out and dump old content. Google is the ultimately pack rat, so if you need to find something, chances are good Google has it on file. You could come across that one piece of information from a decade ago that tells you this person is not the right person to do business with. Granted, that information could be correct or way off base, or you may be able to decide that if it is too dated, it just not relevant and therefore not a good example of your vendor’s character. Regardless of how you process the information, you have to at least find it first. If you’ll research the new iPad and it’s features, and reviews, you have to do the same for your business dealings.

So you’ve put plenty of thought into the deal, and you’ve researched your vendor, and your ready to move forward. Who is to stop the vendor from running away with your cash at that point? Almost no one. And keep in mind that if you do business with someone who is headquartered outside of your area, if there any problems with the deal, you’ll have to go to their area to file suit against them. The best way to handle at least the initial transaction is through a secure service for escrow. Yes, just like your mortgage uses and escrow account, your business can too. The services are not free, of course, but it is a secure way to pay for your product and without running the risk of never getting your product, or losing your money all together. Never ever provide your credit card data to any new vendor of the phone, email, fax etc if you are unsure about their trustworthiness. You’ll be setting yourself up for disaster in that case. You never know what some disgruntled employee may feel like doing with your credit card data.

Once you’ve completed one or two deals with a new vendor, they aren’t new anymore, and you should have a certain level of confidence that they will provide the product or service they say they will, and your financial data is safe with them. Being scammed happens to people and business owners all the time. It doesn’t mean it is unavoidable though. With some thought, some research, and precautions, you can easily ensure that your business will not be taken advantage of, and you’ll create strong vendor relations for the long term.

Taxes

26 Mar

Every business will have to file taxes every year that they are in business. Be aware, business taxes are not the same as your personal taxes. Depending on how your business is organized and filed, will determine what kind of filing you’ll need to complete for your business taxes. If you opt to do your own business taxes, this is where you will be glad that you invested in an accounting software or service. 

The most common form of business tax filings for small businesses would the sole proprietor’s schedule C. This is just a simple form that is filed right along with your 1040. It does have all of the pertinent information, credits, and expenses, so it is all inclusive. This form is also able to be filed with the most popular tax software programs, so it is actually fairly convenient. With the guided ‘interviews’ that most of the programs use, any special additional forms, credits, etc will be automatically pulled into the form for you. Once completed, this form is added to your 1040 form and is also able to be e-filed.

Most tax software programs have services that will allow corporations to also file electronically, however it is usually bit higher priced to do so. Tax filing for corporations are far more complicated than filing as a sole proprietor, however the credits that are included for many corporation types and income levels are also much higher. The benefits of the credits can often offset the actual tax liability. If you have been listening to the presidential campaigns of the last few decades, you are aware of the conflict for corporate taxes. Many high income corporations actually pay far less in taxes than the small businesses. This of course is just wrong on all levels seeing as how the small businesses are the ones that are actually the majority of businesses within the country. I for one, will never understand the logic of
higher income, lower taxes.

In any event, more than likely for your business taxes, you will utilize a program or service to assist you in filing your taxes. The benefit to this is that you don’t need to know the name of every single form that is required to complete your taxes, but you do at least need to know what things you can write off as expenses and how that benefits you. In short, a write off will reduce the amount of income that the government (state or federal) is able to tax you on. A write off is any item, product, or service that you purchased in order to benefit your business. That tax software can even be written off in some cases. Your final taxable income is based on your full income, less the taxes you may have paid throughout the year, less the costs you incurred to do business, and less any credits you may qualify for. That can be a huge difference, so you want to make sure that your accountant has kept up with your expenses and transactions. You certainly do not want to leave off anything, as every penny that comes into your business is taxable, just as it is if it were your salary on your personal taxes. 

The biggest difference between personal taxes and business taxes lies in what you can write off. You can’t write off dinner with friends on your personal taxes. But you can write that dinner off if you were actually discussing your business. So if you treat your 5 friends, who also happen to be business contacts, colleagues, vendors, etc to dinner and drinks, and your conversations, and/or reason for meeting is to discuss anything related to your business, that is a business expense. Meals and entertainment are limited in what you can actually write off, but again every little bit helps to reduce your tax liability. And of course it isn’t just about your tax liability, but about making sure you are only taxed on your pure profits.

It is important to understand what your filing status is, to keep track of all of your income through the year, and of course your expenses. If you have a good program or accountant, and you have these figures, your taxes will not be as painful as they may seem to be. Your bill could be a other issue, but at least filing them won’t be the hard part.

*Be sure to discuss any tax questions you may have with your accountant. This article intended for informational purposes only. It is not intended to be an instructional guide, or to give tax advice on how to file, or what to file.

 

Carmella Martinez

 

LowKeyMedia Marketing Team

Delegating Workflows

20 Mar

So who is supposed to do what here? Who’s responsible for this?

Do you find yourself asking these questions a lot and getting, “I don’t know” answers? If yes, then you need to reassess the roles of your employees, and then make sure they understand those roles as well. Paying someone to do nothing or to not do their job properly doesn’t really help you, now does it? No.

So if you find that you have a need for extra people to help your business run smoothly, the first thing you should do, as the business owner, is to determine what you want those people to do. It doesn’t make a lot of sense to hire a lot of people to do a few things that one person can do. It also doesn’t make sense to hire one person to do the jobs that many people should be doing. You need to understand the complexity of each task you’ve assigned. To do that, you need to start with a description of what you need. Not who should do it, but what you need done. You start your employee search there.

You may find that you can have one person do a lot of what you need. For example, if you need an office helper, more than likely that person will be able to do many types of office tasks. Make a list of all of the things you want done to keep your business running smoothly. Group those tasks together by type. If you need your phones answered, and you need more new customers, you’d probably need to hire someone to do receptionist work and someone else to do sales. While either of those people could do both, it best to separate the job responsibilities into categories and hire accordingly. Once you have determined what you need done and the categories those tasks would fall into (reception vs. sales, etc), you’ll need to further define what those positions entail. Be detailed in what you want done, how you want it done, and what department is responsible for it. Don’t leave out details, as most people want to be given specifics about what their job is. Even if you have hired a person to make those delegations for you, you still need to be detailed about what you want from your business. If you want to know what accounts, projects, products, etc are being worked on daily, then tell your employees that. They don’t know unless you tell them! If you are vague in your workflow delegations, it leaves people open for confusion, and then of course that just means nothing will get done properly or on time. That’s when you start asking those questions about who’s responsible for this. Nothing good ever really comes from that question!

Alternatively, if you have delegated your workflows, and have provided your employees with the details of what they are supposed to be doing, and they aren’t doing it, then you have an even bigger issue. It is important to allow your people the chance to gain further understanding of what you want. It is possible they interpreted your instructions in a different manor from what you had intended. You have to fix that! If you have confused employees, again that will just lead to a lack of productivity.

There are a lot of things to know as a small business owner. A lot of hats to wear, and fires to put out. That is why you’ll probably find that you need some assistance at some point. Just remember that your employees are people. Some are smart, some not so much. Some are really good at reception and computer work, some not so much. Understand their strengths and weaknesses and delegate as needed. If you allow people to do work they enjoy and are good at, and you’ve been specific about what you expect, you should find that eventually you won’t even have to play watch dog. You can just sit back, read your reports, and know that everyone knows what they are supposed to be doing. Now, let’s just hope they are actually doing it!

Carmella Martinez

LowKeyMedia Marketing Team

Social Networking

13 Mar

The social network has actually been around since the beginning of man. Since we are all such deeply social creatures, we all seem to have a primal need to know what everyone else is up to. Busy bodies, we are, really. With the internet taking over a huge part of our communication and our business relationships, it goes without saying that our need for news of any kind would evolve into a whole new networking method.

Since man is at heart a raving gossip hound, businesses of all sorts can take advantage of this quality. Using our own need for information, small business owners can strategically market through the new found fame of social networks online to gain new website traffic, new followers, more shoppers, more subscribers, etc etc.

When newspapers first became popular, there was a section in every paper that outlined what people in town where up to; ‘so and so is out of town this weekend visiting her in-laws.’ Such a nice thing to post publicly in the paper – Just in case you were wondering, so and so’s house will be unprotected this weekend, feel free to pilfer! Of course the local gossip columns blossomed into gossip sections, which eventually gave way to whole magazines devoted to the local drama, and now we have the internet! Full of sites solely dedicated to drama and shocking moments. If ever you are feeling lousy, just take a stroll through any number of galleries about celebrity mishaps, you’ll feel better in a quick minute! ‘Stars, they’re just like us…’

So how does this help the small businesses? Those same sites that we use to pay attention to other people’s business also allow businesses to start their own profiles. Your customers can connect with you through your profile. Of course we all know that we really aren’t connecting with the business personally, but because we all want to feel like we matter, and that what we think is relevant, it makes us feel a little special. What is great about it for you as the small business owner, is that you can tell your customers what is going on with your business directly. Sure you have a website, but with your business profile, you can actually see how may of your followers are actually subscribed to your updates, and even who is talking about your business.

In addition to the updates about the new things with your business, you can also post ads on these social sites that will lead back to your business profile. That gives people who don’t even know anything about to you the exposure to your business that they wouldn’t necessarily have just poking around online. While advertisements on general websites are relevant only to the content on the site, ads that are on the social sites are actually based on the user’s overall preferences, as well as their friends’ preferences. The idea being that if your friend likes a certain kind of product you will too. So even though a user may have never have heard of your business, they could see an ad on their social profile because their friend likes your business.

A new popular method of gaining new subscribers to a business’s social profile is with coupons for ‘fans.’ A site may advertise a special coupon only to their fans. So to get the coupon, the user must log in to their page, and become a fan. The page will then allow them to print the coupon they were interested in. Being that the social sites use the users preferences and the preferences of their friends to suggest ads, adding just one new fan could potentially add up to thousands of new people that are seeing the ads. You’ll need to expect a lot of use with that coupon! As you can see, just like a family tree, the potential to reach people on the social sites through engaging posts, enticing offers, and effective ads, is seemingly limitless. Gamble on the social networks? At least try it out. You can set a budget, and if it does not gain you new fans, then you cancel your advertising account, and try something else. If it works, then you thank the need for gossip for creating a social empire!

Carmella Martinez

LowKeyMedia Marketing Team

Accounting

7 Mar

Ah accounting. The art of balancing your checkbook and budgets. For most of us, we learned basic math skills beginning in kindergarten and learned what a checkbook was somewhere around 5th or 6th grade. Just think about that for a moment. By the time you reach the age of 30, you’ve known the basic point of how to balance your finances for roughly 25 years. If you‘re not so good at this, it kind of makes you wonder why, doesn‘t it? Well some of us just don’t have brains that wrap easily around the ins and outs of basic accounting. Never fear! There are tons of ways to get around your aversion to those pesky charts of accounts.

Luckily, in this uber convenient age of technology, we have tons of options for keeping everything straight. From web based programs to desktop programs, to certified accounting professionals, there is almost no excuse for not knowing what is going on with your money. Unfortunately, few of the solutions are free, so you’ll first need to make sure you have enough money to pay for a software program or service. I know, seems like a catch 22, but dedicate just a few moments of your time to figuring your operating balance, and you’ll be glad you did.

Once you know how much money you have to work with, get online and do some research. You’ll be shocked at how many programs, services, and professionals out there are available for your accounting needs. One of the best programs is Quickbooks. The name says it well. It is designed for those of us who can’t keep it straight. Either the desktop version or the online version will work well for most businesses. The benefit to the online version is that you can have someone else do it for you from a location other than your office. How great is that?! You can pay for a service to keep your money straight, and then pay someone else to do it for you! In that example, all you really need to know is how much money you have to start with, how much the service costs, and how much the service provider costs. Surely that is easy enough to figure out.

The benefit to a software program for your accounting needs is that you don’t have to deal with paper and pens anymore. And most services even will allow you to auto download your transactions from your bank, so you won’t even have to enter those. Just match up the transactions with the proper account, and voila! You’ve effectively balanced your books. Don’t panic if you aren’t sure what account to post something to. The programs usually come with a list of pre-populated categories, like Food & Entertainment, Utilities, Rent, etc. Simple enough to figure out what category your charges go into, right? Then at the end of the year, you’ll make a few clicks, change a few dates and you can get a snapshot of your income and expenses for the whole year. Just remember to breathe when you see how much you’ve spent!

Accounting doesn’t have to be scary, or nerve racking, or dreaded at all. While it may hurt to see all the things you’ve been spending money on, it can also assist you in determining what not you spend your money on anymore. All those magazine subscriptions for your waiting room? Probably not totally necessary. We all seem to have a smart device of some sort these days. If your customers are desperate enough to see the news while waiting, they’ll jump on their device and get informed; nothing like self help!

Take an afternoon, and just figure out the best method for your business to keep all the balances in check. Then when you’ve finished and you’re effectively crushed over the amount you’ve spent on those magazine subscriptions, call the companies to cancel them! Take that cash and use it to pay for the accounting software.

Carmella Martinez

LowkeyMedia Marketing Team

Your Customers Talk!

3 Mar

Yes, they do. They certainly do! They tell everyone they know every relevant thing that has happened in their lives and they listen to each other’s relevant happenings. This trend is just what makes us humans. We are interwoven in each other’s business, whether we want to be or not. Take a look at any one of the many gossip columns or 24 hour news channels. They are chalk full of random happenings of people all over the world. This can be bliss to some, and utter torture for others. The good part is that you can utilize your customer’s need for gossiping, and spreading the word to gain new customers for your business!

We’ve talked about how to listen to your customers, and that goes hand in hand with what your customers are saying about you. Their friends are listening, which means you should be too. It is just as important to listen to your customer’s issues – both good and bad – as it is to make them pleased with your product or service. Since we all know that Facebook can be blessing to your advertising with its wide reaching social networking, you should also know that it can be a crushing blow if used by an unhappy customer. The wide reach of the social network is this generation’s average person endorsement. You have to value word of mouth just as much if not more than your bottom line. 

The biggest corporations in the world have whole departments dedicated to figuring out what people are saying about their products and services. Surely, this is not a new concept, but rather an often overlooked one. These corporations however are not just listening, but encouraging people to talk. They will even pay research groups to gather up some qualifying average people to just talk about a product or service for a while. What they like, what they don’t like, what would like to see the product do, etc. And they pay large sums of cash for this information. Market research through focus groups is a fantastic way to find out what people really think about what your are selling.

In addition to the focus groups, many of the big companies will also use product test panels. They will find a group of qualifying people, give them a new product, or one that is needing improvements, ask those people to use the product for a while, and then provide feedback. Again, they pay big for this kind of service. While it is expensive to do, they are getting direct feedback from their current, past, or would be customers about their product. They take the information they’ve obtained and often will make the changes recommended by the majority. This of course is done to ensure that their product is more appealing to a larger audience.

A twist to the focus group and a product test panel is a new service being offered that combines the two, along with social networking. Again, very expensive, but very worth it – maybe even more so than just the focus groups or test panels alone. These kinds of groups are allowing people to actually try the product, tell the company what they think about it, and then encouraging them to tell their friends. Usually the tester will be provided with a freebie of the product, plus coupons for future purchases, which ideally are handed out to friends.

For service based industries, such as retail establishments, many businesses ask their customers to go online and fill out a survey about their recent visit and then either be provided with a coupon for doing so, or a chance to win a gift card, or both. Again, a bit expensive, as the company would have to pay for each response received, but well worth it to see how your business was doing at a specific day and time. 

While most small business owner’s can’t afford such extravagant methods of opinion gathering, you can certainly utilize the basic concepts in your own business. Give your customers free samples, and ask for their feedback. Provide them with coupons, and ask them to share the coupons with their friends. Of course if you wow them, they’ll not only want to come back, they’ll tell their friends why they should patronize your business too. Never underestimate the power of the incentive, or the power of your customer’s need to spread the word. They’ll do it on their own, so it might as well be good chatter!

Anna Lopez
LowkeyMedia Marketing Team

Business Insurance

27 Feb

On top of all of the other things that you need to consider when you begin your business, is whether or not you need to have business insurance. Most all businesses have some risk of liability, and because of this, business insurance should be a priority. As with everything else in your business, insurance for your business is filled with differences, as well as choices, and of course cost.

So what is business insurance? It is your safety net, of sorts. Within the general term of business insurance, there are several kinds of insurance that you would need to consider. The first being Liability insurance, the second being Worker’s Comp insurance, and possibly business auto insurance, errors & omissions/professional liability, and umbrella insurance. Each of these types of policies will cover your business’s liability for different liabilities within your field.

The most common type of insurance is Liability insurance. Often, this type of coverage is written on a policy that also covers any business personal property, such as your computer, and office equipment. The purpose of liability insurance is to cover any losses you may have that damage a person or their property while you are conducting your daily business operations. An example of this would be if you own a small grocery store, and a customer slips and falls on a wet floor. Your liability insurance would cover their medial bills, any physical therapy they may require, and possibly even additional payments for emotional stress. Of course, if you have no contact with your customers, then you may not have a need for this type of insurance. You’d need to speak with a licensed, experienced insurance agent in your area to determine if you need this kind of insurance.

Another important type of insurance is worker’s compensation, which covers any injuries your employees incur while working for you. If you employ a cashier in your grocery store, and she slips and falls on that same wet floor, this policy will cover her medical bills, as well as pay a portion of her income for the time that she is out of work on work related injuries. It is even possible that you would need to have worker’s compensation insurance, even if you don’t employ anyone. Each state has their own regulations, and many enforce the requirement for worker’s compensation insurance on any business that has three or more people working within the company, including any officers, owners, members, etc. Again, you’d need to speak with an agent to determine if this is required for your business.

Other types of insurance include business auto insurance, which is insuring any vehicles you use specifically for your business – such as a truck you use for grocery delivery to your customers. Professional Liability/Errors & Omissions insurance is designed to cover any mistakes you make during within your work. For example, if you are a lawyer and neglect to disclose back taxes owed on a property, your professional liability insurance will cover any costs you incur due to the resulting legal actions. Umbrella insurance for businesses is the same as it is for personal insurance. It is simply an extra layer of liability coverage that will kick into action if your other policies are exhausted. If your legal bills from forgetting to disclose the back taxes exceed your basic policy limit, your umbrella policy would cover the excess.

There are many different types of policies, as you can see, and even more options within each policy, and each company that can greatly benefit your business in the event of a loss. Just like you would insure your life, or your health, you need to insure your business. The idea of insurance is to put you back in the same place you were before the loss occurred. Even if you don’t like paying the premiums, you’ll be glad you did if you ever have to file a claim. So call your agent today!

Carmella Martinez

LowKeyMedia Marketing Team

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