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Learn Valuable Skills Online to Better Serve Your Business

If you run a small business, you’re probably always looking for ways to improve quality and boost the bottom line. The good news is that you can learn many valuable skills online, often for free, that will help you achieve your business goals. These skills can help you improve your marketing and cut expenses for tasks that you now farm out to part-timers or consultants. The following is our list of skills for you to consider learning.

Marketing-Related Skills

  1. Copywriting:
    Does your website content show you off at your best? Do you feel your marketing emails are effective? If eigther answer is no, part of the problem might be weak copywriting. Poor grammar, inappropriate word choices, and boring copy self-sabotage your marketing efforts. While you can hire a good freelance writer at a reasonable rate, you might also want to improve your writing skills and take on some of the work yourself. You can improve your copywriting skills for free at websites like Copyblogger.
  2. Search Engine Optimization:
    SEO is a way to improve the results of online keyword searches. It involves several technical tasks as well as analyzing data from search engines like Google. Your goal is to get your company listed on Page 1 of search results for your chosen keywords (i.e., the terms a searcher might enter). While excellent, authoritative copy is a must, you can also boost your results by making it easier for the search engines to understand your website content. SEO does this, while data analytics shows how the public is responding. Check out the free online courses available from Google.
  3. Social Media:
    Nowadays, it’s almost mandatory to maintain a social media presence in order to compete effectively. Being a social media guru requires time, effort and skill. The payoff is improved buzz about your product or service, which can lead to higher sales. You can learn the ins and outs of social media at sites like Lynda.com. While some charge money, they often have a free trial period to test them out.
  4. Photography/Graphic Design:
    Beyond great content, your website and other marketing collateral should be visually compelling. Instead of buying the same old stock photos that everyone else uses, you can decorate your website with your own photographs and graphic designs. It could very well be worth your while to learn Photoshop, which will allow you to use your graphic skills to improve the look of your websites and other materials. Many sources of Photoshop training are available for free or a modest membership fee, such as Kelby One.

Other Skills

  1. Excel:
    Spreadsheets are almost mandatory for recording, tracking and presenting data. With them, you can do budgeting, track inventory, and a thousand other tasks. Excel is the most popular spreadsheet program, and you can get free training from Microsoft.
  2. Bookkeeping:
    You might be surprised how today’s powerful yet friendly bookkeeping software packages make bookkeeping an easy task that doesn’t require an accounting degree. Products like QuickBooks can handle your business bookkeeping as your business grows. You can get free training and certification from Intuit, the maker of QuickBooks, or from other free sources.
  3. Tax preparation:
    If your taxes aren’t too complicated, you can file them yourself using one of several tax preparation packages. For example, you can visit the Intuit website for free TurboTax training.
  4. Finance:
    If you have big ambitions in the business world, you just might want to become skilled at finance and financial decision-making. Many colleges and other institutions offer online courses that lead to certificates or degrees in finance. Also, check out the many finance-related articles offered at IOU Financial.

Conclusion

We’ve just scratched the surface about what you can do to beef up your business skills via free and paid online resources. Think about what would work best for your business and then get moving. You can bet your competitors are!

When a Loan Is the Right Move for Your Business

Every business needs adequate funding to survive and grow. Ideally, your operations provide enough cash flow to handle all your funding needs. But for many a small business, cash flow isn’t always enough to satisfy the need for working capital. That’s when it’s time to consider a business loan. Let’s look at a few scenarios in which a business loan is the prudent decision.

Purchasing Equipment

Your business may require expensive or specialized equipment. In addition, you may already own equipment that no longer provides the performance you require. If you feel you are losing sales or profit margin because you lack the right equipment, you owe your business the opportunity to compete using the most appropriate gear. Sometimes, equipment manufacturers or commercial suppliers will offer financing, sometimes not. A business loan used to finance much-needed equipment is a terrific idea.

Expansion

Your product or service is selling like hotcakes, and you know you could grow the business by expanding operations and/or enlarging your selling floor. If you need more or better space, it’s going to cost money. For example, you might benefit by making leasehold improvements to your brick-and-mortar store. Or you might want to open additional stores or move from your current location to something larger and more upscale. You are looking at a number of one-time costs, which is the type of challenge that a business loan can solve. The extra profits you earn through expansion will help you accelerate your loan repayment.

Unexpected Opportunities

It really hurts when a rare opportunity comes your way but you don’t have the capital to take advantage of it. For example, one of your suppliers might have cash flow problems that causes it to offer you inventory at a sharply marked-down price. You need money to purchase the inventory, and perhaps to pay for additional storage space. You know that this will pay off handsomely, so you arrange a business loan to grab the deal before someone else gets it. That’s a smart move.

Fresh Talent

Perhaps you run the type of business where the caliber of your top employees is critical to your success. If you’ve been the typical owner, you’ve had to wear many hats to launch your business and keep it running. You and your staff are overworked, and you can’t afford anyone to burn out, including yourself. In other words, you need to recruit some fresh talent because you know it will increase your revenues and/or reduce your expenses. A business loan can help pay for incentives to hire the right employees. Remember, if you don’t hire the person, your competitor might.

Acquisitions

If you’ve been successful running your business, it’s possible you’ve taken some market share away from the competition. Or perhaps you’ve been eyeing an operating business that complements your own. In many circumstances, a business merger/acquisition is the right way to go. It makes sense to fund an acquisition with debt if it will lead to increased market penetration, greater geographic scope, obtaining key assets, or expanding your business to related markets. You’ll need funding not only to buy the target company, but also to make changes to your own operations to accommodate your revised environment. You may need to increase your marketing budget or add management talent. A business loan is completely justified under these circumstances.

Seasonality

If your business suffers from uneven cash flows due to seasonality, a business loan can provide cash to help you withstand slow business periods. You should be able to repay your loan once the busy season returns. For example, you might need to furlough some employees, but want to continue to offer them health insurance. Or you want to buy inventory during the slow season because it’s cheapest then. Use a business loan to smooth out the seasonal revenue ebbs and flows that would otherwise threaten your company’s survival.

Conclusion

There are many circumstances that justify a loan for your small business. What is never justified is settling for a slow, overpriced loan. IOU Financial offers fast loans with convenient repayment options that won’t disrupt your operations. Our loan rates are extremely competitive, and we can say yes when banks say no. Contact us today to discuss how we can help you fund your business quickly and efficiently.

7 Ways to Avoid Financial Stress When Running a Business

Running your own business requires careful thought and planning. But even with all that, it’s hard to avoid feeling financially stressed from time to time. Handling the stress productively can help your business succeed. But avoiding it in the first place can also make your job far more enjoyable. Here are seven ways to sidestep financial stress before it appears:

  1. Establish good accounting habits:

    You can avoid much financial stress by knowing your exact financial condition every day and tracking your cash flows against your budget. You should purchase either a good accounting system in-house, subscribe to an online accounting package, or hire an accounting service to do your books. You should stay on top of your accounting entries and generate reports frequently to see where you stand. Using this information, you can respond to upcoming cash crunches early and take actions, such as delayed spending, to reduce the problem.

  2. Invoice promptly:

    Always invoice immediately when providing a service or sending goods. Encourage prompt payment with terms like 2/10 net 30. That is, you’ll grant them a 2% discount if they pay in 10 days, but in any event, the full amount is due in 30 days. After sending out invoices, remember to follow up promptly. You can automate your email and SMS service to help you maintain contact with the people who owe you money.

  3. Adopt money-saving ideas:

    For example, consider renting equipment rather than buying it. This can avoid an enormous outlay of cash that you can instead deploy elsewhere. Also, renting equipment relieves you of repair costs should it break down. You can rent office space, or better yet, work from home if possible. If you have staff, see if they are interested in working remotely, as this too can save you (and them) money. Put on your thinking cap and we’re sure you’ll discover dozens of smart ways to spend less money.

  4. Keep it legal:

    One temptation some business owners succumb to when finances get tough is to cut corners and adopt shady practices. Besides being unethical, it will surely elevate your stress level rather than reduce it, and in the long run can lend you in hot water. Keep it honest, and whether you succeed or fail, you’ll know you did so legitimately.

  5. Use an LLC:

    A limited liability company can reduce stress by protecting your personal assets from your business creditors. If you run a sole proprietorship, a creditor or legal opponent can sue you in court and if they win, seize your home, car and other assets to collect the money due them. An LLC shields you from personal liability for your business debts without having to set up a corporation.

  6. Do your own marketing:

    It’s become much easier to manage our own public relations, thanks to the internet and social media. You have the opportunity to effectively engage with people on a personal basis. Social media accounts are free, and you can do online advertising in any amount that is comfortable. Build up your website with good content to improve your position in web searches. Learn the ways of the SEO masters to help build website traffic, increase prospects and convert them to customers.

  7. Use debt wisely:

    Cash flows in a small business are often uneven. This is compounded by any seasonal aspects to your business. The wise use of debt can mitigate these problems by providing injections of cash when you need it. Moreover, a short-term loan can let you take advantage of opportunities that pop up from time to time. For example, you might have a supplier who offers you a great deal on inventory. A loan could allow you to buy up the extra inventory and then use the increased profits to easily repay the loan.

Conclusion

The key to reducing financial stress is to spend less, earn more, husband your cash and rely on credit when you need it. If you are interested in a low cost, convenient business loan, contact us at IOU Financial — we’d love to hear from you.

6 Practical Tips to Manage Your Small Business Finances

Even experienced business owners can benefit from improving the way they manage their finances. This is especially true if your expertise in your product or service doesn’t extend to managing business finance. It would be a shame not to realize the full potential of your company, so we’ve assembled six practical tips to help you stay on top of your business finances.

1.   Remember to Pay Yourself

Especially in the early days, your desire to make your company a success can cause you to plow every dollar back into the business. While the impulse is admirable, it is also unsustainable. The fact is, you need to ensure that your personal finances are adequately handled so that you aren’t distracted from your business. You are central to your startup and deserve compensation for your efforts. Remember, if for some reason the business fails, you don’t want to be in a position where you never received any pay for all your hard work.

2.   Budget for Growth

After paying yourself, it’s crucial to plan for the growth of your company. For many businesses, if you are not growing, you are dying. So put aside some money to fund growth opportunities and to take advantage of favorable circumstances. Besides increasing the scale of your business, your commitment to growth will have beneficial side effects. For example, it might be easier to recruit quality employees if they see your willingness to invest in the future. Your customers will welcome improved service, and your business will realize additional value.

3.   Optimize Your Billing Strategy

Billing is part of your central accounting package, but unlike some other areas, billing can involve extra operations beyond bookkeeping. We’re talking about dealing with those occasional clients who are slow to pay. These semi-deadbeats put a dent in your cash flow, and if the problem gets out of hand, your business could be jeopardized. You can improve your billing strategy by adopting discounts, such 2/10 net 30. This gives your customers a 2% discount if they pay within 10 days. Another strategy is to sell off your problem accounts to a collection agency. You’ll take a small loss, but you’ll free up your time to concentrate on more important tasks.

4.   Be Ready to Pounce

Ideally, you will have sufficient funds put aside to take advantage of unusually favorable opportunities. For example, one of your wholesalers might offer you a special discount on inventory. Or perhaps a desirable piece of equipment suddenly becomes available at a good price. It would be a shame to lose out on these opportunities simply because your money is tied up elsewhere. Therefore, be ready to borrow money on short-notice from a convenient and fast source, such as IOU Financial. Typically, the profit opportunities from a good deal far outweigh the interest costs of a short-term loan.

5.   Stay on Top of Your Tax Payments

Taxes might be the bane of your existence, but you had better keep current with your tax obligations to avoid disastrous consequences. You will owe income tax, sales tax, maybe even property tax, that must be remitted on time. If you have trouble making quarterly payments, then switch to monthly payments. In this way, taxes become a routine monthly expense, just like all your others.

6.   Monitor Your Books

You should review your books and records at least weekly. This is your best bet for quickly becoming aware of potential problems. Part of monitoring your books is being able to diagnose any weaknesses in several important areas, including liquidity, efficiency and return on investment so you can respond quickly as problems arise.

Conclusion

There are many ways to improve your business finances, but they require vigilance and prompt action. Ensure you have enough resources available, including access to working capital, to help you fund your efforts to grow your business and remove impediments to growth. If you’d like to discuss a strategic loan from IOU Financial, we’d love to hear from you.

4 Things Small Businesses Must Include in Their Budgets

Budgeting is to business as oxygen is to life: Without it, you die. The reason budgeting is vital to the health of a small business is that it is your GPS device for telling you where you are supposed to go and where you are actually heading. You use the budget to track business expenses, cash on hand, revenue needed and received, and other items to know whether your business is succeeding. The differences between your projected and actual budget numbers are your early warning system when things start to go wrong — or your confirmation that you are on the right track. Those differences are also a call to address problems by changing what you are doing.

Bottom line, your budget tells you how much money you have, how much you must earn and how much money you will have to spend. Importantly, it also tells you how much you might need to borrow to plug any cash shortfalls and to finance your growth. To know these things, you should include in your budget the items listed below.

Required Budget Items

Your budget might have dozens of line items, but they can all be organized into four groups of items that every budget must track: Sales, costs, profits and cash flows.

Sales and Other Revenues

These figures are the foundation of your budget. You can’t spend money unless you make it, and you don’t want to overestimate how much you’ll make by donning rose-colored glasses. Your estimates should be conservative but realistic — if they turn out to be too conservative, well, that’s a good thing. On the other hand, bloated estimates could leave your business floating belly up.

Estimating your revenues is hardest if you are just starting up your business, because you don’t have any prior-year data. That’s why you did extensive research by talking to other owners in your same field, undertaking market research, and relying on your knowledge from previous jobs.

Be sure to include, if appropriate, estimates for sales allowances and returns, which you subtract from gross sales to calculate net sales.

Total Costs and Expenses

To make money, you must spend money– those are your costs and expenses. You should categorize your costs by type:

  1. Fixed costs: These are costs that remain the same independent of your sales numbers. They include rent, insurance, property taxes, leased furniture and so forth. While these costs are called fixed, they are not carved in granite. “Fixed” just means that it will take a while (up to a year and maybe longer) to change these costs.
  2. Variable costs: These are costs that vary directly with sales volume. They include the costs of merchandise, raw materials, labor, utilities, freight, inventory and alike.
  3. Semi-variable costs: These are costs that can slowly vary with the volume of business. For instance, they include the costs of salaries, marketing, communications and various elements of overhead.

Profits

Profits, or net income, are revenues minus all expenses. Ultimately, your business won’t succeed unless it can generate profits. Your budget should include estimated  interest and income tax expenses when projecting profits. If your budget tells you that it will take years before you might begin making profits, you should re-evaluate your business model and see if you can operate until the profits begin rolling in.

Projected Cash Flows

Lack of profits can slowly poison your business. Lack of cash can stab it in the heart. Your cash flows revolve around collections and disbursements. The timing of both will reveal whether your cash inflows and outflows align. To some extent, you can try to accelerate collections and delay disbursements when revenues fall short or unexpected expenses arise. Your budget will indicate when you might have to inject more cash into your business, either by contributing additional capital or taking out a loan. If the latter is required, contact us at IOU Financial for a quick working capital loan on easy terms and convenient daily repayments.

Budget Templates

You don’t have to build your budget from scratch. We recommend our Business Budget Smart Sheet, which will help you analyze your spending patterns, streamline areas of overspending, gauge the cash flow impact of fixed and variable costs, and much more.

5 Keys to Qualifying for a Small Business Loan

Are you looking to secure a loan to grow your business? The numbers aren’t exactly encouraging when it comes to approval rates. Alternative lenders approve around 56 percent of small business loans, while traditional banks (who have less experience with non-collateralized loans) only approve around 27 percent.

Despite these somewhat disheartening statistics, there are several steps you can take to strengthen your application and make the best case for your business.

Keep in mind that lenders are essentially risk managers. When they review your application, they’re looking at the amount of risk involved when it comes to your ability to repay the loan. Follow these five steps to minimize the risk your business represents and improve your chances of approval.

Get Cash Flow Under Control

In the eyes of a lender, cash flow is king. The strength (or weakness) of your business’s cash flow is one of the main factors lenders consider when deciding whether or not to approve your loan.

Ideally, lenders are looking for a history of positive cash flow — when more money is coming in than going out. They want to see that you have enough money to cover all of your monthly expenses, with enough left over to comfortably make a hypothetical loan payment. Dips into the negative are a red flag that indicate risk.

Depending on the lender, anywhere from 90 days to 24 months of your cash flow history will end up under a microscope. It pays to get serious about cash flow management now so you can build up a history that lenders are comfortable with. Intuitive online tools can help you get a handle on your cash flow, and simplify analysis with visuals like charts and graphs.

Check Your Credit

Always check both your personal and business credit before you apply for a loan, and fix any errors that may be dragging down your score. Depending on the lender and the type of loan you’re requesting, one or both reports may be pulled as part of the loan approval process.

Your business credit will likely be taken into account if you’re applying for an SBA loan, or a loan from a traditional bank. If your business is new and has yet to build up business credit, your personal credit will often be taken into account, along with that of other majority stakeholders. In lieu of business credit, banks often judge your ability to repay the loan based on your personal score.

Not only will your credit scores affect your chances of getting approved for a loan, they can impact your interest rate should you get approved. If either your business or personal credit score is low (below 600 for personal credit), take steps to improve it before you apply for a loan.

If your credit is less than stellar and you don’t have the luxury of time to improve your score, you still have options. Alternative lenders are generally more lenient when it comes to credit scores, and often weigh cash flow more heavily when making their lending decision.

Know What to Ask For

Asking for either too much or too little can hurt your chances of getting approved for a loan, depending on the type of lender you’re working with.

Need a loan that’s less than $500,000? Traditional banks may not be your best bet. Historically, they tend to lend higher amounts — and have less experience dealing with loans that may not be backed by collateral.

Alternative lenders, on the other hand, are more likely to lend small amounts, and the application process can be much faster and easier. The key, of course, is to show these lenders that you can repay the loan (see number 5). To increase your chances of approval with these lenders, only ask for as much as you can comfortably pay back.

Know Why You’re Asking

Would you let a friend borrow $10,000 without knowing what it’s for? The same goes for lenders. A surprising number of applicants fail to tell lenders exactly how they plan to use the loan. Always define how you’ll put the capital you’re requesting to work to grow your business.

A convincing business plan is a great opportunity to remove any doubts a lender may have about your ability to repay the loan. Laying out a plan for the funds you’re asking for will go a long way to boost a lender’s confidence in your business.

Prove You Can Pay it Back

This common sense step goes right back to your all-important cash flow. When a lender scrutinizes your financials, what they’re really looking at is your ability to repay the loan you’re requesting. If you ask for an amount without showing exactly how you plan to pay it back, your application will likely land in the rejection pile.

Cash flow projections will go a long way to show a lender exactly how you’ll cover those loan payments. Fortunately, showing lenders where your business is headed doesn’t have to be difficult. Those same online tools that helped you analyze your past and current cash flow can help you create a future projection that you can hand over with your application to improve your chances of getting approved.

Guest Post: About the Author

Eddie Davis – As VP of Business Development at FINSYNC, Eddie has the great pleasure of introducing a world-class financial platform to partners ranging from financial institutions to accounting, advisory, payment and others parties interested in facilitating better business through automation and analytics innovation.

 

Streamlining Your Bookkeeping Process: Tools for Small Business

Whether you’ve been running your small business for years or are just opening up shop, efficient operations are the key to business success. When it comes to bookkeeping, it’s vital you run a smooth operation that gives you timely, reliable results. Bookkeeping tasks includes setting up accounts, entering transaction data, generating reports and preparing tax returns. It is the key part of your accounting system, including invoicing, bill payment, banking, inventory management and payroll. We’ve assembled here a short prescription for streamlining your bookkeeping process and have included a list of bookkeeping tools to boost your efficiency.

Five Keys to Efficient Bookkeeping

Even minor improvements can have a major impact on your business’ efficiency. Here are five:

  1. Establish or review your system:

    If you are just now organizing your business, you will need to have a detailed bookkeeping system in place from the very start. It starts with basic tasks, such as entering your receivables and payables as soon as you can — don’t let invoices or checks pile up on a desk, as it’s all too easy for something to fall through the cracks. Review your chart of accounts to ensure its properly set up and capturing all the information you need. Establish training materials in case you change bookkeepers, as this will save much time should the need arise.

  2. Maintain your pace:

    As we just touched upon, you should never fall behind on your bookkeeping. Even a delay of a few days can snowball into bigger problems. Errors often occur when you have to play catch-up. For example, your inventory system might fail to reflect orders placed if you haven’t yet entered the data into the system. It’s wise to have at least one “backup” bookkeeper who can step in when the primary one is away.

  3. Contract with a CPA:

    You probably don’t need a full-time CPA on staff, but that shouldn’t stop you from hiring one as a part-time consultant. CPAs can ensure your books are being kept correctly. You’ll probably have the CPA prepare your tax returns and answer any questions that come up. And in a pinch, your CPA can temporarily maintain your books if you need to find a new bookkeeper.

  4. Keep receipts:

    It’s such a cliché, but nonetheless true. If you don’t keep, organize, and record your receipts, your business will likely slow down as you search for purchase information from weeks or months before. Consider digitizing each receipt, and in any event, set up a filing system that ensures you can find a receipt when you need it.

  5. Use the best tools:

    It goes without saying that, in 2019, very few businesses are run using a paper-based accounting system. Since everyone automates, it makes sense to choose the systems and tools that have impressed the experts and other users. Don’t worry, you don’t have to pay thousands to get a basic accounting package. In fact, some good ones are free! Keep reading to see some expert recommendations.

Tools for Efficient Bookkeeping

The most valuable business tool is your accounting system. If you are a small company, consider getting a modular system with separate packages for basic bookkeeping, invoicing, inventory, payroll and so forth. Here are some noteworthy systems to consider:

  1. Wave:

    This is a top-rated free accounting system with more than 1.5 million users around the world. It’s a cloud-based system accessible anywhere you can establish an internet connection. It has impressive functionality, including invoicing, receipt management and banking. The only cost is a processing fee for online payments.

  2. Sage Accounting:

    Perfect for self-employed business owners who need a simple system that can be upgraded as your business grows. Prices start as low as $10/month.

  3. FreshBooks:

    A powerful accounting system that integrates most accounting features and interfaces with popular CRM and customer service apps. Prices start at $19.95 per month.

  4. Others:

    Many other accounting systems also perform well, including QuickBooks Online, Xero, Sage 300 Cloud and Sighted. If you need a payroll package, consider WagePoint, Gusto and SurePayroll. For tracking time and expenses, look at TSheets, Expensify and Neat.

Take the time to get your bookkeeping right from the start and you’ll save countless hours on error correction and rework. Your business will save money and you’ll have one less thing to worry about.

Are You Overpaying Your Business Expenses?

Running a small business is a costly undertaking in terms of time, effort and money. Unfortunately, too many businesses spend too much on their expenses. This eats into your working capital unnecessarily, possibly crimping your flexibility and your ability to take advantage of opportunities as they appear. Let’s look at some expenses for which many owners overpay.

Credit card processing:

As your business grows, so does your credit card volume. Have you asked for a quantity discount on your credit card processing fees? This is an extremely competitive market — shop around and you might find much better deals.

Design instead of content:

Your website is a tremendous lead generator. A problem surfaces when owners lavish too much money on design without paying enough attention to content. Your search results will improve if you populate your website with timely, authoritative content. While fancy design is fine, it won’t improve your Page Rank, and it can be expensive to create and maintain. Spend that money instead on quality writing and search engine optimization.

Oversized office:

Rent is expensive. Are you paying for space you don’t really need? Have you filled your office with expensive furniture and equipment? Many businesses can function in smaller spaces or even in a home office. The latter is a great option because it gives you a tax deduction without additional expense, eliminates your commute time (saving money on gasoline), and perhaps reduces your wardrobe costs.

Inefficient employees:

You might spend more on labor than any other expense. Inefficient employees are costly because you are not getting your money’s worth and you might even overstaff to compensate for some bad apples. There are ways to quantify how much an employee is returning to the business. Good employees should return 5 to 10 times what you pay them. If your employees are underperforming, replace them with better ones (even if they cost more) or use contractors instead.

Unproductive advertising:

Do you know your marketing return on investment (ROI)? If not, you don’t have a handle on how your marketing efforts are performing. Many businesses spend a lot of advertising dollars on Google and Facebook. These media sites can provide extensive information about your marketing ROI, but it goes to waste if you don’t use it.

Using paper:

OK, its 2019. Aren’t you ashamed you still haven’t gone paperless? If you had invested in a paperless office, you’d be saving a small fortune on printing and photocopying costs. Plus, don’t you want to save the trees?

Unnecessary travel:

Some transactions require in-person interaction. But does that really pertain to your business? Consider the costs of travel, hotel, meals and entertainment. Chances are you aren’t getting a good return on these expenses. Your time might be better spent conducting your business on Skype, and you’ll save a fortune.

Living the louche life:

You are a business owner, not a superhero. If you burn the candle at both ends, you’ll get burnt. Guard your health by avoiding too many nights entertaining customers, vendors and employees. Your tab will be substantial, and your health might suffer. Sure, you can probably charge off your entertainment expenses, but you may pay in other ways.

Failure to grab opportunities:

In the penny-wise and pound-foolish department, false economies can cost you in the long run. For instance, you might be offered inventory or raw materials at a discount, but you don’t make the purchase because you don’t want to borrow the funds you need. This behavior can stymie growth. The lesson is to use borrowing intelligently. If you don’t, you can be certain your competitors will.

These are just a few of the many ways you can cut waste and increase efficiency. Should you need to beef up your working capital, contact us at IOU Financial for business loans that are easy to get and easy to repay.

Small Business Tax Deductions You Should Know About

2019 continues the new tax regime passed two years ago that proved so friendly to business. The corporate tax rate now tops out at 21 percent. While that’s great for reducing your tax bill, it also means that deductions are worth less than they used to. Nonetheless, deductions help you save money and might make the difference between an overall profit and loss.

Qualified Business Income (QBI)

You can deduct up to 20 percent of your QBI from a U.S. business that operates as something other than a C Corporation. It also works for the self-employed, trusts and estates. Wage income and C Corp income do not benefit from this deduction. The deduction has certain other conditions:

  • Maximum income: Joint filers $315,000, others $157,500. Deductions above these thresholds may be limited.
  • Limit: Lesser of (20 percent QBI + 20 percent REIT dividends + 20 percent publicly traded partnership income), or (20 percent of taxable income minus net capital gains)

Bonus Depreciation

It’s back! We’re talking about 100 percent bonus depreciation that allows you to deduct the entire cost of qualifying assets with useful lifetimes up to 20 years. In addition, the cap on expensing business assets instead of depreciating them is $1 million, phasing out dollar for dollar once you place assets worth more than $2.5M into service. The universe of depreciable assets is wider, and includes lodging furnishings (refrigerators, stoves and beds), HVAC equipment, roofs, and security and alarm systems. They’ve cut farm equipment depreciation periods from seven to five years.

Business Vehicles

Bonus depreciation on business vehicles obtained after September 27, 2017 and put into service in 2018 is capped at $18,000 in year one, $16,000 in year two, $9,600 in year three, and $5,670 thereafter. If you buy a heavy pickup truck or SUV for business, you can qualify for up to 100 percent deduction in year one.

Entertainment Expenses

These generally are no longer available. But you can still deduct holiday parties. You can deduct up to 50 percent of your employees’ meals while traveling on business. The 50 percent deduction on client business meals appears to be intact, but double-check with your tax professional.

Commuter Benefits

Employers can no longer deduct transportation benefits for employees. This includes mass transit passes and parking. However, employers can deduct up to $20/month to subsidize employees who ride their bicycles to work. Alas, these bike riders will be taxed on the benefit. Employees can set aside up to $260 a month in pre-tax money to cover vanpools, mass transit passes and parking.

Net Operating Loss (NOL)

You can offset up to 80 percent of taxable income with NOL in future years. You can carry forward NOL offset indefinitely, rather than just 20 years under the old tax law. You can no longer carry back NOL.

Family Paid-Leave Credit

For 2018 and 2019, you get a tax credit for workers on paid medical or family leave. The credit amount equals 12.5 percent of the wages paid during the leave. That credit is larger when the employers pay workers on leave more than half of their normal wages. There are many strings attached to this credit, so check with your tax professional.

Cash Method of Accounting

If you are a C Corporation, you can use the cash method of accounting if your average gross receipts over the previous three years was less than $25 million. The cap used to be $5 million. This also applies to LLCs and partnerships owned by a C Corporation.

The Best News

The best news is that business loan interest is still deductible! IOU Financial will lend your business up to $500k and you can deduct every penny of interest. So why wait? Contact us today!

Women in Business: Grants for Female Entrepreneurs

The federal government offers a number of grants to small businesses owned and managed by women. Most of these grants allow flexible use of the money as long as it doesn’t go toward startup expenses. The two major houses for information about federally sponsored grants are:

Grants.gov: This is the main databases of federally sponsored grants. You can search it with a keyword of “women” to identify grants of interest. If you’d like to apply for one of these grants, you’ll have to secure a DUNS number from Duns & Bradstreet, register at the System Award Management website and then create a Grants.gov account.

Small Business Innovation Research and Small Business Technology Transfer Programs: This website from the Small Business Administration can be used to identify grant to small businesses involved in federal research and development. A dozen federal agencies pool their grant information here for businesses with up to 500 employees.

There are also a number of national, regional and state grant programs that female entrepreneurs can tap. These include:

  • Eileen Fisher: Until 2018, this company offered a grant program for women in business. It is currently reformulating its grants program and plans to reintroduce it in 2019.
  • Amber Grant Foundation: The foundation awards $10,000 grants to women-run businesses. It is dedicated to a young woman named Amber who died before realizing her entrepreneurial dream. If you are passionate about your business, this program might suit you well.
  • The Girlboss Foundation: Grants of $15,000 each are awarded every other year to female entrepreneurs. In addition, you receive marketing assistance and press exposure for your business. Grant winners must be women owning businesses in the art, music, fashion or design industries.
  • The Halstead Grant: This $7,500 grant is awarded annually to female emerging silver jewelry artists. The program is designed to boost an artist’s career as she starts out. You must submit your design portfolio and answer 15 business questions to compete for this grant.
  • FedEx Small Business Grant: This is a grant contest for women entrepreneurs and businesswomen who are involved in logistics, trade and other related industries. Ten winners are chosen each year with prizes ranging from $15,000 to $50,000.
  • Cartier Women’s Initiative Awards: This program drives change by empowering women entrepreneurs. Each year, 21 women finalists (three from each continent) are awarded. The focus of the program is to support women who make concrete contributions to solving problems that challenge the planet’s future.
  • Grants for Women: This is an online guide for women grants and scholarships. You can search by entering a keyword, or you can peruse the site’s directory of foundations and organizations that offer grants to women. The website filters out schemes and scams to protect applicants from fraud.
  • Open Meadows Foundation: This organizations offers grants of up to $2,000 each to women who run projects that promote economic, racial and gender justice. It is an activist organization that encourages the building of community power through projects implemented for girls and women who have limited financial access. Recipient must have organizational budgets that do not exceed $75,000.

Grants are a wonderful boost for any small business, but unfortunately, aren’t always enough to go around. The next best thing is to obtain funding through a convenient, affordable small business loan, such as the ones we offer at IOU Financial. If you need up to $500,000 funding for your small business, contact IOU Financial today and we can have your money available in days.