Small business budgets come in many formats, types and degrees of complexity. In most cases though they serve three purposes. The first purpose of a budget is to establish performance targets over a specified period of time. Usually a budget plans for revenues and expenditures on a monthly, quarterly, annual and multi-year basis. Company managers and employees can then devise action plans to achieve the targets provided by the budget. The second purpose of a budget is to measure … [Read more...]
How to manage small business bookkeeping
Angus Reid Public Opinion recently conducted a survey of business owners generating up to $5 million in revenues and employing up to 100 people to understand what they like and dislike about running their companies. The worst-ranking task was bookkeeping with 85 percent indicating they dislike it and 46 percent stating it was their least favorite task. The problem is that bookkeeping can be tedious, time consuming and the business benefits aren’t as obvious as those from sales or marketing. When … [Read more...]
Tax insight: IRS issues new rules on expensing and capitalizing property
Since 2003 the IRS has been working to revamp how businesses should account for money spent on buying, making, improving and repairing tangible property. The final regulations were announced in 2014 with an important update made in 2015. Why would such a seemingly arcane tax accounting topic take a decade to finalize? The changes affect over $17 trillion in tangible assets owned by U.S. businesses and may require accounting changes for virtually every company in the country. The new … [Read more...]
Use price anchoring to boost sales
Nailing your pricing should be the focus of every small business owner. While big companies have entire departments dedicated to price optimization, we usually have to rely on our judgment and trial and error. Does this mean we are condemned to always price too high or too low? Absolutely not! There are many proven pricing strategies developed over decades of research that we can put to work immediately. Many are based on human psychology and have stood the test of time. One such strategy is … [Read more...]
Are you cooking the books without knowing it?
Sometimes your business just doesn’t perform as well as you need it to. Spending 15-hour days at trade shows, pulling all-nighters to revamp your market strategy and tweaking your website all weekend don’t always guarantee a profit or cash flow boost. If you happen to be applying for a loan or line of credit or are in the process of selling your business, a few bad months could mean the difference between loan approval and rejection. When faced with this kind of pressure, some small-business … [Read more...]
Small business accounting: balance sheet decoded
Small business accounting balance sheet The balance sheet provides a snapshot of your company’s financial position on a given date. It lists the assets (what a company owns), the liabilities (what it owes) and the owners’ equity in the business. The balance sheet is based on the basic accounting equation: Assets = Liabilities + Owners’ equity. The left side (assets) is the value of everything the business owns. The right side (liabilities + owners’ equity) represents how the business paid … [Read more...]
From Billions To Bust: Top Entrepreneurs Who Lost It All
Can you be too rich to go broke? Sadly, no. The past year saw more than a few billionaires wind up with nothing. Find out what did them in so you don't suffer the same fate. What’s the fastest way to end up with a million dollars? Starting with two million dollars. It can take a lifetime to build a fortune but only a few bad decisions to lose it all. No matter how much money you have, it is possible to wind up with nothing; and recently a number of famous billionaires have done just that. … [Read more...]
Be Like Bezos: 5 Lessons From A Business Icon
Jeff Bezos took Amazon from sales of $7,000 to $1 billion a week. A new biography, The Everything Store, shines a spotlight on his incredible accomplishments. Who is the most admired tech entrepreneur in the world today? Most people will reply Mark Zuckerberg, Larry Page, Sergey Brin, Steve Jobs or perhaps Elon Musk. Fewer people would reply Jeff Bezos. After reading The Everything Store, a recently published biography of Jeff Bezos written by Brad Stone, however, my answer is Bezos. Bezos … [Read more...]
Common Accounting Tricks That Could Land You in Jail
If you're even thinking about fudging a number to keep your business afloat, you should think again. Here's why you'll get caught. How far would you go to save your business? If you’ve spent any time thinking about this question, you’ve likely formulated an answer along the lines of “I’d go as far up to the line as possible, but I wouldn’t cross it.” Crossing the proverbial line means doing something you know is dishonest, unethical or even illegal. Yet if you ask many business owners who have … [Read more...]
Cash Deposits Lead to Money Laundering Charges for Small-Business Owners
Consistently making cash deposits just under $10,000 could lead to money laundering charges for small-business. Randy and Karen Sowers are living every small-business owner's worst nightmare. The couple owns the successful South Mountain Creamery which produces and delivers farm fresh, all natural and sustainable dairy products in rural Maryland. The Sowers do significant sales at farmers' markets, where customers usually pay in cash. In 2011 and 2012, they earned around $300,000 in sales from … [Read more...]
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