The Restaurant Revitalization Fund opening dates have been announced! Find out more about that and other CARES Act Funding here.

For any business to operate successfully, one needs to know exactly what drives profit and what needs to be spent to make an individual sale, otherwise known as Cost of Goods Sold (COGS).

Any unsold product just sitting on the shelf is obviously not making you any money but is also costing you, which is why the COGS is a key figure in determining net income and an important figure on your profit and loss statement. For most companies, it’s the largest expense – and a critical figure in determining net income.

What it costs you to do business is critical not only in determining your income, but also for making decisions for the effective management of your business. It will also help you keep track of the flow of inventory as it moves through your business. The good news is that you can determine COGS using a simple formula:

Beginning inventory + inventory purchases – end inventory = cost of goods sold

Units Sold

Any business owner should know how many product units his business has sold. There are several ways of doing this, but it all boils down to determining what inventory you have on hand at a given time. To arrive at this figure, you need to know how many units of finished goods you had on hand in your beginning inventory. To this figure you add the number of units created or added to that inventory during the period. Next, you subtract the number of units that make up your ending inventory.

Let’s say you run a dairy farm, for example.  If you begin the accounting period with 400 gallons of milk, and during the period your cows gave you 3,900 gallons of milk, and at the end of the period you have 100 gallons of milk, the amount of milk you have sold would be 4,200 gallons.

Calculating the Cost of Goods Sold

When you finally arrive at the number of goods you have sold, you need to determine what it cost you to create those goods. There are three methods of doing this –FIFO, LIFO, and Average Cost. This is important to know because while you may have a given number of units on hand, that doesn’t mean you paid the same price for each unit. For example, let’s say you sell shirts from a single vendor and that vendor charges you $3.00 per shirt. But in the middle of the month, he increases what he charges you to $3.50. If you sell 100 shirts, is your cost of goods sold $300 or $350? It depends on how you cost your goods.

FIFO, or “First In, First Out,” assumes that the first products in are put out first. In the example above, you would assume that the $3.00 shirts were sold before the $3.50 shirts.

LIFO, or “Last In, First Out,” assumes that the oldest units of inventory are sold first. In our shirts example above, you would be assuming that your $3.50 shirts were sold before the $3.00 shirts.

Average Cost is just what it sounds like. First you take the beginning inventory plus purchases in dollars. Next, this figure is divided by the beginning inventory plus purchases in units. The result of this calculation is the average cost per unit. Next, you take the average cost per unit, and then subtract the number of units sold. The resulting figure is the COGS.

Further, it can be of great use in determining how much money you have really made for your business efforts. Remember, COGS drives profit!

 

This article is a re-blog of SBA.gov’s Marko Carbajo

Since Harrisonburg Downtown Renaissance was formed 12 years ago, one of its goals has been a hotel and conference center in the city’s urban core. This year, construction will start on a hotel with 205 to 225 rooms and a conference center with 20,000 to 22,000 square feet of meeting space that will sit on property owned by James Madison University.

The public-private partnership deal wouldn’t have been possible without JMU’s land and financial input, says the project’s developer, Paul Gladd.

“JMU’s contribution of the land helps the economics work from an underwriting standpoint,” says Gladd, a principal of Gaithersburg, Md.-based dpM Partners.

A key ingredient of the plan was the city of Harrisonburg linking up with the JMU Foundation to provide a quarter of the $40 million needed to build the project ($10 million for the conference center). The rest of the money will be privately financed by the developer. When completed, the complex also will house the university’s hospitality management program.

“It definitely reduces the risk of providing financing,” Gladd says of JMU’s involvement.

The project, to be named Hotel Madison and Shenandoah Valley Conference Center, is one of the more recent, striking examples of the economic reach of JMU.  The university has helped in the development of business ventures ranging from a small bakery in Augusta County to a research campus in Harrisonburg.

JMU’s approach to science and technology instruction has made Harrisonburg, Rockingham County and other areas of the Shenandoah a magnet for specialized industries. And the university’s schools have turned out graduates who’ve launched innovative companies that orbit JMU’s 148 buildings.

Attracting new visitors
Gladd’s hotel and conference center is expected to host events for a variety of associations, many of them involving JMU’s professors. Harrisonburg Downtown Renaissance believes the development has the potential to pull in new visitors.

“The conference center will attract people who would not ordinarily come to Harrisonburg,” says Eddie Bumbaugh, the organization’s executive director. “And if they’re not part of a conference, visitors prefer to shop, dine and visit a few attractions within a few blocks of the hotel.”

The project is expected to generate $1 million per year in taxes from a property that had been exempt from local levies. The partnership calls for the city to pay the JMU Foundation back for its $10 million investment, then keep the lodging and other taxes from the development.

The hotel and conference center complex is just one manifestation of the growing economic influence of the university.

When JMU completed its last economic impact study, the school estimated that it was responsible for $10 million in combined tax revenues for Harrisonburg and surrounding Rockingham County, says Brian Shull, Harrisonburg’s director of economic development. At that time, 2008-09, the university had a $395 million budget.

The school’s yearly operating budget has since gone to $500 million, meaning the corresponding figure in local tax revenues has gone up to about $13 million, Shull says.

Pipeline of talent
The university’s contribution to economic development isn’t as easily calculated. Shull credits JMU’s business education and study programs with attracting and initiating businesses in the region. “The areas of study that they specialize in help other businesses in the community,” he says.

Along with the business school, the College of Integrated Science and Engineering also has helped spur the development of research-based firms in central Shenandoah Valley.

One of the best known companies in Harrisonburg is Rosetta Stone, a tech-based language-learning company that now has its headquarters in Arlington. Started in Harrisonburg in 1992, its operations eventually settled in a converted agriculture warehouse downtown, where it still employs hundreds.

Another company, Serco, an international contractor of information technology and professional services, employs dozens of specialists in Harrisonburg who research trademark applications for the federal government.

“Their employees all have science backgrounds,” Shull says. “The university is a great pipeline for that company.”

SRI partnership
The university is active in regional efforts to recruit business and industry. A partnership with JMU was crucial in SRI International’s decision to build a 40,000-square-foot biosciences center in Harrisonburg. Its research areas include infectious diseases and drug development.

“We were involved in the initial discussion of connecting our faculty with their research,” says Ken Newbold, JMU’s associate vice provost for research and scholarship. The involvement was part of the university’s team-based approach to regional economic development, he says.

The university also provides offices for the Shenandoah Valley Partnership, an economic development marketing organization serving seven counties and five cities, and the Shenandoah Valley Technology Council, a regional network and business development partnership for technology users and creators.

Last year, the university launched the Madison Center for Community Development, a program that links faculty with local governments for help with planning, economic development, grants, training and other tasks. “JMU has always taken a partnership and collaborative approach to economic development in the area,” Newbold says.

Help for small firms
JMU’s assistance extends to small business ventures. Two years ago, Augusta County residents Jack and Mary Wilson asked business professor Marshall Pattie to assist them in reviving an iconic bakery and diner that had closed in the Churchville area west of Staunton.

Pattie enlisted three of his business school seniors to help with research and consulting to bring back what had been White Way Lunch, named for a family who had owned the business for generations. The Wilsons expect to reopen the business this year as White’s Wayside Diner, selling bread made the same way the family had.

The College of Business also has for a quarter of a century hosted the Shenandoah Valley Small Business Development Center, part of a state network of offices that provide advice, training and resources for companies with fewer than 50 employees, says director Joyce Krech.

Most recently, the valley SBDC helped a woman start The Ice Cream Truck  in Page County, where she provides the area’s only mobile food vending operation of any sort. In a southern part of rural Rockingham County, Eastern Bioplastics got planning help from the SBDC staff as the company developed a process for converting poultry feathers into fibers.

Technology transfer
People in the region with big dreams and marketable ideas have a free resource available at the university: Mary Lou Bourne. She runs the university’s Office of Technology Transfer, which helps turn technology created by JMU faculty and students into businesses.

The office helped hatch Madison Assessments LLC, a testing firm. It helps colleges and universities determine how much of their instruction sticks with their students.
Bourne also heads the affiliated James Madison Innovations, which provides licensing and intellectual property management for innovations not developed by the university, in exchange for a small ownership stake.

“At the end of the day, what we’re doing is vetting,” Bourne says. “I talk with entrepreneurs frequently to try to get them to spin out [their companies]. They’re looking to see what babies they can adopt, and we’re looking to see what marriages we can make.”

Madison Innovations also partners with the school’s Center for Entrepreneurship in a program based in downtown Harrisonburg called ICE@JMU. It provides expertise, resources and collaborative space for entrepreneurs.

As much as the university presence has contributed in programs, money and construction, one of the most important drivers of business from JMU has been people — educated individuals with energy and ideas.

JMU’s student population has grown by a third since 2000 to about 21,000 undergraduate and graduate students. Shull, who has been in his position for 17 years, said students provide a growing customer base for businesses and a reliable source of workers. “Just the vibrancy that a university brings to a community is amazing,” he says.

College-town lifestyle
The lifestyle offered by a college town in the middle of the scenic Shenandoah Valley entices many graduates to stay.

Developer Barry Kelley knows all about it. He partly credits the presence of JMU for the success of his real estate firm, Matchbox Realty. It has developed several downtown commercial and residential properties for people seeking a walkable, urban lifestyle blocks from the university. Matchbox is repurposing the Cassco Ice House into a mixed-use building that houses ICE@JMU along with apartments.

“Not that we don’t have an existing [urban] community, but certainly to allow this to grow to the magnitude that it has, it’s been in large part due to the JMU community,” Kelley says. He recently won an award for Matchbox’s downtown development projects.

Like Shull, Kelley notes that, among JMU graduates, a percentage of them —young, educated and highly motivated — look to start their lives in and around the town where they earned their college degrees.
One of them is Kelley, who graduated from JMU in 1983, got married and made a life for himself near his alma mater.

“This is a very dynamic community — now much more so than 10 years ago,” he says. “It’s a lot of fun to be around.”

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This article was reblogged from virginiabusiness.com’s Calvin Trice

Myth 1: Be Your Own Boss

Being an entrepreneur does not necessarily mean you have no bosses. That’s only partially true.

As a sole proprietor, you actually end up with many bosses. Customers are the obvious ones. But then there are the people you owe money to, the people who owe you money, your partners or those you formed strategic alliances with and your employees. At some point, all of these groups call the shots in some fashion.

Investors, should you have any, are most definitely your bosses, considering their money carries weight into how you run things.

If ultimate freedom is what you truly seek, then you’re going to have to learn to live without any relationships or dependents. It may sound a bit harsh but it’s the only real way to have “no one to answer to.”

The only sense in which you are “your own boss” is that you have the freedom to decide what risks to take and what hours to work…as long as your customers and investors are happy.

Myth 2: Getting Investors is Always a Win

Business schools and entrepreneurship classes are to blame for this myth as they teach the steps to starting a business are: develop a business plan and get financed. While there is some truth to this, as investment in your company is often a good sign, it’s not always the case.

Finding investors is a conditional win. It’s a only a positive thing IF…

  1. You need investors and can use the money to grow the business
  2. You find compatible investors

 

If you can build your company without investment, take the chance to do it. Being the sole owner of your business without having to worry about the requirements of investors is worth the experience of finding financial support from other sources even if it’s a bit more difficult. If it’s a choice between growing slowly without investors versus growing faster with them remember, slow growth is still growth, and survival is what counts.

Myth 3: The More Money, the Better

For most startups, there’s a point where the resources should match the opportunity. Don’t be overambitious, meaning build your business without overspending. Just because you have the money, it doesn’t mean the more you spend the more you’ll grow.

So if you want to be an entrepreneur because:

  • You don’t want to answer to anyone
  • You think having someone else foot the bills for your business would be fun
  • Or you’ve got a pile of money stacked up, just begging to be put into a new venture …

… you may be asking to become a victim of alluring but dangerous half-truths.

Think it through.

 

 

By: Kevin Hickman

This content was re-blogged from Tim Berry, Guest Blogger for the sba.gov website

Virginia’s Premier Business Plan Competition

www.virginiavelocity.org

The Governor of Virginia, Terry McAuliffe, has just announced that the Governor’s first business plan competition in Virginia is now open to applicants!

Virginia Velocity will provide $850,000 in prizes for winners, and at least four winners will be chosen.  The competition is open to all companies in the bioscience and energy sectors, including those based outside of Virginia. Eligible competitors are for-profit organizations that have been engaged in their current business for at least 24 consecutive months.  Winning companies need to be willing to locate in Virginia for at least two years and are expected to have an office operating in Virginia by January 1, 2016.  The minimum age to apply is 18 years of age; the deadline for submitting an application is July 10, 2015.

Overseen by the Office of the Secretary of Commerce & Trade, Virginia Velocity is intended to help build awareness of Virginia’s entrepreneurial economy. Our goal is to keep things energized here at Virginia Velocity. If your company is eligible, you are welcome to apply! If you know of eligible companies that would find these cash prizes enticing, please forward this email or direct them to the Virginia Velocity website at www.virginiavelocity.org

We are also accepting applications for judges and mentors. Experience in business start-ups, entrepreneurship, and business plan evaluation are required. Experience in energy and/or bioscience is a plus! For information on being a judge or mentor, or to sign up, this page has more details.

You’ll also find answers to many questions about the competition on our FAQ page And we’re always available at info@virginiavelocity.org

We hope you’ll want to keep up to date on all things Virginia Velocity; you can ‘like’ us on Facebook and follow us on Twitter!

We hope to hear from you.

The Virginia Velocity Competition Team
Chuck Mills, Daryll Morgan, Marianne Vermeer
www.virginiavelocity.org

Venture onward with Virginia!

Is your brand recognizable? More importantly, how is it perceived?

No doubt, aesthetics are one of the most important features of a business. After all, a logo equals a thousand words in the business world. But, looks are just a part of your your brand identity. There is so much more.

Apple and Zappos for example, are two brands that have created identities for themselves, which customers not only recognize but enjoy doing business with and are invested in thanks to brand strategy. Small businesses can replicate this through seven simple steps:

Right from Square One

Logos, websites, signage, etc. are the bedrock of your brand. Inconsistency with these brand identifiers can confuse and ultimately turn away potential customers. You can easily prevent this by creating a set and consistent pattern that your colors, logos, images and fonts must follow. Registering or trademarking your logo is also absolutely imperative for obvious reasons. You don’t want someone claiming your cool logo as their own after you paid good money to a graphic designer or spent hours creating it yourself.

The “voice” of your business is another fundamental to consider. For example, a software company that sells to other businesses might adopt a tone of authority and expertise, while a software company that markets software apps to consumers should adopt a more conversational voice in its marketing materials.

Project Your Company’s Values

Most importantly, everything associated with your brand must reflect the value proposition of your company. In other words, avoid vague mission statements. Instead, use a tagline that briefly summarizes the what you do for your customers rather than who you are.

Make sure to use simple, clear language and imagery that reminds your customers of the unique service you provide or the business problem your company solves and how it makes their lives better.

For more help developing your marketing voice and message, read 7 Tips for Getting your Marketing Message Right or watch this on-demand webinar: Practical Marketing – A Five Step Marketing Program for Small Business from National Small Business Week.

“Pay no Attention to that Man Behind the Curtain!”

If you are a small business owner, do not make the mistake of running your whole show from backstage. Customers want to know their business is appreciated and therefore want to connect with the face behind the operation, especially if their transactions are frequent or substantial.

This doesn’t mean you have to greet every single customer that walks in or introduce yourself as the owner but it doesn’t hurt to be on-site once in a while just to get to know your customers and be in-tune with their needs. It’s an easy way to see what people really think of your business.

Small business owners need to be an advocate for their own brand just as much as their most invested customers, especially if they want to maintain the integrity of their brand identity.

Social Media is the Future

I’m going to let you in on a not so secret little secret…social media is an absolute necessity for all businesses. It doesn’t matter how well you’ve performed without it and it doesn’t matter who told you it’s not necessary, despite their credentials. Social media is the king of business promotion tactics. It allows brands to directly communicate with customers in real-time.

There are lots of quick and easy ways to use social media to grow your brand. Anita Campbell of SmallBizTrends suggests 12 ways to get started. Read part one of “6 Ways to Use Social Media for Branding” and part two here.

Give and You Shall Receive

One excellent way to build trust and a positive image for your brand is to sponsor or get involved in community events such as local 5k marathons, fairs, farmer’s markets, etc.

Give Credit to Your Credentials

If customers are already aware of your expertise in your industry, winning over new business gets much easier. You can easily demonstrate your knowledge by hosting workshops, webinars, and/or writing blogs that offer advice and tips to existing customers without pushing your own product or service. This will not only differentiate your brand but ensure that word of your company gets passed on to new potential customers.

Consistency, Originality, Potency

As mentioned earlier, it’s important to maintain consistency within your brand elements. If you decide to advertise your business or partner with another organization that wants to use your logo, make sure the ad designer and your partner adhere to your brand guidelines otherwise the originality and potency of your brand begins to fade.

Also watch out for trademark or copyright infringement by competitors. A business can actually use your brand materials to promote their own.

Last but certainly not least, your customers associate your brand most with the service they receive. As such, it’s important to monitor and coach your employees regularly to ensure they uphold your brand values.

 

By: Kevin Hickman

This article was re-blogged from the SBA’s blog contributor Caron Beesley 

How much does it cost to start your own business?

According to an estimate by the Kauffmann Foundation, the average business start-up cost in 2009 was  $30,000. However, every business is different and so is its budget. Many micro-businesses such as home-based sole proprietorships can get off the ground with less than $3,000! Some home-based franchises in fact, might have upfront investments as low as $1,000-$5,000!

All the same, costs vary depending on the business so it it imperative to understand the costs of your particular business and how to reach your breakeven point before you get started.

Here are some simple tips for calculating your start-up costs:

Step 1: List Expected Expenses

Start-up costs are technically defined as any costs incurred before income. It’s an important distinction to make because they will impact your tax return. Start-up costs are broken down as follows :

1. Expenses – Costs that come with preparing to open a business such as market research, advertising, training, wages, mileage costs for scoping out a location, and any fees paid to professional consultants (lawyers or accountants).

Up to $5,000 of these costs are tax deductible in the first year of business. The remaining costs are then amortized (meaning you deduct them in equal installments) over a period of 180 months (starting with the month in which your business opens).

However, it’s important to note that the deduction benefit from your research will be considered personal costs and non deductible if you decide not to open a business. Read more about the ins and outs of start-up deductions in How to Write Off the Expense of Starting Your Business.

2. Capital Expenditures – One-time costs to purchase assets such as inventory, property, vehicles,etc. These don’t typically qualify for a deduction, but can be written off through depreciation.

 

Assess Your Assets

Part of starting a business from scratch means taking a risk with personal investment. The money you currently have in the bank will be your primary asset for a while, used to pay off necessary business and personal expenses such as payroll, rent, utilities, etc. until the business is self-sustaining.

Allocate Costs

Using a spreadsheet, create a list of the start-up expenses and capital expenditures that you expect to incur, alongside the assets that you have. Try to assign costs to each expense, even if it’s a best guess.

Make the Calculation

After you’ve created your estimates on the spreadsheet, you can easily calculate your costs with the free Starting Costs Estimator Calculator, developed by PaloAlto Software and offered by Entrepreneur.com. It also includes a sliding scale that lets you estimate your cash reserve needs based on your estimated monthly spending and money in the bank.

If the costs look too high, revisit your expenses and look for ways to cut them. If you need meeting space but can’t afford a commercial lease, consider co-working spaces or serviced office space. You can also cut the cost of many office tools by using cloud-based services instead of pricey software licenses (use google drive instead of purchasing Microsoft Office).

Get Help

Small business resources like your local Small Business Development Center, Women’s Business Center, Veteran’s Business Center or the mentoring experts at SCORE can all help.

Here are a few more resources to bookmark:

 

By: Kevin Hickman

Content from this article was re-blogged from Caron Beesely, who works with the SBA.gov team.

Food is not just a daily necessity, but a passion for many, especially for the people involved in the What’s Cooking Concept Plan Competition! Tonight, the passion for food will ignite as small food business entrepreneurs compete for $15,000 in zero interest loans in the What’s Cooking Competition held at Court Square Theater at 6:00 p.m. Admission to the competition is free of charge and includes the opportunity to vote for the “People’s Choice Award”!

Ask any out-of-towner about Harrisonburg’s buzzing food culture and “surprising” would be the most likely response. To the locals however, it’s no secret that this small town’s food industry is booming and with culinary trends toward local and approachable food, it’s easy to see why. Simply take a stroll through downtown Main Street and you can’t pass by without noticing eager feet rushing into the newest restaurants.

kev_muan__869x576This kind of vigor and excitement is exactly what the Shenandoah Valley Small Business Development Center (SV SBDC) and Harrisonburg Downtown Renaissance (HDR) are trying to inspire. Partnering with Rockingham County and the City of Harrisonburg, these organizations have created “What’s Cooking (WC),” a five-month pilot program that encourages growth and development in the local food industry by helping entrepreneurs fine-tune concepts for viable businesses.

Last fall, the program kicked off with an event called “Pitch Night,” where 14 food entrepreneurs received feedback from the community on their culinary business concepts. Since October, 22 participants in the program have attended a series of workshops and seminars conducted through the Shenandoah Valley Small Business Development Center at the Ice House in downtown Harrisonburg.

Each Monday Meeting (held about every three weeks) touched on various aspects of the food industry, from marketing to competition analysis to food pricing and lease negotiation. Local and industry professionals, including representatives from the Virginia Department of Agriculture and Consumer ServicesVirginia Tourism Corporation and the National Restaurant Association, attended the sessions to offer assistance to the participants.

Chef and Owner of the Shenandoah Meadows Grains Company Marsha Hyatt said, “This program has helped not only me but so many others develop plans, brainstorm and connect with others in the food community. I came to the program with the basic idea of what I wanted to do and with the help of the program, I have been able to expand and get from the ‘idea stages’ to the ‘concrete planning stages’.”

Hotiman Ridwan, an aspiring restaurant owner, said that “Involvement in the program has increased our confidence and allowed us to become better equipped to address the many decisions we will encounter as we start a new business”. A restaurant manager and 18 year veteran of the hospitality industry, Ridwan and his partner Mark Mitchell are utilizing the benefits of “What’s Cooking” to achieve their dream – the BoBoKo Fusion Café. Unlike other international restaurants, his cozy tropical cafe will offer alternatives to full meals, serving smaller portions of Southeast Asian fusion style dishes inspired by street food from his home country of Indonesia.

Jason Hendricks is developing and testing recipes for producing uniquely handcrafted Root Beer. His focus is on perfecting three non-alcoholic flavored soda products and distributing to local bottle shops, restaurants and craft breweries. His main challenge is gathering start-up funds and access to a commercial kitchen in order to perfect the carbonation process and build up quantity for distribution.

Tonight, contestants will be judged by a panel of three industry professionals on the quality and appeal of their verbal and written concept plans. Respective to their winning title, four contestants will be awarded with interest-free loans in the amounts of $5,000, $4,000, $3,000 and $2,000, time in a commercial kitchen, and an assortment of professional service packages provided by sponsors Brown, Edwards & Co.Estland Design, BotkinRose, the local Chamber of Commerce and others.

“What’s Cooking” has been a great success, which means there is a distinct possibility of future competitions. Come to the “Concept Plan Competition” and watch as culinary dreams come true!

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By: Kevin Hickman

Infusionsoft, a private company that offers marketing and sales software to small businesses, recently conducted a study that found 62 percent of small businesses stated”word of mouth” was their best marketing tool – nearly twice as effective as email (34 percent), the second highest rated tactic!

So how does one develop a reputation and expand their audience size by mere hearsay? Try these 11 tips:

1. Set Quantifiable Objectives – Vague word-of-mouth objectives like “getting everyone to talk about us” are useless if they can’t be measured. As with any other marketing tactic, the ability to monitor your progress is essential. Create objectives like “getting X number of new customers through X number of referrals per month or generating X number of leads per month via word-of-mouth marketing.”

2. Create a System for Generating Referrals. Encourage customers to give referrals to other customers by offering bonuses, give-aways or discounts. (Click here for more on generating referrals.)

3. Offer Special Deals to Referred Customers. Give new customers discounts or special offers in return for trying your business.

4. Promote with PR. Keep your business in the public eye by establishing relationships with local journalists, members of the media and bloggers. Keep them informed about your company’s latest news, accomplishments and future plans.

5. Get Active in the Local Community. Sponsor or participate in public events that give back to the community such as fairs, 5K races or any program where the proceeds go to charity. If the logo of your outdoor apparel store is on every runner’s t-shirt, who are they going to think of the next time they go on a hike?

6. Network with Other Business Owners. Just like establishing a friendship with the local media, developing relationships with small business owners in your community can become another form of PR. Other businesses can become your customers and refer their friends and associates.

7. Make use of Your Personal Connections. Use your friends, family and any organizations you belong to to spread the word about your business. Post an an ad to the church bulletin or leave brochures at the front desk of your local gym.

8. Hand out Extra Business Cards. This is a no-brainer. Always give extra business cards to new clients so they can pass them out to friends and colleagues who might require your services.

9. Keep Tabs on what Customers Think. Conducting focus groups, regularly checking your online ratings and reviews, and keeping tabs on social media are all good ways to know what type of word-of-mouth customers are spreading, whether it’s positive or negative.

10. Pay Special Attention to Unhappy Customers. Unhappy customers are inevitable. Win them over by going out of your way to find a solution and offering outstanding service. Never ignore or minimize their problem because unhappy customers tend to complain to more people about their experiences than happy ones boast.

11. Always Ask New Customers How They First Heard About You. Try to get as specific as possible—if they learned about you from a friend at the gym, which gym? Tracking how customers learn about your company will help you assess how well your word-of-mouth marketing efforts are working so you can focus on the most productive avenues.

These tips were provided by Rieva Lesonsky, CEO and President of GrowBiz Media, a media company that helps entrepreneurs start and grow their businesses

 

By: Kevin Hickman

Preparing federal tax returns can be frustrating at times, even for those most knowledgeable. If you are self employed, things can get even trickier. But, fear not. The following are six basic but important tips about income from self-employment that can help sole proprietors or independent contractors stay afloat in the business world:

  • SE Income – In addition to income from your regular job, self-employment can also mean income received for part-time work.
  • Schedule C or C-EZ –  There are two required forms to report self-employment income: The Schedule C for profit or loss from business and the Schedule C-EZ, which reports net profit from business, along with the Form 1040. You may also use Schedule C-EZ if your expenses total less than $5,000 and meet other conditions. Click on the corresponding form link to see if you are eligible to use them.
  • SE Tax – Making a profit means you have to pay income tax as well as self-employment tax, which includes social security and Medicare taxes. Use Schedule SE, Self-Employment Tax, to find out if  you owe this tax, which should be filed along with your federal tax return.
  • Estimated Tax –  Estimated tax payments, are typically done in four installments each year on income that is not subject to withholding. If you do not pay enough tax throughout the year, you may owe a penalty.
  • Allowable Deductions –  You can deduct expenses you paid to run your business that are both ordinary and necessary. An ordinary expense is one that is common and accepted in your industry. A necessary expense is one that is helpful and proper for your trade or business.
  • When to Deduct –  In most cases, you can deduct expenses in the same year you paid for them, or incurred them. However, you must ‘capitalize’ some costs. This means you can deduct part of the cost over a number of years.

Visit the Small Business and Self-Employed Tax Center on IRS.gov for all your federal tax needs. You can also get IRS tax forms on IRS.gov/forms anytime.

If you found this Tax Tip helpful, please share it through your social media platforms. A great way to get tax information is to use IRS Social Media.
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Additional IRS Resources:

 

IRS YouTube Videos:

IRS Podcast:

 

By: Kevin Hickman