Archives for March 2019

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Business owners know that most of their expenses are deductible. But it might surprise you to learn how many leave money on the table by not claiming all allowable write-offs.

Overlooked Business Deductions

Here are the most commonly overlooked deductions.

Carryovers

Your tax activities in prior years sometimes yield deductions in the present. So check prior year tax returns. Look for any carryovers of unused amounts. Examples of carryovers include net operating losses, capital losses, charitable contributions, investment interest, and home office deductions.

Home office

You probably know about the home office deduction. But you may worry claiming it sends a red flag to auditors. Don’t be afraid to claim this deduction if you qualify. Today more than half of all businesses in the U.S. report as home-based. So the IRS won’t view home office deductions with the same suspicion as in the past. In fact, the IRS has created standard deduction for home office use you can use instead of deducting the actual costs of using space in your home for business.

Startup costs

If you started your business in 2018, check for any deductible costs you may have had before you opened your doors. Usually these costs are treated as capital expenditures (added to your investment in the business). But you can elect to deduct these costs up to $5,000 in your first business year. Any remaining amount is then amortized (deducted ratably) over 15 years.

Bank fees

Fees you pay to maintain your business checking account, access the ATM, obtain new checks, and other banking fees are fully deductible. Review your bank statements to see what fees you paid and can deduct.

Cancellations

Things can go wrong, forcing cancellations of various plans. For example, you may have booked a business trip and had to reschedule. The airline rescheduling fee as well as the hotel deposit you lost are deductible.

Bad debts

If your business advanced money to someone … an employee, a customer, a vendor…and you haven’t been repaid, you may be entitled to a bad debt deduction. If it is a business bad debt that becomes partially or wholly worthless, you deduct the amount as an ordinary business deduction.

If you personally loaned money to someone who hasn’t repaid you (and you can prove that the debt is now wholly worthless), you can take a short-term capital loss for the outstanding debt.

Incidental travel expenses

Travel isn’t cheap and you’re not likely to overlook the cost of a plane ticket or a hotel room for a business trip. But you could easily forget the incidental travel expenses that add up quickly. Examples: Fees for checked baggage, extra baggage fees for taking heavy or oversize items, tips.

Accounting fees

Be sure to look at the fees you paid for tax return preparation during the year, and not the year to which the fees relate. For example, you own an S corporation that paid fees in March 2018 for preparation of its 2017 tax return. The fees are deductible on the corporation’s 2018 tax return.

Depreciation

While there are tax breaks that can be used to write off the full cost of certain property purchased by the business, if you don’t or can’t use these breaks, then you must recover your cost through depreciation. Don’t overlook remaining depreciation allowances. Again, check prior year returns for depreciation opportunities. Find information about depreciation in IRS Publication 946.

Miscellaneous expenses

You may pay out of petty cash for items that are deductible. Examples: business and trade magazines you buy at a newsstand, coffee with a customer, or a taxi ride to a vendor. Like incidental travel expenses, these miscellaneous items can add up to a big write-off. The key to deducting them is to have required substantiation for each expenditure. The IRS has guidance on the types of records to be kept, but this doesn’t cover all situations. Suggestion: when you can’t obtain a receipt, take a photo with your smartphone (which is imprinted with the date) and maintain a log of miscellaneous expenses; it can’t hurt.

Final Thought

Review all of your outlays in the year with your CPA or other tax advisor. You may also want to run through all of the categories of business deductions, which are listed in IRS Publication 535.

Image: Depositphotos.com

This article, “Take Advantage of Overlooked Business Deductions – Read These 10 Suggestions” was first published on Small Business Trends

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There’s nothing more important to businesses of any size than being intentional about creating a workplace culture that will attract, engage, and retain the talent you need to fuel your growth. For small or midsize businesses (SMBs), culture building is especially critical because it sets the foundation for future success.

This year at Dreamforce, I had the honor of moderating and participating in a small business executive breakfast panel with  Michael Bush, CEO of  Great Place to Work and  Laszlo Bock, CEO and co-founder of  Humu. We discussed best practices for building a strong company culture that will grow with your business.

There were about 300 SMB executives who had the opportunity to attend in person, but the insights that came out of this panel were too good not to share with the whole SMB community! Below are some of the best tidbits that came out of the panel that I hope any business can use to help create a culture that is built to scale.

What is culture?

Michael Bush: “Culture is the feeling. It’s the thing that makes you really want to go to work or what makes you really not want to go to work. It cuts both ways.”

Laszlo Bock: “Your culture should be your decision code. It’s what you should rely on to make difficult decisions at difficult times, by reminding you who you are.”

Why does it matter?

Michael Bush: “It pays. It’s good for people, it’s good for the world, and you make money, too.”

Jody Kohner: “It’s your main differentiator. Think about it: The day-to-day tasks of any job — whether it’s an account executive or a software engineer — are essentially the same no matter where you work. What’s different is the people you do your job with and the environment you do it in, and that comes down to culture.”

What culture advice do you have specifically for small business leaders?

Michael Bush: “When you’re running a small business, there’s so much work to do. You’re small, and you’re wearing multiple hats. Sometimes when we pick a leader, we pick an outstanding individual performer, but maybe they aren’t a good people leader. We call it the “unintentional leader”. This is a mistake we see more often in small businesses out of necessity, but you need to be extra thoughtful when you’re a small business because that decision sets the tone for your business for years to come. You need strong leaders because a small business can’t afford to lose good talent because the IP is in people’s heads.”

Laszlo Bock: “Culture at small scale is way harder. When you’re big, you have a lot of people to help, and jerks can be avoided. When you are small, every jerk matters and every negative behavior matters. The way to protect your culture is to quickly reset the culture and recover when negative things happen. You need to be very thoughtful about the moments that matter. As leaders, everyone in the company is watching you all the time, so every small thing you do embodies the culture. If you lose your mind and act out when you lose a deal, people remember that. If you stay calm and positive, that sets the tone.”

What are some of the warning signs that culture is not going to scale?

Michael Bush: “Fast growth – you’re so busy doing the work thing, that you forget the people thing.”

Laszlo Bock: “Too much homogeny: people look the same, think the same, behave the same, come from the same perspective. This creates a monoculture, which can lead to massive blind spots and can be a warning sign that your culture is not going to scale. There are a lot of reasons diversity matters. The main business reason is that in situations when people feel psychological safety they outperform.”

How do you build a great company culture?

Jody Kohner: “Be intentional. When our founders started Salesforce, they were as intentional about the company culture they wanted to create as they were about the products they wanted to build and how they would go to market. Two core programs that create an incredible sense of purpose and belonging in our people and are still at the heart of everything we do today, started when we were small – our 1-1-1 integrated corporate philanthropy model and our V2MOM business planning process. You can read more about both on  Trailhead.”

Michael Bush: “It starts with humility. Companies that are arrogant ultimately crumble. Find an objective way to find out what people are experiencing, and then analyze it to continuously improve. Don’t assume that conversations occurring accurately reflect the health of your leadership and your culture. You need to know as a leader, what are the things you need to work on? And trust me, everyone has things they need to work on.”

Laszlo Bock: “Fundamentally, human beings want the same things: people want to find meaning; people want to be trusted, and people want to be empowered. Get a source of truth, not just qualitative, but a valid scientific instrument that gives you direction on what you need to do. Then, you need to act. Get agreement among leadership on what you need to do – might be trust, might be fairness – it’s different for every business. Finally, the hardest thing – activate everyone in your company, so everyone down to the last employee feels the action. Make sure there isn’t a gap between your espoused values and what each person experiences.”

How do you address the “It’s not the same as it used to be here as you transition from small to midsize to big company?”

Laszlo Bock: “People who are predisposed to gratitude stay happy. The others you have to work to instill it in. That’s why you need  constant nudges to encourage things like gratitude.”

Michael Bush: “When you double click on survey results of fast-growing companies there are varying experiences among employees. When this is happening, what we see often is that some leaders are clinging to the old ways and talking about the good old days. Ultimately, this hurts morale. The leadership group needs to get aligned and be looking to the future and find an inspiring way to talk about that, and they need to be asking if everyone is in. It starts at the top. The people are a reflection of what’s at the top.”

Read our earlier  Laszlo Bock interview for more on how culture is an essential growth component for his new business, Humu.

Republished by permission. Original here.

Photo via Salesforce

This article, “Steps SMBs Can Take to Make Sure Their Culture is Built to Scale” was first published on Small Business Trends

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Consider the tremendous potential benefits of having a website. Still a new report from Visual Objects says a significant number of businesses don’t have one.

And when they  decide to build one, they avoid spending big. Two-thirds or 66% of businesses spend less than $10,000 to design, build, and launch a website.

The report, titled “How Small Businesses Use Websites in 2019” looks to inform businesses about the importance of investing time and resources in creating a website. Visual Objects also said it wants to show businesses how to confront the challenges and costs associated with creating a site.

If you have a business with a digital presence, your website is just as or more important than your physical store. And as consumer demand for digital transactions grow, having a digital presence will no longer be an option, especially for young consumers.

Kelsey McKeon, who wrote the report for Visual Objects, said “Younger generations, such as millennials and Generation Z, are an emerging share of consumers who are more accustomed to digital experiences than generations before them.”

In today’s digital world having a website is an indicator of the legitimacy of your business. For a growing number of people, you are not a real business unless you have a website.

Survey Results

One of the most surprising takeaways from the survey is around 40% of small businesses don’t have a website. And of these 40%, the majority or 28% said a website is irrelevant for their business.

Looking forward businesses are changing their stand. Twenty two percent said they plan to launch a site either in 2019, 2020, or later. But there remains a determined 18% who said they are unlikely to launch a website in the future.

Small Business Website Cost

Twenty three percent of small businesses cited cost as the biggest reason for not having a company website. This is despite the fact there are now more affordable or DIY options in the marketplace for creating a website.

When it comes to budget, 66% of businesses spend less than $10K for designing, building, and launching their websites. On the high-end of the budget scale, 19% of businesses spend more than $25K on their company website.

If budget is a problem, the good news is businesses have more options than ever to create a website. In the report Joe Ardeeser, managing member at Jordan Crown, said “[If] a company is unwilling to spend more than $1,000, there are plenty of systems out there like Squarespace and Wix. Those kinds of systems are built for people who aren’t very technical.”

Another option is using freelancers. Ardeeser said if you have a budget between $1,000 to $3,500, freelancers are the way to go. This will allow you to use experts without the high cost of specialized agencies.

Maintaining a Site

Half the battle of creating a website is running and maintain it. Small businesses use their employees, freelancers, and agencies for these tasks.

Beyond the technical aspect of running the website, marketing and promotion are a big consideration for long-term success.

In the survey 30% of businesses said they use their site to increase sales and revenue. Another 22% said it was to establish brand awareness and authority, with 17% stating it was to build relationships with customers.

Taking advantage of the opportunities is still a challenge for small business owners. Low traffic and strong competition is a challenge for 19% of the respondents. Another 13% said lack of time or knowledge as their biggest challenge in maintaining a website.

The Survey

The Visual Objects survey was carried across the U.S. with the participation of 529 small business owners and managers. The businesses represented in the survey have between 1 to 500 employees, with the majority or 54% having between 1-10 employees.

Image: Depositphotos.com

This article, “66% of Businesses Spend Less Than $10K to Build Their Website” was first published on Small Business Trends

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Onboarding is the process where new employees get introduced to all the necessary behaviors, skills and knowledge they’ll need. In a nutshell, it’s the process of integrating a new person into your small business’ culture and procedures.

Small Business Trends contacted Tawni Reed,  an HR manager at BambooHR. She supplied the fact that 31% of new employees quit in the first six months and small businesses can’t afford these high turnover rates.

“The best of the employee onboarding programs we’ve seen are geared toward providing engagement to new hires from the beginning,” she writes. “ Showing new people how to move forward will give them a way to channel their fresh excitement and enthusiasm.”

Onboarding Best Practices

Here’s 10 Onboarding best practices every small business should follow:

Be Proactive

There’s a few things that you can do to start the onboarding ball rolling before your new hire shows up on day one. You can start building a sense of belonging by sending them any company information before they start. If there’s any paperwork that can be filled out, you can send it to them through email to start building their focus and engagement.

Make an Announcement

It’s a good idea to introduce a new hire to the rest of the team. Everyone wants to know who the new face is in the crowd. You don’t need to go too far into detail here. Just a few words about who the new remployee is and the role they’ve been hired to fill.

Go Over Company Policies

Making sure new hires start out with the right information about company policies is critical, according to Reed. She underlines the need to make sure they understand your small businesses dress code, time off policies and pay periods to name just a few.

It’s also important to take your time to get this right.

“Don’t try and cram your entire onboarding program into one day,” she writes. “Spread it out.”

Go Over Your Company Values

Once again, it’s important to spend some time with the new hire here. If you’re interested in having them engage with your values, don’t just read them. Explain why each is important to your company as a whole.

Assign Them a Buddy

“Give your new employees a buddy to help in their first few months,” Reed writes.

NYU has even standardized some guidelines that should help if you get stuck pairing people. They write that new hires should have this kind of help for the first 60 days.

Don’t Forget the Details

Your new hire might be fresh out of college or have years of experience in your industry. Either way, every office is different so you can’t forget any small details. Understanding the company culture and values is critical. However, you’ll also want to be sure to tell them when lunch break is and where they park.

Show Them Every Department

Onboarding can take up a fair amount of time for everyone involved. Still it’s critical for new hires to see the big picture if they want to know how their efforts contribute to the whole. Taking the time to show them every department in your small business pays off.

It’s also a good idea to assign one person in every department to answer questions.

Introduce Them to Management

Reed stresses that it’s important for new employees to be introduced to everyone including supervisors and management. She highlights how important it is to set aside enough time for a decent exchange.

“Make sure you set up some time to have your new employees not just meet your executive team but ask them questions.”

Be Clear

A new hire will be interested in everything that you’ve got to say. It’s important to be clear and consistent when you’re outlining what you’ll expect from them. It pays off to go over their job description yourself before the onboarding begins.

Make sure they understand it’s okay to ask questions during any part of the process.

Line Up Your Resources

A new employee can have questions even after the onboarding process is over. Having a team of people who can be available in key departments is invaluable. Setting up a social meeting or activity with this group and the new hire for the first few months can pay off in the long run.

Image: Depositphotos.com

This article, “10 Onboarding Best Practices Every Small Business Should Follow” was first published on Small Business Trends

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You can’t avoid stress. But consider the many contributing factors. Where you live proves to be one of them. So if your business makes its home in one of these stressful areas, watch out. Keeping your employees stress free should figure high on your priority list.

With that in mind, Zippia set out to find the most stressed out cities in each of the 50 states in the U.S.A. The list has some little known and very recognizable cities, which goes to show you won’t be able to escape stress no matter where you live.

For the report, Zippia calculated the most recent data from the Bureau of Labor Statistics and the U.S. Census American Community Survey from 2013-2017.

Each city in the US were ranked using criteria affecting residents common to most people. This includes unemployment, hours worked, commute times, population density, home price to income ratio, and percent of uninsured population.

Cities ranking high in any or all of those areas were identified as being more stressful. Zappia then took a closer look at all 50 states to determine which cities in those states were the most and least stressed.

Top 10 Most Stressed Cities

In 2019, Zappia identified West New York, NJ as the most stressed city in the U.S. The report said it is one of the most densely populated cities in the U.S. and globally.

More people means longer commutes, which is the case in West New York. Add high unemployment rate and they have combined to make the city number on this dubious list.

The second city is in California, but you might’ve never heard of Huron. The city only has 6,926 people, but the people work long hours, with an average of 45.7 hours per week. Huron also has the lowest average income. Long hours with low income will make anyone stress out.

The third city is South Miami, FL. This is not a typo, it actually made the list as the 3rd most stressed out city in the U.S. even though it is tourist destination.

While tourist may enjoy South Miami, it is a different story for residents who live there. They have to contend with long commutes, high unemployment rates, exorbitant home prices, and a large uninsured population.

The number four spot goes to Glasmanor, MD and Edgewater, CO rounds up the top five cities in the list.

The remaining five cities in the top 10 starts with Manorhaven, NY at number 6, followed by Woodlawn Cdp (Fairfax County): VA at number 7; Justice, IL at number 8; Fair Oaks, GA at number 9; and Terrytown, LA at number 10.

Monitoring and Managing your Stress Level

As the urbanization of the population continues to increase, the taxing effects on both the body and the brain of people living in cities is resulting in more stress.

If you don’t monitor and manage your stress properly, it becomes the underlying condition for some of the deadliest diseases. High stress is an environmental condition for high blood pressure, heart disease, cancer, stroke, obesity, and insomnia to name but a few of the illnesses.

According to the Mayo Clinic, a small amount of stress can be good because it can motivate you to perform well. But if you don’t monitor and manage your stress level it can have some negative consequences.

The clinic says, “Multiple challenges daily, such as sitting in traffic, meeting deadlines and paying bills, can push you beyond your ability to cope.”

With the right stress management tools, you can help your mind and body adapt to the conditions you are living in. And these techniques will help your employees too.

Most Stressful Cities in the US

The graph below lists all 50 of the most stressed out cities in each state.

Image: Depositphotos.com

This article, “Most Stressful Cities in the US: Is Your Small Business Located in One?” was first published on Small Business Trends

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