Tips to Keeping Small Business Start Up Costs Low

July 23rd, 2014

cutting-costs

How exciting to be the entrepreneur you have always wanted to be!  Blood, sweat and tears are not the only things that go into getting your business off the ground.  Money, money and more money may seem to be a dominating issue.  While money is definitely a giant factor in the success of your business, you can control how much you spend by being smart and savvy.

Below are tips to consider controlling these initial startup costs.

  • Where to borrow your money- Do you necessarily have to get funding by borrowing from a bank where you have high interest to pay?  Consider that you may have a lot of family and friends that believe in you and may be willing to loan you the money for little or no interest.
  • Do you really need that nice, plush, expensive office space?  This is where so many people really lose out on a ton of money.  Why not consider working from your home or perhaps renting a small space.  You can grow into a larger space when needed as your business grows.  Also, there are plenty of meeting spaces to rent  to hold your business meetings, interviews and such.  Only do what you absolutely need to do at the beginning of your venture.
  • Consider outsourcing personnel rather than having the expense of hiring people. When you hire someone, you are looking at a ton of expense.  Workers compensation insurance, unemployment insurance and the list goes on and on.  Until you really get into your business and know exactly that you can afford another worker, outsource what you need done.  There are a ton of people looking to bid on jobs that they would like to do for you.
  • Rent some equipment –Consider renting your equipment rather than buying the most expensive laptop, printer and copier at the beginning.  Renting can help you realize what you need and what you don’t need.  If things don’t work out, you have not invested a ton of money into fancy equipment.
  • Take advantage of low cost or free marketing – There are so many ways to get free advertising now with social media.  Consider starting your on page on Twitter, Facebook and LinkedIn.  Have your friends share your page.   Start your own blog or set up an email list.  There is so much to do that is free now instead of initially having to invest in a huge marketing plan to promote your business.
  • Consider using some free technology!It takes time and effort to find some of the free things to take advantage of but in the long run, it will save you money.  For example, some companies offer free conference calling.  Also, consider things like online payment services and direct payment options for you to not incur late fees that you may forget about.  There is also a lot of free small business software to try before you buy.

These are just a few suggestions but there are tons of ways out there to save money. Please continue to browse our blog and knowledge center for more information on starting a small business.

At Maxfilings, we are here to help you fulfill the legal requirements of forming an LLC or corporation, but we’re also here to encourage you and provide insight as you embark on this exciting new journey.

Why Running a Trademark Search Early is Critical

July 16th, 2014

search

Typically, naming your business is usually your first step when incorporating. However, before you set your heart to a name, it is imperative that you ensure that nobody is already using the name. It’s much better to run a search early than to find out after you’ve opened up shop.

Failing to check your potential business name could lead to fines, legal liability, the loss of an opportunity cost (from having to switch names), just to name a few.

A trademark search can also be helpful even if the name you want to use does not turn up in your state or region—it will let you know if someone is using your name in any part of the country. This is especially important for businesses that have the potential to expand into other states. Failure to do so can result in businesses being frozen out of expanding because there is already one with that name in that area.

Running a trademark search early in your business plan also helps to lessen the risk that the United States Patent and Trademark Office (USPTO) will reject your trademark registration. This is helpful as trademarks can be rejected for numerous reasons.

The most common reasons for refusal of Trademark Registration include:

  1. Likelihood of Confusion
    The USPTO runs searches for conflicting trademarks. This procedure is part of the official examination of an application (required only after filing for a trademark). Primarily, this helps to eliminate confusion amongst businesses.

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5 Frequently Overlooked Small Business Tax Deductions

July 9th, 2014

By Bert Seither, Vice President at 1800Accountant

About the author
: Bert Seither is the Vice President at 1800Accountant, the nation’s leading accounting and consulting firm for small businesses and entrepreneurs. For over a decade, Seither has assisted thousands of small business owners by helping them achieve financial freedom.

business-tax-deductionsIf a price tag was put on the amount it costs to get a small business off the ground, there likely would not be enough room on the tag for all the numbers. That’s because diving into business ownership can be a very expensive proposition. Fortunately, the IRS offers entrepreneurs some much-needed financial relief in the form of tax deductions. These 5 small business tax deductions are frequently overlooked and go unclaimed, but they can help you save lots of money.

1. Deducting vehicle expenses

Writing off vehicle-related expenses that you incur as a self-employed individual or as a business owner can save you a nice chunk of change on your taxes. In order to qualify for this deduction, you must use your vehicle to travel from a home office or a place of employment to a separate location for business purposes. There are two basic options on claiming this write-off – either total mileage or actual expenses. The standard mileage rate for 2014 is 56 cents per mile. This means you can claim this amount for every mile you drive for business reasons. If you opt for the actual expenses route, you can generally include fuel, tolls, vehicle maintenance, and insurance when determining the amount you can write off. Be sure to explore both of these options to find out which one will benefit you most in terms of tax savings.

2. Deducting Home Office Expenses

If you do any type of work from home and use an area of your residence for business purposes, you might be eligible for the home office deduction. You can write off a percentage of the costs you incur that are necessary for conducting business in a home or apartment. Qualifying expenses include mortgage interest, insurance, rent, power, repairs, and even Internet access. Just be aware that these expenses have to be specifically associated with business activities you do from home. In addition, they should be part of a room or area of your home that you designate for business activities. In 2013, the IRS enacted a simpler, flat-rate alternative to handling the home office deduction. This option allows small business owners to claim $5 per square foot for up to 300 square feet of home-based office space. However, there is a maximum deduction limit of $1,500 when using this alternative method.

3. Writing off medical expenses/health insurance premiums

Medical expenses and health insurance premiums are normally eligible for a tax deduction for formal business owners and self-employed professionals. If you have a self-insured medical reimbursement plan that you use for medical care, you may be able to write off up to 100% of your out-of-pocket medical expenses. On a related note, medical costs incurred for the spouses and dependents of small business owners are eligible to be deducted in many cases.

4. Deducting the costs of business-related meals and entertainment

A popular yet often overlooked tax deduction for new business owners revolves around meals and entertainment. In the words of the IRS tax code, meals and entertainment activities must be considered “ordinary and necessary.” They have to be directly tied to conducting business in some fashion. If you meet with your business partner, investor, or a client to talk about projects or ideas related to your small business over a tasty seafood dinner, you can claim 50% of the tab as a business tax deduction. Don’t forget to save all of your restaurant receipts. Document the names of the participants involved in a meal, along with what topics were discussed.

5. Charitable contribution deductions

While it’s not specifically a business deduction, any non-cash contributions you make to qualified charities can be a tax-saving write-off. The value of certain items like clothing, furniture, and household goods is fully deductible in most instances. Many non-profits also accept used vehicles that meet certain standards, which you can claim as a deduction as well. Don’t forget to save any receipts or handwritten acknowledgements you get for these donations from your charity of choice. The IRS requires proof of your charitable contribution for it to be considered a legitimate tax deduction.

What to Avoid When Naming Your Business

July 2nd, 2014

When it comes to naming your business, it is as important as naming your first born!  Remember the amount of grueling hours that you spent pondering over the perfect name for your bundle of joy? Your business is most likely “your baby”  and should require the same amount of attention when it comes to being creative in giving it a name.  After all, think of all the blood, sweat and tears that have gone into creating your business. The least you can do is give it a great name that will stand out and be remembered!

There are several tips to keep in mind when naming your business.  There are many suggestions to help guide you, but here are 5 things to avoid when considering the perfect name for your company!

  • No geographic branding – Avoid the pitfall of branding it with a city or state name. Unless you know that you never want to expand, then don’t do it.  You will be faced with feeling the need to change the name after it moves into another state or city!  An example of this is Kentucky Fried Chicken.  They changed the name to KFC to let others know you don’t just have to eat this chicken in the good ole’ state of Kentucky!
  • Don’t ask too many opinions –This can confuse anyone!  When asking mom, grandma and your best friend, they are going to have a variety of opinions.  Ask key decision makers in your business.
  • Be open to change – After a while you may realize that the name was not cracked up to what it should be.  Be open to changing it if it is not “working.”  Don’t think it can’t be changed just because that is how it has always been.  However, try to name it correctly the first time so you don’t even have to deal with this!
  • Be unique – don’t copy – Be daring and unique.  Don’t think you have to put the word “General” in the title like General Motors or General Electric.  These names have such a strong identity that you do not want to look like you are copying them but rather that you are unique and have come up with a name that others have not.
  • Avoid the trend – Don’t name it after the latest trend in technology or any other trendy, catchy title.  Once that trend is over, your company will appear dated and you want to avoid that.  You want to be seen as a company that is with the times and not “old hat.”  For example, “Blockbuster Video.”  Videos are now dated.  Who really has a VCR anymore?  Make sure that whatever you name it, it can flow with the change of time.

Owning your own business is an opportunity to be creative!  Get those creative juices flowing and pick out a name that can help soar your business to great levels.  Please check out our blog and knowledge center for a variety of topics regarding business related topics.  Also, if you are considering forming a corporation or LLC, we can help you decide what is right for you.  We wish you the best in picking out the perfect name that others will remember in a positive way for years to come!

Tips on How to Successfully Work at Home

July 1st, 2014

Working from home can be beneficial for many people. However, this decision can affect your personal life and if your business wasn’t always run out of your home, your business as well. Even with the ability to separate your business and personal lives, a home office can still create unavoidable conflicts.

Is a Home Business Right for You?

If your first thought about having a home business is that you get to work comfortably in your home, then you may want to reconsider. Working from home takes just as much work (if not more) than going to an office every day.

Hurdles you may be likely to face are:

  • Whether you’ve fully considered if your business model is well-suited for a home office
  • How you will deal with customers, clients and suppliers
  • Dealings with family and friends who may want reduced rates for services
  • Friends and family may not understand your need(s) to work uninterrupted
  • Whether being your own boss results in an advantage or a disadvantage in your work

Dealing with Neighbors and Family

Boundaries between a working and home environment—especially involving your neighbors, your friends and your family— most quickly come to mind. Since a traditional office work setting allows you to create natural boundaries, the transition can be difficult for some people. Working at home means that you are responsible for creating these boundaries.

One way to help you create these boundaries is to decide how you will deal with the unavoidable interruptions that you will face.

Interruptions. When working from home, you have the task of making those close to you understand that when you are at home and working, it is your place of business. Unfortunately, people who would never barge into your traditional workplace may act differently when you work at home. They may simply see it as an opportunity to ask you to do errands, baby-sit, call you, or stop by just to chat—all because they may not see working at home as really working.

To try to reduce the instance(s) of interruption, setting up a separate workspace may help—especially if you can put a door between you and the outside world. Furthermore, when people interrupt you, it is important to tactfully let them know that their interruption is unacceptable. It is also a good idea to let them know exactly what they’ve interrupted so that eventually they will learn to take your home business seriously.

While it is definitely important to make sure that you can work as undisturbed as possible, it is also important that you do not end up making yourself feel isolated while working. In a traditional environment, you work and network with co-workers and have the option to socialize with your co-workers. This means that working at home can be lonely.

In order to avoid feeling isolated and gain professional contacts, there are several options available. For example, you can:

  • Join any number of professional groups including those for:
    • Industry organizations or associations
    • People working at home or people in small business
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