03.30.07
Posted in Uncategorized at 4:36 pm by Diana Heeb Bivona
There is nothing more chilling for a small business owner than the realization at tax time that you owe money — big money. You may be considering a variety of options such as paying Uncle Sam with your credit cards, dipping into your retirement accounts, or the big no-no of withholding payroll. All have been done before and all have major disadvantages to them that do not make them the best option.
So what can you do? You can approach the IRS and ask for an installment plan. Generally, the IRS says you cannot be turned down for an installment agreement as long as you don’t owe more than $10,000 and you’ve filed your returns on time and paid any tax due during the previous five years. You also cannot have entered into a previous installment agreement during that time. And you must pay what you owe within three years.
If you do owe over $10,000, you may still qualify for an installment plan, but you will need to seek special permission from a IRS district office and probably submit additional financial statements to qualify.
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03.29.07
Posted in Uncategorized at 5:30 pm by Diana Heeb Bivona
A buy-sell agreeement is a legal document that explains how a company or its owners will redistribute ownership shares after one of the owners dies, becomes disabled, retires or otherwise leaves. The primary goal of the agreement is to avoid conflict and confusion by keeping ownership and control in the hands of those individuals who will be responsible for managing the operations of the business.
When drafting or reviewing your company’s buy-sell agreement, consider address the following:
- Review your buy-sell agreement once each year. This allows you to takes into account changes in your personal circumstances or in the business itself.
- Draw the distinction between ownership and employment. Often in the beginning stages of a company’s life, the lines between ownership and employment are often blurred. It is important to not only separate the benefits of ownership from those of employment, but to think about how one may effect the other in the event of change.
- Specficially address various circumstances. Ensure your agreement very specifically details what happens when: death, voluntary departure and involuntary departure occurs of one of the owners.
- Ensure specific language regarding valuation of shares under various scenarios. For example, what’s the value of the shares if outside investment was sought and must be addressed or if one party has less than a 100% interest in the business?
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03.28.07
Posted in Uncategorized at 4:49 pm by Diana Heeb Bivona
Partnerships can often provide tremendous benefits to a business endeavor in terms of pooling the best talent, skills and resources from one than one parties. Unfortunately, mistakes often occur when forming either a general or limited partnership which could damage the business.
Here are three of the most common mistakes:
No written agreement. Often, two or more people that know each other tend to think there is no need for a formal written agreement between them. This can be a big mistake given that a business can often strain or ruin a personal relationship. Regardless of the type of partnership, all details should be spelled out and signed by all parties to avoid potential problems down the road.
Provide a way out. Sometimes, things just don’t work out between two parties. Having an exit strategy that allows either party to walk away or buy each other out, without destroying the business is an absolute must.
Failure to consider a limited partnership. Some businesses function successfully as general partnerships, however, there is a primary advantage to forming a limited partnership. Limited partners are generally not liable for the actions of the general partner. This is beneficial if you’re only financially backing a business or can’t put in the same time and commitment.
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03.26.07
Posted in Uncategorized at 7:25 pm by Diana Heeb Bivona
Logos are a great visual tool for your company. When done correctly, they can enhance your image and recognition among your customers and partners, establish your brand identity, and present an overall professional image of your company.
When developing a logo, consider:
- Your competitors and/or industry. Are their images conservative, flashy, avant garde, traditional? How can you differentiate your company from the competition?
- The message. What do you want your logo to communicate about your company?
- The benefits. A logo can often communicates to your customer the benefits of your service. Do you provide fast service? Are you reliable? Think of images that convey your benefits.
- Functionality. Your logo should be scalable, easy to reproduce, memorable and distinctive.
- Built to last. Create a logo that will withstand the test of time. Sure, it might look trendy and cutting edge today, but will it still fit the bill twenty years from now?
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03.22.07
Posted in Uncategorized at 9:01 pm by Diana Heeb Bivona
Violence in the work place is becoming a regrettable common occurrence. It is now ranked as the third leading cause of occupational death and the fastest growing type of homicide in the U.S. According to the Bureau of Labor Statistics Census of Fatal Occupational Injuries (CFOI), there were 551 workplace homicides in 2004, out of a total of 5,703 fatal work injuries. The actual number of incidents is probably much higher, but incidents of violence are likely to go unreported.
The assumption that it can only happen elsewhere can prove deadly. Work place violence happens every where and does not discriminate. Its causes are many and varied and can range from everything from a supervisor who just wouldn’t listen, to a job termination or layoff, to feeling like they have been unfairly treated by other employees or a client. The point is that it can happen anywhere. So, what can you do to prevent workplace violence?
Create and Implement Policy. Create and communicate a clear policy of zero tolerance for workplace violence, verbal and nonverbal threats and related actions. Make sure that your managers, supervisors, coworkers, clients, and visitors are aware of the policy. More importantly, practice what you preach. Zero tolerance means zero tolerance.
Encourage Employees to Come Forward. If an employee is being victimized, they need to be encouraged to come forward without fear of reprisals. Communicate that fact to your employees. Consider ways in which employees could anonymously report incidents which could then be thoroughly investigated and addressed.
Maintain a Physically Safe Work Environment. Consider security measures such as i.d. photo badges, individually coded card keys for access to the building, good lighting throughout the building and parking lot and/or security cameras on the premises.
Learn to Recognize. It is important to be able to recognize behaviors that contribute to workplace violence. Behaviors such as substance abuse and episodes of emotional disturbance leave signs that can be noted if you know what you are looking for. If you observe a distinct pattern of such behaviors and attitudes that cause you concern, take the appropriate actions.
Behaviors of potential concern:
- Upset over recent event(s), i.e. a work or personal crisis
- Recent major change in behavior, demeanor, appearance
- Withdraws from normal activities, family, friends, co-workers
- Intimidating, verbally abusive, harasses or mistreats others
- Challenges/resists authority
- Blames others for problems in life or work; suspicious, holds grudges
- Use/abuse of drugs and/or alcohol
- Has talked about committing acts of disruption or violence
Attitudes of potential concern:
- Is isolated or a loner
- Morally superior, self-righteous
- Feels entitled to special rights and that rules don’t apply to them
- Feels wronged, humiliated, degraded; wants revenge
Employers not only have a responsibility to provide a safe working environment for their employees, but can actually be held liable if it’s proven that there was negligent hiring, negligent retention and/or inadequate safeguards to provide a “safe and healthful workplace”. Prevention is critical in avoiding incidents of work place violence. While incidents of disruptions and violence may be increasing, early intervention can assist in preventing more serious and deadly acts.
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03.21.07
Posted in Uncategorized at 8:48 pm by Diana Heeb Bivona
Purchasing office equipment and technology are two huge expenses for a new business. Heck, they can be huge expenses for any business. Understandably, you want the most bang for your buck. However, there is a way to get top of the line office equipment and technology without breaking your bank. In fact, there are additional advantages to leasing your office equipment as well.
It’s easier to secure financing for leasing than it is for purchasing. Generally, financial institutions want to see two to three years worth of financial statements before they will make you a loan. With leasing, you typically just have to show a good credit history for six months to a year.
Leasing improves your cash flow. Loans generally require that you put money down to purchase — sometimes upwards of 25%. Can you afford that type of cash layout? Leasing usually does not require any money down. You may have to put aside money for a deposit, but its nothing compared to 25%.
Keeps your company on the cutting edge. Technology and equipment are rapidly changing fields. If maintaining the latest and greatest is important to you, consider a series of short-term leases instead of buying every few years. Even better – some equipment leases have built-in upgrades as part of their package.
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03.20.07
Posted in Uncategorized at 6:35 pm by Diana Heeb Bivona
When starting a new business, it is sometimes difficult to estimate exactly how much cash you are going to need. In many cases, we tend to underestimate what we will need to not only get the business off the ground, but to keep us in business while our products and/or services are still being developed. Here are a few suggestions for determining how much you need:
Plan on more than you think you need – the caveat to this is that the money comes cheap if borrowing. If you can secure a low-interest loan in the beginning, go for it. Cash is cheap, equity is not. Once you sell a piece of your company to an interested investor, its extremely difficult and expensive to recover it down the line.
Have measureable milestones – ask yourself how long will it take to develop and/or launch a product or expand your workforce? Find a time-measured milestone that you can use to determine how much cash it will take to accomplish. For example, if it will ake 8 to 12 months to launch a new product, calculate how much cash is needed to accomplish this for that time-frame.
Remember your operational costs – all too ofen we tend to accurately calculate how much we need to accomplish our measureable milestones, but forget how much cash we need to continue operating day-to-day during that time frame. It’s important to add a cushion of approximately 6 to 9 months of operational costs to continue running while you accomplish your goals.
Your primary objectives are to have enough money to keep your businesss running AND achieve specific milestones so you can demonstrate increased value before you need to go out again and raise additional funds.
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03.16.07
Posted in Uncategorized at 2:39 pm by Diana Heeb Bivona
As business owners, we are always looking for cost-effective ways to do business. A smart business owner is one that is always looking for ways to save on expenses without sacrificing customer service or their product/service. Unfortunately, we also tend to sometimes look too deeply for a potential solution which ends up to be either too costly or time-consuming to implementing. What do I mean?
May be we tend to look too hard for a solution. Sometimes, its the simpliest things that can save us big money. There’s a wonderful example in a Financial Times article this week. It talks about Roadnet, a division of UPS, who was trying to find a way to reduce green house gas emissions from its 92,000 vehicle fleet. They explored everything from alternative fuels and buying hybrid-electric vehicles, but these alternatives were either to costly or simply not doable.
Then, they hit on something simple. What about reducing the number of left-hand turns the fleet makes? Left-hand turns equated to idling in the middle of the road waiting for oncoming traffic to pass. This was wasting a lot of fuel and greatly contributing to greenhouse gases.
Roadnet uses an underlying map database that can disable left-hand turns in the route planning process. They recalibrated the software to avoid unnecessary left-hand turns. When implemented Roadnet’s clients saved an astounding 54.4 million gallons in fuel. Assuming an average disel fuel price of $2.68 per gallon, and they’ve just saved $144.8 million. Not bad for such a simple idea…
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03.15.07
Posted in Uncategorized at 5:46 pm by Diana Heeb Bivona
Like so many other mysteries in life, so is the IRs’s decision to make the tax return filing date for S and C Corporations March 15th. So, if you operate a S or C Corporation with a year-end of December 31st, your tax return needs to be filed today. If you haven’t quite finished your return, don’t despair, the IRS will provide you with a small reprieve. They aren’t completely heartless after all.
You still can file for an extension today. Simply go to the IRS web site, at www.irs.gov, and download a Form 7004. Complete the form and send it in, certified mail, return receipt requested by the end of today, and you’ve got another six months to file.
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03.14.07
Posted in Uncategorized at 2:14 pm by Diana Heeb Bivona
Interviewing for new employees can be frustrating, particularly when you are not confident you will find the best person for the job. A company’s interviewing style is often at the heart of the issue. The problem, to a large extent, is what types of questions we ask candidate to gather information. Commonly, questions asked are:
- Tell me about yourself.
- What are your strengths and weaknesses?
- Why you you want to work for us?
Its no wonder with these types of canned questions that we often get canned answers. The success rate of finding the right person using this type of unstructured interview process? Statistics put it at around 57% with the problem being that most interviews are merely nothing more than a discussion which doesn’t address the real issues at hand.
There is another style of interviewing being used by more and more companies. It’s called behavioral interviewing and its goals is to probe the candidates for their competencies not just their past experiences or what they would do in certain situations. The success rate for behavioral interviewing is over 77%.
Types of questions in a behavioral interview include:
- Give me an example of a time when you had to be quick in coming to a decision.
- Have you ever had difficulty getting others to accept your ideas? What was your approach? Did it work?
- Have you ever had to “sell” an idea to your co-workers or group? How did you do it? Did they “buy” it?
- What do you do when your schedule is suddenly interrupted? Give an example.
- Give me an example of an important goal which you had set in the past and tell me about your success in reaching it.
Behavioral interview requires research and practice on the part of the interviewer, but it is well worth it if it increases your chances of getting the right person for the right job.
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