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Archive for April, 2010

Your business depends on customers to survive. Advertising and marketing strategies can become expensive, and some tactics turn out to cost you more money than the revenue that they generate. Business networking can cut your advertising expenses significantly while growing your customer base. You also do not have to be a good salesperson to network effectively, Just be yourself.

Networking is a good skill for any business owner to have, and knowing where to network can be just as important. Sure, family and close friends can help promote your business and be a great resources of referrals, but ideally you want to expand your network. Getting involved in community activities, volunteering at charity events and joining your local Chamber of Commerce are all ways of growing your network.

Volunteer and Get Free Advertising

Not only can volunteering be rewarding, it can also bring you new customers and referrals. Choose a charity that you like or an activity that you enjoy and participate as much or as little as you want. You can join more than one group and even participate in one-time or annual activities, like city or school fundraisers.

If your line of work involves a specialized skill like website design, event planning or construction work – see if you can share your skill and expertise to assist with the organization’s activities. This is an easy way to introduce your skills to others and become the “go to” person in your trade. Volunteer Match is a website that lists charity activities and event by type and location.

Networking Groups Make Marketing Fun

Networking groups do not necessarily have to be business-focused. In addition to being involved in trade and industry groups, there are alumni groups, sports and activity groups, volunteer organizations, social clubs and even regional associations. Meeting people with common interests makes it easier and more fun to network, so you do not have to feel like you are constantly marketing.

You can get involved in a very active group or one that meets less frequently, like once a month. Rather than simply showing up to group activities, you will be able to “market” yourself more easily by volunteering to be a chairperson or leader of some sort. The more effort you make, the more others will want to make an effort on your behalf.

Use the Internet with Business Social Networking and Other Sites

Social media is growing fast – and no wonder! This method of communication enables people to reach many people very quickly and stay in touch easily for very little cost. Whether you build your social media network around your business or other interests, you can use this popular strategy to casually inform visitors and followers about what you do for a living.

The key is to avoid blatantly promoting your business all the time. You do not have to share what you ate for breakfast every morning either. Share ideas, thoughts and news that will likely interest others and encourage them to return back or become a subscriber.

Websites like Face book, Linked In and Twitter are all online communities where you can connect your business. There is no cost to sign up and no computer experience is required to use these services. Some lesser known sites that are good for reaching other business owners include Focus, Tribe and Networking for Professionals.

Let people get to know you as a person while also informing them of what you do without throwing out a sales pitch. When you are involved in group activities and events, you can demonstrate to others that you are reliable, skilled, easy to work with, trustworthy, friendly, etc.. Interestingly, these are all traits that someone wants in a business relationship, which is one of the reasons business networking can work so well.

Business networking is a common phenomenon in the world of entrepreneurs. They are built for businesses to come together essentially to share business referrals and other business opportunities to one another in a more personal manner, in meetings they can have outside the circle.

A friend in college, after graduation, said that finally she feels the importance of belonging to a sorority. She said that in finding a job, she has it easier because her sorority sisters serve as her connections to companies they work in. Well, there is a concrete example of the perks one gets in being a part of a group aside from personally carrying your group’s identity with you wherever you go. Of course, it would be better if your group actually has an established name. But that’s another story.

Business networking is a common phenomenon in the world of entrepreneurs. They are built for businesses to come together essentially to share business referrals and other business opportunities to one another in a more personal manner, in meetings they can have outside the circle. Because of such networks, businesses can have strong connections with each other when the need to expand arises or when there seems to be trouble in achieving goals. Through this system entrepreneurs extend their help to each other and at the same time establish important relations that could help each member prosper. Being a part of business network group is also a cost-efficient way to gain support from the business community while having people back you up in the promotion of your products and services. Some businesses need other business’ products and services, through networking businesses can find their best partners hence deals can be made without fuzz.

Since businesses have taken over the internet, so do business networking websites. Business networking sites are useful for any online business because through them business marketing or the facilitation of the sale of their products or services happen. It’s like a social network for businesses where transactions in sale take place. Online are an array of websites a business could choose from and they offer different benefits and prizes for their members. However, the effectiveness of this system is one thing they have in common. There are also perks in joining business networking sites.

Any online business networking groups can provide discounts for its members when they avail of products from their co-members’ businesses. Also, benefits of joining include free memberships and a chance at their lotteries where incredible prizes are up for grabs. In other words, being a member of any business networking group through websites gives entrepreneurs of different standings, whether they be small or large-scale, an opportunity to widen their horizons in the world of business by creating networks where discussions are held, products endorsed, clients exchanged and deals made. These are aside from the other personal benefits included where any member could avail of.

Just like in joining any kind of group, there are some things to consider. But since doing business had always been a serious matter, entrepreneurs should have an extra critical eye out for business networking groups and their fancy websites which are attractive but the actual services offered don’t say much. It is of great importance to build a name in the world of business, it is as important as having loyal clients and promoting your products and services. However, doing business is tough work more than anything else, and to achieve a good place among other businesses, you should have for yourself a reliable network.

Currently the federal government operates under the assumption that all members of society are 14th Amendment citizens; and therefore, it ensures “their” citizen’s privileges and obligations are protected, and that they have federal control over them wherever they reside. Great civilizations have always collapsed because they destroyed the value of their money. 5 OR you can invest in an IRA and the equation changes altogether depending on various factors. I heard one economist state that if most Americans use this money for consumption; it would help to stimulate the economy.

The 16th Amendment was passed by Congress in 1909, and was arguably ratified in 1913. We are the most technologically advanced nation in the world and have the ability to attack any spot on the face of the globe; we do not need to have massive numbers of troops and equipment all over the globe. “In the case of Murphy V IRS (2005), the Supreme Court stated: “The Sixteenth Amendment simply does not authorize the Congress to tax as “incomes” every sort of revenue a taxpayer may receive. Many people have incomes that are too high to be eligible for Roth IRA accounts (modified adjusted gross income must be below $116K single or $169K for a couple). For each child you have, you get an additional $300. The corporate entity enjoys a level of protection the citizen does not, therefore for that protection they pay a tax to the government.

It was not until the government started expanding into socialistic programs, wealth redistribution, and massive funding of other countries that they needed to steal from the American population. Republican Presidential candidate Ron Paul puts it best, “you can’t solve the problem of inflation with more inflation. Government will still get the extra money that it would otherwise have had to tax us for. I guess the only thing I can justify is maybe the new window blinds and they are for my kid’s bedrooms. You can create a winning strategy, regardless of who wins the 2008 Presidential Election!. Funding the total operation of the government solely by constitutional taxation could be done if we were to remove the Federal Reserve, downsize the IRS, reduce overseas payouts (which amount to billions every year), cease to fund groups such as the UN, discard unnecessary social programs, and reduce our military footprint around the world.

Like many small business owners, you engage a Chartered Accountant and probably view your accounting fee as “normal”. It’s important for you to consider what you’re getting for your money. Before shopping around to reduce your accounting fees, compare the value that you’re receiving from your accountant.

Consider the following two examples:

Example 1: Your accountant prepares monthly management accounts for you, as well as end of year tax returns, etc and charges you $3,500 throughout the year. During that time, they give you regular business advice and advice on how to legally reduce tax (via an on-line newsletter like we do). You gladly adopt a few of the tips and you see a dramatic improvement in your business. And now you work less and fish more!

Scenario 2: The only time you talk with your accountant is at tax time and your accounting fee is $1,750. You receive no monthly management accounts to identify any early warning signs and you receive no advice at all.

Would you choose accountant 1 or accountant 2? Which one will provide you with more value?

Business owners often seek my advice on how they can receive a value added service from their accountant. Here are a few of my tips:

* Ask them to show you a way to organise your accounting records and if they recommend suitable accounting software.

* The majority of accountants charge an hourly rate (rather than fixed fees) so if they need to call you to get a missing bank statement or payroll return, you’ll be charged more. Keep your bank records, deposit books, cheque stubs and invoices tidy and in some kind of order.

* Don’t over complicate your needs. Often, you’ll only need a set of basic financial statements. Clients regularly instruct us to code hundreds of transactions to dozens of separate account transaction codes. This additional work adds to accounting fees and is often unnecessary for most small businesses.

* Separate your personal and business spending. Open a new account with your bank and pay all business expenses from that account as much as possible. Many people forget cash expenses for the business and then forget to claim for them. Try to remember to keep receipts and write on each one a brief description of what you spent your cash for. Think about adding yourself to your payroll, rather than taking irregular cash drawings.

* It’s ok if you hate accounting – hire someone to do your book-keeping. Recruit a part-timer or see if your accountant has book-keeping staff. Your accountant probably has junior accounting staff who can help you and their fees will be less than senior accounting staff. You should find that they’ll be able to do the job quicker and better than you which will ultimately save you time and money.

* Before making big business decisions or investments, consult with your accountant first. Poorly considered business decisions that affect your business’ financial performance may be very costly to rectify after you have made them.

File your GST & PAYE returns ahead of time or if you are falling behind your accountant should be able to negotiate a repayment plan for you.

* Speak with your accountant every few months or so to establish feedback on your business’ performance. You don’t need me to tell you that your business is far too important to ignore early warning signs and proven business methods.

You may view a “cheaper” accountant as a short term solution but longer terms consequences can often be overlooked. If it’s just number crunching you want, there are plenty of accountants out there to help you. But you should view your accounting fees as an important investment.

If it’s value for money you’re after, I hope you’ll use these tips to ensure your Chartered Accountant gives you more than bean counting.

The Bamford tax decisions were handed down on 30 March 2010 by the High Court of Australia. This was important because the highest court in Australia had the opportunity to give its views on some of the difficulties involved with the taxation of trust income.

I will not discuss the facts of the cases. In summary, the High Court decided two key things.

These were that:

[1] The capital profit made by a trust was “income of the trust estate” as a result of the valid exercise by the trustee of a power under the deed. The income of the trust estate refers to the accounting or distributable income of the trust; and

[2] The term “that share” in section 97 of the Income Tax Assessment Act 1936 referred to a proportion of the income of the trust estate and not a part or portion. This meant that the High Court affirmed what is know as the “proportionate” approach as the correct method of allocating the taxable income of a trust to its beneficiaries.

The ATO has reacted to this decision with some very important changes in its views. On the 2nd of June 2010, the ATO released its decision impact statement on the two Bamford cases.

These include:

[1] A provision of a trust instrument, or a trustee acting in accordance with a trust instrument, may treat the whole or part of a receipt as income of a period and it will thereby constitute income of the trust estate – that is the accounting or distributable income.

[2] If a trust instrument does not specify when a receipt is to be treated as income of a period, and the trustee does not have any special power to characterise the receipt, then the question of whether the whole or part of a receipt constitutes income of the trust estate will fall to be determined in accordance with the general presumptions of trust law.

[3] The provisions of a trust instrument, or a trustee acting in accordance with a trust instrument, may determine whether an outgoing is properly chargeable against the income of a period (absent which the question will fall to be determined in accordance with the general presumptions of trust law).

[4] Subject to the possible operation of provisions outside the trust tax provisions, the amount included in a beneficiary’s assessable income under section 97 consists of an un-dissected or un-allocated proportionate share of the entirety of the tax net income.

What flows from this is that the ATO is withdrawing a number of rulings that have been part of the way trustees and tax practitioners have dealt with the taxable income of trusts for many years. Significantly, Taxation Ruling TR 92/13 is being withdrawn. This ruling dealt with dividends received by trusts and specifically whether franked dividends could be streamed to beneficiaries.

It appears that the ATO may now be going to adopt the view that trust income of various types cannot be streamed to different beneficiaries. The ATO states in the decision impact statement that it will be consulting on a new interpretative product that will consider the current imputation provisions in the 1997 Tax Act.

The ATO also released a Law Administration Practice Statement. This is PS LA 2010/1 in relation to the Bamford decisions. This advises tax officers that the Commissioner has changed his view in relation to the way beneficiaries and trustees are taxed due to the Bamford decisions.

Broadly, the assessments of beneficiaries and trustees will not be altered if trustees and beneficiaries lodge tax returns based on the Commissioner’s prior interpretation of the law for the 2009/2010 income year and earlier years. However, if there is a deliberate attempt to exploit the trust tax provisions or there is a dispute in relation to these years, tax officers must apply the law as the Commissioner now views it.

The PS LA also states that if there is uncertainty as to whether a trustee or a beneficiary should be assessed on trust income, assessments should be raised against both the trustee and the beneficiaries.

These two documents herald an important change in the way the ATO expects trustees of trusts to allocate taxable income to beneficiaries. If you deal with trusts, it is most important that you understand these changes.

Wishing you easier business.

John M. Jeffreys

I have had the experience of working for both the corporate world and working for my own business from home. Both experiences have its own perks and advantages, both have its own downsides, as well. Working in the office required me to work fixed hours, usually business hours 8am to 5pm and with two children at home, being away for nine hours daily could translate to a lot of stressors at the end of each day. To be able to be away from the kids would mean paying extra for household help or if this is not available, paying extra for childcare center fees.

The first time I heard the news about the possibility of earning my own money from the comfort of my own home, with just a computer and internet access as tools, I had to shake my head in disbelief. I have never thought that five days after, I would have the need to verify the information and see for it myself. Until I have met somebody who has actually started making money out of selling some of her unused valuables at home and until I have seen the profit from her sales. That was when I have decided to start planning so I can try setting up my own business at home. I started with completing online surveys from eBay so I can be familiar with the site and then eventually transitioned to selling on eBay.

Before I knew it, I have developed the skills, the ease and the joy of running my own online business, I did not have to go to the office and be gone for nine hours every day. I even have the luxury of choosing my own hours to check on the status of my business at any given day.

I have never been back to working away from home which gave me more time with my family, which will always be the things that will count to anyone. While working or while waiting for a sale to be completed, I can check on my kids, I can plan the housework I need to complete for the day, I can drop in on my social networks online and do anything imaginable with my time. Of course, over time I get to learn the tools I need to keep for my online business, such as the ever reliable resource link from SaleHoo. Can life get any better than making your job work for you, rather than making yourself work for a job? If I ever need extra money at any given time, I just log more hours online so I can improve on product descriptions or personally check on any potential customer, thus improving sales for the week.