Posted by Biz Central USA Marketing Team on March 31, 2009 under Small Biz and Entrepreneurship | Read the First Comment

So you met the tax deadline and your feeling pretty good, but what happens if the IRS decides to audit you? Will you be prepared? According to IRS officials, the audit rate for small business taxpayers is higher than the overall rate because small businesses tend to have more compliance problems than other taxpayers. How do you know if you are at risk? Really, there is no way of definitively knowing this answer.

The IRS selects returns for examination in five ways: 1)Computer scoring by DIF (discriminate information function), a formula used to select returns for review, 2)National Research Project, 3)Local and national projects that look at particular areas, 4)Information matching, such as Forms 1099, 5)Related returns. If selected, it′s good to know that some audits are worse than others.

 Three Types of Audits:    

• A Correspondence Audit- by mail, asking for a straightforward answer (by mail) on less complicated issues, such as proof of deductions.
• An Office Audit- held in the IRS office, where you′ll be asked to produce receipts and other documents related to specific issues.
• A Field Audit- where the IRS agent comes to your home or place of business.

While tax professionals say it is unlikely the IRS will come knocking at your door, if you are choosen, it′s definitely not a good place to be. After all, audits cost time and money – two things most small business owners have in short supply. Therefor, the best thing to do is be prepared!

Preparing for an Audit:

• Always keep any business-related records including: canceled checks, invoices or sales slips, handwritten notes, receipts or petty cash vouchers showing any payments etc.
• Pinpoint problems backing up income sources or expense deductions. You′ll need to legally show your right to take tax deductions or other tax benefits claimed on your return.
• Retain the service of a professional. Hiring a seasoned professional can make this experience less painful and cost you less in the end.

A IRS audit is nothing to take lightly. Improper bookkeeping and faulty filings can lead to thousands of dollars coming out of your small business. In the end, the more prepared you are, the less likely you will be penalized with hefty fines and the more likely your business will succeed! 

Posted by Biz Central USA Marketing Team on March 26, 2009 under Small Biz News | Read the First Comment

Yesterday, USA Today published a story regarding unqualified companies abusing the HUBZone Program (Historically Underutilized Business Zone).  This is definitely something you might want to read if you are a small business owner, an entrepreneurial ′newbie′ or anything in between.  In a short re-cap:

• The Government Accountability Office found that 19 companies were improperly awarded nearly $30 million in federal contracts.
• The GAO reported that ″there are likely hundreds and possibly thousands of firms″ in the program that don′t meet its requirements.
• The committee′s chairwoman, Rep. Nydia Velázquez, D-N.Y., said she plans to urge the SBA to shut down the program until it can fix the problems.
• In July, the GAO reported that they found that 10 Washington D.C. area businesses were improperly part of the program. One company, for example, listed its office as a small room above a dentist′s office in a low-income area, while investigators found its main office was in the suburb of McLean, Va.
• It was determined that 7 of the 10 companies invested in the July report were ineligible.
• SBA officials told the GAO they are ″reengineering″ the program to make it more efficient and to do a better job of preventing and detecting fraud and abuse.

For qualified small businesses the HUBZone program can be an excellent opportunity to secure government contracts, help to empower communities, create jobs, and attract private investment.  What happens though, when small businesses are taking advantage of this program?

 As a small business owner, how do you feel about the millions of dollars given to these unqualified companies? What steps do you think the SBA can make in improving the HUBZone program and preventing such abuse?

Map of U.S. HUBZones

Read the full GAO report.

Posted by Biz Central USA Marketing Team on March 19, 2009 under Small Biz News | Be the First to Comment

In efforts to jumpstart the Recovery Act in ways of small businesses, President Obama and Treasury Secretary, Timothy Geithner, announced Monday that the Government will increase lending guarantees administered by the Small Business Administration and plans to spend $15 billion to bolster the secondary market.

Currently the SBA guarantees payment on 85 percent of a loan up to $150,000 and as much as 75 percent on loans of more than $150,000. The plan will increase this to 90 percent across the board. The increase reduces lender risks as an incentive to make loans. In addition, the plan also waives fees up to $75,000, which borrowers usually pay for the loans.

“Small businesses are at the heart of the American economy,” Obama said Monday. “This is going to be a first step” to help entrepreneurs.

Under the plan, the administration will also require the 21 largest banks getting government bailout money to provide monthly reports on how much they are lending to small businesses, and all other banks must make quarterly reports on such lending.

Treasury Secretary, Timothy Geithner, pushed forward to urge banks “to go the extra mile” to offer loans, stating “they bear a “social responsibility” to assist in the recovery because of their role in the financial crisis.”

As a small business owner, what are your thoughts on these first steps to recovery? How will an increase in loan guarantees assist you as an entrepreneur?

Posted by Biz Central USA Marketing Team on March 17, 2009 under Small Biz and Entrepreneurship | Be the First to Comment

Every small business will inevitably go through three stages of a life cycle: start-up, throw-up and grow-up, (As stated by Jay Goltz, in an article on CnnMoney.com).  For those of you who haven′t been there yet, it is the point usually between 6 months to 2 years after your initial start up, where you find that your business is not meeting the expectations first projected.  Mr. Goltz gave a fine example on how stage two can come about very quickly and unexpectedly through faulty accounting.  In addition, I believe there are many other variables that can lead to the throw-up stage.

Each of the variables below can either make or break a small business.  If you have found yourself in the throw-up stage, take a few minutes and ask yourself the following questions:

1) Do you resist changing with the times? Take a look around you-the world is not the same way it was 8 months ago, let alone 10 years ago.  Times change and so do market trends, communication capabilities and business tactics, (to include a few examples:  the explosion of online social networks, SEO, viral marketing and blogging). Traditional methods of doing business are not to be forgotten, but you must learn to integrate these methods with a new laundry list of tactics.

2) Do you practice outstanding, excellent and rewarding customer service? Remember the first rule of thumb- “If you don′t take care of your customers, someone else will!” Too often poor customer service can lead to a grapevine of bad publicity and referrals.  Word of mouth can be one of the strongest influencers when one is making a decision.  Don′t believe me? Check out these stats: 67% of all consumer decisions are primarily influenced by word of mouth (McKinsey/Thompson Lighthouse) and  90% of customers identify word of mouth as the best, most reliable and trustworthy source about ideas and information on products and services (NOP World).

3) What marketing and self-promotional initiatives are you practicing? I understand that most entrepreneurs probably have a tight wallet, but a small budget is no excuse to eliminate marketing and pr from your business structure.  Recently, I spent a lot time on some of the top 50 social tools on the web, including (Facebook, Twitter, Furl, Digg and more).  These sites are no longer just for picture posting of the latest college mixer! Large and small businesses alike, have adapted these tools as a way to gain leads and build presence on the web. Utilizing these tools, will act like a bull horn for your company new, updates, questions, promos and comments.

4) Do you know your competition? What are their strengths and weaknesses? Think back to your high school football team.  Usually every night before a big game the team would review “film” from the opposing team′s recent games.  Your home team would take notes, observe tendencies and learn the competitor′s weakness.  The next night, your home team was prepared and ready to take home a victory! The same goes for business, you cannot compete if you don′t know who your competition is!

However it is that your business found itself in the throw-up stage, don′t forget there is light at the end of the tunnel, but not without a lot of hard work and re-evaluation of your current business structure.  In many cases you will have to start at the core of the problem and work your way through this mess, but in the end you will come out stronger and more confident in the future success of your business!