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In an effort to simplify accounting for small business owners, the American Institute of Certified Public Accountants (AICPA) recently released an easier way for small and medium size business owners to create financial statements for any interested party (managers, banks or investors) an improved way to view a company’s finances.

What does it do?

The new model was created for private, for-profit businesses (so not GAAP compliant) and won’t help you file taxes. Rather, it gives reliable financial statements—for business owners, lenders and bonding companies (for construction businesses). It is meant to be more comprehensive than tax or cash accounting and additionally designed to create a single format all small and medium size businesses can use. In practical terms, the new framework uses historical costs versus fair-value estimates and gives business owners the ability to adapt and produce a financial statement appropriate for their needs. There is also the hope that as more businesses adopt the new framework, more reliable information about small and medium sized businesses and therefore make it easier for those business owners to compare their growth to others.

Who is it for?

According to Entrepreneur.com, the standards are for private companies with $300,000 to $100 million in annual revenue. Bob Durak, Director of Private Company Financial Reporting at AICPA said, “What we hear when we talk to these small businesses and the CPA’s that serve them is that they are looking for another option. These new standards are likely to be used by owner-managed firms that don’t have an in-house accounting team. If a company expects to go public in the near-term, it may want to avoid these non-GAAP accounting principles.”

Do I have to use it?

At the moment the format is completely optional. However, there is also the hope that as more businesses adopt the new framework, more reliable information about small and medium sized businesses and therefore make it easier for those business owners to compare their growth to others. However, to gain that kind of acceptance it will need the blessing of accountant and bank lenders. That might not be as easy as the AICPA thought.

Last month, the Institute of Management Accountants (IMA) released a statement announcing their opposition to the AICPA option. According to their press release, “An accounting association body [in this case, the AICPA] should not be setting what could be perceived as authoritative standards, which in fact are non-authoritative and thus difficult to regulate or enforce…Private companies need to maintain credibility with sound internal controls while maintaining the freedom to innovate and create sustainable value for stakeholders. However, it is IMA’s assertion that businesses should not risk that credibility by adhering to a framework created by a group other than a national standard-setting entity.”

For More Information
Talk to your CPA or visit the AIPCA site.

Change is a-coming on the health care front. Obamacare is making sure of that. Otherwise known as the Patient Protection and Affordable Care Act, this 2400-page bill, passed into law in 2010, is confusing and worrying an awful lot of small business owners.

 

What Does it Mean for Business ?

The Act originally stipulated that every American citizen must have health insurance as of January 1, 2014; the date has since been pushed forward to the beginning of 2015. The impact for business? The bill also requires employers to make quality, affordable health insurance available to their full time workers. This simple task sounds like it carries the potential for a huge – and perhaps expensive – hassle. But a closer look at the details of the bill will give a clearer perspective on the situation.

How Small is Small Business and What is Full Time?

Small businesses are exempt from the requirement to provide health insurance, but must inform their workers about the Act. According to the PPACA, a small business is one that employs fewer than 50 people full time. Should an enterprise of this size voluntarily opt for employee health insurance, it must comply with the new law. Employers of more than 50 workers are subject to fines if they fail to come through. For the purpose of the PPACA, a full time employee is defined as working at least 30 hours weekly or 130 hours monthly, on average.

Are You Exempt?

At this point, you may be breathing a sigh of relief if you calculate that you have fewer than 50 full time employees. Not so fast. If your business is seasonal – say a tourist gift shop or a ski resort – the folks in your employ can be assessed as FTE (full time equivalent employees). FTEs, who average 120 hours of work in a month, or work for a period longer than 4 months, are also eligible for the health care provision.

Confused yet? There’s more. Less-than-50-employee enterprises with a common owner may be grouped together for purposes of this law.

What’s in Store?

Marketplaces for health insurance, called “exchanges,” are part of the plan, to be run by individual states. These will include Small Business Health Options Program exchanges for firms with fewer than 100 employees. SHOP, as it is dubbed, will facilitate small businesses cooperating to increase their joint health insurance purchasing power. However, it’s up to the states to decide whether to limit SHOP eligibility to businesses with <50 employees rather than <100.

Good News

The good news is that once an enterprise is part of SHOP, it may continue to participate even if the number of its employees increases to over 100. More good news: a small business tax credit is available for two years to cover 50% of the cost of health insurance premiums on plans purchased through SHOP. Even more good news: PPACA will make affordable health insurance more available to small business owners themselves. Eighty-three percent of entrepreneurs who presently have no coverage whatsoever will become eligible for health insurance under the provisions of the Act.

Shop Around

Despite the appeal of purchasing insurance via the Small Business Health Options Program, it pays to shop around. Self-insurance may turn out to be a better choice in terms of price and/or benefits.

The Bottom Line

Looking at the facts regarding its impact on small business, it seems that Obamacare, far from being a bogey bill, may actually be of benefit to employers as well as employees. As Richard Lorenzen wrote in Forbes recently, “The Affordable Care Act … enables us to provide a better life for those who help make our success possible everyday.”

 

For detailed information on the provisions of the PPACA, see the US Department of Labor’s Affordable Care Act Regulations and Guidance.

If you are running a small business, time management may seem like a never ending game of tail chasing. Let’s face it, there are only so many hours of the day- no matter how much we try to squeeze into every minute or manage our time.

But for those of us who have been in business for a while, there are some tricks of the trade that can give you back some your precious minutes and hours. The trick to time management is to focus on those tasks that only you can do, the things that bring real value to your business, while smartly “outsourcing” all the rest.

Enter the micro job market. Numerous micro-job sites have been popping up all over the place lately. While the lure of getting a service (and sometimes even a product) for what’s essentially pocket change, has no doubt done much to fuel the interest and growth of these platforms, people are also pressed for time. This sites offer business owners in particular a way to unload some of the items on their to-do lists without putting much of a dent in their profit margins.

What kinds of things can you outsource? Practically anything! And, if you spend some time finding quality workers, you can even get some talented, trained professionals for a fraction of the cost it would take to hire someone directly.

That said, here is a look at the top five micro job market places online:

1. Fiverr–  Fiverr is perhaps the most well-known micro jobs site. All jobs cost $5 per task, but most sellers offer job “extras” that will enhance the task and naturally cost you a bit more. They just revamped the site making the process of searching for and buying “gigs” there a pleasure.

2. Amazon Mechanical Turk – One of the oldest sites in the list, Amazon’s Mechanical Turk is a a crowdsourcing Internet marketplace that enables individuals or businesses (known as Requesters) to request HITs (Human Intelligence Tasks), or tasks that cannot be done artificially by a computer. Some tasks sell for as little as one or two cents.

3. Micro Workers– This site boasts “400,000 workers worldwide.” The best feature of this site is the ability to post micro tasks and geo-target only specific workers

4. SEO Clerks– As the name suggests, this site is specifically targeted to SEO, coding, and other web-related tasks.

5. GigPayrr– This is a pretty obvious Fiverr knock-off micro jobs site. But, it does sport a pretty active community of users. So it’s worth a look.

Just a word of caution over here: make sure you really spend some time hiring the right people. Knowing how to hire a freelancer is a skill that will take some time to learn. But, once you get it right, you may be amazed at how much more productive you can be.

Last week, Twitter announced the release of Vine for Android devices, putting the micro video service back in the spotlight after being introduced to iPhone users a few months ago. The app allows users to record looping videos of up to 6 seconds long and then share them with their Twitter followers.

The videos can either be taken as a single shot or at intervals to create a stop animated style clip.

Even if the alloted time is relatively short, it hasn’t stopped some enterprising businesses from using the new platform to promote their products and services and connect with customers. Here are some of the most creative and appealing business uses for Vine:

1. Encourage customer participation. Vine is extremely easy to use and there’s no high-tech equipment required. Users can just click and create on their smartphones. For this reason, Vine is ideal for audience participation- especially for high-engagement interactive content like contests.

For example you could ask your audience to submit video clips of them using your products or services in the most imaginative way and offer a prize to the most creative.

2. Get customer testimonials. Vine is a great platform to highlight video testimonials. You could either choose to showcase your best individual testimonials, or you could ask your clients and customers what word or idea they would use to sum up their customer experience and collate these clips into a fast-paced, dynamic and engaging video.

3. Create video how-to’s. Vine can be harnessed to create a series of ‘how to’ videos to demonstrate how consumers can use your products and services most effectively, or how to install your products in a series of easy to follow steps. One example of this in action is Bacardi. The liquor company created a six second cocktail series with each video demonstrating how to make a different Bacardi-based drink.

4. Strengthen brand awareness. These short videos can present a creative opportunity to build your brand. You can set the tone and style of your videos to match your own unique image and resonate with your target audience, and don’t be afraid to show a little personality either.

5. Promote an upcoming product or service. You can use the platform to create a six second teaser or trailer for a new product or upcoming event. Make sure you include a link to more information or a carefully crafted landing page. You could similarly use Vines for event countdowns or other attention grabbing reminders and notices for giveaways, special deals, discounts or contests.

6. Create a unique portfolio. Why have a static portfolio when you can display your past work in an animated and eye-catching short video?

7. Show your personal side. Let your audience get to know you better on a personal level. Share behind the scenes video clips of you, your employees, and your work space. Use carefully edited clips of your team at company events or fun workshops. If you work by yourself then show customers your desk with the photos of your family and the view out your window, or tell them what you love about your business.

8. Highlight an event. You can use Vine to showcase an event being hosted by or at your business or any promotion and include a Tweet that encourages viewers to show up.

In short, the novelty of Vine is something to pay attention to, and there is little to stop it from becoming a versatile tool in your online marketing efforts.

I find it funny that some business owners may spend more time shopping for a $300 laser printer than they would shopping for a bank. Choosing a bank for your small business should involve more than just opening a new account at your personal bank or picking the nearest branch. You need to understand what services you require, how much they are going to cost you, and how open the bank is to working with small businesses.

Small Business Friendly Banks Actively Make Small Business Loans

One sign that a branch is committed to small businesses is its history of lending money to business owners in the community. If you want to know how your local bank stacks up in the small business lending department, you should definitely check out this handy bank lending grader tool. The tool rates 6,800 banks in the United States based on quarterly FDIC call reports, as well as the total small-business loan balance for each bank divided by its total domestic deposits, and then assigns each bank a grade A through F. To get a good rating (A or B), the bank would need to use at least 10% or more of their deposits to make small business loans. The only thing to keep in mind is that this tool does not offer any insight into how much a bank gives back to a particular local community.

Other Ways to Rate Your Local Bank

What is the bank’s lending authority? What’s the largest loan he or she can approve without checking with higher ups? Relationship managers at community-based banks often have more discretion than those at a unit of a big institution. But, the distinctions between “large” and “small” banks have blurred with the industry’s consolidation. Many community banks have undergone mergers that now allow them to offer a wider range of services.

What is the bank’s underwriting criteria? Smaller, regionally focused banks tend to understand local market conditions more than big national banking institutions. Small, local banks often provide more one-on-one access to a loan officer and put more emphasis on a borrower’s character rather than just applying a credit-score model.

Does the bank make SBA loans or is it a non-SBA lender? Does the bank work with the U.S. Small Business Administration (SBA) loan system? Federally subsidized loans help protect the bank against default, which makes it easier for banks to lend money- that is, once they get through all the paperwork! SBA loans are available to businesses whose credit histories, cash flows or collateral would be inadequate for them to obtain traditional bank loans, and the SBA typically offers more flexible repayment terms. For a list of SBA preferred lenders near you, you can search their online directory.

What business services does the bank offer? Here is where larger banks may have a leg up on smaller institutions. Ideally, you need to think about the long-term relationship. Consider not just what you need today, but services you may require in 18 to 24 months out. See if your local branch offers added benefits such as online services that help save time and money. These may include sending invoices, collecting payments, payroll and loan applications. Some banks may have requirements in place in order to access these services, such as requiring employees to use direct deposit.

In short, the search for the right business banking services should not be approached in the same way you would a typical supply or product purchase. This is all about finding the institution that is willing to build a relationship with you and your business. That’s a real value that can be leveraged in good times and in bad.

If you’ve been in business long enough, then you should be creating a pretty descriptive mental picture of the best possible client to walk in your door. Perhaps you’ve even begun to do this automatically after having the experience of working with different customers. The more you get to know this ideal customer profile, and the more you understand this customer’s characteristic wants and needs, the closer you’ll be to attracting these very people or companies to your business and the less time you’ll spend on unfruitful leads.

Defining Your Ideal Prospects

Many business owners confuse their ideal customer with their target market. If you assume that everyone will fit your profile perfectly then be prepared to be sorely disappointed. The reality is that your that your targeted customer base will probably include a small spectrum of current and potential buyers, and within this spectrum, some customers will just be better than others.

So how do you make sure that the best potential customers are in your marketing cross-hairs. Consider the steps below:

1. First, understand the real value of your product or service. What specific value are you providing your clients? Even if you’re a service provider and don’t have an actual product per se, know exactly what you’re selling and think of it as you would a product.

2. Now, determine why your buyers would need it. What does your product or service do for them? How does it help them? What will they be left with?

3. Understand who is most in need of your product or service. This will be easier to answer once you know the answers to the first points. If you know the true value (or benefit) of your products or services you’ll have a better idea of who to target.

4. Targeting your potential customers. Now that you have a good idea of the who and what, you can create an effective system for targeting those prospects. Target marketing is following a specific structured process focused on a particular group of prospects. To be effective you have to narrow the field of prospective clients. Select a segment of your market to focus on first.

5. Create a clear vision of your ideal client. You still have to break it down further. This includes asking yourself questions such as:  What’s your clients’ ability to make the decision to buy, as well as their ability to pay for your product?  Where are they located geographically? Is the time you will spend with them equal to or less than the revenue you will realize? These four points are important to know before you start your sales and marketing. Having this knowledge when you approach the actual sales process will help you qualify your leads and prospects even better.

When you do this work from the beginning you avoid spending time with people who are never going to become clients. You will feel less frustration, because you’ll close more sales from true qualified leads than you will from randomly approaching the world at large. Not all customers are created equal, so don’t approach them that way.

Business rewards cards are long time tools of the trade for credit card companies. Offering eye-catching rewards and money-saving opportunities is a tactic credit card companies use to lure small business owners into a new account. If you have good credit, you can be disciplined with your spending, and you make the effort to research the best deals, then the truth is that you can really earn a significant amount of money this way. There are plenty of pitfalls to this practice, however. After all, the credit card companies are in the business of making money- not giving it away for nothing. So, before you run to take advantage of the next great offer, make sure you consider the points below:

Get in touch with your current financial reality. Rewards credit cards are used to encourage business owners to put money on their credit cards in order to earn the rewards. Credit card companies know that when businesses and individuals spend with credit they tend to overspend. If you currently have a large amount of credit card debt, then most business rewards cards are not for you. Even if you are accepted the interest you’ll pay on the outstanding balance will completely eat away any benefits you receive. In this case, you’d be better off with a good balance transfer credit card offering a low introductory APR (annual percentage rate). Bottom line: business rewards cards are the best for businesses with good credit, a relatively steady cash flow, and the ability to pay off the outstanding balance in full each month.

Figure out where you can most use the savings. Different businesses spend money in different areas. Does your business involve a lot of air travel? Does it involve significant gas consumption via long commutes or deliveries? Do you spend a lot of money on office supplies and equipment? Rewards cards tend to target specific purchase categories. If you are not sure where the focus should be then look for cards that offer a versatile rewards point system as well as other, non-points benefits, such as cash-back on purchases.

What are your spending habits? Are there groups of purchases, such as standard overhead expenses, that you can put on the card? In order to get the biggest reward and avoid falling into the trap of over-spending, one tip would be to have two business credit cards, each of which is only used for specific categories of purchases.

Read the fine print! I probably should be putting this tip in bright neon orange. Rules and requirements will definitely vary, and they are often subject to change with little to no warning. Make sure you are clear about the kinds of rewards being offered, any requirements you need to fulfill before receiving them, as well as any limitations on their use. You also need to be in touch with the realities of keeping the account after a trial period has ended. What is the APR? Is there an annual fee?

Keep your eyes open for new deals and promotions. Many credit card offers are given during a trial period, as mentioned above, and once the trial ends, higher expenses may kick in. Many savvy cardholders cancel their accounts just before the trial period ends and simultaneously open another account with a different credit card company to take advantage of a new rewards program. If you plan on doing this, then make sure you send yourself some kind of alert or reminder to cancel the original account.

For more information on business rewards credit card offers, see our top picks for small business owners.

While the human price is paramount and therefore cannot be measured, what impact does terrorism have on business, especially small businesses that may not have the resources available to large corporations to recover? Whenever there is a threat or attack gas prices increase, job security decreases (as businesses are forced to close or reservists are called up when the US strikes back), there is a general slowdown in the delivery of industrial inputs and travel. From a small business perspective, terrorism lowers foot traffic, interrupts customer relations, reduces cash flow and staff morale. Small businesses feels these affects more profoundly than large corporations as any short interruption can have a disproportionate effect. Also many small businesses exist in specialized markets with a smaller client base. For example, in the three months after 9/11 approximately 430,000 job-months and $2.8 billion dollars in wages were lost. 18,000 small businesses in Lower Manhattan near the World Trade Center were destroyed or displaced, resulting in lost jobs and their consequent wages. The numbers from the Boston Marathon bombing have yet to be calculated but it’s estimated that each day the greater metropolitan area was shut down cost somewhere in the ballpark of $333 million or more.

 

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If you were thinking about getting a business charge card for your company, and you have good credit, then don’t miss out on this hot deal for the American Express Business Gold Rewards Card. For a limited-time only American Express is offering new Business Gold cardholders 50,000 Membership Rewards points when they spend $5,000 in 3 months. The $175 annual fee is also being waived for the first year.

That’s a lot of rewards points and a pretty doable spending requirement for a business. But, this is only part of the deal. There are many other incredibly useful benefits that come along with this card. After all, we’re talking American Express. As long as you have not had any Business Gold, Green or Platinum Card account within the last 12 months (personal Amex cards are excluded) you may be eligible for this offer. Here’s a rundown of what Business Gold cardholders can expect:

Earn additional rewards points quickly. The Amex Business Gold charge card will give you double points on advertising, gas and shipping, and even more points when you use the card to buy airfare- up to $100,000 in each category, after which you’ll earn 1 point per $1. You will receive 3 points for every $1 spent on airfare, and 2 points for every $1 spent on U.S. advertising in select media, gas at U.S. stand-alone gas stations and shipping. For everything else, you get 1 point for every $1 spent.

Maximize your flexibility and choice when redeeming points. Not only does the American Express Business Gold Rewards Card offer a generous point system, you’ll also enjoy ultimate flexibility when redeeming those points. The program offers 21 airline and hotel transfer partners for travel both within and outside of the U.S. Points can also be redeemed for gift cards and other merchandise from over 300 brands, and your points will never expire. American Express has even teamed up with Facebook so that you can redeem your rewards points for Facebook ads. Each $6,750 spent on this card is worth $50 of Facebook advertising. It’s something to think about.

Free extended warranty. If you purchase an item that has 5 years or less of warranty coverage, then American Express will extend the original U.S. warranty by up to one year.

Get full purchase protection. If you try to return an eligible item purchased in the U.S. within 90 days from the date of purchase and the store will not accept the return, the purchase price will be refunded by American Express, up to $300 per item, excluding shipping and handling, up to $1,000 annually per card account. There is also the Purchase Protection Plan which provides 90-day protection of purchases against loss, damage, theft and fire.

Travel accident insurance. If you use your Business Gold Rewards Card to pay for your transportation, whether via plane, train, ship, bus, or even helicopter, you’ll have access to travel accident insurance.

Car rental loss and damage insurance. When you charge your car rental to your card, you will be covered with this insurance at no additional charge. Just make sure that you cancel the coverage that the car rental company will try to give you.

Additional benefits. The American Express Business Gold Rewards Card offers more benefits such as emergency medical and legal referrals, death-and-dismemberment insurance, and baggage loss insurance. Members are entitled to roadside assistance anywhere in the country with free towing, flat tire repair, battery jump, fuel delivery and locksmith services. Through the American Express OPEN Savings Program, Business Gold Rewards Card members can save 25 percent on everyday business expenses ranging from travel and car rentals to office supplies retailers, merchants and dining establishments. Finally, Amex also provides its Business Gold Rewards Card members with several features designed improve accounting and streamline record-keeping, such as its one-click online statement integration into QuickBooks.

Plus, enjoy outstanding customer service. Notice any fraudulent activity on your account? The American Express Business Gold Rewards Card offers 24-hour card replacement to anywhere in the world and guaranteed online fraud protection. They also have a customer service department that actually serves its customers. It’s a “benefit” that other credit card companies aren’t even close to providing, and it’s a refreshing change.

In short, if you are running an established small business and you have good credit, then this latest offer for the American Express Business Gold Rewards Card provides a lot of value. With so many benefits and options, you don’t want to miss out. Visit this link to sign up: Gold Delta SkyMiles® Business Credit Card from American Express.

The term “entrepreneur” has evolved recently into this mushy catch-all phrase that can really mean several different things- especially in the Age of the Internet where many of the barriers to entry have come down in an unprecedented way. But while many people may be proudly claiming this title, very few can claim it successfully. The truth is that those barriers still exist- even online. You may be able to start certain businesses more easily these days, but you’ll still have a heck of a time making any money from them.

So, I wanted to write this post to help set the record straight. Depending on where you are holding you’ll either be inspired to push forward knowing that you probably have what it takes to be a successful business owner, or you’ll back off to re-evaluate your career path. I’ve found that most “traits of successful entrepreneurs” articles generally leave these kinds of things off the list, or they don’t do them enough justice. The result being that people go in with a false sense of security. Don’t be fooled! Take a look at the list below and see how these signs apply to you:

1. You’re not exactly clear what you want to do. Obviously, if you are starting out, there will be some unknowns and some things you’re going to have to learn along the way. I’m not talking about that. I mean that you don’t know the basics: who your target market is, what need you are filling, what your value proposition is and what separates you from the competition.

2. You are doubtful or cautious about your business -especially when things are slow. You need passion because your desire to succeed will carry you through all the downs along the way. This is especially true if you are doing business online where the rules change very rapidly. For this reason it’s extremely important that you have people to turn to for advice and support- especially if this is your first attempt to start a business.

3. You’re doing this entirely alone…or relying on some guru’s advice. Following on the heels of the point above… Ever see a start-up team of one? It’s very rare, and even when it does happen, the business owner will typically receive advice from a team of trusted, knowledgeable people. Just one caveat here: be very careful about who you turn to for advice. Ideally, you want to work with someone familiar with your business, your industry, and you. If that is not possible, then make an extra effort to find those experts who can bring real value to your start-up process and operational stages.

4. You can’t make long term decisions because you are too dependent on short-term gain. When it comes to successfully running a business you have to be able to “think long.” This means a few things:

• You can’t be too financially dependent on your business’ early revenues since it may cause you to make decisions that will result in a short-term financial gain at the expense of a bigger, more stable gain in the future.
• You have to be able to step back and look at the big picture of where your business is going. If that is a challenge for you, then you must align yourself with others who can help you with the process or else you’ll get lost and confused in the day-to-day details.
• Lastly, while there are definitely benefits to being frugal with your business and looking for ways to save money, at the same time, there are places where money just needs to be spent in order for the business to grow and develop in the way in needs to. In other words: running a business costs money.

5. You’re not open to feedback and learning. Get this clear: even for veteran entrepreneurs, each new business that you try to start will involve a learning process. You may have to learn about new market segments, technological advancements, and trends related to both your industry as well as your market and the economy as a whole. You also need to be open to learning through feedback. It doesn’t mean that you have to follow or act on everything that people tell you- whether it’s your customers, business partners, or concerned friends and family. But you can’t shut off the possibility of consideration either. A business is a dynamic entity, and if you don’t have your ear to the road, then the opportunity for real progress will pass you by, and you won’t even know it.

So, where do you stand with this list? If you are struggling with any of the five things mentioned above, then get a move on to fix it. It could make all the difference between the success and failure of your new business.