Business Tips

We live in a time when starting and running a home-based business is easier than ever. With a little bit of ingenuity, some seed money and a good internet connection, you can start and run all kinds of home-based businesses. From drop shipping to freelance graphic design to making and selling crafts, it’s all possible.

But there are risks involved with home-based businesses that a lot of people are blithely unaware of. Running even a simple home-based business can endanger your assets unless you take steps to protect yourself.

Common Home-Based Businesses

Some common home-based businesses that people operate include:

selling handmade items on Etsy
selling home baked goods at local farmer’s markets
selling digital services online
providing local lawn and landscaping services
providing moving help

These are all very simple little home-based businesses that can be considered innocent and low-key. They can even be considered as doing the community a favor by providing needed services.

Then there are the more advanced home-based businesses that are run by professionals who are licensed in a particular field, or who have years of professional experience. These are services that may be done by people who have semi-retired and now work part-time out of their home, like:

hairdressing
massage therapy
makeup sessions
portrait/event photography
computer repair
business consulting
sewing
etc.

All of the examples above, including many other kinds of home-based business, need the protections outlined here. No matter how simple or innocuous your home-based business may be, you need to protect yourself and your assets.

Make it Official

Talk to your CPA about your home-based business plans. It’s likely that they’ll recommend setting up a business entity so that you’re protected. Even if you’re just running a very modest business with modest returns, it’s worth it to set it up as an official business entity of some sort. For a small business, a sole proprietorship, LLC or corporation are viable options. You and your CPA can discuss which one makes the most sense for your situation.

Sole Proprietorship

This is the simplest form of business organization where a single person owns and operates the business. It’s easy to set up and has low start-up costs.

Limited Liability Company (LLC)

An LLC is a business entity that combines the benefits of a partnership and a corporation.

Corporation

A corporation is a legal entity that’s separate from its owners. It has perpetual existence, limited liability for owners, and can raise capital through the sale of stocks.

Separate Your Business and Personal Finances

This is an easy one to miss, especially when you’re starting out so simply. One day, you decide to open an Etsy shop. Etsy asks for your bank account information so they can take their 20 cents for every item you list, and so they can directly deposit your sales money. Not thinking much of it, you give them your personal checking routing number and account number. The next thing you know, you’ve just risked your personal assets. Mixing business and personal finances can have serious legal and liability consequences. What if your Etsy product causes harm and your Etsy business is sued? If you’ve mixed your personal and business finances, the court may “pierce the corporate veil” and hold you personally liable for any damages. To protect your business and personal assets, it’s crucial to keep these finances separate and maintain accurate records.

Protect Your Work Space

When running a home-based business, it’s important to protect your physical space. This includes keeping your office secure and safe for you and your customers. Let’s say you offer consultation services in your home office. You need to make sure your workspace is well-lit, with no trip hazards, and secure from unauthorized access. Whenever you have customers visiting your home, ensure that your home insurance covers this type of activity. You may need a rider or addendum to cover business activities.

Obtain Proper Insurance Coverage

Even if you operate your business from home, you still need insurance coverage. This may include general liability insurance, professional liability insurance, and business property insurance. General liability insurance covers damages caused by your business to third parties, such as a customer who slips and falls on your property. Professional liability insurance protects you against claims of negligence or errors made while providing professional services. Business property insurance covers damage or loss to your business property caused by events such as fire, theft or natural disasters. There may be some overlap between business insurance and your homeowner’s insurance, and you don’t want to pay for anything you don’t need. Talk to your insurance representative to determine which insurance policies make the most sense for your needs.

Protect Data

Finally, there’s the issue of data protection. Businesses can be sued for not protecting customers’ information. If you’re taking customers’ payment information yourself (not through a third-party payment processor), you need to take every possible precaution to protect that data, because you have a responsibility to do so. Your business insurance may cover you for data loss, but the best course of action is prevention. Put some protocols in place that help you make a routine out of handling customers’ data. For example, if you accept checks from clients, put them inside a lockbox or locked drawer until you make the deposit. Invest in a cross-cut shredder to dispose of customer information you no longer need. Set up passwords on your computer and phone so others can access data.

Working from home is increasingly popular in recent years. It’s never been easier to start a home-based business. Whether you’re a freelancer, consultant, or entrepreneur, running a business from home can offer flexibility, freedom and convenience. However, with this new found freedom comes certain risks and responsibilities. Protect yourself with the advice mentioned here and the advice offered by your CPA.

As a small business owner, you realize just how important your employees have been to your company's success. Since the holiday season is fast approaching, this is a perfect time to show your appreciation for their hard work. But like many business owners, you may be unsure as to the best ways to express your appreciation. If so, here are some great ideas you could implement during the holiday season to say thanks for another year of hard work.

Throw a Party

Let's face it, everyone loves a party. Even if your business is very small, you can still throw a holiday party for your employees. Remember, it doesn't need to be anything fancy. Whether you have it catered or it's a potluck dinner, this will give everyone a chance to unwind, eat some tasty food, and bask in the glow of knowing their efforts are appreciated.

Hand Out Bonuses

If business has been good over the past year, you may want to surprise your employees with holiday bonuses. As you know, nothing makes employees happier than finding a little something extra in their paychecks, especially at the holidays. Even if you think the amount of the bonus is somewhat small, this will still let your employees know you want them to share in your financial success. If you do decide to hand out holiday bonuses, don’t wait until the last day before the holiday. Most people can use a little bit of extra cash around the holidays, for gifts, holiday food, travel expenses, etc. Hand out the bonuses early enough that your employees can use them to make their holidays more special.

Have a Fancy Lunch Catered

One of the ways you can honor your employees’ hard work and dedication is by having a fancy lunch catered into the office. This doesn’t have to be the one thing you do for employees during the holidays; it can just be a special day leading up to your main gift to employees. In fact, this could be a great time to hand out bonuses or other gifts. One afternoon, cover the conference table with a white tablecloth and fine china. Choose a caterer that will serve as well as bring food. Arrange for employees to choose foods that appeal to them and then, on the day, let them be treated to a lovely holiday feast with decadent and luxurious foods they might not get to enjoy on a regular basis. An event like this will certainly bring out the holiday cheer, help your team bond and show your employees how much you appreciate them.

Give Out Gift Cards

If you want to do something that won't cost you too much money, yet will still express your appreciation, consider handing out gift cards to your employees over the holiday season. This usually goes over very well with most people, since there are gift cards available for practically anything. Possible ideas include giving out gift cards for local restaurants, movie theaters, retail stores, or prepaid debit cards that allow your employees to use the money for whatever they wish.

Plan a Family-Friendly Event

To help build a sense of family within your business, use the holiday season to plan a family-friendly event for your employees and their loved ones. For those employees who have children, don't forget to have Santa stop by for a visit and perhaps a few photos with the kids. More and more businesses are opting for this type of event over the traditional office party.

Give Additional Time Off

If your business is like most others, you know things tend to start slowing down quite a bit the closer it gets to Thanksgiving or Christmas. If you think you can do it, you may want to make everyone's day and give your employees some additional time away from the office over the holidays. For example, you may want to close down things a couple of days prior to Christmas or Thanksgiving, since this can give your employees extra time to shop, cook meals, or travel to their holiday destinations. Also, you may want to give them some extra time off around New Year's Day.

Offer Work from Home Opportunities

In today's business world, many employees relish the opportunity to work from home. If your business is one that is capable of making this adjustment, giving your employees the option to work from home during the holiday season will likely be met with tremendous gratitude. Since children will be out of school and many of your employees may be having family members come in for visits over the holidays, being able to work from home will likely make their lives much easier.

Shine the Social Media Spotlight

Like practically all businesses today, your small business probably has a presence on social media. If so, turn some of your employees into online celebrities by showcasing them on social media. In the spirit of the season, try placing the spotlight on one employee each day over the holidays, where you emphasize their achievements, why they are important to your business, and perhaps even let everyone in on a hidden talent your employee possesses. Naturally, it’s best to get each employee’s permission before implementing this particular plan.

Talk to Your Employees

Last but not least, taking the time to talk to your employees over the holiday season will go a long way towards showing them just how much you care about them not only as employees, but as human beings. Along with talking to them about their personal lives, use the holidays to also find out about their career goals, what they'd like to accomplish in the year ahead, and how you can help make their dreams a reality. These chats don’t have to be formal sit-down affairs. Just spend more time with your employees and let the conversation flow naturally.

Whether you use only one of these ideas or multiple ones over the holidays, you will have employees who work hard, stay loyal to your company, and appreciate working for a boss whose they know cares about them and their families.

When you own a small business, every dollar counts. Unfortunately, many business owners don't take this philosophy to heart, leading them to make various budgeting mistakes. While some mistakes are relatively small and can be easily corrected, others can have a devastating impact on a business. If you want to make sure you don't make budgeting mistakes with your business, listen to your CPA and work hard to not make the following budgeting mistakes that could hurt your bottom line.

Not Having a Budget at All

Believe it or not, some surveys have shown that nearly 50 percent of small businesses never create a budget. If you want to send your CPA into a tailspin and almost guarantee that your business will fail, don’t bother creating a budget. When you don't create a budget for your business, you will be juggling expenses as they come, meaning that, at any given time, you will have little grasp of how much you're spending versus how much you are earning. This mistake will also prevent you from developing a long-term financial plan for your business, giving you little chance of success over the long-term..

Budget and Business Strategy Not Aligned

When you create a budget, you need to make sure it is properly aligned with your business strategy. If it's not, you won't be able to keep track of your business goals, know if you are meeting your financial expectations, and where you should be spending your money, such as developing a website, buying new equipment or hiring more employees.

Not Managing Expenses

One of the biggest and potentially most devastating budgeting mistakes small business owners make regularly is not properly managing their expenses. When you talk to your CPA about this, you will find this is one of the primary reasons why many small businesses fail each year. When you don't properly manage your expenses, you may find yourself purchasing more inventory than you need, spending more than you need on marketing campaigns, or discovering that you don't have the money needed to meet your next payroll.

Not Budgeting for Taxes

Despite what many business owners wish for, Uncle Sam continues to come along each year with his hand out, requiring that taxes be paid. Unfortunately, if you have made the same mistake other small business owners have made and failed to budget the money needed to pay your taxes, you and your CPA will have quite a problematic situation to address and resolve. Therefore, always remember to budget appropriately for sales tax, employment tax, income tax, sales tax, property tax, and any other taxes you know will need to be paid. If you are unsure about this area of your budget, always ask your CPA for assistance.

Not Giving Yourself Any Wiggle Room

Even if you are meticulous about creating a budget for your small business, always remember that sudden and unexpected events can occur that could throw your budget into turmoil. After all, no one anticipated the COVID-19 pandemic to come along and wreak the havoc it did on small businesses. Whether it is something as serious as a pandemic or perhaps a piece of equipment that breaks down when you least expect it, always create a budget for your small business that gives you a certain amount of wiggle room with your money. If you don't, you may find yourself making drastic budget cuts in many areas, which could include laying off employees, reducing the hours you are open, or other things that could make operating your business much harder.

Not Keeping Up With Receivables

One of your budget categories will be sales income. You likely calculated this number based on sales from the same month in a prior year. However, if your current year’s receivables are not paid in a timely manner, your budget calculations will be very far off. You need to have a plan in place to keep up with receivables so that your income doesn’t fall behind. Experts recommend allowing no more than 30 days for clients to pay accounts in receivables.

Not Maintaining Margins

Prices have risen globally on nearly all kinds of merchandise and materials. If you have kept your selling prices the same, it’s likely that your margins are shrinking. You should focus on keeping profit margins the same, which may mean raising your price points, in order to keep up with the rising costs you’re incurring. Otherwise, your budget will ultimately fail because your expenses are overrunning your income.

Not Having a Backup Plan

When things do go awry, it’s essential to have a backup plan in place. This may be keeping a list of angel investors, growing a business savings account or keeping a look out for lower retail rents in other neighborhoods. Don’t wait until things go south to start trying to figure out how to dig your business out of the hole.

Not Updating Your Budget

Finally, once you do create the budget for your business, don't assume your work is finished. In fact, your CPA will tell you the work has only begun. A budget, while in some ways a blueprint or roadmap for your business, is also something that will need to be constantly updated and revised. Remember, your business budget will need to reflect where your business is at that particular moment. By meeting with your CPA regularly to review your budget, you can keep it updated so that you will have a much better idea of where your business is going financially.

While many small businesses close their doors each year, just as many, if not more, thrive and prosper. By relying on the advice of a CPA you know and trust, you will have few budget worries for your business.

Bankruptcy is not only financially embarrassing; it can make a person feel like there is no future, at least in the money sense. Those who file for bankruptcy are often required to face their debtors in open court. Their whole finances are on display for others to critique. Unlike some online bankruptcy articles may insinuate, filing for bankruptcy does not bring on a feeling of relief; instead, it can make you feel as though you are a failure. But there is life after bankruptcy, and you can recover - emotionally and financially. You just need to face some hard truths and be willing to make some adjustments.

Forgive Yourself

Sometimes bankruptcy is the only economically viable choice. You may have gotten to the point where there was no way you were going to be able to pay all your bills. This may have happened due to irresponsible money management on your part or your spouse’s part. But people file bankruptcy for all kinds of reasons. You may have incurred debt due to hardship or medical reasons. Perhaps you had to leave your job to care for a loved one. Or maybe you encountered a long run of bad luck that caused you to lose your job. Whatever the reason - even if you can honestly say it was entirely your fault - the first step is to forgive yourself. Think about it this way. Your debts have been forgiven; now it’s time for you to forgive yourself.

Figure Out Why it Happened

The next step on the road to recovery from bankruptcy is to figure out how you got yourself into that situation. Was it because you weren’t able to manage your money well? Hiring a professional CPA can help with that, and the cost is well worth avoiding another bankruptcy in the future. Do you have a personal problem that led to irresponsible spending? If you struggle with dependency issues, a tendency to binge shop or depression, these can lead to financial disaster. In that case, your next step would be to get that problem resolved. Is there a relationship problem that leads you to overspend or to miss work? Again, personal problems can sink money ships. The point is, figure out how you lost control and make a plan to resolve those issues.

Don’t Get Into Debt Again

One of the insidious things about successfully filing for bankruptcy is that all of sudden you may be inundated with credit offers. Why? Because creditors see that you’re debt-free. That means that your likelihood of being able to pay off purchases is increased, since you don’t have to pay off old credit card bills. Your mailbox may fill up with offers of credit cards, personal loans and more. But you’ll notice that they all have high interest rates. And high interest rates or not, the last thing you want to do right now is to rack up more debt. Don’t let the vicious cycle of reckless spending continue. Shred the offers without even looking at them so you aren’t tempted, even a little bit.

Build Your Credit Again

As far as your financial future, it’s time to build up your credit score again. Bankruptcy will stay on your credit report for seven years. During that time it pulls down your credit score, making it hard or impossible to get a car loan, mortgage or even Care Credit for dental work. All you can do is work hard to increase your score again. One way to do this without going into debt again is to get a secured credit card. A secured credit card is one for which you pay a deposit ahead of time. The deposit equals the amount of your credit line. So basically, you’re using your own money as credit. You still make monthly payments on your purchases. The deposit money stays with the credit card company until you prove that you can make consistent and monthly payments on time. All this time, your payments get reported to the credit agencies, which can boost your credit scores. Once you have proven to be a responsible credit user, typically after a year, you may qualify for a regular credit card, and you’ll get your deposit money back. But remember, don’t go crazy with your credit card. Only use it for emergencies so you don’t get caught in the credit trap again.

Don’t Close Your Bank Accounts

Whatever you do - whether you move or not - don’t close your bank accounts. With a bankruptcy on your credit report, it’s unlikely that most banks will open a new account for you. Just maintain the status quo.

Come Up With a Reminder System to Pay Bills

If your bankruptcy was caused in part by your forgetfulness to pay bills, set up a reminder system for yourself. Don’t just open utility bills and throw them in a drawer. Put their due dates on the calendar and check your calendar daily. If you don’t like that idea, consider setting up monthly reminders on a phone app or on your home computer. After a year of successfully paying your utility bills on time, you can have those timely payments added to your credit report, which will boost your score. Your CPA will be able to tell you how to do this.

Get Creative With Money

With a bankruptcy on your record, you’ll have trouble getting a car loan. If you end up needing a car, you’ll have to get creative. Consider carpooling, or riding a bike or scooter to work until you can save up for a cheap used car. Consider taking on a second job to save up money for expensive things you need—not want—but cannot get credit to pay for.

Once you begin to gain control over your finances after bankruptcy, you’ll get a very satisfied feeling. There’s satisfaction in knowing that you don’t owe anyone, and that all the extra money you have has been earned, not borrowed. As always, you can rely on your CPA for advice and recommendations to help you stay out of financial trouble in the future.

If you were a small business owner years ago, the only methods of payments you were likely accepting from customers were cash, checks, and credit cards. However, today's business world includes cryptocurrency such as Bitcoin and many others, and crypto is quickly becoming popular with many consumers. In fact, statistics show that as of 2022, 30% of small businesses in the U.S. accept crypto as payment. Should your business be one of them? Here's what you need to know when speaking with your CPA and making your decision.

Your Sales May Increase

If you decide to accept crypto as payment, it is quite possible you could see an increase in sales. Since crypto is very popular internationally, adding crypto as a payment option to your online customers could open your business to international buyers. In fact, many businesses report seeing a spike in online sales of their products or services once they choose to accept crypto as payment.

Better Merchant Protection

As a merchant, you are always concerned about fraud, especially when it comes to fraudulent chargebacks. If you allow crypto to be used as payment, these can't occur with this particular currency. Since crypto relies on a decentralized setup, this means crypto transactions are essentially like your customer is paying cash for products or services. This results in the transaction being final, since there will be no third-party that can reverse charges.

Technical Difficulties

Now for a potential problem you may encounter regarding crypto payments. When speaking to your CPA about this, you'll find out quickly that choosing to accept crypto payments means you may have many technical difficulties ahead. To accept this form of payment, you will need to create a digital wallet on a digital currency exchange, which is as difficult as it sounds. As a small business owner, this means you will need to make a substantial investment to upgrade your current computerized payment technology. If considering this, definitely speak to your CPA to discuss how such an investment would impact your bottom line.

Remember the Crypto Volatility

As a relatively new form of currency, crypto is extremely prone to volatility in terms of its value. One day its value skyrockets, while the next day it plummets. Should you want to accept crypto as payment at your business, you will need to pay close attention to this volatility. To begin with, you will need to discuss with your CPA how you can convert crypto payments into your currency of record. Using a merchant service company like Coinbase or BitPay can protect your small business from crypto volatility, since these companies will exchange the digital currency to its current value in real-time. If there is one thing your CPA will advise you not to do, it is to let crypto payments linger indefinitely. Since its value is constantly changing, doing so could find you getting far less revenue than you anticipated.

Lower Transaction Fees

If your business has been accepting credit card payments for any length of time, you as a business owner know all too well about the high cost your business incurs from credit card transaction fees. When a typical small business accepts a credit card payment, it usually incurs a fee of 25 cents per card swipe, plus up to four percent of the transaction's total. When you are sitting down with your CPA to analyze your finances, it's easy to see how these fees add up in a hurry. If there is one big advantage to accepting crypto, it's that the transaction fees associated with it are much lower. Generally, you can expect transaction fees associated with crypto payments to be no more than one percent of the transaction's value.

Almost No Regulations

While initially this may sound great to you as a business owner, the fact that cryptocurrency is virtually unregulated at this time can pose risks to your business. While lawmakers are currently trying to craft crypto regulations, this will take time for the laws to be passed and then actually accepted and understood by business owners like yourself. At the moment, crypto is a currency that is very prone to new and unexpected problems and difficulties. Until it becomes clear as to how your business would report gains and pay taxes on cryptocurrency payments, you'll need to stay in close touch with your CPA, especially if you are wanting to add crypto as a payment option.

Crypto and Security

If your business has ever fallen victim to cybercriminals, you know that is something you don't wish to experience again in the future. While crypto transactions mean you don't have to worry about credit card numbers being stolen, don't assume these transactions are completely safe from cybercriminals. Unfortunately, there is currently no full-proof way to ensure online hackers cannot gain access to digital wallets. Also, you need to remember that unlike the U.S. dollar and other well-known currencies such as the Euro, cryptocurrency is for the most part not insured. Thus, it is possible that should a hacker gain access to your company's crypto payments, you could experience a total financial loss. When discussing this with your CPA, you'll need to weigh the potential gains and risks of accepting this form of payment.

Added Convenience for Customers

Should you decide to accept crypto payments, this will add another level of convenience for your customers when buying products or services. As an added bonus, accepting crypto will also demonstrate to customers that your business is choosing to stay modern and use the latest technology, which may appeal to many younger consumers. Finally, accepting crypto payments may give you an advantage over competitors, which is something you are of course always seeking.

Since there are many advantages and disadvantages to consider when trying to decide if your business should accept crypto payments, it's best to have numerous in-depth conversations with your CPA. By doing so, you'll stay abreast of the latest crypto developments and make the best decision for you and your business.

Whether you are starting a new business or have a business that is already established and in need of additional financing for new equipment or something else, obtaining a business loan can be the perfect solution. However, wanting a business loan and actually getting the loan can be two different things entirely. If you are considering a business loan and want to increase your chances of success in obtaining one, here is what you should talk over with your CPA as you begin your journey.

Ask Yourself Some Questions

When meeting with your CPA about taking on a business loan, always begin by asking yourself some important questions. First, why do you want the loan? Is it to buy new equipment, expand your business, or perhaps provide cash flow to pay off existing debts? Next, are you able to take on a business loan? Remember that once a lender gives you the money, it's not a gift. Instead, the lender will actually expect you to pay back the loan. Finally, have you considered all possible financing options? Before getting a business loan, always compare multiple lenders and discuss their pros and cons with your CPA.

Gather Your Information

Once you have asked yourself a few questions and have given answers that satisfy both you and your CPA, the two of you should then begin gathering the necessary information that will be needed for the loan application. This will include both personal and business information. Personal information will often include your full legal name and address, a credit report, criminal record, a personal statement, and related financial documents. Business information typically includes articles of incorporation and organization, share certificates, and Schedule Cs.

Organize Your Financial Statements

This step is where your CPA will really earn their money and put their expertise to great use. If you apply for a business loan and don't have your financial statements well-organized, you have virtually no chance of being approved. When getting financial statements together, remember most lenders will require balance sheets, bank statements, tax returns, accounts receivables, and multiple profit-loss statements.

Should your business own or rent property, you will also need to include information associated with this, such as rent/real estate schedule, tax payments and monthly payments, and documentation pertaining to ownership percentage.

While you and your CPA are organizing your financial statements, don't forget to take a close look at your business credit score. If it is less than 600, you may have difficulty gaining approval for a loan. Should you manage to be approved, a low score such as this will likely mean higher interest rates and repayment terms that may not be to your liking.

Outline Your Debt

As you know, most lenders hate to give out loans to applicants who already have large amounts of outstanding debt. Should you as a business owner happen to have outstanding debt, this does not necessarily mean you won't get a loan. Instead, you and your CPA will just need to carefully outline your debt. To do so, a business debt schedule will be needed, showing your current outstanding debt, credit amounts, and monthly payments. If a lender sees you are committed to repaying your debts, they may approve your loan application.

Complete Your Loan Application

Once you have all your information organized, it's actually time to complete your loan application. Depending on the lender you select, you may do this online or be required to submit a file that's filled with paperwork. If you need to submit actual paperwork, organize it so that the lender can easily find what they need.

Regardless of how you apply for your loan, your CPA will strongly emphasize that it is critical you be completely honest on your application, especially about your debts and any past businesses you may have owned. If there is one thing that will quickly kill a business loan application, it is a lender catching you in a lie. Once it is determined you have submitted false information, your application will almost always be rejected.

If you have completed the application on your own, don't submit it until your CPA has been given sufficient time to review it for any mistakes. Once you and your CPA are satisfied, cross your fingers and submit your application to the lender.

Be Prepared to Wait for an Answer

Unfortunately, there is no standard time regarding how long it will take to learn if your business loan application has been approved. If you use an online lender, you may learn your fate in as little as 24 hours. However, it is not unusual for some online as well as brick-and-mortar lenders to take up to six weeks before making a decision.

Like many loan applicants, your lender may ask that you submit additional information before they make their decision. If so, don't assume this is a bad sign. If you do get approved for a loan, don't automatically take it. Instead, let your CPA look over the loan agreement and its terms before you sign on the dotted line.

If for any reason your loan application is denied, don't be afraid to ask the lender for feedback as to why it happened. Whether it was a low credit score, too much debt, or other issues, knowing why your application was rejected can help you the next time you apply. Should you be in desperate need for financing, you may be able to get a loan through the Small Business Administration. Often able to help business owners who can't gain financing from traditional lenders, discuss this option with your CPA if necessary.

Since gaining a business loan may mean the difference between your business growing stronger in the years ahead or possibly shutting its doors for good, do all you can to get your application approved by a lender. By working closely with your CPA as you gather information and complete your application, you increase the odds of getting the money you need for your business.

When you are facing various types of financial difficulties or are in the midst of undergoing a major financial change in your life, consulting with a CPA you know and trust can make any situation easier. Whether you are facing an IRS audit, have questions regarding your business or investments, or are dealing with the death of a loved one, it is vital you get expert financial advice as quickly as possible. To make sure all goes well, here are 10 reasons to contact your CPA immediately.

Tax Law Changes

Whether you're a business owner or an individual who has multiple sources of income, you know all too well just how often the IRS changes its tax laws. Since there is no way you can keep up with what has changed and how you will be impacted, always consult with your CPA once any tax laws change. By doing so, you can make sure you benefit as much as possible from the new laws.

An Upcoming Audit

When the IRS comes calling with an audit, you need to go into that audit as prepared as possible. Remember, being audited does not necessarily mean you are in trouble with the IRS. In many cases, the agency may only need to get something clarified about your tax return, which in some cases may be to your benefit. By contacting your CPA as soon as you are notified of the audit, you can learn what to expect and arrange to have your CPA with you during the audit.

Starting a Business

When starting a new business, making early mistakes can doom you from the start. Along with finding out about taxes and other financial matters, a CPA can also advise you about the details involved with purchasing a location, equipment, payroll for your employees, business licensing, and much more.

Death of a Breadwinner

Should you experience the death of your family's breadwinner, you may be at a loss as to what to do next. If you were named as a beneficiary for life insurance, your CPA can work with you to answer questions about taxes, act as a go-between with you and the insurance company, and help you set up a financial plan for you and your family moving forward.

You've Inherited Cash or Property

When you inherit a large amount of cash or property, life can change in a hurry. If you fail to speak to a CPA about how these changes will impact your financial future, you could be in for some unpleasant surprises, especially in terms of inheritance taxes. Since these can be quite high, it is best to have a CPA work with you to reduce your taxes as much as possible.

Making a Large Financial Gift

When you want to make a large financial gift to a school, organization, or elsewhere, there will be many tax implications. While you will be eager to make your contribution to a school you attended or an organization you care about very deeply, doing so in haste could result in costly mistakes. By talking over your plans with a CPA you know and trust, you can gain great tax benefits while also helping others.

You Own Investment Property

As a real estate investor, you know the many nuances that go along with not only purchasing property, but also in ensuring it is profitable for you in the years ahead. Due to the many different tax situations that can exist within various states across the nation, you need to know how certain tax laws and other regulations will apply to your properties. Once you consult with your CPA, you can learn how tax laws and other rules will keep your investment portfolio profitable.

You Earn in Excess of $200,000 Annually

Should you find yourself now earning in excess of $200,000 per year, it will benefit you to speak to a CPA as soon as possible. Though it may not seem fair, the more money you earn, the greater the chances you will at some point be audited by the IRS. Once you are officially a high earner, talk to a CPA so that you understand the tax implications and how you can avoid a future audit.

You Need to Reduce Debt

Whether you have suffered the death of a spouse, have recently undergone a divorce, or have made poor decisions regarding your business or investments, you may now be staring at far more debt than you ever imagined could happen to you in your lifetime. When you need to reduce debt, a CPA is a financial professional who can help in many ways. For example, if you are being pressured by creditors, your CPA can act on your behalf and negotiate with creditors, helping you reach agreements to settle your debt. By taking your CPA's advice about debt management, your finances may improve much faster than you expected.

Losing a Major Client

If you are a business owner who has lost a major client, the moves you make in the weeks ahead may determine the fate of your business. Since a major client who disappears also takes a great deal of money with them, you may now be struggling to make ends meet. However, since you will still have a cash flow, there are certain financial maneuvers you can make to keep your business afloat. By working closely with your CPA, you can learn how to rebound from this setback, get your business steadied, and move forward as you gain new clients.

Even if you are a person who feels as if you can work your way out of the most difficult of situations, don't take any chances when it comes to your finances. Whether you are worried about your business, facing an IRS audit, or need to learn how to maximize the profitability of your investment properties, consulting with an experienced CPA will be a smart decision. By not procrastinating, you can take charge of your finances and get much-needed expert advice.

When the COVD-19 pandemic hit, thousands of small businesses were shutting their doors, laying off workers, and wondering if they would ever open up again. However, once Congress passed the CARES Act, businesses could take out loans that would prop them up and survive the pandemic. Best of all, these Paycheck Protection Program (PPP) loans were set up to be forgivable. However, forgiveness is not set in stone with these loans, meaning business owners who perhaps let deadlines lapse may be on the hook for whatever amount of money they borrowed. If you took out such a loan and have questions as to how PPP loan forgiveness works, here are some things to remember.

Used for Designated Expenses

To begin with, PPP loan borrowers will be eligible to have their loans forgiven only if they used the money on designated expenses allowed for by the program. Yet whatever amount of money was spent on designated expenses over the course of 24 weeks or only eight weeks, these loans will be eligible for forgiveness. For example, 100% of payments made to payroll will be forgiven, as will rent, utilities, and mortgage interest up to 40% of the PPP loan. But even if your loan is forgiven, remember that the expenses covered by the PPP loan will not be tax-deductible.

First-Draw Loan Forgiveness

If you received a first-draw PPP loan, you will be eligible for loan forgiveness if you meet certain criteria during the eight or 24-week period that was covered. This includes maintaining compensation and employee levels, spending your loan on payroll and other approved expenses, and making sure at least 60% of your loan proceeds were spent on payroll. As for second-draw PPP loans, the only difference in making sure you get loan forgiveness is that you must have maintained your employee and compensation levels exactly as you did when you received your first-draw loan.

You Must Use Up Your Loan Proceeds

Though you will be eager to make sure your PPP loan is forgiven, this does not mean you can apply for forgiveness soon after getting your loan. In fact, you can apply for loan forgiveness only after you have used up all of your loan proceeds on the expenses noted earlier. Also, note that once you have used up your loan proceeds, you may apply for forgiveness at any time, so long as you do so by the maturity date of your loan.

Failing to Ask for Forgiveness

Since these loans can be completely forgiven, it is imperative you know exactly not only how to spend your funds, but also your deadlines for when you might have to start making monthly loan payments, which is something you definitely can't afford at the moment. To make sure your PPP loan payments are deferred, you must apply for forgiveness no later than 10 months after the last day of your covered period. If you don't, your PPP lender will then expect a monthly payment from your business.

Apply For Loan Forgiveness With the SBA or Your Lender?

Whether you are self-employed, an LLC, or have another type of business structure, you will need to determine if you will apply to the SBA or a specific lender for loan forgiveness. Should your lender be a participant in direct forgiveness, you can apply to the SBA anytime after August 4, 2021. If your employer is not participating in this program, you will apply directly to your lender to have your loan forgiven. When doing so, you will need to submit SBA Form 3508, 3508EZ, or 3508S. In some instances, your lender may have forms equivalent to these they will want you to use, so always ask your lender for assistance if you have questions.

Compiling Your Documentation

If you use SBA Form 3508S, it will be much easier for you and your business. By using this form, you won't be required to provide more documentation that shows the calculations used to determine the amount of your loan forgiveness. However, don't be surprised if the SBA requests more documents when reviewing your loan and its forgiveness. To make sure you use the proper documentation when filling out your forms, always have bank statements, tax filings, receipts and cancelled checks for utilities and rent, and any other documentation you believe may be necessary.

Monitor Your Application

Upon submitting your PPP loan forgiveness application, don't forget about it and assume all is well. Instead, don't be afraid to contact the SBA or your specific lender to find out how things are going. In cases where the SBA chooses to review your loan, the process may take some time to complete. Once the review is finished, the SBA or your lender will inform you of whatever decision was made. Should you disagree with the decision, you have the right to appeal. Also, your lender will be responsible for notifying you of whatever amount the SBA has forgiven from your loan, as well the date any payment on the remaining amount will be due.

Ask for Help if Needed

Even though the PPP loan forgiveness form is only two pages long, it comes with several pages of instructions and worksheets to help you make the correct computations. However, even at only two pages, chances are you will still have many questions along the way. Therefore, don't be afraid to ask for help if you need it. Whether it's from your lender, the Small Business Administration, or an accountant or CPA you know and trust, having others assist you with the paperwork can help you avoid errors that could delay having your loan forgiven, forcing you to make unnecessary loan payments you likely can't afford.

Since the PPP loans you received helped you keep your business afloat and allowed your employees to continue earning a living, make sure you pay attention to the details now that you're ready to have the loan forgiven. By doing so, you'll get peace of mind and a loan that is forgiven by the SBA or your lender.

While only a few months ago it may not have seemed possible, most states are now lifting mask and social distancing mandates, meaning life where you live and elsewhere in the nation is slowly but surely returning to normal. However, the COVID-19 pandemic took quite a toll on businesses, yours included. Therefore, while you're optimistic about the future, you know you have plenty of work ahead of you to re-energize your business. Since the ball is in your court now, it's time to be proactive and start thinking about what it will take to get your business back to pre-pandemic levels in terms of customers, sales, and profits. If you're ready to kick COVID-19 to the curb and get your business going once again, here are some effective ways to make it happen.

Secure Working Capital

Although you may have relied on the Paycheck Protection Program loans to help your business survive during the pandemic, it's still important you secure the working capital you will need post-pandemic. To do so, you can work with your favorite lender to secure a loan, open a line of credit, or even use some credit cards if necessary to rebuild your inventory, pay for advertising and other crucial expenses.

Have Your Business Fully-Staffed

If you had a great team of employees whom you had to lay off during the pandemic, reassemble your “Dream Team” as fast as possible. While some people may have moved on to other jobs by now, it is possible that many of your staff have been eagerly awaiting a call from you, inviting them to come back to work. Even if you lost a few employees, many others are now actively searching for jobs. By offering some incentives such as a sign-on bonus, perks such as gift cards, or flexible schedules with a solid starting wage, you should have little trouble getting fully-staffed within a reasonable period of time.

Reclaim Your Customers

No matter what type of business you own, chances are your customers are more eager than ever to walk back through your doors. However, if you just sit back and assume this will happen, you may be in for a rude awakening. Since your competitors are also wanting as many customers as possible, you have to do all you can to make sure it is your business that customers ultimately select for various products or services. To do so, be very aggressive with your marketing efforts. A great way to do so is by staying active on social media, where you can use your company's Facebook, Twitter, Instagram, and other platforms to inform customers of special deals, your grand reopening and other enticing tidbits of information.

Have a Full Inventory

When you have a grand reopening for your customers, the last thing you want is for them to walk in and find store shelves that are empty. Therefore, you need to make rebuilding your inventory a major priority as quickly as possible. Though there are some supply chain problems that currently exist with various types of products, most experts agree there is still plenty of inventory available for most businesses. Along with getting back in touch with some of your most reliable vendors, make sure you have the money needed to purchase what you need. If necessary, use a line of credit or even a merchant cash advance to have everything in place upon reopening.

Diversify Your Products and Services

If there has been any silver lining in the pandemic, it has been the fact that you and others realized things can be done in different ways. Because of this, you may be able to re-energize your business by choosing to diversify the products and services you offer to your customers. For example, if you didn’t previously offer delivery services prior to the pandemic but found it was very popular with customers, consider continuing the service after you reopen. Depending upon the nature of your business, you may want to consider making house calls to provide certain services, or instead continue offering live-streamed classes or consultations to customers.

Identify Key Business Opportunities

With so many businesses having closed for good due to the pandemic, this may be your chance to identify and capitalize on some unforeseen opportunities. For example, if you had been considering relocating your business or perhaps opening another location, there may be some prime pieces of commercial real estate available now that otherwise would not have been on the market. If so, you can arrange for financing and find yourself turning what was only a dream into reality.

Give Back to Your Community

Even in the worst of times during the pandemic, you likely still had many customers who did all they could to help you stay in business. If so, you need to remember this and be willing to give back to your community now that things are returning to normal. There are many ways to do this. For example, you can host a live music event, which is something people have been longing for over the past year. Also, you can work with a local charity to support a food drive, host a pet adoption day or other event that will help others in your community. By showing a willingness to give back, your customers will remember your efforts and be even more committed to remaining loyal to you and your business for decades to come.

Since time is money in the business world, this is no time to procrastinate. Whether you are getting some signs made for your grand reopening, deciding which new products or services you will be offering your customers, or hiring new employees and getting them trained, it won't be long before all of your hard work pays off in a big way.

If you are a business owner and have thousands of customers buying your product or service on a daily basis, this sounds like a great formula for success. However, there’s more to the success formula than sales. You need to pay attention to your customer acquisition cost. If it costs too much to acquire your customers, this will cut into your profits. If your customer acquisition cost is too high, you and your business have a serious problem that needs to be corrected as quickly as possible. To keep your business growing, you need to carefully calculate your customer acquisition cost and reduce it as much as possible.

What is Customer Acquisition Cost?

If you're unclear as to what customer acquisition cost is, think of it in the following terms. Simply put, it is the total cost of everything that is needed for your business to acquire a new customer. This can include such things as your advertising costs, physical supplies and services such as designing, printing out and mailing materials, salaries of salespeople and other related expenses. Once this is calculated, the result is divided by the number of customers acquired.

Why is Customer Acquisition Cost Important?

As to why customer acquisition cost (CAC) is important to your business, it all comes down to how much revenue you are earning. If your customer acquisition cost continues to outpace your revenue over an extended period of time, your losses will eventually put you out of business. Needless to say, this is not a scenario you want to encounter. In addition, knowing how to calculate and lower your customer acquisition cost can be beneficial in helping you decide how to invest in your company's future growth.

Don't Overlook Hidden Costs

When you are calculating your CAC, don't make the mistake of overlooking hidden costs that may be linked to acquiring new customers. For example, if you are paying salaries to various marketers, always include those in your CAC calculation. If you’re paying fees to a social media management platform, a social media manager or placing social media ads, include that. Also, make sure you add in any payment processing fees your business pays when a customer buys your product online. By making sure you properly calculate all costs associated with CAC, you can ensure that you stay on top of your expenses and won't experience an unpleasant surprise.

Define Your Target Market

Once you've calculated your CAC and begun looking for ways to get it lowered, a great starting point is to define your target market. If you are able to do this with laser precision, the result will be lower costs and higher revenues. By accurately defining who your typical customer is, your messaging and sales tactics can be narrowed to that particular market, saving you money and time.

In fact, a very easy way to reduce your CAC is to put your efforts into obtaining those customers who will be the easiest to get and the most likely to convert into sales. In essence, reaching for the low-hanging fruit will make far more sense—at least in the beginning—than trying to grab onto that which may be unreachable.

Improve Your Conversions

While all businesses are concerned about driving traffic to their website, not all of them pay as much attention to turning potential customers into conversions. Remember that traffic does not equal sales. To improve your CAC, make improving the rate of conversions a top priority. As for how you can improve this and lower your CAC, pay attention to such things as slow loading times, navigation difficulties on various pages of your website and other issues potential customers experience, then make the necessary changes.

The Importance of Customer Retention

Once your business is able to acquire a customer, that is only the beginning of making sure your CAC stays low. To stay on this path to success, you also need to know how to retain that customer and get long-term value (LTV) from them. If you don't, you will be in a constant cycle of acquiring and then losing customers, which forces you to spend far more time and money on acquiring new customers than your competitors. By working closely with your marketing and accounting teams, you can learn more about this metric, what your company's LTV and CAC rates need to be, and coordinate your efforts to get both of these rates to their desired levels.

Streamline Your Process

In business, time is money. Therefore, try to streamline your processes utilizing automation technology as much as possible. This can include such things as sending out welcome or thank you emails to customers, offering discounts and promotion codes, and other incentives for customers to continue using your business. While this may sound like lots of work, it is actually far easier than you would imagine, and will save you and your staff plenty of time once the system is up and running. As for how it will reduce your CAC, automation leads to reduced customer support costs and increased brand recognition. Automation is also less costly than paying a human to do the same tasks.

Take Advantage of Live Chat

Now considered one of the primary ways companies can lower CAC, live chat is unique in that it can be the source for a customer's entire journey; from being only a prospect to becoming a loyal customer. Combining conversational marketing and customer engagement strategies, live chat gives your business more opportunities to sell various products or services to customers. Best of all, it increases a customer's long-term value to your company. In fact, studies show customers who use live chat with companies tend to spend almost 15% more with that company during their lifetime.

Remember that no matter how great your product or service is within your industry, your business will only succeed if CAC is kept as low as possible. Once you start to use the above-mentioned strategies and prioritize CAC as a key business metric, you'll be surprised at the results. Talk to your CPA about CAC and how it affects your bottom line.