Business Tips

One of the most significant, if not the most significant function within any secure business is that of risk management. Risk Management equates to having a set of policies and procedures in place that are designed to mitigate losses caused by a myriad of circumstances including natural disasters (floods, tornados, hurricanes, etc.).

It is incumbent on business owners and management to be prepared for the threats from the fore-mentioned types of disasters. Risk management and Disaster planning, in general, is concerned with minimizing the impact on the company’s operations and IT functionality caused by disaster.

As Search Disaster Recovery notes, a disaster can be anything that puts an organization's operations at risk, from a cyberattack to equipment failures to natural disasters. The goal of Disaster Recovery is for a business to continue operating as close to normal as possible. The disaster recovery process includes planning and testing, and may involve a separate physical site for restoring operations.

In addition, a disaster recovery plan provides a structured approach for responding to unplanned incidents that threaten a company's IT infrastructure, including hardware and software, networks, procedures and people. The plan provides step-by-step disaster recovery strategies for recovering disrupted systems and networks to minimize negative impacts to company operations. A risk assessment identifies potential threats to the IT infrastructure; the DR plan outlines how to recover the elements that are most important to the company.

As this disaster recovery report observes, an IT Disaster Recovery Plan (DRP) is created to ensure a business and more specifically their technology department can recover quickly and efficiently should they lose their data centre or have a major IT software or hardware failure. Prior to developing an IT DR plan it is critical that a Risk Assessment and Business Impact Analysis is carried out. These two prior phases will clearly highlight where a potential disastrous event may occur and also establish important factors such as the time frame and recovery order in which the business needs to re-establish their systems.

According to Yatsish Mishra: “Ninety four percent of businesses that suffer a large data loss go out of business within 2 years”

As this disaster recovery report further observes:

Preparing for a disaster requires a comprehensive approach that encompasses hardware and software, networking equipment, power, connectivity and testing that ensures DR is achievable within targets. While implementing a thorough DR plan isn't a small task, the potential benefits are significant.

Not the following elements to an effective disaster recovery plan published by CIO:

1. Let employees know where to go in case of emergency – and have a backup worksite. “Many firms think that the DR plan is just for their technology systems, but they fail to realize that people (i.e., their employees) also need to have a plan in place,” says Ahsun Saleem, president, Simplegrid Technology. “Have an alternate site in mind if your primary office is not available. Ensure that your staff knows where to go, where to sit and how to access the systems from that site. Provide a map to the alternate site and make sure you have seating assignments there.”

2. Make sure your service-level agreements (SLAs) include disasters/emergencies. “If you have outsourced your technology to an outsourced IT firm, or store your systems in a data center/co-location facility, make sure you have a binding agreement with them that defines their level of service in the event of a disaster,” says Saleem. “This [will help] ensure that they start working on resolving your problem within [a specified time]. Some agreements can even discuss the timeframe in getting systems back up.”

3. Include how to handle sensitive information. “Defining operational and technical procedures to ensure the protection of…sensitive information is a critical component of a DR plan,” says Eric Dieterich, partner, Sunera. “These procedures should address how sensitive information will be maintained [and accessed] when a DR plan has been activated.”

4. Test your plan regularly. 

“Your plan must include details on how your DR environment will be tested, including the method and frequency of tests,” says Dave LeClair, vice president, product marketing, Unitrends, a cloud-based IT disaster recovery and continuity solution provider. “Our recent continuity survey of 900 IT admins discovered less than 40 percent of companies test their DR more frequently than once per year and 36 percent don’t test at all.  

In short, when it comes to preparing an effective DRP and executing it with success, always err on the side of being over-prepared.

Small businesses looking to increase sales and profit, reduce dependence on the domestic market and stabilize seasonal fluctuations should consider exporting. Consider these facts: 

• Nearly 96 percent of consumers live outside the U.S.
• Two-thirds of the world’s purchasing power is in foreign countries.

Today, as noted by Export.gov, it’s easier than ever for a company like yours, regardless of size, to sell goods and services across the globe. Small and medium-sized companies in the United States are exporting more than ever before.

In 2013, for example, more than 300,000 small and medium-sized U.S. companies exported to at least one international market—nearly 28 percent more than in 2005. The value of goods and services exports was an impressive $2.28 trillion, nearly a 25 percent increase since 2010. And 2014 topped the previous year, with exports valued at $2.34 trillion.

The following list is of sales channels are available to global trading partners active in the export process,

Sales channels can include:

• Direct to end-user
• Distributors in country
• Supplier to the U.S. government in a foreign country
• Your e-commerce website
• A third-party e-commerce platform where you handle fulfillment
• A third-party e-commerce where they handle fulfillment
• Supplier to a large U.S. company with international sale
• Franchise your business. 

You are not limited to one of these channels. As it is also noted in the Export.gov study, today’s global trading system is ideal for the smaller company employing more than one marketing and sales channel to sell into multiple overseas markets. But most U.S. exporters currently sell to one country market—Canada, for example. And the smaller the company, the less likely it is to export to more than one country. For example, 60 percent of all exporters with fewer than 19 employees sold to one country market in 2005.

Tips For Potential And New Exporters

In a recent report from Shipping Solutions, these seven tips will provide helpful guidance for businesses new to exporting:

Tip #1 – Make a Commitment

Businesses new to exporting can expect to face numerous challenges such as redesigning packaging or establishing a new distribution channel. 

Tip #2 – Do Your Research

To be successful overseas, do some research on potential markets. Which countries have the lowest duties? Write an international marketing plan, which addresses a range of potential issues such as unique labeling requirements.

Tip #3 – Focus Your Efforts

For example, first-time exporters in Minnesota often target Canada as the first international market to enter. The proximity of Canada and the benefits of the reduced North American Free Trade Agreement (NAFTA) tariffs are advantageous for new Minnesota exporters ramping up on their export knowledge.

Tip #4 – Set Aside Resources

Entering new markets requires resources—primarily time and money. Companies in the best position to export already have an established track record of domestic growth and a steady revenue stream. For many companies, gearing up a business to export means having to reallocate resources from domestic business opportunities.

Tip #5 – Increase Your Company’s Export Knowledge

Look for opportunities to develop and expand the export knowledge of your staff. Work toward credentials to ensure you develop a baseline of skills. For exporting companies, encourage staff to attain the Certified Global Business Professional credential. 

Tip #6 – Line Up Experts

It's unlikely that one person will know all aspects of the export process in full detail. As you prepare to export, establish a network of specialists with expertise across a range of issues such as export documentation, letters of credit, or international contracts. 

Tip #7 – Leverage Government Resources

The U.S. Commercial Service, which has Export Assistance Centers located across the U.S. and offices in many American Embassies and Consulates overseas, is a global network of trade professionals who can provide ground support in many overseas markets to assist U.S. exporters. 

The Small Business Administration (“SBA”) has published through its website at several useful tools to help get started with exporting. Note the following:

Step 1: Complete the Free Export Preparedness Questionnaire

Determine your business’s preparedness for exporting and find useful info about exporting that can help grow your exporting business.

Step 2: Training and Counseling

The federal government offers free, in-person counseling services to help small businesses locate business opportunities overseas, understand shipping logistics and international payment options, and obtain financing for their export sales.

Step 3: Create an Export Business Plan 

Creating an export business plan is important for defining your company’s present status, internal goals and commitment. You will learn how to develop an export plan by assembling facts, identifying constraints and setting specific goals and objectives as milestones to success.

Step 4: Conduct Market Research

Use Market Research to learn your product’s potential in a given market, where the best prospects exist for success, and common business practices. The Country Commercial Guides are the latest information prepared by commercial and economic experts in U.S. embassies worldwide.

Step 5: Find Buyers

Federal, state and local governments are continually organizing highly focused export events directly putting U.S. sellers and potential foreign buyers in direct contact. 

Step 6: Investigate Financing Your Small Business Exports, Foreign Investment or Projects

Become familiar with SBA’s export loan programs and other federal government financing, insurance and grant programs.

Conclusion:

Experience has shown that increased revenues and profits vis-a-vis an exporting business strategy can become a living reality by applying critical preparation and planning.

Rollovers as Business Start-Ups (ROBS) are financing mechanisms in which current or prospective business owners use their 401(k), IRA or other retirement funds to pay for new business start-up costs, for business acquisition costs or to refinance an existing business. ROBS is an acronym from the United States Internal Revenue Service for the IRS ROBS Rollovers as Business Start-Ups Compliance Project.

As Fit Small Business notes, a ROBS is a way to invest funds from your retirement account, like a 401k or IRA, into your startup business without paying early withdrawal penalties or taxes. A ROBS isn’t a business loan, or even a 401k loan, so there’s no paying back debt or interest. Business owners who use a ROBS often see higher success rates than those who rely on traditional business financing. According to a study by Guidant, 81% of small businesses funded with a ROBS were still operating after 4 years. Only 39% of businesses funded with a traditional business loan fared that well.

A ROBS transaction takes the form of the following sequential steps, as listed by the IRS:

1. An individual establishes a shell corporation sponsoring an associated and purportedly qualified retirement plan. At this point, the corporation has no employees, assets or business operations, and may not even have a contribution to capital to create shareholder equity.
2. The plan document provides that all participants may invest the entirety of their account balances in employer stock.
3. The individual becomes the only employee of the shell corporation and the only participant in the plan.
4. The individual then executes a rollover or direct trustee-to-trustee transfer of available funds from a prior qualified plan or personal IRA into the newly created qualified plan. These available funds might be any assets previously accumulated under the individual's prior employer's qualified plan, or under a conduit IRA which itself was created from these amounts. Note that at this point, because assets have been moved from one tax-exempt accumulation vehicle to another, all assessable income or excise taxes otherwise applicable to the distribution have been avoided.
5. The sole participant in the plan then directs investment of his or her account balance into a purchase of employer stock.
6. The individual then uses the transferred funds to purchase a franchise or begin some other form of business enterprise. Note that all otherwise assessable taxes on a distribution from the prior tax-deferred accumulation account are avoided.
7. After the business is established, the plan may be amended to prohibit further investments in employer stock. This amendment may be unnecessary, because all stock is fully allocated. As a result, only the original individual benefits from this investment option. Future employees and plan participants will not be entitled to invest in employer stock.
8. A portion of the proceeds of the stock transaction may be remitted back to the promoter, in the form of a professional fee.

As seen above, a ROBS is a mechanism that can provide funds for investment in start-up business without incurring a tax liability. It isn’t a simple mechanism to implement, however. Our advice is that you engage the services of a tax attorney to assist you during every step of the ROBS implementation process.

One of my favorite sayings is “the only constant is change.” This saying certainly holds true in the business realm where it seems that the mandate is also “growth and go.”

Experience seems to show that upon the purchase of a business the new owner needs to roll-up his or her sleeves and really get to work.

The following steps, as noted by Business Daily, help to summarize a recommended agenda for a new business owner to focus on:

1. Do an audit of the existing processes and practices: "Regardless of the entrepreneur's background and the amount of due diligence conducted prior to an acquisition, the entrepreneur will never truly understand the business until he or she starts to operate it," said Michael B. Shaw, chair of Much Shelist law firm's business and finance group. "Every company is unique, and an entrepreneur needs to truly understand that business before deciding what changes to make."
2. Communicate with the existing staff members: Mark Davis, CEO of Puro Clean, said one of the biggest challenges a new owner will face after an acquisition is fear throughout all levels of the organization.
3. Study and understand the company culture: Before you try to improve or alter the company culture, stop and analyze the existing culture to understand the key factors that led to the company's success, Shaw said.  "Rather than starting over with [your] vision for the culture, those key factors should form the foundation for the culture's evolution, which should be an organic process," he added.
4. Plan your changes carefully: Making numerous, significant changes right away isn't always the best approach when you acquire a business. Shaw said that although you may be eager to make an impact, big moves like this shouldn't happen overnight. "An entrepreneur should begin implementing his or her changes in a manner that minimizes disruptions to employees and customers," Shaw said.
5. Be transparent about the changes you're making: Change can be difficult for all parties involved, and people won't always be happy with the decisions you make. The best thing you can do is to be up front and honest about any impending changes and how you arrived at them, said Matt Moss, a franchise owner of Dogtopia.

In conclusion, I think it’s fair to say that the single most important factor a new owner should give attention to is communication. Fear of the unknown can be remedied by working on eliminating things that are unknown, and good communication is a crucial part of that.

So, you’ve decided you want to open a business? Have you given any thought to the type of business you want to open? Deciding what type of business you’re going to open is a key first step in the process of going into business. Everything you do will flow from the type of business you decide on opening.

There are a variety of business types available to the entrepreneur that present somewhat unique opportunities. It only makes sense to decide on opening a “business type” that presents opportunities for growth, profitability, and success. For example, why open a business type in an environment that is overly saturated the market already?

The following business types are recommended for consideration because of the associated unique opportunities they possess.

Green Business

Business Dictionary defines a “Green Business” as the following:

A Green business is a business functioning in a capacity where no negative impact is made on the local or global environment, the community, or the economy. A green business will also engage in forward-thinking policies for environmental concerns and policies affecting human rights.

Implementing sustainable (green) business practices may have an effect on profits and a firm's financial “bottom line.” At first blush, this challenge might make many corporate executives cringe. However, during a time where environmental awareness is popular, green strategies are likely to be embraced by employees, consumers, and other stakeholders. In fact, according to many studies, a positive correlation exists between environmental performance and economic performance.

People With Disabilities

As noted by Shoretel.com, there are more opportunities than ever for individuals with disabilities to start their own businesses. Those who are deaf, blind, paralyzed or dealing with intellectual disabilities can reach out to government programs, support nonprofits and organizations, scholarship and grant foundations and more. These programs boost the likelihood of success, and give people with a disability and a plan the start they need.

Women-Owned Businesses

The following information is taken from the 2016 State of Women-Owned Businesses Report:

• There are now 11.3 million women-owned businesses in the U.S., employing nearly 9 million people and generating over $1.6 trillion in revenues;
• Women-owned businesses now comprise 38% of the business population, employ 8% of the country’s private sector workforce and contribute 4% of the nation’s business revenues; and
• Since 2007, there have been 1,072 net new women-owned firms launched each and every day.
• Between 2007 and 2016, while the total number of firms increased by 9%, the number of women-owned firms increased by 45% – meaning that over this period the number of women-owned firms grew at a rate fully five times the national average;
• Who are entering the ranks of women business owners at a fast clip? Women of color; their numbers have more than doubled since 2007, to nearly 5 million. They comprise fully 44% of all women-owned firms.

Franchise Businesses

A franchise provides the entrepreneur with the opportunity to be the boss without taking on the risk of starting his or her business from scratch. A franchise is a business model that involves one business owner licensing trademarks and methods to an independent entrepreneur.

For example, under “Product/trade name franchising”, the franchisor owns the right to the name or trademark and sells that right to a franchisee. Under “Business format franchising” the Franchisor and franchisee have an ongoing relationship, and the franchisor often provides a full range of services, including site selection, training, product supply, marketing plans and even assistance in obtaining financing.

Home-Based Businesses

An academic report from the University of Maine notes how, for more and more people, home is not only where the family is, it is where the business is. In recent decades, large numbers of people have chosen to market their skills and talents from home.

In fact, as many as 20 percent of new small business enterprises are operated out of the home. Many home-based businesses are started on a part-time basis and then expand into full-time businesses as the market for the business develops and grows.

In addition, the majority of home-based businesses are started by women and typically employ other family members.

As the report notes:

• Advantages Of Operating A Home Based Businesses
  • Can start as a part-time business.
  • More flexible lifestyle and more integrated with the family.
  • Lower start-up and operating costs.
  • Cost-savings on child/adult care.
  • No commuting.
  • Flexible work hours.
  • Satisfaction of being own boss.
  • Increased tax benefits and write-offs.
  • Employment of family members by the business.
• Disadvantages Of Operating A Home Based Businesses
  • Space may be cramped, limiting growth potential and family use.
  • Personal and family lifestyle patterns may be disturbed.
  • Business and family privacy may be disrupted.
  • Long work hours and time away from family.
  • Lack of fringe benefits.
  • Lack of informal social contacts or opportunities to network.
  • Stress due to inability to balance family and business needs.
  • Family members and friends may demand more of you when you’re home all day.
  • Business activities may cause problems with neighbors.
  • Discipline is required to establish steady, homework patterns.

An entrepreneur has a lot to consider when trying to decide on the type of business he or she wants to open. It’s an imperfect world and there are usually disadvantages for every advantage. Frequently, however, the final decision simply comes down to the personality of the entrepreneur.

If you happen to be in start-up mode you probably haven’t given much attention to the importance of keeping your personal and business finances separate from each other. This blog is certainly not limited just to start-ups, but also includes ill-informed businesses that are beyond the start-up phase of maturity.

Keeping your personal and business finances separate is more than just a “nice thing.” Experience has shown how messy it is to unravel co-mingled finances when forced to do so to satisfy legal requirements such as preparing your tax return or when the IRS comes knocking on the door to do an audit or when lenders request financial reports before approving any cash infusion that you need for your business to survive.

Furthermore, you may have to provide evidence to the IRS that your business is not a sham but is indeed a credible, ongoing concern. Co-mingled finances only go to show a lack of credibility that the numbers you report “might” be inaccurate.

Not a good thing.

The following items describe some of the things that you, the business owner, can do to help present your business in the most credible and  favorable light.

The first two points, as neatly summed up by American Express, touch on checking accounts and credit card strategy:

1. Set up separate checking accounts. If you have separate checking accounts and you are diligent about drawing on the right account at the right time, come tax time, all you have to do is review your bank statements for a clear picture. If you can manage to only use your business debit card and avoid cash, you may even be able to do your taxes and other financial reporting straight off your bank statements.
2. Get a credit card for the business. A business credit card will help you build up a credit history for your business separate from your personal credit history. More importantly, your credit card is one of the likeliest places for your finances to get muddled. Separate credit cards means that even if there's something a little out of reach of your business' current budget, you won't be tempted to use your own credit card.
3. Keep your accountant informed. Quickbooks recommends the following: ask your accountant about making quarterly estimated tax payments to the IRS and your state treasury. If you do end up mixing personal and business finances, such as using your personal funds to invest in your company or purchase something for your company, always ask your accountant how to record the investment in your bookkeeping program.
4. Use accounting software. As noted by WAHM, one of the most important reasons to use accounting software in your small home business (any business for that matter) is to help keep separate business and personal finances for tax purposes. When you work at home and report your own income to the IRS, statistically, there is a higher chance of audit. Completely separating the income will help you when filing your taxes, so as to prevent any issues if an audit arises.

Conclusion

Besides reducing legal liability, as Fund Box recommends, keeping your business finances separate makes recordkeeping easier, which helps you manage your taxes and business bills more efficiently. And if you need additional help, the IRS website has hundreds of resources explaining what business and personal records you should keep, how long you should keep them, what forms you need to file and more.

Expanding a company’s business (or an aspect of its business) internationally might be a good thing. It all depends on a number of variables that need to be closely examined.

I happen to have some relevant first-hand experience in the area of expanding a company’s infrastructure across international boundaries, which, in a very real sense, is similar to introducing a new business or product line across international boundaries.

Several years ago I took on the responsibility of project manager for the implementation of a new ERP system in France, Holland, and Australia. These European locations were in fact subsidiary divisions for an American-based international company.

All in all, the project went very well. It was a fascinating project for several reasons.

First of all, the project at each of these locations took approximately six months to complete and gave me the opportunity to get to know and develop relationships with some of the local folks employed at each location. Over time this enabled me to develop an appreciation for the nuances in the local traditions and cultures. I am a strong believer that success at leading the completion of a project like this across international bounds depends not only on the technical aspects of introducing a new ERP system (anything “new”) but also on the sensitivities that the division personnel might have against changes being forced upon them from corporate America (which I represented).

I can assure you that customs unique to each area existed and presented challenges. For example, throughout the project to enhance ERP efficiencies, there was the concern that the Americans couldn’t be trusted and that they would all lose their jobs by the time the project was finished. (Didn’t happen.) This sensitivity, I’m convinced, was exacerbated by the fact that the folks in America were dictating changes.

To help you navigate these situations, I’d like to draw your attention to the following tips to keep in mind when expanding business operations globally, as noted by Michael Evans of Forbes:

Organizational Readiness

• Evaluate the organization structure needed to successfully execute your strategy.
• Develop policies, procedures, and handbooks that comply with local requirements while maintaining balance with overall company policies.
• Develop competitive benefits and compensation programs to attract qualified local employees. (Note that in my project where we implemented a new ERP system there will be increased burdens on the IT group who will manage the ERP function).
• Develop a local information technology infrastructure that is compatible with your domestic infrastructure.

Develop A Localized Strategy and Business Plan

As Evans notes: “each market has its own nuances due to economic, cultural, governmental, and market conditions. It is important to develop a localized strategy and business plan that drives local success while remaining integrated with the overall corporate strategy and objectives.”

Issues to consider are the following

• Import/export pricing strategies.
• Initial financing streams and anticipated revenues.
• Legal, regulatory and licensure requirements.
• Potential partnership or investment opportunities

Establish an executive team

In addition, global companies will often try to launch with executives from the parent company or quickly build a local team from scratch. Evans offers this warning:

This is time consuming, risky, and slows time to market. Using proven senior interim executives allows the company to hit the ground running, quickly validate assumptions, and drive key readiness initiatives while the company hires the right senior management team.

Identify and investigate target markets

In addition, it’s crucial to consider every possible factor, positive and negative, that will impact your ability to penetrate a market. As noted by the Young Entrepreneur Council (YEC) in this Forbes piece:

“Remember those widgets we talked about selling in Europe?” You might need to make adjustments, such as changing the manufacturing materials to meet environmental requirements in certain countries. Or, local content initiatives like those mentioned earlier might require you to refine your manufacturing, distribution or sales model.

Do I have the available resources and staff to focus on both expansion and my established business?

And as noted by Business News Daily, it’s also critical to be prepared for growth in staff--enough growth to handle the operation:

Trying to juggle an overseas operation while maintaining your current domestic customer base with a small staff is incredibly difficult, and you likely won't be able to sustain your growth. Before you decide to expand, make sure you have the financial and structural stability to add staff members who can handle the new influx of work that comes with such growth.

"An organization should have a strong team solely focused on international growth that is ready to face challenges and fully support the expansion," said Taki Skouras, co-founder and CEO of international wireless accessories retailer Cellairis.

Conclusion

Not every company or market is the same. There are resources, however, that can help you figure out the right path for your company. As the YEC notes:

Fortunately, the U.S. government, as well as many state and local governments and business-incubator groups, expends a considerable amount of time and energy helping businesses―in some cases, specifically resource-strapped, small and medium-sized businesses (SMBs)―penetrate foreign markets.

The YEC also notes the following resources that may be of use during your quest for an international presence.

• The International Trade Association (ITA).
• The SBA Office of International Trade.
• Tradeology, the blog of the ITA.
• International Trade Data Bank.
• U.S. House Committee on Small Business’ Small Business Export Guide.
• The U.S. Commercial Service (an arm of the ITA; focuses on helping SMBs find international partners).

Crowdfunding is a tool that provides an alternative to more traditional forms of financing available from banks and other institutions. It has evolved to answer the needs of investors and entrepreneurs who have a desire to participate in a variety of investment opportunities but are severely limited by the amount of cash or credit they have available.

The crowdfunding model is based on the premise of bringing together a large number of individual contributors who individually do not have the resources to invest in an attractive project but together, with other contributors, are able to accumulate a sufficient critical mass. At that point, they join in a unique partnership with the project’s creators--often getting a front row seat of the project’s journey and getting exclusive updates as the project evolves--that they otherwise would not have been able to experience. In some cases there might even be a financial yield that contributors gain from a project much as they would in a more traditional investment situation. However, most crowdfunding projects are about having privileged access to a project’s development and receiving immediate incentives from the campaign along the way or at the completion of the project.

Crowdfunding has been a successful form of funding projects in real estate, start-up companies, philanthropic endeavors, civic projects, journalism, music and independent film projects. In many of the artistic projects, contributors give money to the project in order to receive immediate incentives (i.e. a signed copy of the album or some collectible that is only available through the crowdfunding campaign) instead of a future financial return. In this way, many crowdfunding campaigns differ from more traditional investments. They are not “investors” in the traditional sense: they are not trying to grow their wealth by investing and gaining a financial yield from a successful project.

The process of raising funds using the crowdfunding approach involves online platforms such as Kickstarter, Crowdfunder, or Indiegogo. The purpose of the platform is to provide the fundraiser with a place to setup a campaign where contributions can be received.

On April 17, 2014, The Guardian published a list of "20 of the Most Significant Projects" launched on the Kickstarter platform up to that time. The following is a sampling taken from a Kickstarter list, which demonstrates the potential magnitude of successful crowdfunded projects.

• The "Coolest Cooler" raised a total of $13,285,226 from 62,642 backers. The cooler features a blender, waterproof Bluetooth speakers and an LED light.

• Filmmaker Spike Lee raised US$1.4 million from 6,421 backers in August 2013 to produce Da Sweet Blood of Jesus.

• Writer Rob Thomas raised $5.7 million from 91,585 backers in April 2013 to create a feature film version of the defunct television series Veronica Mars. 

• Musician Amanda Palmer raised US$1.2 million from 24,883 backers in June 2012 to make a new album and art book.

• The highest reported funding by a crowdfunded project to date is Star Citizen, an online space trading and combat video game being developed by Chris Roberts and Cloud Imperium Games, which—as of 7 April 2016—claimed to have raised over USD $111,600,000, beating the previous record of $10,266,844. 

In a recent March 2016 article at Entrepreneur.com, Catherine Clifford noted how, after an analysis of 170,000 Kickstarter campaigns, there were three distinctive fundamentals that led to crowdfunding success:

• A potential backer of a crowdfunding campaign is making the decision to invest without any “in person” time with an entrepreneur. Therefore, the more visually engaging a crowdfunding page is the greater the likelihood that the campaign will achieve its goal.  

• Backing a crowdfunding campaign is not without its share of risk. This risk can be mitigated somewhat if the entrepreneur behind the campaign has a resume of successful projects.

• Reading the comments of campaign backers is a good source of worthwhile information.

Although the massive popularity of crowdfunding has saturated the field with campaigns--and this makes it harder to be effective--if you are diligent with the principles above, the effort could prove to be worth the hard work. 

Scan it.

A valuable tool for the average taxpayer to the small business owner that can be surprisingly simple to integrate into your life is scanner. From simple scanners built into your office printer to dedicated document scanners for documents, receipts and business cards, there are a lot of options out there in a variety of price ranges.

Regardless of the scanner you choose to purchase or how much money you spend on it, a scanner is only worthwhile if used consistently and set up properly. Here are some things to remember and rules to follow when you decide to start digitizing your financial documents with a scanner.

Be secure. Make sure you are uploading your documents to a protected folder on a backed up hard drive or a secure cloud based server. You don’t want these documents being lost or corrupted, and you also don’t want them to be accessible to the wrong people.
Set your scanner up to upload your documents directly to a location that is dedicated to financial organization. Having a file full of unorganized documents hidden somewhere on your hard drive is about as useful as having them stuffed away in a drawer or filing cabinet.
File your documents immediately. Don’t let them pile up, if you make this a routine it will be easier and you will see the benefits quickly come tax season or during that surprise audit.
Create a file naming legend and follow it, upload your documents, rename them and file away for later.

Make Your Calendar Work For You

Spending time and money getting your financial documents organized is a great first step. The next step is making the organization work for you. Having all of your financial documents accurately filed away is great, but how can you access those documents when you need them on the go? We’ve already talked about uploading those files to a cloud server such as google drive to make them accessible to you at all times as well as desktop. Another great tool for financial organization is a cloud based calendar.

A cloud based calendar that you synch with all of your devices will keep you on track with all of your financial responsibilities. Because it is stored on the cloud rather than scribbled in a calendar somewhere, you aren’t dependent on having your datebook in hand. Whether it’s your work computer, smartphone, tablet, or even your personal computer at home, you will be kept up to date on what’s going on in your financial universe.

• To begin with, sit down and choose a calendar service, it’s a good idea to choose one that is linked with your email account, if you use Gmail, you might want to go with Google Calendar.
• Start off by going through the big events that you are going to encounter during the next year. These are dates that probably won’t change and that aren’t flexible, such as tax filing dates and lease renewals. Input these events into your calendar and set reminders.
• The next step is recurring reminders, these are events that happen repeatedly over the course of the year. For instance, payroll and recurring bills. You can add all of these at once, or add them as you go through a typical month. Once these events are added into your calendar, your calendar will start working for you, keeping you on top of your financial organization.

If you’re starting a new business, you may need an EIN (Employer Identification Number) from the IRS. Here’s how to determine whether or not you need one as well as how to get it.

If you’re a sole proprietor or in some states, a single owner of an LLC, the good news is that getting an EIN is free! This is a relief if you’ve already had to pay for the LLC, business insurance, and city business licenses. More details on costs coming up.

What is an EIN?

Essentially, an EIN is like a Social Security Number for a business—at least in regards to paying taxes. You’ve more than likely had to enter an EIN on your 1040 from your W-2.

Do you need an EIN?

You need an EIN if you meet any of the following criteria laid out by the IRS:

• You have or are planning to have employees in the next year
• You are a corporation or are set up as a partnership
• You withhold income tax on anyone you pay that’s not a resident alien
• You have a Keogh Plan (a pension/retirement plan for a self-employed individual)
• You are involved with:
  • Trusts, except certain grantor-owned revocable trusts
  • IRAs
  • Exempt Organization Business Income Tax Returns
  • Estates
  • Real estate mortgage investment conduits
  • Non-profit organizations
  • Farmers' cooperatives
  • Plan administrators

EIN Costs

• Sole Proprietors are free.
• A non profit may have a fee up to $150 depending on the state and that fee is paid to the
• Secretary of State.
• An LLC or Corporation may have a fee of $100 depending on the state.
• A business partnership also may have a fee of $100 that’s determined at the state level.

Is that all?

If you don’t meet any of the above criteria, you’ll probably still want to get an EIN for a few other reasons.

• You want to get a bank account for your business. Sometimes banks will want to see your EIN and sometimes not.
• Business credit cards also will sometimes ask for your EIN.
• You may also need an EIN to get business permits and licenses.
• If you ever hire an independent contractor, you’ll need to to have an EIN in order to furnish them a 1099 in January.

You can get your EIN online in less than 10 minutes more than likely. So, you’re better off just going ahead and getting one. Let us know if you have any questions or need any help at all making sure you’re tax structure is right for you and your business.