Choosing the Best Entity for Your Business

Sole proprietorships are the most popular business entity in the U.S., with about 27 million businesses listed as sole proprietorships.

Deciding on the proper structure for a new business in your state– sole proprietor, partnership, limited liability company (LLC) or corporation – will depend on the type of products or services your business will provide, the ownership structure and the financial situation.  Consider these factors when deciding on a business ownership structure:

Complexity 

If you are starting your business without a lot of capital, you may wish to choose a simple structure, like a sole proprietorship or partnership.  More complex corporate structures like corporations and LLCs are more expensive to maintain, and require certain operational formalities that may not be needed if you have a simple business.

Risk 

If your business is inherently risky – for example, stock trading or construction – you will probably want a business structure that protects your personal assets from business claims, like a limited liability company (LLC) or corporation.

Taxes 

Taxes on business profits for partnerships, LLCs and sole proprietorships are all reported on the personal income tax returns of their owners, who must pay income taxes on all net profits.  Corporations pay corporate taxes at special rates on any profit at year-end.

Investment Capital 

With a corporate structure, you can sell shares in your business to raise investment capital.

If you are still uncertain which entity would be best for your company, give us a call at (714) 533-2600 and a CPA can help guide you in the right direction.

Save Your Business Miles! It Can Save You Thousands!

If you have to travel for business, you may know that you are allowed to deduct your business miles traveled. Some companies have a system setup for their employees to enter their trips and it will calculate it for them.

However, if you own your own business or you are not compensated by your employer for business miles traveled, then you have to track your miles on your own. When it comes to showing proof for tax deductions, it becomes difficult to show if you did not track every time you traveled for business.

Luckily, with new technology on smartphones an app can be used to track your miles and save them. This will let you know how much you are traveling and how much you would be able to write off when it comes to your taxes. It is more efficient than writing it on paper and will not be lost as easily.

Blue Ocean Strategy-What is the Next Big Idea?

For many business owners, their focus is how to compete in their competitive industries. For the restaurant industry there are endless amounts of competitors that provide similar products. For other industries, they might be trying to sell the exact same product.

The question that is then asked is how to differentiate from the competitors? What can be done to become the better option? For many businesses it becomes the customer service or extra amenities offered. While this may separate the business from the below average industry competitors, these types of things should be a given of what to do when trying to run a good business.

Then what can really differentiate your business from competitors?

To help answer this question, consider a blue ocean strategy.  This strategy created by W. Chan Kim and Renée Mauborgne states that most businesses operate in red oceans. These red oceans are described as shark infested waters filled with blood from countless competitors fighting for scraps of market share. What they suggest for businesses who want to prosper is to create their own new blue oceans. These oceans are uncontested and creates new demand for a new market. 
Why fight a for small share of profits against so many competitors when you could create your own market contesting against no one else? 

This may seem hard, but this progressive thinking about your business could be what gets you to where you want your business to go.

3 Ways Technology Can Help Improve Your Business

Change can be scary. Technology advances at a much quicker rate than before and it is hard to keep up. Year after year there are new software programs, gadgets and devices that come out that are made to make life easier.

 

But how does this affect businesses?

 

These new technological advances can help to improve your business. From simple attachments for smart devices to read accept credit card transactions to tablets that allow customers to enter their information electronically.

Here are 3 ways technology may help your business:

1. Keeping Track of Information

Database systems have taken over the file cabinet in your office. For some industries, a paper trail of information is still needed for security and audit purposes. But for many businesses, a cloud based server can help to keep track bank statements, invoices, bills, and any documents related to the business.

2. Convenient Payment Options

As time goes by, less people are carrying around cash to purchase items. Now there are more options for businesses when it comes to credit card scanners. Any mobile device such as a smartphone or tablet can be used to process transactions. While this comes at the cost of processing fees, it reduces risk of losing customers and helps to keep track of sales.

3. Staying in Touch with Customers

It is a lot easier to keep in touch with customers now by being available on different online platforms. Social media gives businesses the opportunity to exhibit their product or services to attract new business. This has helped many businesses in the food industry advertise their food and start trends that followed by thousands to millions of people.

Not all businesses are the same and some technologies may not suite your type of business. Regardless, it is worth it to try something new to improve your business.

Small Business Success Story – Chad Mureta (App Empire)

Chad Mureta ran a real estate business when the impossible happened: A devastating car accident has caused to be delivered to the hospital, nearly taking out his arm. His business could not continue without him being physically present, but Mureta’s mounting medical bills meant he had to find an alternative source of income.

After reading a magazine article about mobile apps during his hospitalization, Mureta decided to try his hand at producing mobile applications. At the time, the industry was relatively new, but he felt the growth potential was worth the risk he would say.

“Lying in my hospital bed, I decided to take a Hail Mary shot and get into this industry.” Mureta said. “I needed a new business and decided to jump in with both feet.” Immediately, he started sketching out ideas for his own apps on pieces of paper. Soon after, he found a development company and outsourced all his work to create his first app.

Mureta took out a loan for $1800 to produce his first app. Fingerprint security – Pro. It soon became one of the 50 most popular apps in the App Store, earning him $140,000 in the process. From there, Mureta founded and sold three app companies – Empire Apps, Best Apps, and T3 Apps and now is currently running a blog called App Empire. He has produced 46 apps to date, and authored “App Empire: Make Money, have a Life and Let Technology Work for You”

Mureta advised other entrepreneurs to not be intimidated by their lack of experience in an industry if they see an opportunity. With a thirst for knowledge and the willingness to find and connect with the right people, anyone can begin to carve out an entrepreneurial path for him or herself, he said.

“I’m still not a tech guy,” Mureta said, “I couldn’t tell you how to program an app, but I can tell you how to make it a success. I researched the market and the consumers, and saw opportunities for people like myself. I kept researching and kept expanding my knowledge to grow my business and income.”

 

***ARTICLE BASED ON BUSINESSNEWDAILY.COM, WRITTEN BY NICOLE FALLON TAYLOR***

Small Business Benefits – Cloud-Based Accounting Tools

 

What will you do when you have too many projects and business events to attend for your business while you have a ton of bookkeeping and accounting issues that you have to work on? In today’s world, there are many advantages that a small business owner can get access to such as an ever growing suite of organizational tools and technologies to reduce the headache of work that involves accounting work and instead pursue on business opportunities. Eventually these tools become available as cloud-based offerings, and most small businesses should consider migrating their current accounting workflows to the cloud.

 

WHAT IS THE CLOUD?

Cloud based software, or software as a service offers users access to technology on a subscription basis. The software provider securely hosts all necessary databases and servers, and small- business owners can access their data anytime, anywhere via internet connection. The benefit of using a cloud based technology is mainly the update aspect. Because we live in a world where technology is always growing and changing, business owners also need to keep themselves up to date with the latest technology to a bare minimum in order to regulate themselves in the business world.

Just imagine if you had a business with the best technology and software that were probably the best tools out there for this current year. Fast forward 2 years later and suddenly your technology and tools are one of the lowest quality and least efficient for the business world. And the best part about cloud technology is that you can take your tools anywhere in the world!

 

**BASED ON ARTICLE BY JEN COHEN CROMPTON from ENTREPRENEUR-IN-RESIDENCE AT THE NEAT COMPANY**

 

WHY CLOUD?

Well let’s take a look at what benefits it brings for business owners:

1. Enable smart organization for a distributed workforce.

Accounting information stored in the cloud can be added or access anywhere, team members or you can quickly and easily compete with their work regardless of physical location. For example, a sales rep needs to add expense receipts or a project manager needs to check an invoice for a supplier. Having cloud- based tools in place makes organizing and accessing important information as easy as taking a picture of a document or searching by vendor, amount or date.

1. Maintain relationships and easily verify discrepancies.

Relationships with vendors and distributors play an enormous role in the success of many small businesses. When a vendor or distributor questions why a bill hasn’t been paid, small -business owners that leverage cloud -based tools can quickly search for invoices. Advanced cloud toold allow team members to search by virtually any term to locate a bill and identify whether it was missed and pay for it quickly to preserve the vendor relationship.

1. Use a broader suite of apps.

Cloud applications such as QuickBooks Online and Neat not only provide access to information and documents from any device, but they also integrate with other cloud-based tools. As soon as a small business starts using one cloud-based accounting technology, it’s easy to extract and leverage data across a number of different platforms and reduce time spent on manual data entry.

Small-business owners start businesses because of passion for what they do — not to spend time managing paperwork. Migrating traditional accounting workflows to cloud-based solutions enables small-business owners to reduce spent managing information and improve overall operational efficiency.