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Seven steps to survive the economic downturn

Posted in March 8th, 2009
by Peter in Uncategorized


The present sluggish economy calls for fearless steps to survive in the crowded marketplace. Following are seven steps that I feel will keep you steady, in spite of any eventualities.

Step 1: Find The Real You
In the present time, it will do well to focus on your skills that you feel confident about. Put out the skills to practice to your customers and prospects. Hone your skills on something that comes to your help to the best possible use and become an expert on them. It may be that you own an ad agency on fashion, but it would do well at the present moment to build B2B websites. If you have a little skill on it, bring it to the best possible use.

Step 2: Make Use Of Your Differences
The present economic times calls for standing out for something instead of crouching under the economic turmoil. It is no use to keep on doing what you usually do as you cut back expenses and also see to it that you do not lose your business. However, standing up to something important is the right answer right now. Make use of your strengths to make the difference with your customers.

Step 3: Have Greater Social Network
Now is the time to strengthen your relationships to keep anchored in the economic downturn. Stay connected with your customers, reward them for their loyalty, lunch with them, and connect with them through different social networking sites. The present time calls for deepening your customer relationships to ensure the security and future of your company.

Step 4: Keep Your Core Values
One important point to remember at this juncture is to remain true to your core values. As you get with a prospect, try to be part of the new culture without losing your own culture with it. It can be a real deadly affair to get carried away with someone’s culture or demands and at the end find it difficult to find the real you. It would be better instead to look for what resonates within you and do not accept what you do not feel right. Otherwise, at the end of this recession, you may not identify yourself or your own company.

Step 5: Put Yourself On The Forefront
Put up what is different about your business to make your business make a difference and at the same time position itself perfectly. It is often good to go behind a good cause that puts you in the hero’s pedestal. You need to shake off your fear of pushing up the hill. Give others and see what you receive in return.

Step 6: Recast Yourself
Re-invent yourself with the changing times and with your customers. Conformity does not cast you differently. Updating your style, your advertising, your website and your thinking while holding onto your values are some of the easiest ways to the top. Stay true to who you are and then change your image to feel a new brand about yourself.

Step 7: ABC - Action, Belief and Courage
It is the fearless who overcomes the doubts about their values on the personal front as well as of their business during uncertainty by practicing the principle of ABC - action, belief and courage. Raise your hand now to make a difference in your business instead of wringing your hands. Belief can do wonders. Use your power to make others believe that you are indispensable and you will remain such.

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Surviving In Economic Uncertainty

Posted in February 12th, 2009
by Peter in Uncategorized


The present economic scenario has made everyone uncertain about the future of the marketplace. People are concerned about their job stability and 401Ks, given the economic state and the bailout plan of the government. Be it business owners, recent grads or entrepreneurs, there is a cloud of uncertainty looming over everyone about tomorrow. People like to know what lies ahead in the days to come.
As an entrepreneur, I can fully understand and appreciate the thought of revenue that concerns everyone. However, if few things are kept in mind, we can find ourselves better equipped and protected in these uncertain times.
The first thing to keep in mind for every entrepreneur or for that matter everyone is “not to panic”. It is found that in most of the times as we panic, we make a wrong decision. In this regard, one should find the importance of emotional intelligence, which in simple terms means separation of emotion from one’s decision making process. At the time of making decision, one must not panic and think about decisions as well as plan. One must know that it is a buyer’s market and there are different advantages available for everyone. One should make wise financial decisions as well as wise decisions about their career.
This brings us to the next important decision of keeping your “Resume updated”. There is every possibility of meeting someone who would come as a help for you. So, keeping your resume updated is a good way to remain prepared for these unthought-of opportunities that you may come across in your day-to-day life.
You also need to keep “researching for potential opportunities” that could come your way. This might be in the form of other job opportunities. For entrepreneurs like me, this means finding new client contacts for developing your business. You should not be content with what you have but keep on expanding your base as well as network while keeping your options open. As nothing could be taken as guaranteed, there has to be different options available to you. Mainly so, as presently 6 to 9 months are required to get a new job, that makes it important to make a constant search of the different opportunities that are available and understand them.
Due to economic downturn, a misconception exists that there are not enough availability of jobs and bleak job prospects. The growth in other areas is taken to be not happening at all. However, the ground reality is quite different. A lot many companies are stable and still posting record profits. It is these companies that one should consider to build their career by applying in multiple areas.
Another means of equipping oneself in these uncertain times is to “go to different network events”. However, the point to remember is not to be pushy. It is found that people in network event are really forceful or say such thing as if they are looking for a job. At any networking event, one must try to meet the right people and make these people to remember you. Make these people interested in talking to you. You should not ask for anything to anyone.
In such events, ask people about how you could come to any help to them. By talking to people one can learn about the businesses they do and also the happenings taking place around their fields of concern. This way, one can develop a synergy with these people and find ways to develop your interests.
The last but most important point to consider is to “believe in yourself”. You must remember that you have talents, gifts, skills and abilities. You must always remember about these qualities. After all, it is YOUR ATTITUDE which is your strongest asset.

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The Many Benefits Of Self-Employed 401 (k) Plan

Posted in January 28th, 2009
by Peter in Tax and Small/Self business


The new rules of the Tax Relief Act of 2001 provide enough reason to cheer about for small business owners. It makes sense to open a Self-Employed 401 (k) Plan that not only provides tax breaks and savings for the future like most retirement plans do, but also provides the following additional benefits:
• The self-employed 401 (k) plans are easy to set up with no administrative hassle and are not expensive to maintain.
• You have the freedom to decide whether to make contribution and the amount of contribution.
• You get the benefit of tax-deferred contributions, going up to three times the amount available with other types of retirement plans.
• The loan option of 401 (k) can be used to get loan amount of up to $50,000 or one-half of the account balance in 401 (k). One can spend the loan amount for any purpose and no penalty is charged if the amount is repaid back on time.
• The facility to consolidate assets into Self-Employed 401 (k) from the traditional IRA or other retirement plans.
The 401 (k) can be opened by business of any type, and with no employees, and is known as Self-Employed 401 (k) or Solo 401(k). The business can be a newly started one or an old business and can be of sole proprietorship, partnership, LL.C or a corporation. The plan has to be set up within 31st December for availing tax deductions for that tax year.
A Solo 401 (k) plan can be established by a self-employed business owner with one-person administration. This type of plan helps self-employed businesses with no employees except spouse to start a structured retirement plan.
Self-employed 401(k) plan could be established by any sole proprietor, corporation, partnership or S Corporation. Anybody owning a business can make contribution into a Solo 401 (k) plan, the amount being 100% of total compensation or $42,000, whichever is less. There is the option whereby participants can defer a maximum compensation amount of $14,000 along with 25% of the total profit sharing amount into the plan.
Owners of Self-employed business which is 50 years or more old can also become eligible for 401 (k) plan by contributing an additional $4,000 every year through catch-up provision. Both Solo 401 (k) and Self-employed 401 (k) provide high contribution limits with practically no administration and no costly tests of discrimination. The rules for both Solo 401 (k) and Self-employed 401 (k) are quite relaxed.
If before starting your own business, you were having an IRA or some other 401(k) plan, there is the rollover option for these plans into a Solo 401(k). The plan provides one to decrease or completely stop their contributions at any time.
However, the eligibility requirements are quite strict for establishing self-employed 401(k). Most investment companies do not offer self-employed 401(K) Plan and those who do provide this type of plan offer limited investment options.
The rules are such that the moment a single employee is added to the business other than the spouse, you have to convert your Self-employed 401 (k) plan into the traditional or the simple 401I (k) plan.

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Points To Consider For A Successful Business

Posted in January 28th, 2009
by Peter in Home Based Business, Small/Self business startup guide.


I have often found people starting a business of their own with passion, putting in a lot of money, time and resources into it, but ultimately failing to see it succeed. What makes a new venture to succeed or fail in spite of all the effort and hard work? I have found the following 12 factors to be the reasons behind the success of any business venture.
First of all, one must have a clear vision for the short-term and long term of the business you are about to start. This will result in giving a sense of purpose and the much needed focus. This will also inspire other employees as well. They will respond to the need. You can now set the strategies as well as goals and specify a time frame to achieve it.
Secondly, hire outside assistants to help you in your venture, in spite of you being a solo entrepreneur. It is worth to hire quality assistance in this regard, even if that means a higher price for you. Make the hired people feel the importance of their work towards the development of the business.
The third important point is to remain focus on what the business stands for and spend your time, resources and energy on making your business a successful and profitable entity. Your focus should not waive for a single day.
The fourth important point is innovating new strategies for running your business. As your business has its unique features and problems, finding solutions for your business will be the best strategy for you. It may be that the product your business produces is the same as that of many others, but providing a unique selling proposition for your product will make it stand apart.
The fifth point is to keep a realistic expectation for your business. It is found that most of the small business fails within five years of its start. It may be that there may not be any sale for a month or in the first six months. It must be made clear that even with the best hope, the reality may be worse. So, be prepared for it.
The sixth consideration is to know the market well. This includes the climate of the market, trends of users, newer innovations in technology, and the economic scenario which are important indicators of how your business fairs. These considerations will help you to know in advance the potential threats as well as opportunities. You can then prepare yourself better for any eventualities.
The seventh important point to consider is to keep your expenses and spending low and in sync with the economic health of your business. Do not spend on incomes that may come in future. Spend on what really needs to be done and let go not-so-important ones.
The eighth consideration to remember is to bring in a business partner or investor into your business. This is one of the most important decisions that you could make for making your business a success. Look for a business partner with whom you have compatible mindset as well as entrepreneurial styles. And make your agreement with the business partner in writing.
The ninth point is to set a culture of success in the organization. Make the employees do things that are aimed at attaining the goals of the company. The tenth important need is reviewing and revising your business strategy for better performance.
The eleventh consideration is to keep going your learning process so that you get the necessary confidence and inspiration to fulfil your dream.
The twelfth and important need for you is to be open to changes that may be required for running your business.

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Tips On Getting Good Rates For Self-Employed Health Insurance

Posted in January 28th, 2009
by Peter in Health insurance and Small /Self employed


It is often found that self-employed persons often err when it comes to purchasing their own health insurance plans that are rightly suited to their needs. I am a self-employed and also involved in working as a health insurance agent for the last twenty years. I would like to share some tips that I learnt over the years working as an agent. The tips provided are well-tested to give the best coverage options when it comes to purchasing health insurance within one’s budget.
Tip 1: Keep Your Health Insurance For Sometime
The best way to ensure your health insurance after leaving job is to continue the same coverage using the rights provided under COBRA of 1986. The COBRA rules make you to continue the coverage plan after leaving your job for a period of 18 months at group rates, provided there are 20 or more people working at the company that you left and you were not sacked for any negligence of duty or incompetence.

However, the cost of coverage for health insurance for a self-employed, which is the full cost, will be much higher compared to what you were paying as an employee.

Tip 2: Sign Up For The Least Expensive Plan
It will do well to go for the least expensive health insurance plan at the open enrolment period close to departure date, when it comes to sign up for yourself. This will help you to pay a lower cost premium for yourself under COBRA.

Tip 3: Don’t Waste Time
The law guarantees you health insurance access till a new policy is found by you within 63 days after the benefits of COBRA ends. If no health plan is found within this time, your application for health insurance may be rejected or else there could be exclusion of pre-existing condition in the new policy for a maximum period of one year.

Tip 4: Marry A Working Person
Marrying a working person has the advantage of joining the plan of the spouse. This way, the cost of paying premium to you will be less compared to most of the other options that includes COBRA.

Tip 5: Check-out Online And Other Sources
It will do well to go through online resources to know and compare health insurance plans offered in your area as well as the financial status of the insurance companies. Know the specific rules that apply to you, especially if you or someone in your family has any pre-existing condition.

Tip 6: Look For A Good Health Insurance Agent
If you are planning to buy self-employed health insurance, search for a reputable health insurance agent. You can interview different agents and find out about the price and coverage of the plans they offer before selecting one for you.

Tip 7: Pay More Now To Pay Less Later
A good way for lowering premiums for the health insurance in spite of good coverage for the self-employed is to look for a plan that has high deductible and at the same time go for tax-free HSA. The pre-tax money that you deposit in the HSA could be used to meet medical expenses which the health insurance does not reimburse.

Tip 8: Join Any Professional Employers Association
As you begin hiring employees, it will do well to join a professional employer association so that you get health insurance as well as other services through them. You find a group that is right for your needs.

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Reality of Health Insurance for the Self-employed

Posted in January 23rd, 2009
by Peter in Health insurance and Small /Self employed

I have often found that a lot many misconceptions exist among small business owners, who believe that there is a steady rise of premiums for health insurance that make it beyond their reach. I call it misconception because the ground reality is quite different from what is portrayed by the news media. Secondly, all the statistics have lots of errors with them which actually better reflect “group” premiums.
As I personally run a small business, and also have been in the health insurance market for quite some time, I would like to share my experience about health insurance. Let me start with group insurance which is funded by the employer.
There are several problems involved with group insurance as the risks involved are shared by small number of participants and there is the need to cover all the conditions existing earlier. Also, the portability of the plan is not there as employees move of their own or for some other reasons. This results in an increase of premiums in proportion to the number of participants in the plan who are considered “high-risk”. Small businesses are required to administer COBRA and need to fill certain quota in the plan which in normal circumstances is 70% of the total employees. The percent of companies who are looking for small group coverage have been decreasing by forty percent every year and presently it is touching sixty percent.
The individual health plan on the other hand provides individual coverage. It is the employee who designs the plan which the employer could subsidize with a certain dollar amount or with some percentage of the total premium. The employer provides a choice of different plans with varied deductibles, RX options, co-pays among others and it is upon the employees to either make a choice from the plan or simply select their own health insurance plan elsewhere.
The employer gets a “list bill” and the employer uses payroll deduction to collect the premiums. This type of health insurance plan is portable and there is no need to fill COBRA. The premiums are shared by a large group of employees that make them lower and are good for those who are healthy as there is no need of pre-existing conditions.
It has been found that a big mistake is made by the self-employed as they consider every plan to be a “major medical plan”. If the plan has no provisions of Stop Loss, there could be mistake to the tune of thousands of dollars while claiming.
One golden rule that must be considered before going in for some plan is that the premium is directly related to the financial risk taken. With an increase of financial risk, the premium decreases accordingly. Another important point to consider is that one has to pay both the deductible and the co-insurance stop loss.
There are also plans that in spite of not being major medical plans provide limited dollar amount and do not come with Stop Loss. These are the Limited Benefit plan and also the Discount Plan. Self-employed must realize that they are not benefitted by a POS or PPO plan. They should also know that the HSA plan must not be taken as the only solution available to them, though it being an excellent option.

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SELF EMPLOYMENT

Posted in October 13th, 2008
by bidib in Health insurance and Small /Self employed, Limited Liability Company, Small/Self business start up, Small/Self business startup guide., Small/self business and finance., Tax and Small/Self business, Uncategorized

Self employment is a term comes under the category of capitalism. It means running a small scale production unit by a group of very few people. Basically, people get self employed when they either do not have the situation to do jobs, or do not have techniques to start a business. In this sector, owners themselves have to get indulged with the work. They have no such designations as used in companies. Utilization of variable techniques are lesser in this sector, these increase the tendency of owner to provide the buyer with quality goods.

It has become a good source for people to earn a handsome amount of money. This amount of money is termed as profit other than remuneration or salary.

You can be a self employed

You can also be a self employed person. Just invest small capital! You need not to produce a huge quantity of goods but what you have to do is providing your buyers with quality ones.

Sit at home and be your own boss

You don’t have to go out and rush for earning money. Just relax at home and run your small production unit. You have to arrange an internet connection, a telephone and related accessories to win the race against your competitors.

Your family is beside you

No you are not alone in this race. You don’t yet have the situation to pay wages to your workers. Don’t get tensed! You have your family members, the real well wishers giving their hands on to your work. They will help you to overcome every rough and tough situation.

You have to produce for your society

Don’t put the finger on your chin about what to produce. You know the taste of your society. Just go on with it. Take up a product or service your neighbor need the most and start production. Don’t go for complicated ones.

Enhance lifestyle by the extra handsome amount you earned

Now you can add extra charm to your lifestyle. At the time you get extra and handsome amount of money, the first thing you do is to enhance the quality of your day to day life, adds more comfort to your lifestyle.

Most importantly you will secure the health of your family members

Health is the crucial factor in every family. Whenever you get some money, first thing comes to your mind is securing health of the family members. This can be done by investing in shopping for health insurance:

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Being self employed and getting the right health coverage

Posted in August 13th, 2008
by Sam in Health insurance and Small /Self employed, Uncategorized

Over the last two decades or so there has been a great surge amongst the average American population to do something of their own. The concept of self- employment is not restricted to increased responsibilities- it also means greater returns if done properly. But being self- employed means a win- win situation only if you have the right recipe for success. In this entire situation, health insurance has a major role to play and not being able to find the right coverage can make or break a self employed individual. Read on to find out the best ways to get the health insurance you have been looking for.

Hold on to what you have- This applies to all self- employed individuals and more so to newbies. With new found responsibilities you sure don’t want to get harassed with coverage worries. So the best thing to do while starting off with your own business is to hold on to your previous group coverage (that is, if you’ve had any). Had you been working in a firm with more than 20 employees, the Consolidation Budget Reconciliation Act (COBRA) would definitely be applicable in your case. Inform COBRA within 60 days of shifting jobs and they’ll allow you to enjoy your previous health insurance plan for the next 18 months to come. This is a good way of biding time and getting your resources in place.

Be your best friend, lower your costs- When you have the assurance that you’ll have COBRA beside you when you leave your current job, your next step should be to lessen your financial burden as much as you can. The best that you can do with regards to this one is opt for a health insurance plan that will cost you far less. Sign up for a low cost plan during the open enrollment period that lies nearest to the time of your departure (from the job to your own business). That will offer you the advantage to pay a lesser premium once you come under COBRA coverage.

Play your cards intelligently and save on time- It’s great if you have fore knowledge that COBRA will protect you for 18 months once you become self- employed. But that doesn’t mean you can sit back and wait for your coverage to lapse just like that. In fact you need to prepare for the time when you’ll not be eligible for COBRA coverage anymore. COBRA gives you 63 days to decide on new coverage once your previous coverage has got over. If you happen to take a step after this 63- day period is over, you may face the risk of being refused coverage or your new policy might slap pre- existing conditions on you upto a maximum of 1 year. Neither of the two has any chances of happening if you act on time.

Get your comparisons right- Do not take the plunge the very first time you come across a low cost plan. Give it time so that you can look through several plan structures at one go. To do this effectively, go to a reputable plan comparison site.

Have a good insurance agent by you- There’s no better way to deal with your self- employed health insurance worries than by asking an agent to help you. Get in touch with as many of them possible and scan the range of plans they have on offer. Since reliability is also an important factor, check from the state insurance commissioner’s office whether the agent in question has the license to operate in your state or whether he has been embroiled in any legal discrepancies in the past.

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Tips for small business owners to save on taxes

Posted in July 19th, 2008
by Sam in Tax and Small/Self business, Uncategorized

How people would feel at the end of their tethers managing their own business in the early days. A lot has changed really because people now want to come into contact with a greater number of ways to get their business working without going financial bankrupt. And what better way to start off than by saving what gets most us counting our pennies- taxes. Yes, that’s right, you too can save a lot on taxes and here are a few tips that could help you refrain from paying through your nose-

Get organized- However boring and hackneyed that might sound but it would help you immensely if you were to get some organization into the all business- related madness and chaos. Keep track of all the transactions your business participates in. If you think you’re still not too financially strong to go ahead and get yourself an accountant, then opt for affordable accounting software that will keep your business running in good stead for at least some time to come.

Opt for a retirement plan- Though something quite unlikely, a retirement plan can in fact allow you considerable tax savings both at present and in the future. Thanks to the plan you’ll have the opportunity to pay less at the time of your retirement.

Include family members in your business- This seems to be the easiest option as far as a small business goes, but unfortunately not many people think of this option. There’s nothing like engaging your family to do work that they really can. Next what you do is not like a regular business owner- You pay them with health benefits. This could be completely in sync with your tax saving routine.

Look out for professional help- Stop worrying about the money you’d need to spend on expert advice had you required counsel. And mind you, every business owner, large or small needs that. The cost you incur today on an adviser takes you a long way into the future. Discuss al- deductions, investments, purchases and more-l that you need to with a consultant.

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Limited Liability company.

Posted in June 26th, 2008
by Jen in Limited Liability Company, Uncategorized

Nowadays in the United States most of the company offers limited liability to its owners. LLC as it is popularly known is an amalgamation of both - a corporation and a partnership. It offers the owner limited liability for the actions and debts of the company. It is suitable for small/self business with a single owner. It is simpler, easy to handle more flexible in the economical and managerial field, with no personal liability and no separate business returns. The key benefits to opt for a LLC Company are:

Ø You can secure personal assets through liability protection

Ø You can reduce certain expenses

Ø Minimize audit risk

Ø Establish credibility with your customers.

A LLC should possess at least one member. Like the shareholders, they are the owners of the LLC. A member’s liability to repay the LLC obligations is limited to his/her capital contribution. The operating agreement determines, defines and apportions the rights of the members. Members can be natural persons, corporations, partnerships, or other LLCs. A member’s right to control or manage the LLC is directly related to her membership interest.

LLCs are managed by the members or by the managers. A member managed LLC may be governed by a single class of members or multiple class of members in proportion to their membership interest. In many LLCs there is manager or board of managers to execute the day to day operation of the LLC. Managers are appointed by members and can be removed by them. A member can also become a manager and is called managing member.

ALL LLCs must file evidence of their existence with he secretary of the state or some governmental office of the state where they choose to be organized. LLC must disclose their company, appoint a statutory agent and disclose their business purpose. The fees associated with filling the articles of organization also vary by state.

Income Taxation

LLCs use IRS Form 1065 and Schedule SE. The LLCs operates and functions according to the document known s “articles of organization,’ or “the rules of organization” which is a contract among the members of an LLC and the LLC governing the membership stating the management, operation and distribution of income of the company. A LLC must have an “operating agreement” privately specified by the members.

However, it is the members who decide whether the LLC is to be taxed like a corporation or not. US federal partnership tax forms are required  while operating a LLC . As a partnership, the income and deductions attributed to each member are reported on that owner’s tax return.

If the LLC does not possess a partnership structure then it fails to reap the tax benefits. The possible label “disregarded entity” for income tax purposes singles out the one-member owner of an LLC as actually earning income and deductions directly. Since the owner is the business proprietor, it is he who reports. An LLC passively investing in real estate and owned by a single member would have its income and deductions reported directly on the owner’s individual tax return on a Schedule E tax form. And an LLC owned by a corporation–in other words, an LLC with a single corporate member–would be treated as an incorporated branch and have its income and deductions reported on the corporate tax return, creating double taxation.

LLCs are the most sought after form of organization and is fast gaining popularity. If the state where you intend to operate allows you to form and operate LLC then what are you waiting for? Learn the pros and cons of creating a LLC, consult an attorney or online corporations to offer solutions to your queries and then go ahead. All the best!!

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