Categories
People & Relationships

When To Drop a Client

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About.com Entrepreneurs: Have you ever been fired by a client? It’s painful, embarrassing and even a bit depressing when it happens. It can completely throw your confidence as an entrepreneur.
And yet, it may be the best thing in the world for both you and your client.
But why let it get to the point that they have to fire you? Don’t you want to be the one in charge of the relationship? Don’t you want to end it on your own terms, as much as possible?
While you may feel like you really have to hang on to the client, whether for your own cash flow or out of your sense of commitment, there are several signs that it may be time to terminate the client relationship.
In some cases, the problem really is with the client, and you should just fire them:
The client is a jerk.
Life’s too short. Dealing with jerks is stressful, and if you’re stressed, not only will it affect your mental and physical well-being — it will also affect your ability to serve your other customers well. It will affect your relationships with employees and business partners. And if they’re that difficult, odds are that they’re not going to be a good referral source for you anyway — they may even be a liability.
The client drains all your time.
You may have heard of the Pareto Principle, aka “The 80/20 rule”. In this context, it’s the idea that 80% of your profits come from 20% of your customers, while 20% of your profits come from 80% of your customers. Now I’m not suggesting you should drop your smallest clients, just the least profitable ones. Sometimes it’s difficult clients, but sometimes it’s the nicest ones — the ones who can talk you into doing just a little bit more, then a little more, then more, and so on. Scope creep! Try to draw the line with your client, but if it continues, you may have to cut them off.
7 Signs It’s Time to Drop a Client [About.com Entrepreneurs]

Categories
Entrepreneurs Entrepreneurship Finance & Capital Home-Based Business Starting Up

Ouch! There’s a Lot More Than Income Taxes

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When most small business owners think about taxes, they think about Federal income taxes. But there are other taxes that I want to let you know about, so you’re not surprised if you have to pay them.
The first is self-employment tax. If you’ve ever worked for someone else, you know that social security and Medicare taxes get deducted from your paycheck. When you’re self-employed, you don’t actually get a paycheck.
Here’s what happens if you’re a sole proprietor. Following the IRS rules and regulations for calculating income and expense, you report your results for the year on your personal 1040 by filling out Schedule C.
Then you take the net profit and put it on Schedule SE for self-employment tax. After a small deduction, you calculate 15.3 % as your self-employment tax. This is double the rate of 7.65 % that’s deducted from employee paychecks because as a sole proprietor you’re both the employer and the employee so you have to pay both parts.
You get to take half of the amount of self employment tax as a deduction from your income on the front of your 1040. This has the effect of reducing your taxable income.
The self employment tax itself goes on the back of the 1040 in the section called Other Taxes on the line that says self employment tax. For the 2006 filing year that was line 58. This tax gets added to your Federal income tax and any other taxes you owe and is paid when you file your 1040.
If you (and/or your spouse on a joint return) have had Federal income tax withheld during the year that adds up to more than your total taxes for the year (which includes self employment tax), you’ll still qualify for a refund.
If your business is operated as a corporation AND you’re active in your business, you should receive W-2 wages and you won’t be subject to self employment tax on your earnings. Distributions from S corporations are generally not subject to self employment taxes.
If your business is operated as a partnership, you might have some items of income that are subject to self employment tax and some that are not. These items will be reported to you on a schedule K-1 that is part of the business tax return.
Sales tax
Many States have sales taxes. If you sell products to customers, you’ll have to charge them sales tax and pay it to the State. In some cases, digital downloads are considered products as far as the sales tax rules are concerned and certain services might also subject to sales tax. In Indiana, where I live, the rules are put out by the Indiana Department of Revenue. There will be a similar agency in your state who you can contact to find out the rules.
Local Taxes
Some cities and school districts have local taxes that you might have to pay. Some of these depend on your type of business. There might be additional sales taxes, property taxes, innkeeper’s taxes, or food and beverage taxes. Check with the authorities in your area for details.
And then there’s the often dreaded Estimated Taxes
This is a subject that confuses many people.
First, let’s try to understand the reason that the estimated payment system exists. Our system of Federal taxes is a “pay as you go” system. When you think about it, that makes sense. The government needs money all year long to pay for various things.
When you work for someone else, taxes are withheld from your paycheck each pay period, so the government gets its money over the course of the year. If you’re a sole proprietor, this doesn’t happen, so you’re expected to make estimated payments.
As with many IRS rules, there are some exceptions, and some penalties if you don’t pay enough or pay on time. There are some cases where you might not be required to make estimated payments (and you won’t have a penalty if you don’t), but it would still make sense to make them anyway, to avoid having to pay a large amount on April 15th.
If you have another job in addition to your self-employment, you can increase your Federal withholding on that job to cover the amount of the estimated taxes that you would otherwise have to pay. And if you’re married and file a joint return and your spouse has wages from another job, he/she can have additional Federal withholding taken out to cover the estimated payments.
Or, you can make quarterly payments using Form 1040-ES. You can also sign up to make the payments on-line. You might also need to make estimated payments towards your State taxes.
Payroll
If you have employees, you’ll need to pay various Federal, State, and local payroll taxes. But we’ll have to save that conversation for another time.
The most important thing you need to understand is that it’s your responsibility to find out what taxes your business has to pay. And that the laws vary from place to place and by type of business.
A good source of information is an accountant who specializes in consulting with small businesses.

SherylSchuffPhoto.jpgSheryl Schuff, CPA, is a Certified Public Accountant, author, and consultant who teaches entrepreneurs how to get their businesses organized, keep good accounting records, and maximize their business tax deductions. She is President of Schuff & Associates, PC and has been in private practice for over 30 years. She recently started an information products company www.TaxesForSmallBusiness.com to provide individual training materials for small business owners.

Categories
Success Attitude

The Key to Absolute Power

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Do you want to be in control of your life and create the results you desire? To be in a position of power and change whatever is not working in your life? Do you want to be able to change the people around you, the results you produce and even how you feel?

Most people believe that power and control are limited to the fortunate few who were born into power (e.g.: the tycoon’s son), or acquire power through exceptional talent, business acumen or lady luck.

They believe (and we’ll prove them wrong), that the rest of us are destined to be buffeted by whatever winds of change swirl around us.

Economic slowdown, recession, company takeovers are the common winds of change.

The truth is, you do not need to have money or be in a top position to take control over what happens. In fact, people at the helm can also lose control…with much bigger consequences.

Look at the CEOs who watch their company’s profits nose-dive helplessly in a bear market.

Or what about the US Army Generals who entered Iraq thinking that they were liberators of the people only arriving to find themselves regarded as invaders. Were they, the high and mighty in control? Not at all!

Taking Absolute Responsibility Gives YOU Absolute Power

The secret is to take absolute responsibility for whatever happens. That’s right! When you take full responsibility for whatever happens, it means you acknowledge the fact that you have created whatever happens.

If you created it, then you have the power to change it. So, taking absolute responsibility for something puts you in a position of absolute power.

The extent to which you take responsibility over something is the extent to which you have control over it.

For example, if you take responsibility for your low pay, it means you acknowledge the fact that it was your actions and decisions that were the cause of this result.

Reasons could be that you are not creating enough value to be paid more; you have not demonstrated your true value to your boss; or that you chose to work in a company which does not recognize your true value.

Regardless of the reason or position you are in, you have the power to take charge and change anything in your life. The moment you take responsibility, you put yourself on the road to doing something about it.

You can either find ways to create more value by going beyond what is expected, make yourself more valuable by upgrading your skills, ask for a pay raise or find another job that will pay you what you are worth.

When you start taking any of these actions, your situation will change… you will get paid more!

Taking absolute responsibility for your situations and results puts you in a position of absolute power. So remember every time you feel like blaming others or circumstances, stop and take charge!

Categories
Networking

Best Networking Secrets Out!

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Young Go Getter: There’s not a career choice out there that doesn’t allow you to advance by pitching your most marketable asset, which just happens to be… yourself. You’ll never end up in a situation where you can say to somebody “I can’t do that, because I don’t have the resources or tools that I need” without looking like a total fool to anybody who is worth their salt. You have yourself. The rest is just stuff and comes just as easily as you being, if you know how to get what you want in life. And let’s face it, if you can’t market yourself as a valuable asset, you’re not worth the time to anybody worth selling yourself to anyhow.
Think of your professional network as a trading floor to use when you really need things done, or really need work to do.
“Okay. So, how do I get my own awesome network of people who will actually do what I need, when I need it?”
If you don’t have money to pay people what they’re worth, this can be a hard question to ask yourself, for fear of the answer most people give themselves their first time dealing with the situation. The good news is you’re already half way there. The fact that you’re acknowledging that it can be done at all, means that you’ve got what it takes to make it happen.
What’s the next step? Well, if you have the fortune and opportunity to build your network before you need it, feel free to take your time. Consider this part of the process similar to the interview phase of hiring for a job. A good network is built on good people. Take a look back and think about the finer qualities of people that you’ve enjoyed working with in the past, including work ethic, loyalty, quality of work, etc. Look for those qualities in others. These are the people to approach.
When you find these people, hand out business cards, make your intentions known, and put your best foot forward. The one rule: Don’t ever give false impressions of who you are or why you’re trying to network with them.
After you’ve found these people, don’t let them go. Be good to them, and they will be good to you, unless you’ve done a poor job picking people to network with. If they need a hand with something, give them a hand. When it comes time for them to return the favor, they’ll bend over backwards to make sure you get the help you need. After all, at this point you’re just as valuable to them as they are to you.
Never take advantage of your network. Some of them just want the connection for tough times and some of them are just being courteous. Feel them out, and then label your network’s members. After you label them, make sure they know your label. What are your strengths? What are your weaknesses? How much time do you have to contribute to others’ requests? One of the biggest reasons to have a professional network, more so than utilizing its members for your own means, is to offer yourself as an expert and find work in your field. How will they know to give you work if you don’t tell them you’re interested? How will they know you’re an expert if you don’t show them?
The tools of the trade.
Although your most valuable networking tool is your own willingness to meet and greet, there are tools built for the purpose of making it easier. Here are a few of my favorites:
1. Professional Networking Websites such as LinkedIn, YouNoodle, or Monster. Few people really use these websites to their full potential. They’re there for a reason. Sign up, and make use of them.
2. Business Cards. Never underestimate the power of a handshake and a business card. Anytime you meet somebody new worth networking with, they should have your business card in their hand before you walk away.
3. V-Cards. These are little electronic versions of your business card. Treat them as such. Make one (create one in Mozilla Thunderbird, Microsoft Outlook, or one of several other software programs) and pass it around like nobody’s business.
4. Your Resume or CV. These aren’t just for getting a job anymore. People really are interested in where you come from, what you do, and how good you are at it. This is a copy of your resume (or CV) that you can feel comfortable getting a bit more personal with.
5. A Handshake. Practice your handshake! Practice makes perfect, and the perfect handshake can say wonders about your personality. Dig in there tight, look the other gentleman/gentlewoman in the eye with a smile, and don’t let go until they return the favor.
Get out there and make it happen.
Networking As a Necessary Business Process, And the Top 5 Tools of the Trade [Young Go Getter]

Categories
Planning & Management

7 Tips for Prioritizing Your Work

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Blogtrepreneur: As an online entrepreneur you will always be faced with more tasks that you need to get done than you can manage. There will always be new ideas and opportunities that are tempting to pull you away from other things you are working on. Prioritizing your work is extremely important to achieve efficiency with your time and to get the most accomplished. Whether you are working full-time or part-time with your online ventures, you will need to recognize what tasks on your to-do list are most important and urgent.
Here are some tips for getting more out of your time by prioritizing your work:
1. Have a strategy
You need to have a sound strategy that will keep you moving in the right direction. An effective strategy will help to keep you focused and avoid distractions from activities that don’t fit with what you are ultimately trying to accomplish.
2. Recognize what makes you money
I think most online entrepreneurs, and definitely bloggers, face the challenge of identifying what work will actually produce an income. If you are going to make money through freelance blogging for example, writing posts for other blogs is what will produce your income. Using social media, reading other blogs, and participating at community sites will all help the cause, but none of these things will directly put money in your pocket. As a result, your income-generating work should take priority.
The important thing here is that you recognize the significance of activities according to how much money they can produce for you. Make sure that you are dedicating the majority of your time to things that will make you successful.
3. Set goals
One way to keep yourself on track and working on the most important activities is to set goals. For example, my monthly income goals keep me focused on the work that will help me to meet those goals. Whatever your goals may be, make sure that they will lead to your ultimate success.
4. Schedule your time
Once you have set your goals, schedule your time accordingly so that you will give yourself the chance to achieve those goals. Scheduling your time for specific activities can help you to reduce the amount of unproductive time, and it will force you to decide what work is most important and worthy of your time.
5. Use to-do lists
Each day there are so many different things fighting for my time, but with a to-do list I always know what is most critical and what I need to get done first. If I get everything on my list done then I can move on to other things. I like to write out the list at the end of the night (making a list for the next day) or first thing in the morning before I start any work.
6. Focus on one project at a time
Try to resist the urge to start something new until you have achieved some success with your current project(s). Be realistic with how much available time you have, and make sure you are giving yourself a chance for success at anything you attempt.
7. Get organized
For most of us, doing some of the day-to-day tasks of running an online business can become more time consuming than we would like. Usually some improved organization would help. Whatever areas are the most time-consuming for you, evaluate to see if there are areas for potential improvement in organization.
7 Tips for Prioritizing Your Work [Blogtrepreneur]