For any individual looking to capitalize on franchising opportunities and owning a franchise business, there are several advantages to consider. Some of those you may be interested in are outlined below:
The Franchise Business Pros
· Having a brand behind you, whether it is locally or nationally famous, will save you a lot of time and money that would be needed to create your own brand or trademark. You will also attract customers immediately rather than having to advertise extensively.
· You will have an established business framework to work within, which dramatically reduces the risk associated with a startup business.
· You will already have tried and tested suppliers and services at your disposal, which will again save you the time and money associated with finding your own.
· You will receive ongoing support for sales and marketing throughout your franchise ownership. Franchisees often choose to tap into the help that is offered to them throughout their tenure via existing marketing and advertising assistance.
· Franchisees often get comprehensive financial assistance because banks are often more willing to lend money to well-known brands and names than business startups that are completely unknown to consumers. Franchisees may also have access to direct financial assistance from the franchisor.
· The risk of investing in a franchise is lower than it is for a regular business startup. An established concept is much more desirable because there is less risk.
· Continued development opportunities and research will be available. Franchisors tend to choose to tap into information concerning competition in the local area, seasonal goods, demand, and local attitudes.
· You will get business support from your franchisor, which will help to find you the best possible site and enable any construction work that needs to be done in addition to employee training and operational assistance.
· All business procedures and methods that you use will already be tried, tested, and proven to work.
· The quality and desirability of the franchisor products have been proven and come at a certain standard level that is well established.
· You will have the buying power of the franchisor and centralized purchasing at your fingertips, so costs may be reduced as a result of bulk buying savings that are handed down to the franchisee.
In addition to the pros of franchise businesses as outlined above, there are also others that you may want to consider. For example, expansion may come more easily with a franchise business and you may enhance your business interests with additional businesses, either within the franchise or outside of it. This is how dreams of riches become realities.
That is not to say that there are not cons and disadvantages associated with franchise businesses. A few of them are outlined below:
The Franchise Business Cons
· You may lose ultimate control of your business as a result of the established franchise standards that you have to run your business in accordance with. You may also find that you cannot implement your own ideas and initiatives.
· The level of royalties could be as much as 10% or more in select cases, which will of course affect your profits.
· You will have to pay an initial fee to buy into the franchise. It could be as little as $4,000 but may extend up to $50,000 so there is significant initial outlay.
· You will have to pay advertising fees to ensure that your business is recognized as existing in your current location. If the franchisor advertises poorly then your fees are wasted.
· You may have to buy a signage pack from your franchisor. Some franchisors insist on you buying their specific signage and so you may find it extremely expensive.
· If the franchisor gets into difficulties then so do you. As you effectively bear their name then you bear the brunt of a problem, including issues with suppliers.
In conclusion, although there are some disadvantages with having a franchise business, the positives far outweigh the negatives. The risks of failure are significantly reduced and so there are fewer problems than a brand new startup business. Of course, you should always ensure that the paperwork is in order, and you should complete your research and due diligence before committing because there are no guaranteed profits, and you would ultimately be responsible should the venture fail.
About the Author:
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Category: Finance & Capital
When a business registers for vat the vat rate should be added to all sales from the date of registration. The standard vat rate is 17.5 per cent of the sales value. The value added tax added to sales is known as the output tax.
Value added tax paid to suppliers on purchases is known as the input tax. When completing the vat form the amount paid to HMRC is the total output tax after deducting the input tax.
Vat on goods purchased up to three years prior to vat registration can be reclaimed against the output tax liability. A business can also claim vat paid on services incurred up to 6 months before vat registration.
To be able to claim vat paid before the vat registration a business must have kept vat accounting records of items bought and sold to enable the business to claim vat on those items still in stock at the time of the company became vat registered. The vat claim for goods and services incurred before registration should be made on the first vat form after vat registration. A good accounting software package to enable record keeping is useful for this purpose.
Claim Vat on Goods Purchased Prior to the Vat Registration
A business can vat input on purchases made by that business for up to three years prior to vat registration provided those goods are also available for resale either as stock, raw materials or work in progress at the date of the vat registration and do not relate to exempt items.
If the goods were bought by another business, for example, pre incorporation then the vat claim would not be allowed. The vat claim would also be disallowed if the goods purchased have already been sold. In the same context vat on items such as petrol, gas and electricity would also be disallowed if they have been consumed prior to vat registration.
The vat claim is restricted when goods are used for personal and business purposes. The restriction being the proportion those goods are used for non business purposes.
Claim Vat on Services Purchased Prior to the Vat Registration
A business can vat input on purchases made by that business for up six months prior to vat registration provided those services do not relate to exempt items or goods that have already been sold before vat registration.
The services must have been bought by the registered business and as with goods purchased only the business proportion may be claimed.
Vat Accounting Records
In order to claim vat on goods and services purchased prior to registration the business must have kept accounting records which include valid vat invoices and there should also be an audit trail through the accounting records to support the completion of the first vat return.
When the first vat return is submitted and contains a large refund it is not unusual for the HMRC vat office to inspect the vat accounting records before authorising a refund payment.
The vat accounting should also include detailed stock records to demonstrate the goods on which vat is being reclaimed existed at the time of registration and also show when goods have been disposed of after vat registration
Detailed vat accounting records must also be kept of any services on which the vat claim is based. Those records stating the date received, description and should be capable of supporting the fact those services had been or would be sold after the vat registration.
If the items being sold are exempt from vat then the value added input tax cannot be claimed. If part of the goods and services being sold are exempt then only the proportion not exempt may be claimed.
Terry Cartwright qualified as a Chartered Management Accountant and Chartered Company Secretary in 1971. A successful business career followed as Head of Finance for major companies in the UK and several consultancy appointments. In 2006 he created DIY Accounting producing Accounting Software for self employed and small companies that use simple accounts spreadsheets to automate tax returns.
It seems in like and oxymoron: “The Economy Is So Bad That Government Will Be Giving Away More Money”. You and I tighten our belts in hard times, but as we seen before, the government responds differently.
In 2007 the government gave out over $1.8 trillion in grants, direct payments and other monies. In 2008 that figure grew to close to $2 trillion, and that figure is not accounting for an extra $1.6 Billion in bailout money, stimulus packages and other extra goodies that congress added so far in 2008. So, this year Washington will almost double what they intended to spend at the beginning of the year. Next year it will be even bigger yet.
So don’t believe the headlines when government officials start complaining about budget cuts. Sure, some programs may be trimmed, changed or reevaluated, and there will be states that will have to trim due to balance budget laws, but above all the cries of “Poor Me Budget Cuts,” there will be more opportunities with government programs because:
During hard times less people will apply to programs because they’ll believe in the cry wolf headlines. Any normal person would believe that the government can’t give out money if it is going deeper in debt… and the economy is in deep trouble.
Many of these government programs are classified as “entitlements,” which means that those who show up and maintain eligibility, are legally entitled to receive help, regardless of the government’s debt level. These programs include Social Security, Medicare, Medicaid, federal employee and military retirement plans, unemployment compensation, food stamps, agricultural price support and hundreds of others.
Government program agencies may first cut back on overhead expenses. During past budget cuts I’ve seen agencies cut out their 800 number just to save a few bucks when in fact they were giving away more money than ever before. These agencies will do everything they can to trim down extraneous spending without drastically interrupting services offered.
Like many things in Washington, the idea of “Budget Cutting” is not exactly as clear as it may seem to everyday taxpayers. In many cases, officials’ budgets are not actually undergoing drastic reductions; rather, they will simply see smaller increases than previously forecasted — instead of 6% growth, perhaps only 4% will be realized.
As times get harder, watch for more legislators try to increase their popularity amongst voters by trying to increase current benefit programs or starting new ones that they say will ease people’s pain during hard times. With Wall Street getting $700 Billion to cover their hard times it is going to be an easier case to make to give to others in the country. What the heck is a couple billion more.
Matthew Lesko is a best-selling author, government money expert and business mentor. His website, MyAmericanBenefitsPlan.com, is an interactive, online resource that serves as a hub linking entrepreneurs and free-money-enthusiasts alike. Lesko’s 30 years of researching government money programs and his extensive video talents are all going into the web service. Lesko holds free, online seminars on Wednesdays, live at UncleSamLive.com.
Article Contributed by Satish Patel
Tax seems like a boogeyman giving nightmares to those businessmen who have zero accounting and tax background or knowledge to find their way out of this chaotic labyrinth.
The problem begins when small businesses wait till the very end to gather the required details and file returns. Rush job makes it difficult to approach your tax in a planned manner resulting in paying more than you actually need to.
There are many deductions which get generally ignored as they might seem insignificant or one is just not aware about benefits of such deductions. Below are list of 15 such deductions that every businessmen should know to get smart and save money which can be better utilized for your business growth:
I. Startup and Organizational Costs Deductions: When someone begins a start-up business, he or she often incurs expenses just to get the business up and running. As part of the American Jobs Creation Act, taxpayers can deduct up to $5,000 of start-up costs and $5,000 of organizational expenses incurred in the first year of their small business. Start-up expenses are the costs the business owner has for setting up an active trade or business. If these costs meet the following tests, they may be recovered through a process known as amortization:
The costs would be deductible if they were paid or incurred for an existing trade or business.
The costs must be paid or incurred before the small business begins operations.
Examples of costs that may qualify as start-up expenses include the following:
· A survey of potential markets.
· Analysis of available facilities, labor, supplies, etc.
· Advertisements for the opening of the business.
· Salaries and wages for trainee-employees and their instructors.
· Travel and other necessary costs for securing prospective distributors, suppliers, or customers.
· Salaries and fees for executives and consultants and for other professional services.
Start-up expenses do not include deductible interest, taxes, or research and experimental costs. Expenses not deductible within the first year can be amortized over 15 years. Business owner may be eligible to deduct some of their business startup costs up and organizational costs. Again there are limitations on this deductions and needs to be checked by professional tax advisor.
II. Home Office: A home office must be a separate room in business owner’s home to do business and accounting. Part of a living room or bedroom will not count. A percentage of utility Bills, home owners insurance, property tax, mortgage interest, refinance fees, repairs and maintenance, cleaning supplies, office decor, etc. are deductible. Find out the percentage by dividing the square footage of the office by the square footage of the entire house. Even if you don’t take the home-office deduction, you can deduct the business supplies you buy. Hang onto those receipts, because these expenditures will offset your taxable business income.
III. Personal Assets used for Business Purpose: Business owners who use their personal computer for business purpose can claim deductions for depreciation on the fair market value of such assets. Check on maximum ceiling available to claim such a deduction. It varies case to case.
IV. Mileage or Vehicle: There are two ways to take a vehicle expense. One is to take the mileage basis use when picking up product, supplies, office supplies, meetings, handing out advertising or business cards, meals and entertaining clients, etc. The other way is to take the expense of using the vehicle: fuel, parts, mechanics, oil changes, etc. Along with taking expenses, one can also depreciate the vehicle.
V. Advertising & Promotion Cost: Business owners can claim deductions for costs involved in preparing Business cards, newspaper ads, information packets handed out, free samples, flyers, product testing, videos and CD’s all can be claimed under business expenses. Money paid to hire temporary help with promotional activities like delivering flyers, product, stuffing envelopes or for even cleaning office and car, etc. can also be claimed under business expenses.
VI. Travel expenses related to business: Unreimbursed travel expenses are tax-deductible. The IRS recommends keeping a log of your expenses and receipts. Transportation, (such as airfare) lodging and even dry cleaning can be deducted, and half of any business meals. You also can deduct expenses for business associates traveling with you. You can’t write off expenses for family members or friends if they accompany you, unless they are employees and are professionally involved in the business end of the trip, but it is fine to deduct your part of the trip if it is for business.
VII. Research and Experimental Costs: Costs of research and experimentation may be deductible if it is chosen not to list them as capital (long-term) expenses. There are many restrictions and qualifications relating to this deduction.
VIII. Disability Access Costs: In case improvements or remodeling has taken place for business facility to accommodate customers and employees, business becomes eligible for a deduction for these expenses.
IX. Carrying Charges: Carrying charges are fees and interest on property. Some carrying charges may be deductible if they are not capitalized.
X. Dues and Subscriptions: Dues to professional organizations and magazines that have to do with particular trade or business can be part of deductions.
XI. Educational Expenses: Classes or seminars that improve business can be claimed under deductions.
XII. Gifts: Gifts to clients and associates are deductible.
XIII. Laundry and Cleaning: This includes uniforms and Protective clothing and also owner’s clothing when they go out on touring for business purpose.
XIV. Communication expenses: Cell phone, long distance calls on home phone, extra phone lines into home for business, fax or Internet can be claimed as deductions.
XV. Retirement Plan Costs: As owner of a small-business and having recently established a retirement plan for the business, the business may be eligible to receive a non-refundable tax credit for expenses incurred to implement the plan. The tax credit may be claimed for a maximum period of three years for retirement plans established after 2001.
Items such as paper clips, bank charges, credit card charges and home office expense seem small and unimportant at the time, but multiply those little things over a year or two and then multiply it times 35% and it can add up to quite a bit of money that should be in your pocket rather than in the federal fund.
To learn all the ins and outs of the tax code and really start saving on your business taxes, get in touch with professional tax consultant who can guide you and give you tips to save money during this severe liquidity crisis. The above information is general in nature and it is advisable to contact a professional who will advice after thoroughly checking individual business type and requirements for tax savings and investments issues.
About the Author:
Satish Patel is the CEO/President of Analytix Solutions LLC, a leading provider of back office support services like Bookkeeping, Accounting & Tax preparation. He has more than two decades of experience in handling tax related issues for small to mid-sized firms including his several personal business ventures.
I should not be providing this information, the government should.
I believe the IRS should include a book like this to every American when they send you your tax forms. That way every American would know how to get their tax money back, because even though I call this “free money,” it really isn’t free. This is money that you gave to the government to pay your taxes and now you can get it back.
Here are a few basics on Government Money Programs that everyone should know:
1) Only 12% of Gov’t Money goes to the poor
Most Americans think that government money programs are for everyone else… for instance only the poor, minorities or friends of the president.
But, only 12% of Government Handouts go to the poor
And only 25% of Government Programs Have Income Requirements
The rich and famous, including Donald Trump, H. Ross Perot, Dick Cheney and George W. Bush, all made millions as private citizens with the help of government money programs. If they’re eligible, you certainly should be too.
2) Only 20% of Free Money is called “Grants”
Most free money programs are not called “grants” by the government, they’re called “direct payments.” It is very easy for someone not to know all about government jargon, but just a little research can clear up quite a few misconceptions. Don’t discourage yourself by focusing only on “grants” and dismissing the other 80%.
3) 50 Million people don’t even know they’re eligible
This is one of the most important points to keep in mind: The Government cannot and does not advertise programs that offer free money. But it’s out there, lots of it. You just have to invest time finding the programs.
4) You can’t make one phone call and just get a check in the mail
Getting government money is like looking for a job. When you knock on one door and ask about a job, and they tell you that you are not qualified, you don’t go home and wait for them to change their mind.
No Way. You would never hear back. You have to be persistent and go from one company to the next until you find a good fit.
5) Free Money keeps growing no matter who is sitting in the White House
We constantly hear about government budget cuts and that makes people believe that government money is going away or will soon be gone. But every year for the past 30 years the amount of free government money given out to individuals keeps growing. It keeps increasing no matter if it’s the republicans or the democrats who are in charge. With the new Obama administration especially, we will be seeing more offered to small business and entrepreneurs in the form of government money programs.
6) You certainly don’t need a professional grant writer
Nine out of ten times you will not need help in filling out an application. Most free money programs to pay for your bills, education, health care, housing and even business require just a few pages of blanks to fill in.
If you have trouble filling out an application for money, don’t hire a consultant. Go to the office that is handing out the money. The are obligated to help you fill out your application and they are in the best position to know what should be included.
7) You can apply for as many programs as you like
Don’t worry about how many programs you can apply for, If you see a program that you think might work for you, apply to it. Sure there are some programs that give money for specific reasons and if you get accepted from 2 separate places you will have to refuse one of the offers, but that’s still a nice position to be in.
8) It doesn’t always matter if it sounds like you don’t qualify
Here’s an example: “All the money is given out by August 30th”: The end of the accounting year for most government agencies September 30, but the agency can start giving out more money beginning October 1, and you can be the first in line.
In all likelihood, you can wait another 30 days for your money.
9) Information can often times be out-of-date
Every day programs come and go. Every day people change their address, phone number and websites. It is just a fact that these things happen in our modern society.
But remember, if a listing leads you to a non-working number or website, it does not necessarily mean that the program is gone. Call the agency listed in the program description and ask.
10) Don’t be intimidated by the idea that the applications are all long and confusing
Getting an application that is only one-page long is not unreasonable at all. Many of the government programs that give our grants really don’t need a lot of financial information because unlike a bank they are not worried if you don’t pay the money back. They don’t want it back. It’s free money.
Matthew Lesko is a best-selling author, government money expert and business mentor. His website, MyAmericanBenefitsPlan.com, is an interactive, online resource that serves as a hub linking entrepreneurs and free-money-enthusiasts alike. Lesko’s 30 years of researching government money programs and his extensive video talents are all going into the web service. Lesko holds free, online seminars on Wednesdays, live at UncleSamLive.com.