The Desire For Money, Do You Have Business Sense?

For those of us who grew up with parents who worked for businesses rather than owned them, the world of business can be quite a mystery. Even more so if we've dared to try to start one of our own. There is the factor of what type of business to start - a product or service business. There are the issues of doing a good market analysis, licensing the business, understanding the codes of law governing businesses, and determining just what type of business structure to choose - especially if the business will have employees. For example, should we start a sole proprietorship or a corporate business? It's a lot to work on, and it's not an overnight process to the road of success. But, the most crucial challenge to whether a business succeeds or fails lies deep within the realm of emotional versus financial intelligence.

Many start-up businesses fail within the first year of existence. This is especially so with businesses started from home, or exist without the traditional bricks and mortar structure we are so accustomed to. And, far too often the reason many start-up businesses fail has to do with the emotional challenge the new business owner faces. The challenge of seeing him or her self now as a business owner, rather than a paid worker for someone else's business. It means dressing differently, thinking differently, and talking differently. It means believing that you are already successfully established even if you have a long ways to go on the business's balance sheet. To put simply, if the business owner doesn't have a firm belief and commitment in the business and his or her role as the owner, then others simply won't be convinced that this business is the place to get what they need.

Then, there is the crucial issue of having the financial intelligence to keep the business going in the direction the new owner desires. To put it simply, if the new business is only taking money to operate and not making money, it won't be long before the doors of opportunity become closed. No matter how much motivational self-talk and emotional pump-me-up the new business owner does, it is the results shown on the bottom line that determines the future of the new business. And, if the bottom line is steady generating a negative, the business will eventually lose. Far too many new business owner simply don't understand this simple fact and it's incredible impact upon the future of his or her business. And, far too many system based business endeavors, such as network marketing, fail to properly focus the majority of their teaching on this.

To keep the vision, motivation, commitment and, ultimately, the business alive, a start-up business owner must simply know the ins and outs of basic business accounting. The more he or she comprehends the principles of good financial management, the greater the chance of achieving the desired goals for the business. It is, ultimately, the financial bottom line the determines whether a business owner maintains the belief and dreams associated to his or her business. The financial bottom line determines just how much commitment to marketing and advertising the principal staff of the business will willing give. It's very encourage able to develop a love for numbers, especially when working with the basic additions, subtractions, multiplications, and divisions of the financial budget. Here's a recommended source to spur this number love: http://www.jtsef.com/financial.htm .

Many schools of thought teach that marketing and advertising is the key to success in any business. To their credit, there is a certain truth to this, because the market is a numbers game. The greater the numbers of people that know about the owner's business, it's products or services, the greater the chances of getting the sale. Understanding the numbers allows us to measure where we are and where we want to go. But, regardless how successful the new business owner is with marketing and advertising his or her business, no amount of business exposure alone can guarantee the success of the business. There are big businesses that are testimonies to this fact with their sudden bankruptcies at the time they seem to be at their greatest.

Ultimately, the deciding factor on whether a business succeeds or fails lies in the level of knowledge and expertise that the principle players of a business have with the business balance sheet. This level of knowledge also determines just how much belief the business owner has in his or her business, and how willing he or she is to make the necessary efforts and adjustments that steadily drive a business up to the road of success. And, once reaching this point where the customers and clients are knocking at the door and the money is rolling in, it is the degree of financial intelligence that will ultimately determine whether the business stays in business or not. And, no amount of motivational self-talk or marketing is likely to change this simple reality.

What this means for those who are just starting a business or are struggling to keep a business idea alive, is that it is imperative to develop a deep appreciation - if not love - for numbers and how these numbers play out on the business balance sheet. If the business is progressing in a positive way financially, the rest of the aspects to running a business will fill itself in over time. Isn't it a lot easier to learn the ends and outs of operating a successful business venture and maintaining the commitment and motivation to the business vision when the business is steadily in a financial growth? Something to seriously think about. Especially, if owning a business is an appealing idea, but is equally as much a mystery to the aspiring entrepreneur. The key to success ultimately is determined by the plusses and negatives found in the business's balance sheet. And, a focus on this will dispel many of the mysteries and emotional challenges to owning a business.

Joseph T Farkasdi is the President of JtseF, Inc. and is a member of the Financial Freedom Society. He is an entrepreneur who is committed to helping others achieve the financial lifestyle they desire. For more information, visit [http://www.jtsef.com/financial.htm] .

TheDesireForMoney@jtsef.com

Popular Business Misconceptions Cost You Money!

Faulty information costs you money! Which of these

popular business misconceptions do you believe?

Popular Misconception #1:

"We Only Need Our Books Done Once A Year For Tax Purposes."

Are Your Accounting Records Adequate To Run Your Business?

Although it is important to keep records for tax purposes,

it is not the only reason (or even the primary reason) good

accounting records should be kept. Another frequent reason

clients request financial statement preparation is to obtain

bank financing. Although important, this also is not the

primary purpose of keeping good records for your business.

Good recordkeeping will enable you to extract meaningful

financial information for your business that will help you

to manage it properly. If you can`t access this information,

you will not be able to manage your business properly. Bad

management leads to business failure.

Yes, the primary reason good accounting records should be

kept is to produce periodic (at least on a monthly basis)

financial statements for management information purposes.

Only with this current financial information can you properly

manage your business. This information can alert you to

declining sales, excessive expenses, tax opportunities,

cashflow problems, and many other vital concerns for your

business.

To be of value, this accounting system should be set up

with meaningful account categories and departments. It may

be cost-effective to have an outside accounting service do

the monthly bookkeeping. However, with accounting software

that is readily available, you don`t have to be an expert

bookkeeper to do your own books and extract meaningful

financial information.

If you do your monthly statements yourself, it would still

be prudent to have your accountant or business advisor help

you set up your system and, as well review such information

with you to discuss problems and opportunities.

Popular Misconception #2:

"Writing My Hobby Off As A Business Loss

Saves Me A Lot Of Income Tax!"

Is Your Hobby A Tax Write-Off?

If your business has no reasonable expectation of profit, if it is a

hobby and not really a business, you will ultimately fail in your tax

objective. Since your losses are being incurred for a hobby and not a

true profit generating business, the tax authorities will take the

position that you aren`t entitled to any deductions. This is a double

blow. First, you`re losing money. Second, you`re denied tax deductions.

It is true, however, that if you enjoy what you`re doing, you`ll do

better at it. You`ll be willing to work longer hours and you`ll be

willing to put up with more hardships in order to make your business a

success.

Rather than attempting to have the tax system subsidize your hobby,

why not turn that favorite pasttime into a real, profit generating

business? This is a doubly rewarding. First, you make money at

something you love doing. Secondly, the tax authorities legally have to

allow your reasonable expenses to earn your now substantial business

income.

Prove that you`re running a business by running a business. Prepare and

follow a proper business plan. Keep good accounting records with at

least monthly financial statements to give you the information you need

to manage your business. Above all, make money from what you do.

Popular Misconception #3:

"I Don`t Make Enough Money to Incorporate!"

Will Incorporating Really Benefit You?

Some persons resist the idea of incorporating themselves because

the tax savings may not justify the added costs of incorporation,

annual minutes, and extra tax returns. However, incorporation gives

advantages that go far beyond tax savings.

Insurance may give you some protection against loss. However, you

may suffer business losses and lawsuits that may not be covered. For

extra protection, consider incorporating yourself. The limited

liability of your own corporation alone may justify the additional cost

and complexity.

Corporations may also be used for income-splitting with your family,

as well as estate planning and retirement planning objectives.

Additionally, corporations lend some credibility to smaller businesses

and may enhance your image and prestige in the eyes of clients or

suppliers.

Lower corporate tax rates will generally apply on small business income.

Even in loss years, wages can be paid by the corporation to you so that

you may utilize personal tax credits available. If unincorporated, these

credits might be lost forever. The now larger corporate losses can be

carried forward to future (hopefully more profitable) years.

A full analysis of the advantages and disadvantages of incorporation is

beyond the scope of this report. However, being incorporated may give

you more flexibility and advantages than you originally anticipated.

Certainly, it is not prudent to reject it as an option simply because it

is more complicated and costly. In fact, it may be one of the best

investments you ever made.

Popular Misconception #4:

"I really need an office out.

Being home-based makes me look amateur!"

Is A Home Office REALLY Professional?

Many times small business persons make the mistake of generating

unnecessary overhead in order to impress clients and prospects. Often

this attitude leads to escalating debt and business failure. One such

example is getting an impressive, but expensive, commercial office

space.

Customers aren`t stupid. They can see when such outside space is

necessary or advantageous for them. They can also see when it is a

waste of money and designed to fuel your ego. What matters most to

clients is whether they are getting cost-effective results or not. If

your product or service delivers such excellent value, your customers

will be impressed and come back. In contrast, if one allows his ego to

get in the way of satisfying the customers` needs, they will go

elsewhere.

With the move to telecommuting, downsizing, networked communications,

and home-based businesses, operating from your home office is actually

smart and trendy. Can you think of a more appropriate location for a

consulting firm specializing in home-based businesses? They of all

businesses should set the example in cutting unnecessary expenses and

operating efficiently.

This is not to say that there aren`t any disadvantages to being

home-based. One certainly must be well organized, disciplined, and

willing to follow good time management principles. This alone could

mark you as more professional than other businesses, home-based or not.

Expensive office space is not the answer to reflecting a professional

image. If you are truly concerned about your image, offer quality

service. Make sure that all your corporate communications (telephone,

websites, printed materials, et cetera) reflect the professional nature

of your business.

Popular Misconception #5:

"Since we`re not seeking financing,

we don`t need a business plan."

Do You REALLY Need a Business Plan?

To obtain financing, many persons will prepare a business plan.

Although entrepreneurs will go to great lengths to get their loan or

capital, these same business persons will not bother to plan ahead very

far or analyse their business. Even if you required no additional

money, preparing a business plan can help you to succeed in your

business.

Running a business without a plan is like going on a trip without a

map,sufficient gas, money, or even a destination. Just as you wouldn`t

go on a vacation without some planning, no business can be successful

without it. Putting that plan in writing helps you to think out a

strategy for successfully operating and growing your business.

Where is your business today? Where will it be tomorrow? What is your

mission statement? What product lines are profitable? Which ones

aren`t? What business do you think you are in? What business do your

clients think you are in? Should you be in a different business? Is

your product or service less attractive to your clients? How are

competition, global commerce, technological and social changes affecting

your company? What is your competitive strength? What are your

weaknesses? Who are your biggest competitors? What are their

weaknesses and strengths? What is your marketing strategy?

What are your projected income and expenses and cashflow for the next

year? How about the next five years? Do you have a capital budget?

What determines whether you buy an asset or not? Do you have an exit

strategy? How will you manage growth? Do you have a financial plan? Do

you have an operations plan? What definite sales and net profit targets

have you set for this year and the next five years? What factors could

interfere with the attaining of these goals? What contingency plans have

you made to deal with such problems?

The purpose of these questions is to get you thinking and planning.

If you fail to plan, you plan to fail. Although your accountant or

business advisor can help you prepare your business plan, only you can

set the appropriate goals and follow through on them. Yes, you

definitely need a business plan, not just for obtaining capital, but as

a roadmap for your business.

Popular Misconception #6:

"I like bartering with clients

because it saves paperwork and taxes."

Are You Reporting Barter Transactions?

Bartering is an excellent way of doing business. However, contrary to

popular belief, some barter transactions are taxable, both for income

and sales tax purposes.

Legally, you must maintain adequate financial records for your business.

Barter transactions made by your business must be reported to the

appropriate taxation authorities and taxes paid. However, transactions

between friends not engaging in business with each other may not be

taxable.

If you are an auto mechanic and I am an accountant and I swap accounting

services for your car repair services, the transaction in this case is

most likely taxable, even if we are friends. However, your accounting

fees should be deductible as a business expense and so should the

business portion of my car expenses. Note also that sales and similar

taxes may apply on this transaction.

On the other hand, if I trade accounting services for a vacation for my

family, I should really declare the value of such services as income.

The firm supplying the vacation would be able to deduct that value as

accounting fees. Any sales or similar taxes would have to be paid on

such transaction.

Many persons don`t record such transactions. For some, it may be a

matter of wanting to believe that you don`t need to be bothered with the

extra paperwork or taxes. Remember, though, that ignorance of the law

is no excuse. Legally, you must keep proper records and pay all taxes

due.

Popular Misconception #7:

"All My Workers Are Self-Employed, So I Don`t Need

To Bother With Payroll Or Workers` Compensation."

Do You Need To Pay Payroll Taxes?

To save on payroll taxes and workers` compensation premiums, many

employers arrange their affairs in such a way that those working for

them are self-employed, independent contractors. This is good tax

planning.

On the other hand, some employers take the position that all those

working for them are self-employed, whether they are or not. Although

it is tempting to eliminate payroll taxes and workers` compensation

premiums, care should be taken to do so legally.

Whether those working for you are employed or self-employed is a

question of fact (which can be determined by the Courts). Do you supply

the tools and vehicles? Do you determine the working hours? Do you

have the right to control how the job will be done? Do you pay a

flat-rate or by-the-hour or a salary? Does your worker have other

clients?

By asking several such questions, a pattern will emerge as to whether

your worker is employed or self-employed. If it turns out that your

worker fits all the criteria of an employee, don`t say he`s

self-employed. On audit, you would still be responsible for the payroll

taxes (and penalties and interest as well).

Even if your workers are considered independent contractors by the

Income Tax Department, it is still possible that they will be considered

to be "workers" for purposes of Workers` Compensation legislation.

Thus, it is the responsibility of the employer to determine whether such

coverage is necessary or not. Failure to obtain proper coverage could

subject you to substantial (and unnecessary) costs.

In review, calling someone self-employed, doesn`t necessarily make them

self-employed. If you have a dog, call it a dog. Your position that

your dog is really a cat will not be successful. Likewise, make sure

that your position regarding your workers is legally correct.

Popular Misconception #8:

"My Accountant Charges Too Much.

I Can`t Afford It Anymore."

Is Your Accountant Worth His Fee?

Many business persons view bookkeeping, accounting, and tax preparation

as necessary evils. In their view, accounting fees are an expense to be

reduced, deferred or even completely eliminated.

A good accountant, however, can give you benefits far in excess of the

fees charged. Well-designed accounting systems will enable you to

extract meaningful financial information for your business that will

help you to manage it properly, avoid business failure, and alert you to

declining sales, excessive expenses, tax opportunities, cashflow

problems, and many other vital concerns for your business.

Your accountant can save you lots of money with the advice you receive

on tax and other business matters. As well, a competent accountant can

be a valuable resource in discussing business problems and opportunities

with you.

Popular Misconception #9:

"Nobody Makes Money On The Internet."

Can You REALLY Profit From The Internet?

Many people feel that the Internet is all hype. Many others feel that

it is overrated. Still others are of the opinion that it may be good

for some types of business, but not theirs.

Typical comments heard include: "I`ve lost money on the Internet...Major

corporations have lost millions...Do you personally know anyone who has

made money from the Internet?"

However, if you check out the list of recent billionaires, a high

proportion of these are Internet-related, and many of them under

forty years of age. As well as the very rich, you can find many cases

of more modest financial prosperity resulting from Internet commerce.

It is true that many are losing money on the Internet. It is also true

that many don`t know what they`re doing. However, with the proper

assistance, you, too, could profit from the net.

J. Stephen Pope, President of Pope Consulting Inc., http://www.popeconsultinginc.com/ has been helping clients to earn maximum business profits for over twenty-five years.

For valuable Work at Home Small Business Ideas, visit http://www.yenommarketinginc.com/

How To Raise Money to Start Business and Where to Get Money for Business

The common questions for anyone who want to start business are: How to raise money to start business, and where to get money for my business?

To raise money to start business is not as difficult as most people seem to think. This is especially true when you have an idea that can make you and your backers rich. Actually, there's more money available for new business ventures than there are good business ideas. We will help you for where you can get money for business.

A very important rule of the game to learn: Any time you want to raise money, your first move should be to put together a proper prospectus.

This prospectus should include a resume of your background, your education, training, experience and any other personal qualities that might be counted as an asset to your potential success. It's also a good idea to list the various loans you've had in the past, what they were for, and your history in paying them off.

You'll have to explain in detail how the money you want is going to be used. If it's for an existing business, you'll need a profit and loss record for at least the preceding six months, and a plan showing how this additional money will produce greater profits. If it's a new business, you'll have to show your proposed business plan, your marketing research and projected costs, as well as anticipated income figures, with a summary for each year, over at least a three year period.

It'll be advantageous to you to base your cost estimates high, and your income projections on minimal returns. This will enable you to "ride through" those extreme "ups and downs" inherent in any beginning business. You should also describe what makes your business unique---how it differs form your competition and the opportunities for expansion or secondary products.

This prospectus will have to state precisely what you're offering the investor in return for the use of his money. He'll want to know the percentage of interest you're willing to pay, and whether monthly, quarterly or on an annual basis. Are you offering a certain percentage of the profits? A percentage of the business? A seat on your board of directories?

An investor uses his money to make more money. He wants to make as much as he can, regardless whether it's short term or long term deal. In order to attract him, interest him, and persuade him to "put up" the money you need, you'll not only have to offer him an opportunity for big profits, but you'll have to spell it out in detail, and further, back up your claims with proof from your marketing research.

Venture investors are usually quite familiar with "high risk" proposals, yet they all want to minimize that risk as much as possible. Therefore, your prospectus should include a listing of your business and personal assets with documentation---usually copies of your tax returns for the past three years or more. Your prospective investor may not know anything about you or your business, but if he wants to know, he can pick up his telephone and know everything there is to know within 24 hours. The point here is, don't ever try to "con" a potential investor. Be honest with him. Lay all the facts on the table for him. In most cases, if you've got a good idea and you've done your homework properly, and "interested investor" will understand your position and offer more help than you dared to ask.

When you have your prospectus prepared, know how much money you want, exactly how it will be used, and how you intend to repay it, you're ready to start looking for investors.

As simple as it seems, one of the easiest ways of raising money is by advertising in a newspaper or a national publication featuring such ads. Your ad should state the amount of money you want--always ask for more money than you have room for negotiating. Your ad should also state the type of business involved ( to separate the curious from the truly interested), and the kind of return you're promising on the investment.

Take a page from the party plan merchandisers. Set up a party and invite your friends over. Explain your business plan, the profit potential, and how much you need. Give them each a copy of your prospectus and ask that they pledge a thousand dollars as a non-participating partner in your business. Check with the current tax regulations. You may be allowed up to 25 partners in Sub Chapter S enterprises, opening the door for anyone to gather a group of friends around himself with something to offer them in return for their assistance in capitalizing his business.

You can also issue and sell up to $300,000 worth of stock in your company without going through the Federal Trade Commission. You'll need the help of an attorney to do this, however, and of course a good tax accountant as well wouldn't hurt.

It's always a good idea to have an attorney and an accountant help you make up your business prospectus. As you explain your plan to them, and ask for their advice, casually ask them if they'd mind letting you know of, or steer your way any potential investors they might happen to meet. Do the same with your banker. Give him a copy of your prospectus and ask him if he'd look it over and offer any suggestions for improving it, and of course, let you know of any potential investors. In either case, it's always a good idea to let them know you're willing to pay a "finder's fee" if you can be directed to the right investor.

Professional people such as doctors and dentists are known to have a tendency to join occupational investment groups. The next time you talk with your doctor or dentist, give him a prospectus and explain your plan. He may want to invest on his own or perhaps set up an appointment for you to talk with the manager of his investment group. Either way, you win because when you're looking for money, it's essential that you get the word out as many potential investors as possible.

Don't overlook the possibilities of the Small Business Investment Companies in your area. Look them up in your telephone book under "Investment Services." These companies exist for the sole purpose of lending money to businesses which they feel have a good chance of making money. In many instances, they trade their help for a small interest in your company.

Many states have Business Development Commissions whose goal is to assist in the establishment and growth of new businesses. Not only do they offer favorable taxes and business expertise, most also offer money or facilities to help a new business get started. Your Chamber of Commerce is the place to check for further information of this idea.

Industrial banks are usually much more amenable to making business loans than regular banks, so be sure to check out these institutions in your area. insurance companies are prime sources of long term business capital, but each company varies its policies regarding the type of business it will consider. Check your local agent for the name and address of the person to contact. It's also quite possible to get the directories of another company to invest in your business. Look for a company that can benefit from your product or service. Also, be sure to check at your public library for available foundation grants. These can be the final answer to all your money needs if your business is perceived to be related to the objectives and activities of the foundation.

Finally, there's the Money broker or Finder. These are the people who take your prospectus and circulate it with various known lenders or investors. They always require an up-front or retainer fee, and there's no way they can guarantee to get you the loan or the money you want.

There are many very good money brokers, and there are some that are not so good. They all take a percentage of the gross amount that's finally procured for your needs. The important thing is to check them out fully; find out about the successful loans or investment plans they're arranged, and what kind of investor contacts they have---all of this before you put up any front money or pay any retainer fees.

There are many ways to raise money---from staging garage sales to selling stocks. Don't make the mistake of thinking that the only place you can find the money you need is through the bank or finance company.

Start thinking about the idea of inviting investors to share in your business as silent partners. Think about the idea of obtaining financing for a primary business by arranging financing for another business that will support the start-up, establishment and developing of the primary business. Consider the feasibility of merging with a company that's already organized, and with facilities that are compatible or related to your needs. Give some thought to the possibilities of getting the people supplying your production equipment to co-sign the loan you need for start-up capital.

Remember, there are thousands upon thousands of ways to obtain business start-up capital. This is truly the age of creative financing.

Disregard the stories you hear of "tight money," and start making phone calls, talking to people, and making appointments to discuss your plans with the people who have money invest. There's more money now than there's ever been for a new business investment. The problem is that most beginning "business builders" don't know what to believe or which way to turn for help. They tend to believe the stories of "tight money," and they set aside their plans for a business of their own until a time when start-up money might be easier to find.

The truth is this: Now is the time to make your move. Now is the time to act. the person with a truly viable business plan, and determination to succeed, will make use of every possible idea that can be imagined. And the ideas I've suggested here should serve as just a few of the unlimited sources of monetary help available and waiting for you!

Now you should get idea for how to raise money to start business, how to get money for business, and where to get money for my business.

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Julia Tang publishes Smart Online Business Tips, a fresh
and informative newsletter dedicated to supporting people
like you! To find out the best online business opportunities,
and to discover hundreds more proven and practical internet
marketing secrets, plus FREE internet marketing products
worth over $200, visit: http://www.best-internet-businesses.com
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