Saturday, June 13th, 2009 at
10:26 pm
Frequent watchers of late night television often think that simply applying for a government grant will give them the necessary capital to start a business. While there are a lucky few who get their money that way, they are very few, and very far between.
To receive a grant to start a business it is necessary to be a part of the group for which the grant money is intended and to meet other criteria. While some people do receive grants, and some people do win the lottery, there are more practical and more likely methods.
One of those methods is offered by the SBA, the Small Business Administration While the SBA does offer loans, it offers very few loans directly and prefers to guarantee loans made by banks. The guarantee is valuable because banks are more willing to make a loan knowing that if the loan is defaulted the SBA will make the payments, and knowing that after SBA qualification the rate of default is very low.
Another way to get government help with a small business start up is to locate your business in en Enterprise Zone. These zones are also called Empowerment Zones, and are designed to create economic growth in certain areas that are in need of economic assistance.
In an Empowerment Zone or Enterprise Zone taxes, many times local, state and federal, are waived for a business to encourage the business to come into an area and create jobs. These zones are sometimes located in rural areas that have lost indigenous industry. Others are located in urban areas that have become rundown and need to be built up.
Members of some groups or communities who have suffered a particular hardship, such as the victims of Hurricane Rita and Hurricane Katrina are often given preferential status for business loans to encourage them to start up in areas that were damaged economically.
One of the most overlooked areas of government assistance in business start up is in the area of education, perhaps the most valuable commodity a new entrepreneur can have. Pell Grants and federal student loans make it possible for many people to go to college or technical school. A budding entrepreneur can use a Pell Grant to cover books and tuition to acquire a degree in business and gain the knowledge necessary for success, and increase the chances of creating a successful business.
Friday, June 12th, 2009 at
12:20 pm
The old saying is “location is everything.” And that old saying is partially right. Location is very important, in different ways for different businesses.
If your business is a professional office, then being around other professionals is important for the image you wish to convey to clients. Insurance agents and financial advisors for instance will often locate themselves in bank buildings, or in buildings that also house lawyers, architects or other professionals. They want to convey a better image than they would project if their offices were located behind a carnival for instance.
A retail store has a different goal in mind concerning location. Many retail businesses opt for strip centers with convenient drive up parking, making it easy on the customer to see their storefront and stop in. Others utilize shopping malls, which have large parking lots but generate a tremendous amount of foot traffic and benefit as well from people who come to the mall for different reasons, but see the store and are attracted to it.
Some businesses believe in being as far away from their competition as possible, and for some businesses that is probably a good idea. Two convenience stores next to each other, selling the same goods for almost the same prices, are probably just cutting the pie into two pieces, whereas if one were located a couple of blocks down the street both businesses would probably benefit.
Other businesses are able to achieve a symbiotic relationship with the competition. Have you ever noticed for instance that several popular fast food franchises will all locate very close to each other? Tacos, hamburgers, ice cream, pizza, fish, fried chicken, and sub sandwiches will all located close to each other realizing that they all share the same customer base and by making it easy and convenient for the customers, they will all get their turn with the customer dollar and all will benefit. Some survive by serving the overflow of other businesses during busy times of the day, like lunch and dinner rush hours.
Whatever type of business you have, location is important and should receive a great deal of thought so that it can contribute to your success.
Thursday, June 11th, 2009 at
10:21 pm
Buying or leasing a vehicle for your business simply comes down to dollars and cents. Having your accountant run the numbers both ways before a tax year beings will help you determine the wisest course to take.
Many times leasing a vehicle allows a company to take a large deduction, and that can be beneficial since deductions save money. Many leasing companies and car rental agencies have special business plans and can help a small business needing only one or two vehicles to determine a good fit.
If a business is larger then auto manufactures often have fleet leasing representatives who can help the business take advantage of the buying power of needing more automobiles. All of the major manufacturers, be they American or foreign, have fleet programs in place.
While the benefits of leasing are well known, what is not as well known is that businesses often come out ahead through outright purchase due to the tax credit rules that apply, and change from year to year.
If a tax credit is being offered, then the entire cost of a vehicle can be taken right off of taxes rather than depreciating the cost over several years, or taking the deduction as with a lease. Again, it varies from business to business and from year to year as to which option will save the most money. The tax credit saves a lot of money for a company during one year, but saves nothing the following year, and deprecation and deductions both continue from year to year.
Which is best depends entirely on you, your business and the particular tax bracket you are falling into this year. Of course, those who sell leases and those who sell vehicles will always know and if their particular product is the best tax wise for you, they will probably let you know. But the best way to decide is probably through a visit with your tax preparer doing some joint pre-planning to get the best deal.
Rearrange It is great for starting a Redesign business
