Posted by permission of Cliff Ennico – author of The eBay Seller’s Tax and Legal Answer Book – Get your copy at www.TaxandLegalBook.com

Here are six more New Year’s Resolutions for business owners.

Find Three New Sources of Saleable Product.  If your business is selling stuff online, one of your biggest challenges is finding high quality stuff to sell at a profit.  If you’re not currently taking consignments, you’re out of your mind.  Take out an ad in your local newspaper saying “I Take Consignments!” with a toll-free telephone number.  Trust me, you will get calls.  Let the local senior citizen community know you are available to help them clean out their houses and apartments when they move into an assisted living facility.  Finally, make 2008 the year you cut out the middlepeople in your life — go to www.worldwidebrands.com and www.globalsourcedirect.com and find out where you can buy the stuff you’re currently selling directly from the manufacturers in Asia. 

Get Your Taxes Right.  If you have been selling things online and haven’t been paying taxes, now is the time to get into compliance with the tax laws.  The IRS is losing patience with people who don’t know they are in business when they’re selling online, and it’s only a matter of time before they require PayPal and other online payment systems to send you 1099s (with a copy to the IRS) making your activities public.  Get a copy of my new book “The eBay Seller’s Tax and Legal Answer Book,” and read it cover to cover – it’s the best twenty bucks you will ever spend.

Renew Your Web Address.  If your business is dependent on the Internet, make sure you check Network Solutions at least once each year to make sure your Web address hasn’t expired.  They do send you renewal notices, but often these get picked up as “spam” by your antispam software, so you never see them, your Web address expires and gets grabbed by someone else.  Pick a date that’s easy to remember – like your birthday – and renew each of your important Web addresses on that day.

Update Your Software Twice a Year.  Just about every software program gets updated at least once or twice a year, but not every software developer sends you an e-mail announcing the latest updates.  Make it a point to visit the Website “home page” of each software company whose products you license, and look for a button that says “check for updates” or something like that.  It just may save your PC.

Sheath Your Cell Phone.  Make 2008 the year you stop being a “cell phone slave”.  Make some rules about when you will use your cell phone, and when you won’t, and stick to them.  Among those I highly recommend:  do not use your cell phone while driving a motor vehicle; use your cell phone only for outgoing business calls; do not use your cell phone in public places where your conversation may be overhead by total strangers with evil on their minds.

Get Control of Your Bookkeeping.  If your bookkeeping system consists of a shoebox, you have absolutely no idea what’s going on in your business.  Sign up for your local community college’s evening class on QuickBooks Pro® and learn to do it the right way.  If you use “live” bookkeepers, meet with them at least 3 or 4 times every year, review your chart of accounts and other operating statements with them, and get their opinions on things you are doing right and things you need to improve.  Because they are not “in the trenches” with you every day, they are likely to see patterns and trends you are too busy to notice.

Start Escrowing for Estimated Taxes.  If you pay estimated taxes to the federal and state governments four times a year, and find yourself occasionally without enough cash on hand to make the tax payments, you need to start “escrowing” for these taxes.  Take your gross sales each month, withdraw 40% of that amount from your business checking account, and deposit it in an interest-bearing savings account.  Do this every month, and learn to operate your business on the remaining 60% of revenue.  This way you will be sure to have enough cash on hand to make your tax payments when they come due.

Get Involved in the Election Process.  This is an election year, and with all the talk about the war in Iraq, universal health insurance coverage, and other policy issues, so far none of the Presidential candidates has said anything about what they will do to help small business owners.  Go to their Websites, participate in their periodic “town meetings,” and ask them.  If your Congressperson or Senator is running for re-election this year, call up her campaign director and volunteer to be an advisor on small business issues.  Whatever you do, don’t be silent.  If you don’t make yourself heard, then you won’t have any right to complain when your business gets clobbered with high taxes and crazy government regulations in 2009.

A happy, prosperous and successful New Year to all of my readers.

Cliff Ennico (cennico@legalcareer.com) is a syndicated columnist, author and host of the PBS television series ‘Money Hunt’.  This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state.  To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com.  COPYRIGHT 2008 CLIFFORD R. ENNICO.  DISTRIBUTED BY CREATORS SYNDICATE, INC.

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Posted by permission of Cliff Ennico – author of The eBay Seller’s Tax and Legal Answer Book – Get your copy at www.TaxandLegalBook.com

When you stop to think about it, New Year’s Resolutions are all about habits.  Breaking some bad ones (smoking, drinking excessively, binging on fast food when you’ve had a bad day), and starting new ones (working out, eating more Brussels sprouts).

Businesses, like individuals, develop bad habits over time that need correction, while success in business over the long run usually means adopting good management habits and sticking with them year after year.

So, without further ado, here are my 2008 New Year’s Resolutions for business owners.

Do an Annual “Legal Review”.  It isn’t enough to hire a good lawyer and pray you don’t get sued.  Every business has laws and regulations you need to know about, and it’s your responsibility to learn about them so you can prevent lawsuits before they happen.  Take your lawyer to lunch sometime in January, tell him or her everything your business did last year and is planning to do this year, and get some education on how to do things better.  If you are a corporation or limited liability company (LLC), have your attorney draft some resolutions for you and your partners “ratifying” the big decisions you made last year – these will save you a lot of heartache if you are ever sued, or audited by a government agency.

Sign ‘Em Up; Nail ‘Em Down.  You’ve got a part-time salesperson or administrative assistant working in your business one or two days a week.  While they’re there, you tell them what to do, when to do it, and how to do it.  You believe this person is an “independent contractor”, so you don’t withhold money from their paycheck each week.  Bad idea!  The IRS is very likely to look at this person as a part-time employee, and they will come down on you like Thor’s hammer if they find out.  Now’s the time to have this person sign a one-page employment agreement “effective January 1, 2008” (your attorney can draft this for a couple of hundred dollars), and add them to your payroll.

What should the agreement say?  At the very least, it should clearly state (1) that the employee serves “at will” and can be terminated at any time, with or without a reason, (2) that the employee cannot work for a competing company while they’re on your payroll, and (3) that the employee will not hire your employees or solicit business from your customers for one year after the employment relationship is terminated for any reason.

If the part-timer is your first employee, don’t forget to have your accountant sign you up for payroll taxes (IRS Forms 940 and 941), and for your state’s unemployment compensation system.  You may also have to look into worker’s compensation insurance; your insurance agent can help you with that.

Loosen Up Your Vocal Cords.  One of the best ways to distinguish yourself from your competition, especially if you are a consultant, is to become the local expert in your field.  Volunteer to speak at local business luncheon meetings.  Teach a course at your local community college.  If you run a butcher shop, call your local cable TV news show and volunteer to do a segment on “how to carve your holiday turkey” – people love that stuff, and news reporters love it when you make their life easier by suggesting story ideas.  However you do it, get out in front of your marketplace and let them see you.  Not only will you build your self-confidence as a public speaker, you will get tons of free publicity for your business.

Finally, have a local musician record your presentation, break it down into segments by topic, and put them up on your Website as downloadable “Podcasts”.

Update Your Web Presence.  Look at your business Website, and make at least five (5) changes that will make it more attractive, fun and “cool” to prospective customers.  Post some content-rich articles answering commonly-asked questions about what you do.  Put some videos on your Website (and post the videos on YouTube) demonstrating in an entertaining way how to do (or not to do) something.  Start a “blog” where your customers can talk to each other about the stuff you do, with you as the all-knowing “moderator”.  Most importantly, hire a search engine optimization (SEO) consultant and learn what you can do to get your Website higher in the Google search rankings.

At the same time, delete things from your Website that are boring, difficult to access, or that do nothing to address your customers’ fears and passions.  If you are a lawyer or accountant, nobody cares what you look like or where you went to school, so get rid of the Website photo and biography.  Put up your fee schedule instead, because clients DO care about how much you are going to charge them for your services!

More next week . . .

Cliff Ennico (cennico@legalcareer.com) is a syndicated columnist, author and host of the PBS television series ‘Money Hunt’.  This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state.  To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com.  COPYRIGHT 2004 CLIFFORD R. ENNICO.  DISTRIBUTED BY CREATORS SYNDICATE, INC.

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Posted by permission of Cliff Ennico – author of The eBay Seller’s Tax and Legal Answer Book – Get your copy at www.TaxandLegalBook.com

MAKING SURE YOU GET PAID ON TIME, EVERY TIME

By Cliff Ennico

            “I am a marketing consultant who gets a lot of business, mostly from small companies in far-flung locations around the country, through referrals.  Lately it seems like every account has turned problematic for me – the clients pay late, or not at all, and still they expect me to perform my services on time.  I realize these are smaller businesses and they have to be careful about cash flow, but still, I can’t pay my bills if my clients don’t pay theirs on time.  How can I do a better job of getting their attention so that I don’t have to stay on top of them all the time?”

            When you’re in business for yourself, nothing – and I mean nothing – eats at your insides like clients who don’t pay their bills on time.  The best time to deal with delinquent accounts is before they happen, and you should never treat someone who owes you money with “kid gloves”.  By showing your customers you have zero tolerance for late or missed payments, and making sure you have your customers’ respect (with a little fear thrown in), you will get paid a lot faster, and will spend a lot less time chasing down receivables.

            You never will get rid of problem accounts entirely, of course, but here are some tips for keeping deadbeats to an absolute minimum.

            Get a Retainer Agreement.  It’s amazing to me how many consultants fail to get written agreements with their customers before they begin work – especially in a situation like yours where there is no pre-existing relationship between you and your client.  A simple one or two page agreement sends the client two very important signals: 

(1)               this is a business relationship – while you are a nice person, you are not their “friend” who will wait indefinitely to get paid while other, nastier people get their money on time; and

(2)               this is a legal contract that you are prepared to sue over if the client tries playing games.

The agreement should state clearly your hourly fee, how frequently you will invoice the client, when invoices are payable, and that interest “at 18% per annum or the highest rate allowed by law, if less” will be charged on any overdue invoice.  Be sure to include a statement that you will stop work the minute there’s a payment problem, and will retain ownership of all materials you have prepared for the client, with the right to sell them to other clients, including the client’s competitors.  An attorney should not charge more than one hour’s time to prepare a “master form” retainer agreement you can revise slightly for each new client.

Get an Advance.  In consulting deals, the client always, always, always must pay you something up front as an advance against future invoices.  Do not work with any client who refuses to prepay at least the first few hours of your consulting time.  The sooner clients get into the habit of writing you checks, the better.

Make the Advance “Evergreen”.  Your retainer agreement should contain language allowing you to require the client to continue paying in advance for services once the initial advance has been paid down.  This is called an “evergreen” retainer, because you always have money in your checking account to apply against your future invoices, and is especially important when the client is out-of-state and your invoice amounts are relatively small.  If the client objects, you can change the language to require payments in advance only in the event the client fails to pay one of your invoices on time. 

Do Some Diligence.  A bank or employer would ask for referrals.  Why shouldn’t you?  Insist on talking to at least one other consultant who’s worked for them in the past couple of years.

Avoid Crazy People.  Be alert for signs of instability, eccentricity or just plain weirdness that signals the lack of a professional approach to business.  For Example, Be Suspicious Of Any Person Who Sends You E-Mails In Which The First Letter of Every Word Is Capitalized (As In This Sentence).

Get the Referral Source on the Hook.  Before contacting a client that has been introduced to you via a referral, get the referral source to send you a letter or e-mail confirming that he or she is making the referral, and stating (“to the best of my knowledge”) that he or she believes the referral is creditworthy and can live up to its obligations. 

That way if the relationship with the client sours, you have solid ammunition to remind the referral source that he is at least partially responsible for the mess you are in.  While the referral source won’t pay your outstanding bills, and isn’t legally obligated to do so, playing on his guilt should motivate him to bring pressure to bear on the deadbeat client to “do the right thing” if the referral source has greater leverage over the client than you do. 

            Cliff Ennico (cennico@legalcareer.com ) is a syndicated columnist, author and host of the PBS television series ‘Money Hunt’.  His latest books are ‘Small Business Survival Guide’ (Adams Media, $12.95) and ‘The eBay Seller’s Tax and Legal Answer Book’ (AMACOM, $19.95).  This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state.  To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com.  COPYRIGHT 2007 CLIFFORD R. ENNICO.  DISTRIBUTED BY CREATORS SYNDICATE, INC.

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