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Business

Financial planning for launching a small business

CharlesSimsJr-160Are you considering making the transition from the role of employee to small business owner in this evolving economy? Start by strategizing and prioritizing your financial planning responsibilities.

With the collective guidance of a qualified tax adviser and Certified Financial PlannerTM professional from the Financial Planning Association, you can assemble a well-organized system of tracking what you spend to produce income. In addition, you can sensibly save money by learning more about eligible tax deductions you should take for your self-employed business.

Apply the following pointers and perspectives to efficiently develop and manage your new business:

How to close the business

CarleeMcCullough-160There is a right way and a wrong way to close, dissolve or wind down the business. Simply walking away will leave a lot of open doors that need to be closed permanently.

Although it is never pleasant to shut down, sometimes you close a door so that another may open. If the business is not working and it cannot be saved, dissolve it and regroup. Bob Johnson of BET started and closed several businesses before hitting it big and becoming a billionaire. Not bad for regrouping, huh?

The goal of closing a business systematically is to close it quickly in a cost effective manner. So, the big question is: How do we properly close a business?

The 1 percent factor: A way to help boost retirement savings

CharlesSimsJr-160In a survey of workers who participate in an employer-sponsored retirement plan, 71 percent said they wanted their employers to increase their savings rate automatically by 1 percent each year. Some plans have auto-escalation features that increase workers' contributions by a percentage point on an annual basis.

Regardless of whether you save by default or by choice, increasing your retirement contributions could make a big difference in the amount you accumulate during your working years.

Although there's nothing magical about a 1 percent annual increase, it may be a manageable way to get closer to an appropriate contribution level for your age and personal situation. Industry estimates suggest that workers need to save 13 percent to 15 percent of salary throughout their careers to fund a retirement lifestyle equivalent to their pre-retirement standards of living. People who don't start saving until later in life may have to save a higher percentage.

Is my business in trouble?

CarleeMcCullough-160The fact that businesses come and go is no surprise to anyone. Taking the current economy into consideration, many businesses are suffering. As business owners, we are trained to hang in there and ride out the storm. We are taught to sacrifice and put everything into the business.

To an owner, the business is like a child that was birthed. A failing business is a painful thing to endure because it is no longer fun. Both the owner and employees dread coming to work.

Win by any means necessary is the motto for many owners. Unfortunately, the conversation involving when to shut the business down is all too rare. Few want to admit failure or defeat. They do not even want to think about closing down.

ON OUR WAY TO WEALTHY: Business tax pitfalls

CarleeMcCullough-160Too many times pride stands in the way of folks asking for help. But if you are a small business, asking for help is the only way to stay above the fray. One area that business owners tend to run from is tax preparation.

Whether the business is fledgling or experienced, tax preparation is always dreaded. It is a necessary evil that cannot be avoided under any circumstance.

Here's a snapshot of the tax issues that can arise and detrimentally affect a business:

Did you know that you can lose money that is invested in bonds?

CharlesSimsJr-160This is a question you could soon begin asking as a recent rise in interest rates contributed to price declines in many bond funds. News the Federal Reserve feels comfortable enough with the strength and state of our economy to consider a change in current monetary policy is, without doubt, a positive development. Unfortunately, for some bond investors, good news may be bad news!

Bond prices and yields have an inverse relationship, meaning they move in opposite directions. This means as yields (interest rates) rise, bond prices (values) can fall. Many investors – driven by fear, the need for income, increasing underweight allocations, or other factors – have invested heavily in bonds. Over the past five years, this demand has helped drive bond prices higher, lowering yields and subjecting many investors to the often ignored or forgotten risks associated with these investments, one of which is "interest rate risk".

"Interest rate risk" is a term used to describe how an investment's value will change due to an increase or decrease in interest rates. As a simple example: a bond yielding 4 percent is more valuable to investors if interest rates fall to 2 percent and is less valuable to investors if interest rates rise to 6 percent. This is because their fixed interest income would either be greater than or less than what a new investor would receive purchasing a bond at current rates. Interest rate risk affects all bondholders, but typically bonds with longer maturities and/or lower yields are most impacted.

The business of childcare

wealthy 600Quality childcare is not just about babysitting and entertaining the child. As competition amongst centers increases, so does the need to offer a creative and learning environment where a child's appetite for learning is stimulated.

Tiffany Glover, owner of The Academy of Creative Learning, makes it her mission to challenge and develop young minds at her three-star academy. Equipped with an advanced degree and credentials, Glover prides herself on heading up a staff of like-minded professionals that use every opportunity to educate and motivate the children in their care.

Carlee McCullough: Tell me about yourself?
Tiffany Glover: I am the owner of The Academy of Creative Learning. I hold an MBA and I have over 18 years of professional experience as a human resources professional, entrepreneur, leader, early childhood educator and consultant. Additionally, I have a credential as a Tennessee Early Childhood Administrator (master level).

On Our Way To Wealthy: day-cares

CarleeMcCullough-160Entrepreneurs with a passion for childcare and child development may become attracted to the idea of day-care business and what they consider a lucrative calling. The demand for services is increasing steadily and as the industry has evolved, so have the reimbursement formulas.

Parents in search of quality childcare typically will find their options fall into three categories: family care provided by a relative, in-home care provided by a nanny or babysitter, or day-care center.

Competition among day-care businesses is fierce. As more people move into the childcare business that equates to more options for parents and potentially diluted attendance at many centers. On the face of it, a move into childcare would appear a profitable business venture. However, state regulations have increased, funding formulas have caused decreased payments, and many centers are barely operating at break even.