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Is Your Small Business on Solid Financial Ground?

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dollar-1362243_640Does anything scare you when it comes to managing your small business?

If you are like many other small business owners, you know all too well how things can change in a heartbeat.

At one point and time, things are humming along. Take a look a couple of months down the road and you’re nearing or in the red.

So, how do you go about doing all you can to keep your small business on solid financial ground?

While there are many ways to approach this, some work better than others.

Are You on Top of Your Business Needs?

To do your best to keep your small business running along, file away these tips:

  1. Expenditures

One area of major importance is of course your office expenditures.

Are you spending too much money, money that can be saved with some ingenuity on your part?

Always look to see where you can cut costs without cutting performance.

Areas to scale back on include supplies, transportation, and how many hours the office is open.

With that last one, letting employees work from home one day a week can lessen your need to be open five days a week. How much could you save with an extra day a week having the office closed?

Also, go back and review what you spend for office supplies.

In many instances, you are not doing needed things like recycling or buying supplies in bulk.

And when it comes to transportation needs, think how you use any office vehicles.

For instance, if you have to make deliveries to and/or meet with customers, think about how you schedule them.

Try and get with several customers all in a period of time the same day, avoiding running in and out of the office.

  1. Growth

Understanding when to grow your small business is important.

While you might be timid, know that increasing your company’s capacity can be what the doctor ordered.

In doing this, you might need some fast cash for your small business.

If you do need some cash infusion, be sure to research the options available to you.

Knowing where that money will be coming from, what to expect in return etc. are both quite important.

Take the time to think about any growth plans.

The worst thing you could do is rush into an expansion. This would be one in which you were not prepared on many fronts.

  1. Security

Even if wanting to grow moving forward, don’t fall asleep on your company’s security.

As an example, has your company ever faced a security breach? If not, consider yourself lucky.

Too many companies over the last decade have in fact suffered security breaches. They can be even more impactful when it is the small business owner taking the hit.

To keep on solid financial ground, be sure to invest in whatever security needs are necessary.

From your online efforts to what you do as a small business owner offline, never think it can’t happen to you.

So, as you move forward this year, do you consider your small business to be on solid financial ground?

Photo credit: Pixabay

About the Author: Dave Thomas covers business topics on the web.

Make It Your Business to Go Paperless

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Hr Manager Conducting An InterviewHave you sat down recently to see what your small business is ultimately costing you as far as expenses?

If the answer to that question is no, it probably would not be a bad idea to schedule some time to do just that. In the end, you may find yourself saving some money over the long run, money that could help keep you in business for years to come.

As many business owners can tell you, it is oftentimes the expenses of running a company that weight on them most.

So, where can you look into cutting expenses to keep your small business moving along smoothly?

Do an Inventory of Your Expenses

Start by breaking down your costs (including if you have staff), seeing where you might save some money.

This includes:

  • Employees – Oftentimes the most expensive component in running a business, your help typically doesn’t come cheap. That said having employees takes a huge burden off of you when running a small business. Even if you are a really small business that relies on just an assistant, he or she can prove more than worth their weight in gold over time. If money is tight (yet you still need help), you can look to reimburse the employee or employees in other ways besides income. Partial or full healthcare benefits, providing them with discounts to other area merchants, allowing them to work from home (saves them commuting time and gas bills etc.) are some ways to compensate for lower salaries. Most importantly, weigh the true costs of not having others help you. Those costs in added time away from your family, additional stress etc. can certainly give you reason to want assistance in running your business;
  • Supplies – How often do you run the numbers in what it costs you as far as office expenses? You may be surprised to learn just how much money you truly are shelling out in terms of supplies etc. More businesses are going paperless (or at least attempting to) not only to save money, but expedite how they deal with clients. Instead of there being a long and expensive paper trail, your business can ultimately save money and have faster and more precise contact with clients through technology. Whether you run a medical office or another form of business, getting information to your customers via electronic means is a win-win for both parties. This is also true when it comes to billing clients. Instead of the cumbersome paper trail, everything can be neatly viewed online. When ordering supplies yourself, you should also do as much online as possible, saving you and the vendor time and money;
  • Teleconferencing – While in-person meetings with clients are sometimes necessary (don’t underestimate the value of such interactions), doing teleconferences has benefits too. Instead of having to run in and out of your office meeting with this person and that person, doing it over the computer, by phone etc. can save you time and money in the long run. If you run your business from home, set up an area in your residence where you can shield yourself from distractions, allowing you to do Skype and other video conference calls with customers. This saves you the hassles of being stuck in traffic and spending gas money driving all over town to meet with clients. In many cases, you will discover your customers prefer this mode of communication too;
  • Deductions – Given tax season is in full bloom, have you made sure to deduct everything but the kitchen sink for your 2015 returns? Oftentimes, small business owners will miss key deductions, deductions that ultimately end up costing them money. Take the time now to do a thorough review of your 2015 taxes, looking for any possible missed deductions. You might be surprised to see the money you are literally leaving on the table.

From paperless projects at work to making your meetings with clients more productive, there are many ways your small business can save on expenses in 2016 and beyond.

The goal is to take the time to find those savings, knowing that it is a worthwhile investment over the long run.

So, as a small business owner in 2016, how are you saving money?

Photo credit: BigStockPhoto.com

About the Author: Dave Thomas covers business and marketing topics on the web.

Save on Taxes by Making Wise Choices During Open Enrollment at Work

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By Sharita Hutton

When it comes to tax-deferred accounts for health expenses, most taxpayers get it all wrong. A recent Fidelity survey shows that nearly 3 in 4 incorrectly think employer-provided health savings accounts and flexible spending accounts are virtually the same thing. H&R Block (NYSE: HRB) knows this misunderstanding causes many to miss out on a chance to pay less in taxes because contributions to these accounts are not taxed. Before checking off the same boxes they do every year during open enrollment for health benefits at work, taxpayers who have access should consider these accounts.

How much money? A $2,000 annual ($166 monthly) contribution to health savings account or a flexible spending account could save a taxpayer in the 25-percent tax bracket $500 in taxes (contribution × marginal tax rate = tax savings).

The money contributed to either type of account must be spent on qualified medical expenses, which include eyeglasses, contact lenses and prescribed medication. Also, appointments with doctors – for general preventative checkups, appointments with specialists and visits when not feeling well – are among the eligible expenses. All these routine expenses can add up quickly; out-of-pocket costs for a family of four were expected to average $3,600 in 2013, according to the 2013 Milliman Medical Index.

Not going to the doctor when sick could save money, just like wearing outdated prescription glasses and only taking half as much medication as prescribed, but none of these are advisable ways to save on health care expenses. Here is some information taxpayers can use to determine if a health savings account or a flexible spending account could help them save money.

Health savings account gives opportunity for long-term saving

As with other savings accounts, the money in a health savings account can stay in the account indefinitely, allowing the account holder to save for future medical needs. Funds used for qualified expenses can be withdrawn tax-free, and interest earned on the account is tax-exempt. Here are some of the participation rules:

The taxpayer must participate in a high-deductible health plan

  • High-deductible is defined as at least $1,250 deductible for self-only coverage and $2,500 for a family
  • Plan must not pay benefits until deductible is reached

(There are exceptions for preventive care and certain permitted benefits, such as dental expenses)

The maximum contribution for 2014 is $3,300 for self-only coverage and $6,550 for a family

  • An additional $1,000 may be contributed for taxpayers who are at least 55 years old.

Flexible spending account money must be used by deadline or it will be lost.

Unlike with health savings accounts, the money contributed to a flexible spending account must be used by the end of the plan year or grace period, or it will be lost. Up to $2,500 may be withheld from gross income for contributions to flexible spending accounts.

Just like other elections made during open enrollment for benefits, decisions about these accounts cannot be changed before the next annual enrollment period, unless an employee has a qualifying event. Among qualifying events are birth, divorce, marriage, death and loss of benefits from another source (e.g., a spouse losing a job).

Some retirement options selected during open enrollment also have pre-tax benefits

Another option for pre-tax savings that happens as part of open enrollment in the workplace is selecting retirement savings plans. The average retirement span is 18 years and 80 percent of people ages 30-54 don’t think they will have enough money put away for their retirement. A good first step in saving for retirement is to make pre-tax contributions to a 401(k). Because these contributions are made with money that has not been taxed, the amount contributed reduces taxable income and that can potentially reduce the overall tax bill. Also, retirement savings grow tax-free.

For more information about health savings accounts and flexible spending accounts, saving for retirement or advice on other ways to reduce tax liability, contact an H&R Block tax professional. To find the nearest H&R Block office, visit www.hrblock.com or call 800-HRBLOCK.

How to Cut Down on Business Travel Expenses

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As a small business owner, you or your employees may need to do quite a bit of business travel.

So, it should not come as a surprise that this can add up to be a hefty expense, leaving you to maybe think it’s one area where you could cut some spending.

Over the past years, travel expenses, from airlines to hotels to dining, have increased.

But how can you cut travel expenses while still meeting the needs of your clients?

Check out these ideas to help you do both:

1.     Air Travel

*  Carry on your bags instead of checking them. Often airlines charge a fee for checked bags and you can save a bit here, plus it saves time in the airport.

* Use the long term or off site parking at the airport instead of the high cost hourly parking.

* Check around for flight differences and book the cheapest, even if it’s not the most convenient. Often midweek travel is cheaper than over a weekend (though that is not necessarily true of hotels). See if flying into a close by airport is worth it to save money even if it’s not the absolute closest.

* Join frequent flyer clubs.

* Think about special airline benefits. Airports offer special rooms for airline members that can be earned or purchased. Maybe you have to pay for these, but could it benefit you because you and your employees can get quality work done there or possibly have meetings?

2.     Ground transportation

* Though renting a car seems like a big expense, it’s cheaper than taxis and more efficient than public transportation. Join loyalty programs with rental car companies and gain some benefits here, too.

* If you don’t have a rental car, see if your hotel provides shuttle service to nearby locations and the airport – again, taxis add up, best to avoid them.

* With a rental car, fill it up yourself before turning it in. If you don’t, the car company can charge an arm and a leg to fill it up.

3.     Hotels

* Just like with airlines, check around for deals and specials. Often depending on when you check in and out, your rates will differ substantially. Hotels run specials, and if you join their loyalty groups, you can also sometimes get special treatment.

*  If your hotel offers free breakfast – take it! Not only is it convenient, it will save you the cost of breakfast and transportation.

4.     Have clear, stated policies

* Your employees need to know what they can spend and how it needs to be turned in. It’s best to have these written out and on hand so there is no discrepancy.

* Do you require receipts from taxis and restaurants? Do you have a maximum per diem or do you want to set a price per meal? Do you need to okay arrangements before final booking?

* Be clear in what is reimbursable and what’s not. Can employees have a drink with dinner or is that not part of your expense plan? What is the policy for taking clients out to meals?

Travel is an important, often necessary, part of running a business. It’s costly, though, and you have to make sure it’s not costing you more than it’s worth.

Keep your spending in check and you should be able to keep your customers happy and your expenses from going through the roof.

As a business traveler, what do you do to save some money?

Photo credit: apex-portal.com

About the Author: Heather Legg is a writer who covers topics from small business to how to remove news articles from Google.