SBDC | Los Angeles Small Business Development Center

Understanding Capital Gains

admin — Wed, 15 May 2013 13:30:52 +0000

Publisher: Kelly Burkart – Posted on 03/08/2013 US Bank Connect

Almost every small business can have capital gains (or losses). These transactions can impact your taxes, cash flow, and ability to get financing. The more you understand, the better position you will be in to manage capital gains to your company’s advantage.

What are capital gains?

Capital gains refer to income derived from selling investments or capital assets that belong to your business. The capital gain is the difference between what you paid for an item and what you sold it for (minus depreciation, amortization, and fees related to the sale). You are taxed on that difference.

What are capital assets?

Capital assets, subject to capital gains tax, are company assets not easily converted into cash. Examples include stocks, bonds, real estate such as land and buildings, equipment, and machinery. Capital assets are usually owned because they enable the company to make a profit. This covers a wide variety of assets, for example, equipment owned by a construction company, the property a convenience store is built on, and cameras gear owned by a portrait photographer.

Capital assets do not include inventory, business accounts receivable, and other specific items.

What’s the difference between short-term and long-term capital gains?

Capital gains are classified according to the period of time they are owned, which is known as the “holding period.” They are either short-term or long-term.

Short-term capital gains are income from assets held less than one year. This income is taxed at regular income tax rates.

Long-term capital gains are income from assets held 12 months or longer. This income is taxed at a “capital gains rate,” which is typically less than the regular income tax rate. Holding assets for longer than 12 months is usually advantageous because it enables you pay a lower tax rate, have more working capital on hand, and maintain better cash flow.

You can also reduce or defer capital gains tax by selling capital assets in installments across more than one tax year, rather than all at once.

What if you sell capital assets at a loss?

Selling assets for less than you paid is called a capital loss. If you have capital losses of up to $3,000, you can deduct the amount from ordinary income. In some cases, capital losses offset capital gains.

Are all businesses’ capital gains taxed the same?

The structure of your business determines your capital gains tax rate. For example, in a partnership, the income “flows through” to the owner’s individual tax return. On the other hand, corporations (including S-corps) are subject to corporate tax rates.

How do capital gains impact business other than at tax time?

Understanding and managing capital gains is important beyond their impact on your annual tax bill. If you plan to pursue financing for your business, you’ll want to make sure capital gains don’t have a negative impact on the value of your business. If you need to liquidate assets, you need to assess which will be the least detrimental in terms of losses and taxes.

Your tax advisor is the best person to guide you through the intricacies of capital gains, and you’ll want to rely on him/her or face the possibility of costly errors. Having a basic understanding of capital gains and their impact on taxes will help you become a better financial manager.

Kelly Burkart is a freelance writer from Minneapolis, Minn. While she has spent most of her time writing about financial services the past 15 years, she has also explored and written about everything from cardiovascular health to travel, higher education and sustainable energy practices.

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10 Tips for Marketing Your Business with a Blog – May 2013

admin — Wed, 01 May 2013 13:00:56 +0000

Do you want to become known as an industry expert, attract traffic to your website and boost sales? Blogging just once a month can deliver all that—and more. More than half of companies that blog at least once a month have acquired customers through their blog, according to HubSpot’s The 2012 State of Inbound Marketing. (Sixty-six percent of those who blog weekly, and 78 percent of those who blog daily, have gained new customers.)

However much time you choose to invest, here are 10 tips for successful blogging.

1. Set a goal. Decide how your blog fits into your overall marketing strategy. Is the goal to promote your expertise, increase website traffic or interact with potential customers? Setting goals helps you measure results and determines what you’ll blog about.

2. Choose a blogging platform. WordPress, TypePad and Movable Type are three popular options that offer a variety of templates and plug-ins, and are simple to use.

3. Choose a leader. Whether it’s you or an employee, someone must take ownership of planning, obtaining and posting content, as well as managing the blog.

4. Create a schedule. Decide how often you will post, and stick to a regular schedule. Use an online calendar or Excel spreadsheet to plan and track post topics and dates.

5. Start writing. Your topics are limited only by your imagination and goals. Blog about trends in your industry (what new tax laws mean to clients of your CPA business); seasons (summer lawncare tips for clients of your landscaping business); or holidays (a toy-store owner could blog about the hottest kids’ toys for Christmas). Blog about news in your business, such as new products, new hires or upcoming events. Keep up on general news, too: Tying posts to trending topics attracts readers (a hair salon could blog about the best hairstyles at the Academy Awards).

6. Don’t stress. If you’re not a natural writer, don’t worry. Blog posts work best when they’re brief (under 500 words) informal and conversational, so just write the way you talk.

7. Use SEO. Optimize your blog for search engines by using keywords related to your business in post titles, in the first paragraphs of posts, and in post tags.

8. Use images. Photos not only attract readers’ eyes, but also boost SEO if you tag the images with keywords. Post only photos that you have the rights to use. Take your own photos, subscribe to a stock photo service like Thinkstock or Getty Images, or search online for “creative commons” photos that you can use by citing the photographer.

9. Interact. Allowing readers to post comments enables you to build relationships. To avoid inappropriate comments and spam, adjust your settings so you can approve comments before publication. Respond to every comment, even if just to say, “Thanks!”

10. Promote. Tell customers and prospects about your blog by promoting it on your social media accounts, in your marketing materials, in your email signature and newsletters, and on the home page of your website.

Rieva Lesonsky is founder and President of GrowBiz Media, a media and custom content company focusing on small business and entrepreneurship. Before launching her business, she was Editorial Director of Entrepreneur Magazine. Follow Rieva at Twitter.com/Rieva and visit her website SmallBizDaily.com to get the scoop on business trends and sign up for free TrendCast reports.

Finding Cash Flow for Growth

admin — Mon, 15 Apr 2013 14:00:19 +0000

By Mike Ward Publisher: U.S. Bank – Posted on 03/08/2013 Posted In: Money

When a small business has a nice uptick in sales it is usually cause for celebration. Those sales need to be produced, stored, delivered and collected, which can also generate some significant cash flow needs. The needs from higher sales can come in four areas:

Inventory: either raw materials or just more goods on hand
Receivables: higher levels than normal that won’t be collected for 30+ days
Accruals: Items like payroll or utility bills that run higher than normal to support more sales
Assets: if the extra sales require new equipment or space

How do you find the cash flow to cover these sales growth driven needs? There are at least five areas to consider:

1. Vendors: Can you negotiate longer terms, even if it is just for the large orders you are experiencing? Your higher sales mean more sales for your vendors as well, so it is worth discussing if they can partner with you.

2. Client Deposits: If the sales are important enough for your clients they may help fund their production in the form of an upfront deposit, especially if the orders are more specialized in nature. This is an option to see if you can negotiate.

3. Client collections: Just getting the payments faster by using your bank’s ACH service or a product to scan and send checks electronically could lower financing needs by a day or two.

4. Accruals: This is harder to do, but if you have the ability to accrue items longer this can provide cash flow. Items like paying payroll bi-weekly instead of weekly fit here.

5. Financing: Utilize your bank for working capital financing.

This last one is where small business owners often start. While that is likely where you may end up, checking if the other areas can generate at least some of your cash flow needs is worth the exercise. Before considering bank financing for sales growth, consider the following:

Will this be short term growth? If it is then using a line of credit makes sense. A good test is to consider if you will be able to bring the line down to a zero balance sometime during the year. If not, your sales growth is more permanent in nature as is your financing need.
What impact does permanent financing have? Permanent financing involves taking the higher increased levels of inventory and receivables and terming them out in a traditional loan over a few years. Your banker and accountant can help determine if this is the correct structure and how much of your growth is permanent and should not sit on a line of credit.
Are your assets tying up cash flow? Many small businesses use up valuable cash flow by paying cash for equipment / real estate, or worse – tie up their line of credit with them. These longer term needs should be put on a term loan to keep short term cash flow strong.

Thinking ahead and working with your banker, accountant and other advisors can insure that sales growth is a celebration and that cash flow worries don’t slow your firm’s ability to add more clients.

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Small Businesses Attribute Growth to California SBDC in 2012

admin — Wed, 03 Apr 2013 19:05:37 +0000

SACRAMENTO, Calif.—According to a recently completed annual report created from small business client surveys, California Small Business Development Centers have contributed to the development of a combined 10,817 new and retained jobs in 2012 – representing an increase of more than 17 percent over 2011.

Through its 43 service centers in the state, the California SBDC provided free one-on-one consulting and low cost trainings to more than 63,000 of California’s 1.3 million small business owners last year. The SBDC is the largest provider of technical assistance to small businesses in the state and is a part of a national program of the U.S. Small Business Administration.

According to the annual report, job growth and increased success at accessing loans and equity capital topped the most-improved economic impact areas for California entrepreneurs in 2012. Loan and equity capital investments attributed to SBDC services by business owners, increased to more than $381.7 million, up from $211 million in 2011, resulting in an 80 percent increase in loans and equity for small business clients.

Priscilla Lopez, state chair of the California SBDC, credited some of the increases to an overall improvement in the U.S. economy as well as a one-time state investment into SBDC services championed by Assembly Speaker John Perez (D-Los Angeles) in the 2010/2011 fiscal year. Increased capacity by state funding allowed for more businesses to be assisted by the SBDC in 2011 and resulted in an additional $170 million in loan and equity growth in 2012.

“Small Business Development Centers have also made concerted efforts to help entrepreneurs navigate the new, higher standards that lenders are held to when deciding which businesses are safe investments,” Lopez said. “Times are changing and our business advisors are constantly monitoring where opportunities exist for their clients.”

Combined, centers reported spending more than 120,000 hours assisting entrepreneurs with loan applications, cash-flow management, business plans, government contracting and specialty technology advising and other needs. As a result of SBDC services, small businesses increased sales by $285 million, up from $244 million in 2011. Further, clients attributed 929 new business starts to the assistance they received by the California SBDC in 2012.

“Job creation and access to capital remain top priorities for the Small Business Administration,” said U.S. SBA Regional Administrator Elizabeth Echols. “The California SBDC’s focus on helping the state’s small businesses access capital has made a significant impact for entrepreneurs at a time in our economy when they most needed it.”

For more information on the California SBDC go to www.californiasbdc.org or to find a Small Business Development Center near you in the Los Angeles Regional Network please click here.

To view the full press release please: click here

10 Tips for Successful Email Marketing – April 2013

admin — Mon, 01 Apr 2013 13:00:21 +0000

Did you know that email is still the most cost-effective digital marketing method around? According to data compiled by iContact, the average ROI on email marketing is $44.25 for every $1 spent, making email up to 20 times more cost-effective than other marketing methods. Not only is it cost-effective, it’s just plain effective: Consumers who receive email marketing messages from businesses spend 83 percent more when shopping and order 28 percent more frequently than those who don’t.

To make the most of email marketing, try these 10 tips.

Get help. Email marketing service such as Constant Contact, iContact and MailChimp automate delivery and provide templates to simplify the technical aspects of sending email.
Follow CAN-SPAM laws. Email marketing services help you stay up-to-date with the latest regulations regarding email privacy, but the ultimate responsibility for compliance is yours. Read the Bureau of Consumer Protection’s CAN-SPAM Act Compliance Guide.
Build your own email list. Create your own list of email addresses from customers and prospects—you’ll get better results than you will by renting lists. Ask customers to sign up for your emails at the point of sale, by collecting business cards, via sign-up sheets at events or on the home page of your website.
Make it simple. Don’t force customers to fill out a lengthy registration form to receive emails. Simply request a name and email address (or even just an email address). If you want more information later, entice customers to provide it by offering a discount, free consultation or something else of value in return.
Decide what you’ll deliver. Will you send notices of sales and special events at your business, news about your company, codes good for discounts and deals, a regular newsletter or all of the above? Start small and add more components as you get comfortable.
Design for mobile. According to a report by Knotice, more than 40 percent of emails are opened on a mobile device. Make sure your emails are simply designed, using minimal images that load quickly, so they’re easily readable wherever recipients open them.
Time it right. In general, you’ll want to email at least once a month, or customers may forget about you. An email newsletter can be sent monthly; try sending notices of sales or special offers bimonthly or even weekly.
Get social. Promote your email signups on your social media accounts. Put social sharing tools like Facebook and Twitter buttons in your emails; ask subscribers to forward emails and share them with friends.
Maintain your list. Regularly remove addresses that get bouncebacks; check your list for duplicate addresses or misspellings like “@gamail.com.” If you send too many emails to “dead” addresses, you may get marked as a spammer.
Test and measure. Test to see what subject lines, content, design and frequency get the best results. Your email service provider should provide analytics tools that show you open rates, clickthrough rates and other measures of success. Use this information to fine-tune your email marketing efforts.

10 Tips for Successful Email Marketing.

SBDC 10 Tips for Managing Your Business to Better Serve Your Customers – March 2013

admin — Sat, 02 Mar 2013 01:24:29 +0000

Today more than ever, the level of customer service that you provide can make or break your business.Customers have higher standards, more choices for where to take their business, and the ability to share stories of poor customer service across social media-possibly harming your business’s reputation. Here are 10 tips for management moves you can make to ensure your customer service is stellar.

1. Understand how customer service affects your business goals. For instance, if your goal is to increase profitability by 10 percent this quarter, but poor customer service results in having to redo many of the orders you fill, you will spend more time and money, cutting into your profitability.

2. Engage your team. Every employee, whether or not they directly interact with customers, must understand how their job performance contributes to customer service, how customer service drives business goals, and how achieving business goals is in their best interest.

3. Set customer service goals. Once you know what business goals you hope to achieve, you can set customer service goals. Make them specific and measurable. For example, you might have a goal to fulfill 100 percent of orders within 48 hours, or to answer all incoming calls before the third ring.

4. Create systems and procedures. Using standardized systems ensures that customers receive the same quality of service no matter which employees they interact with. Develop processes and systems your employees will use to achieve the customer service goals you’ve set.

5. Develop an operations manual. Detail these processes in an operations manual (you can keep it online, offline or both) that your employees can refer to. Your operations manual should include sections for each department in your business and should be updated regularly.

6. Provide ongoing training. Train employees in the procedures and systems that you’ve developed; update your training as needed. Every business has its customer service stars. Enlist these top employees to train the others and give them feedback on how they’re doing.

7. Harness technology. A survey this year by LivePerson found 51 percent of online shoppers will give up immediately if they can’t get help right away when making an online purchase. Whether your website sells products or not, make sure your website offers a variety of ways to contact your business. Enable customers to serve themselves by incorporating tools such as maps and directions, answers to frequently asked questions (FAQs), or online appointment scheduling.

8. Measure results. Track and measure progress toward the customer service goals you set. For example, if one customer service goal is keeping your restaurant’s restroom clean by having employees check it hourly, have them sign their initials on a form when they’ve done so.

9. Get feedback from customers. Interact with customers both offline and online to find out how well your business is meeting their customer service expectations. Tools such as comment cards, social media, online reviews at sites like Yelp! or online surveys like those you can do with SurveyMonkey are all great ways to discover what needs improvement.

10. Don’t get complacent. Give your business regular customer service audits. Enlist friends or a professional mystery shopping service that can view your business’s customer service with an objective eye. Have them come in as customers and alert you to any problems or shortcomings they find.

SBDC 10 Tips for Managing Your Business to Better Serve Your Customers – March 2013

Four Community Colleges Receive $10,000 Grants Via the National Association for Community College Entrepreneurship/Sam’s Club Competition

admin — Tue, 12 Feb 2013 18:10:44 +0000

SPRINGFIELD, MA – FEBRUARY 9, 2013 – Four community colleges that have shown excellence in their entrepreneurship programs have each been awarded $10,000 grants through the “Shared Vision for Small Business” grant competition conducted by the National Association for Community College Entrepreneurship (NACCE) and Sam’s Club. The grants are the cornerstone of a collaboration formed last year between NACCE, the nation’s leading organization focused on promoting entrepreneurship through community colleges, and Sam’s Club, one of the nation’s leading retailers.

Sam’s Club is providing financial support for NACCE and for members of its Presidents for Entrepreneurship Pledge (PFEP), through which over 180 community colleges presidents have agreed to fulfill five commitments that will increase both the focus on entrepreneurship at community colleges and the impact these colleges have on the economic well-being of the communities they serve.

“NACEE is an outstanding organization leading a conversation about the needs and impact of local entrepreneurs on our national economy, and the role community colleges play in providing support and training,” said Susan Koehler, Senior Manager, Sam’s Club. “Congratulations to four outstanding educational institution winners. We are pleased to support their efforts to deliver relevant and effective programming that leads to successful and sustainable business ventures.”

The winning colleges and the programs that will be supported by the grants are:

• Fox Valley Technical College, Appleton, WI: Deliver the Small Business Design, Plan and Grow Program, an experiential learning program that includes a three-day, 24-hour Business Model Generation Workshop and an eight-week, 24-hour E-seed Express Entrepreneurship Training Series, one-on-one coaching, and networking.

• Long Beach City College, Long Beach, CA: Expand a customized training program for small business owners, augmented with one‐on‐one advising offered through the LBCC Small Business Development Center.

• North Seattle Community College, Seattle, WA: Enhance and expand offerings through the on-campus Entrepreneur Success Center, which provides one-to-one assistance for individuals who contemplating starting a business, in the early stages of their start-up process, or experiencing a stall-out in taking their business to the next level.

• South Mountain Community College, Phoenix, AZ: Continue the development and enhancement of the college’s Small Business & Entrepreneur Center, which is both a physical and virtual resource for entrepreneurs. A portion of the grant funds will be used to pay stipends to local entrepreneurs to advise returning veterans and students about entrepreneurship and self-employment.

For more information about the NAACE and Sam’s Club grant, please read PDF of Press Release.

Kauffman Foundation, Lorain County Community College Select 3 Schools to Pilot Entrepreneurship Education, Funding Program

admin — Fri, 01 Feb 2013 22:29:17 +0000

Media Contact:
Barb Schulte, 816-932-1103; bschulte@kauffman.org, Kauffman Foundation
Tracy Green, 440-610-9664, tagreen@lorainccc.edu, Lorain County Community College

‘Innovation Fund America’ will help communities in California, Kansas, North Carolina access key resources for high-growth tech startups

Innovation Fund America (IFA), a 501(c)3 partnership between Lorain County Community College (LCCC) in Elyria, Ohio, and the Ewing Marion Kauffman Foundation, has selected Long Beach (Calif.) Community College, Johnson County Community College in Overland Park, Kan., and Catawba Valley Community College in Hickory, N.C., as the first schools to pilot its program that invests in, mentors and motivates high-growth entrepreneurs.

“The IFA partners share a vision and passion for democratizing technology-based entrepreneurship,” said Thom Ruhe, Kauffman Foundation vice president of entrepreneurship and IFA board member. “Together we aim to make community colleges a front door for entrepreneurship across our country.”

Leaders of the Kauffman Foundation and LCCC will introduce their pilot IFA partners on Feb. 2 at the 2013 American Association of Community Colleges’ Workforce Development Institute in San Diego.

“Our partner schools in Long Beach, Kansas City and North Carolina already are doing standout work to support entrepreneurs in their regions, and they have clearly demonstrated the innovative spirit needed to take on such an ambitious, game-changing program,” Ruhe said. “I expect our IFA pilot will provide a replicable baseline methodology that can advance the movement already under way to position community colleges as front doors to high-growth entrepreneurship in under-resourced communities across the country.”

For entire press release click on link

10 Tips for Better Time Management – February 2013

admin — Fri, 01 Feb 2013 15:00:48 +0000

What’s the one thing that small business owners never seem to have enough of? No, it’s not customers, inventory or capital—it’s time. If you’re constantly wishing that there were more than 24 hours in a day, try these 10 tips to better manage your time.

Harness your natural rhythms. Do you notice that you have more energy in the mornings, or that you’re most creative late at night? Whenever possible, take advantage of these natural energy cycles. For instance, if you’re more energetic in the morning, schedule key tasks such as client meetings, brainstorming sessions or long-range planning then.
Choose a scheduling system. Having your to-do list and appointments written down in multiple places causes confusion. Create one electronic calendar you can access anywhere, such as iCal, Outlook or Google Calendar, and put all your commitments there. Simplify scheduling by sharing it with your assistant.
Make appointments with yourself. Important but non-urgent tasks like strategic planning often get pushed aside by urgent tasks like dealing with a customer crisis. Set aside time each week to work on long-term issues in your business, and treat this time as you would an appointment with your biggest customer.
Manage interruptions. Interruptions can’t be avoided, but they can be managed. Try building in a 15-minute cushion between appointments to account for interruptions; closing your door for a set time each day so you can focus; and turning off sound alerts on your computer so you don’t get distracted every time a new email arrives.
Get a grip on email. Try checking your email just three times a day—in the morning, before lunch and in the late afternoon. Train your team to eliminate unnecessary emails and avoid “reply all.” Consider holding a “no email” day (or afternoon) once a week so people can focus on work uninterrupted.
Limit meetings. Hold meetings only when necessary and keep them as brief as possible. (Holding meetings standing up can encourage brevity.) Start on time, and people who are habitually late will quickly learn to show up on time.
Use technology. There are apps to help you do everything faster, from scanning receipts to sharing contact information to taking notes and more. Search “business productivity apps” online, and ask your colleagues what apps they rely on, to find the best ones for you.
Pare down. Are you participating in organizations, reading industry publications or using outdated processes that no longer add value to your business? Look for ways to simplify and streamline, whether by canceling memberships, unsubscribing from emails or revamping business processes.
Delegate. Trying to do everything themselves is a common time-waster for small business owners. Determine which tasks only you can perform, then train your employees to take over the rest. Yes, training will take a little time upfront, but it will save you time in the long run.
Get enough rest and exercise. It sounds counterintuitive, but taking time out to exercise and get adequate sleep will give you the energy to get through your day more effectively and productively.

10 Tips for a More Successful Business in 2013 – January 2013

admin — Tue, 01 Jan 2013 13:00:19 +0000

Do you want your small business to enjoy a higher profile, greater success, more engaged employees and increased profitability in 2013? For a better business in the New Year, begin by making resolutions to improve in the 10 areas below.

Have a plan. Too often, small business owners get so caught up in day-to-day operations that they neglect long-range planning. If you have a business plan, update it to reflect your current goals. If you’ve never written a business plan, do so—it will force you to think about what you want to achieve in 2013 and beyond.
Take action. Don’t put that business plan in a drawer and forget about it. No matter how busy you are, set aside at least one hour a week to assess your progress toward the goals you’ve set. Together with your partners and key employees, create action steps and set deadlines for accomplishing them.
Give your website a makeover. Does your business’s website reflect what you do, or is the information outdated? Does it look current, or is it sporting a design template from 1999? Does it load easily on mobile devices so customers can access your business wherever they are? Make the necessary changes to modernize your website.
Take charge of your finances. If you’re not already using accounting software, make 2013 the year you upgrade. A program such as QuickBooks is inexpensive, easy to learn and makes budgeting and forecasting simple.
Plan ahead for financing. How will you finance your business growth plans for 2013? If you can’t fund growth from profits, investigate options for outside financing, whether from bank loans, private investors such as angel capital groups, or your friends and family.
Start socializing. No matter what your industry, almost any business can benefit from social media. If you aren’t currently using social media, resolve to try at least one social network in 2013. If you are active on social media, step it up a notch by learning more about your favorite social network, posting more often or adding more videos and photos to your mix.
Delegate. It’s tough for small business owners to give up control, but delegation is essential for business growth. Give employees more autonomy so you don’t become a bottleneck in your organization. Try to structure operations so you can focus on your strengths and delegate the rest.
Assess your HR needs. Do your employees have the skills your business needs to grow in 2013? Whether you need to provide additional training, hire new employees or outsource to independent contractors, think about how you will fill the gaps.
Upgrade your equipment. Whether it’s technology tools like tablets and smartphones or a new pizza oven for your restaurant, small changes can make a big difference to your bottom line. Decide what investment would have the biggest impact on your productivity and profits, and figure out a way to make it happen.
Celebrate success. No matter how busy you are, be sure to celebrate when you, your employees and your business achieve important goals. Taking time out to recognize results will re-energize you and your team for the next challenge.

Do you need help achieving any of these goals? Contact your local SBDC, where expert Business Advisors can assist with all of these activities and more.

Rieva Lesonsky is founder and President of GrowBiz Media, a media and custom content company focusing on small business and entrepreneurship. Before launching her business, she was Editorial Director of Entrepreneur Magazine. Follow Rieva at Twitter.com/Rieva and visit her website SmallBizDaily.com to get the scoop on business trends and sign up for free TrendCast reports.