Getting Things in Order for Your New Business in 2007

Here’s a quick reminder for those of you who started a new business in 2007.  Please be sure to have a talk with your accountant before the end of 2007, to make sure you have set yourself up properly for tax purposes. 

Here are a few things to consider and talk about with your tax professional.

·         First of all, if you don’t yet have an accountant, I do highly recommend finding one – business taxes are significantly different from personal taxes.  You can easily over pay or under pay what you owe from business income if you don’t understand the differences between how your business will be taxed and how you are taxed for personal income from a job.  An accountant can save you a lot of money and a lot of hassle.

·         Depending on how things have gone over the past year in your business, it might be to your advantage to consider forming an LLC or other type of corporation.  An accountant can explain the pros and cons of this to you, as well as the option of forming a corporation in a different state than the state you live in, to take advantage of different state tax laws.  I have a Nevada S-Corp, for example, although I operate my business where I live in Rhode Island.

·         If there are any substantial purchases you will be needing soon for your business, consider buying them before the end of the year so that you will be able to take the tax exemption on your 2007 tax return rather than waiting until your 2008 return.

·         More expenses than income in your first year?  That’s not unusual for a new company.  Did you know that you can carry-over your start-up business expenses for several years on your business tax returns?  Your accountant can document those expenses for you so that you will be able to deduct some of your 2007 expenses on your 2008 return.  But they do need to be documented correctly.

·         Operating your business out of your home?  You can deduct part of your mortgage or rent as a business expense, but only for that part of your home that is used exclusively for business.  Your accountant can give you the information you need to figure out your deduction. 

These are just a few things for you to be aware of – after all, I’m not an accountant! – and motivate you to call your accountant.  It can save you a lot of money and trouble later on to make sure you have set up your business properly in that first year or two. 

It’s well worth a short conversation with your tax professional now, so you’ll know you are ending this year and starting the next year right.  Here’s to your success!

Time to Savor – and Make the Most of — 2007

Hard to believe it, but this year is winding up, and 2008 is only 6 weeks away.  Where the heck did this year go?!!!

2008 will be a great year, but don’t count 2007 out yet.  What will you make happen between now and December 31^st?

I don’t know about you, but for me 2007 was full of surprises and some significant challenges, triumphs and some disappointments, things that went my way and things that decidedly didn’t.  I feel as though I’ve re-invented myself several times over the course of the year!  While I didn’t accomplish everything I wanted to, I made some great things happen in my life and business, and I truly feel that I’ve become a stronger and more resilient person.  I also feel proud of having gained clarity in my life and what matters to me the most. 

Before the New Year jumps out and surprises me in a few weeks, I decided to take a little time to come to terms with 2007.  I invite you to do the same, and to gently prompt you in that direction, I’ve compiled a few questions to ask yourself about this precious, never-to-be-repeated year in your life:

2007 – What a Year!

What am I proud of?  Don’t let yourself get away with a quick answer to that one – really take some time and savor what you have accomplished this year.  The big stuff, and also the day-to-day accomplishments, like the kind words and patience you offered to your children or friends, the smiles you passed around to the people you work with, the times you did your very best, even though you were tired or discouraged.  The world was a better place because of you this year!  Be proud.

What am I not satisfied with?  What could I do between now and December 31 to make that something to look back on with pride and satisfaction?

What do I wish I’d done differently?  What could I do over the next 6 weeks to turn that around?

What was the most fun thing I did this past year?  What was great about that – and when am I doing it again?!

What person had the most profound impact on me this year?  Have I told him or her the difference he or she made in my life?

Who do I wish I’d seen more of, or been more in touch with, this past year?  And when will I call them?

And finally,

What are the three most important things I could do between now and the end of the year to give this year an extraordinary finish?  What could I say, and to whom, what could I start or finish, what could I finally decide?  What fabulously fun thing have I been putting off, saying “I’ll do that later, next month, next year…”  Isn’t it about time?! 

You’ve got 6 weeks – plenty of time to make the end of this year something to be proud of.  What’s your first step?

–Ann

What’s Your Plan? — Part Four

Part Four is creating a strategy.  In my experience, many people and businesses never take this final step.  But before we go further, here’s a quick review of the four parts of a great plan, whether it’s a business plan or any other kind:

1.    Clearly defined end goal, in detail, with specific end results occurring in real time (Where are you going?)

2.    Clearly defined current circumstances, including financial and personal resources, skill sets, network resources, knowledge resources, etc.  (Where are you now?)

3.    Clearly defined gaps – identify what is missing from where you are now that you will need to develop, find or create to get you to the end goal (What’s missing that you need?)

4.    A strategy for addressing the identified gaps, including specific action steps to address each specific problem or gap (What’s the best way to get there from here?) 

As I mentioned, a real strategy is often never developed at all.  Jay Abraham, marketing and strategy guru, states unequivocally that most businesses operate tactically, rather than strategically, the majority of the time.  And he should know, he has consulted on thousands of businesses over the years.

All of this begs the question, what is strategy?  If you think about that for a minute, you’ll probably realize that it is not an easy question to answer.  It certainly has something to do with plans and planning, but not every plan could be called a strategy.  A strategy suggests something bigger than a plan, a kind of overall approach that looks at more than just producing certain results.  One thing you could say is that a tactic is a way to produce a specific result, and a strategy is a way to create, coordinate and implement many tactics in order to realize an overall vision.

The way I expressed this in my last post was that a strategy does not just address getting from A to B, but instead a strategy answers the question, “What’s the best way to get from A to B?”  (I’m rather proud of that, by the way, I came up with that myself!)J

Once you have done your work in steps One, Two and Three, the next question you ask yourself is critical in determining whether or not you will be one of those unusual entrepreneurs who actually operates strategically rather than tactically.

Shifting the question just that little bit — from “how do I get from A to B?” to “what’s the best way to get from A to B?” – is shifting from tactical to strategic thinking.

To really experience the difference this simple change makes, you need to engage with it yourself.  Look at your business or business idea – whatever stage you are in on your entrepreneurial journey.  (If you haven’t already done it, you need to do steps one, two and three!) 

Look at your end goal and where you are now and your gaps, and ask yourself “how do I get there from here?”

Then, ask yourself “what’s the best way to get to there from here?”

You will see that different answers, different ideas, different approaches will come to mind with that second question.  That’s not to say that you will necessarily know the “best way” right off the bat, but that’s not the point.  The point is that always asking yourself the best way, the smartest way, the most efficient way, forces you to be strategic. 

When you run your own business, one of the most common pitfalls is the tendency to spend all your time working in the business which means you don’t take time out to work on the business.  Being tactical is working in the business.  Being strategic is working on the business.

If you are committed to creating a successful business, disciplining yourself to consistently think and plan strategically is possibly the most important single thing you can do as an entrepreneur. 

A great exercise to begin to train yourself into the habit of being strategic is to take that simple question, “What’s the best way to get there?” or “What’s the best way to do this?” and start to form the habit of asking yourself that as many times a day as you can.  Not only will this start to train you to think more strategically in your business, but it can be quite illuminating when you apply it to just about any area of your life!  

So what’s your strategy?  Only you can answer that, and you will need to do all four steps in order to create it, so go ahead, get started!  You start with Step One – Where are you going?  And the sooner you do all four steps, the sooner that great vision you create in Step One will be your reality.