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Rules Regarding Independent Contractors
In today’s free market world, more and more companies are hiring people as independent contractors rather than as employees. The big reasons? To save payroll taxes and benefit costs, which together can add an extra 20% to the cost of having an employee. If you’re considering using this strategy, keep in mind that the IRS has criteria for determining independent contractors vs. employees and that penalties can result if you don’t follow the rules. The following three criteria are generally considered to be the most important:
Posted on January 28, 2006
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Business Dashboards
How would it feel if you could turn on your computer every morning and immediately have a complete, real-time picture of your company’s financial performance? Not only that, but what if the information was presented in an easy-to-understand, visual manner (i.e. gauges and graphs) as opposed to the usual bunch of lifeless numbers? That is the basic idea behind business dashboards, a promising management tool that is gaining more attention in the business world these days.
Posted on January 16, 2006
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Advice For Selling Your Business
Thinking of selling your business? One of the first things you should know is that the process is far from a precise science. For example, business valuations can vary greatly depending upon the type of business, the valuation method used (there are several), and a variety of financial factors (which generally boil down to three things: assets, profits and/or cash flow). As if that weren’t enough, sometimes the most important factor in a company’s sale has nothing to do with the numbers- instead, it relates to the buyer’s motivation. (Case in point: eBay just paid $2.6 billion for Skype, the free internet phone service that has revenues around $60 million and isn’t expected to break even until the end of 2006. Why? The folks at eBay plan to use it to make buying and selling easier for their 157 million users.)
Although the process may seem bewildering at the outset, all in all it’s a lot less confusing and stressful than the experience of starting a business in the first place. If you survived that, you can definitely handle this. As with many things in life, the first step is to focus on the big picture. To help you get started, here are a few simple suggestions:
1) Start early. If you can, start the process three years ahead of time. Business brokers report that 99% of the businesses they list for sale are not properly prepared to be sold. Starting early will give you time to fix problem areas (outdated inventory, unprofitable product lines, poor staffing, etc.) and clean up any possible tax/legal/ownership issues.
Posted on December 29, 2005
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Overview of Types of Financing
One of the biggest challenges that successful entrepreneurs face is: how to find money so that you can keep growing. For example, if you are a growing retailer you may need additional capital to open new stores or bring on new product lines. For companies who are just getting started, here is a basic overview of the different types of business financing.
Posted on December 13, 2005
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Understanding Your Total Business
Ram Charan is a well-known business advisor to CEOs and business executives in companies ranging from start-ups to the Fortune 500. He has a rare gift for translating complex ideas into simple terms that everybody can understand. Here is an excerpt from his classic book, What the CEO Wants You to Know. These basic questions are designed to help you step back and get a picture of your company's "total business."
1) What were your company's sales during the last year?
Posted on November 26, 2005
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Lame Tagline for Ernst & Young
Ernst & Young is featuring a new slogan in their advertising: "Quality In Everything We Do." Hmmm, that sounds eerily reminescent of a tagline that a major U.S. automaker used back in the 1990's. Maybe I'm missing something, but isn't the "quality" promise supposed to be a given? Plus, in typical corporate fashion the tagline says nothing about customers or their aspirations- it's all about the firm. Anyway, it's great to finally see some bold thinking from one of the Big Four CPA firms, as opposed to just recycling used marketing ideas from twenty years ago.
Posted on November 19, 2005
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WalMart's Pricing Strategy
In a recent program, PBS' Frontline examined the inner workings of WalMart. One of the most interesting revelations had to do with the company's pricing strategy, which was pioneered by legendary founder Sam Walton. The strategy is known as "opening price point," and here's how it works.
Posted on November 14, 2005
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