by Andrea Carson | Jun 28, 2023 | Getting Out of Debt
Consumer Counseling Work is ideal for people overwhelmed by their debts. A credit counselor will help you to get your finances under control. Before choosing a counselor, you should ensure they are BBB accredited. A credit counsel is supposed to set you on a debt management plan to lower your interest rate and payments. There are various factors to consider before choosing a counselor. Discussed below are signs that you need to seek the advice of a consumer counselor work:
If You Are Struggling With Minimum Payments:
Consumer Counseling Work is what you need if you can only afford to make minimum payments. When you make the minimum payments, more debt accumulates due to the accrued interest. As a result, you will take longer to clear your debt; credit counseling will come in handy if you want to take control of your finances and, eventually, your life.
If You Make Blind Purchases:
You should see a Consumer Counselor if you do not know the total amount of debt you owe. This can directly result from not recording your purchases and keeping good records. Knowing the total amount of what you will help you control your spending. You will minimize your purchases to prevent the debt from accumulating.
If You are Spending More Than 20 Percent of Your Net Income:
If you spend more than 20 percent of your income to pay off what you owe, then Consumer Counseling is for you. A professional counselor can assist you in making a reasonable budget and negotiate a lower interest for you.
If You Are Using a Credit Card to Pay for Necessities:
You should seek counseling if you use your credit card to pay for your basic needs. A Consumer Counselor can analyze your income and expenses to develop a budget to stabilize your finances. The counselor can also negotiate the suspension of payment with your creditor if your poor financial situation is temporary.
If You Are Overwhelmed by the Debts:
If your debts are too much and you feel you can no longer afford to pay them, this is a sign that you need Consumer Counseling. The counselors will advise you on how you can manage your finances.
If You Have no Savings:
You should seek help from a credit card counselor if you do not have an emergency fund. Emergencies include illness or losing your job, which comes with many expenses. A Consumer Counselor will give you tips on how to save.
If You Live From Paycheck to Paycheck:
If you are living on a paycheck, then it shows that you spend more than you earn. A Consumer Counselor will help you come up with a budget that will enable you to live comfortably and save money.
by Andrea Carson | Jun 21, 2023 | Make Money
Turn Your Ideas into Income: Advice From The Pros
When it comes to success, millennial women aren’t afraid to challenge black-and-white definitions since they know they can design their color palette. This is why more Americans today are starting their own business. Whether it’s a freelancing side hustle or running an Etsy shop, that becomes a full-time job.
It’s no wonder many women are turning away from traditional positions to start their businesses. In the US, women entrepreneurs own 4 out of every ten businesses. When starting a business, women have a wealth of wisdom to give. Given that women are the driving force behind small business owners, there’s a lot we can learn from their experiences.
Women entrepreneurs have the unique potential to transform a brilliant idea into a multi-million-dollar empire. But how do they do it? Most successful female entrepreneurs didn’t launch their businesses overnight. They rose to success after several career shifts and risky decisions.
Women who have achieved success serve as role models for aspiring entrepreneurs. You might find an entrepreneurial spark within yourself through these lessons you weren’t even aware of!
Do Something You Truly Enjoy
As written by Lisa Coulhan, American women entrepreneurs report a higher happiness level than women who aren’t self-employed or business owners. Investing time, money, and effort in something that doesn’t offer you joy doesn’t make sense. Yet that is what most people do.
If your job makes you unhappy and unfulfilled, you don’t want to take the same energy into your business. Make sure your niche is where you want to be before building on it. You’ll be happier in the long run if you pursue an idea you’re passionate about.
Turn Fears and Mistakes into Strategies
Arianna Huffington admits she wouldn’t have been able to build a global brand without letting her fears get in the way. Don’t fixate too much on the drawbacks if you have a business plan you believe will work.
The best approach is to take charge and see where it takes you. You’ll be able to fine-tune your plan as you go along. But if you don’t take that chance, you’ll miss out on what could have been your big break as an entrepreneur.
In Sara Blakely’s eyes, failure is a sign that you’re willing to push yourself beyond your limitations and take chances. Making mistakes is a learning curve. After every misstep, you can adjust your business strategy to get the best long-term outcomes.
In other words, making mistakes is okay if you learn from them.
Be Brave, Not Cautious, Around Challenges
Despite the allure of being your boss, starting your own business has its share of difficulties. Taking the first step forward. Dealing with the unknowable. Figuring out your finances. Perhaps you’re quitting your work or a previous profession. However, for women entrepreneurs, the rewards easily surpass the challenges.
According to an American Express study, there are 9.2 million individuals employed by women-owned enterprises. These companies are more than overcoming the challenges, generating $1.8 trillion in revenue annually. If you want to turn a part-time job into a full-time profession, Christine Andrukonis suggests being careful but not unduly cautious.
Every Leader Needs to Follow a Mentor
Similarly, look for role models you can learn from or aspire towards. In her book Women Make Great Leaders, leadership coach Jill Griffin emphasizes that having a mentor is crucial to a startup’s success.
Having a group of people cheer you on and keep you motivated makes a difference. Having an experienced mentor on your side will be invaluable in facing setbacks. Successful women in business understand that taking risks involves the prospect of failure.
Invest in Quality
Quality sets a brand apart from others in a world where quantity is everything. Lailah Gifty Akita showed the world that hard work and determination are the way to success – but quality requires time, effort, and long-term investments.
While it is important to keep your motivation strong, you should also ensure your teammates share the same energy. Spending money on high-quality office supplies is an investment toward employee comfort, well-being, and job motivation. In turn, it leads to improved productivity and output quality.
Today, many women entrepreneurs are willing to make the financial commitment necessary for their businesses to profit from them. They understand the importance of making your employees feel valued.
Never Shy Away from Asking for Help
World-famous entrepreneur, author, and producer Oprah Winfrey once said, “You get in life what you have the courage to ask for.” Understanding that you can’t do it all alone is integral to becoming a successful business owner. Your passions will only come to life with the help of a community. Research shows that women are drawn to teamwork.
Establishing your own business can be a daunting experience. A business you want could be within reach if you ask for help when needed. Engage those in your network who will help you get your business, whether investors, friends, or colleagues.
Seize Gaps in the Market
When finding a fitting niche, look within and out into the market. Have you ever wished there was a product for a problem you face daily? Or do the products and services currently on the market not satisfy you as a consumer? These gaps in the market are opportunities waiting to be taken up.
A huge part of becoming a successful woman entrepreneur is constantly learning about business trends and news. Staying on top of what’s happening in the market will help you identify your niche.
by Andrea Carson | Jun 14, 2023 | Entrepreneurship, Finances
One of the major ways to save funds in your enterprise is through intelligent tax financial savings. Each yr, many tax deductions are provided by the IRS, which can not solely reduce your taxable but can also reduce the income related to the self-employment tax. Sometimes the difference between an enterprise making gains and surviving could be managing one’s taxes.
In. this article, we discuss ways to help you relieve stress from your business’ taxes and help save you some funds. Ultimately, success is not measured by what you make but by what you keep.
Fund a Retirement Plan
Self-employed individuals or small company vendors have more retirement planning alternatives than any other. Like everyone else, individuals below one or two of these categories will have access to the Traditional IRA of $5,500 annually. An IRA is an individual retirement account that allows you to save finances for your retirement by utilizing taxes to your advantage.
An enterprise with one hundred or fewer staff is provided the SIMPLE IRA (Savings Incentive Match Plan for Employees) plan. The conventional IRA of $5,500 can be mixed with different retirement plans, such as the SEP IRA or the 401(K), which can result in enabling you to contribute up to $55,000 each yr. Those who are over 50 can have access to even a lot bigger contribution limits. You can put away as a lot as $150,000 if you can get the 401(K) jointly with a Cash Balance Pension Plan.
You can reduce your tax bill when you are income-wise. Contributing to the plans pointed out above will, without a doubt, get a tax deduction. That can gain those companies trying to turn into pass-through entities, which can help them get a 20 % tax deduction on their web income.
Under the “phase-in rule,” your deductions are lowered pro-rate if you are a single filer, and your taxable is extra than $157,500, and if you are a joint filer (meaning you are married) and your taxable exceeds the $315,000 threshold. The phase-in becomes finished for single filers, whose is $207,500, and for joint filers, whose is $415,000
If you have taxable extra than these upper thresholds, neglect getting that 20% tax deduction of a pass-through entity. But if you contribute to the retirement accounts, your taxable could be less than these thresholds, making you a qualified pass-through entity. It’s just like killing two birds with one stone.
Employ a Family Member
Hiring a family member in your small enterprise is one of the most useful ways to reduce taxes. Business vendors can even engage their kids. No, this way, you won’t impose child labor on your children, but you will educate them on the worth of hard-earned funds. The IRA allows for many different options, which can give a haven to you from taxes.
You have to make yes that you can present that your child’s earnings come from justifiable enterprise services. Typically, the kids are put in a lower tax bracket, so paying them would decrease the tax burden on your family. For example, if someone is a sole proprietor, they wouldn’t have to pay the Medicare and social security taxes on their child’s wages.
You can have your kids open a ROTH IRA with their earnings, including further credit. For three years, from 15 to 17 years, if a child places $5,500 into a ROTH IRA and doesn’t ever contribute once more. Every yr, they would earn 10% of the donated amount, and by the age of 70, that $16500 would have piled up to a tremendous $25. million. Consider how a lot of an influence compound curiosity would have on funding that would have been opened when someone was a teenager.
Deduct Travel Expenses
When you use your vehicle for your business, you can get a deduction from expenses related to that vehicle, like mileage, lease, or upkeep. You might be thinking, what percentage of the mileage of your vehicle can be allotted to your business? Well, it doesn’t matter what the price is. You must word the mileage and apply it to your yearly auto expenses.
For the deductions related to your vehicle, the IRS provides two ways. First, track your true expenses and then subtract the percentage associated with your enterprise. The second method tells you to word your yearly mileage and then apply the tax deductions on those miles. For the yr 2020, the commonplace mileage price is 575. cents per mile
Let’s assume you drive a Range Rover. For its lease, you pay $1500 monthly, driving 10,000 miles in your Rover in a yr. Of these 10,000 miles, 80% come below relocating to work. If you used the first method, in which you have to maintain track of your true expenses, you would spend $18,000 in a yr for your lease plus different expenses related to the fuel consumed and any extra upkeep costs. You would get a tax deduction of about $14,400, solely for your lease. On the different hand, if you used the commonplace mileage price deduction method, you would solely be able to get a deduction of $4,600
Deduct Your Home Office
If you are a small enterprise proprietor or self-employed and work from home, you might be eligible for the “home office deduction.” There is a huge myth regarding the dwelling office deduction. Many individuals believe that the dwelling office deduction mostly results in an audit. You don’t have to fear anything if you qualify for this deduction and have good information. According to IRS publication 587, your house must meet two requirements to qualify for a deduction. First, half of your house should be exclusively and repeatedly used for business, and second, you must prove that your dwelling is used as your principal place of business.
Time Business Income and Expenses
A timing enterprise strikes you from one yr to the next. To use this procedure fully, determine which yr will have the highest taxes because your taxes will rely on two things: the of your enterprise and the premiums on enterprise taxes. To reduce your web for a specific year, move your expenses to the yr with bigger taxes.
Review your current expenditures earlier than the end of each year, and if decreasing can give you some benefits, then pay some of the amounts in advance. By stocking up on supplies, you can decrease and increase your sales.
by Andrea Carson | Jun 7, 2023 | Entrepreneurship
How frequently do entrepreneurs speak to their accountants and feel even more confused than they have been earlier? This is most likely the case with several entrepreneurs and managers without a background in enterprise or accounting.
To aid business owners through the arduous process of managing their accounting resources, we have come up with a checklist of common accounting terms that most enterprise managers come throughout during their time as entrepreneurs.
Terms in the Balance Sheet
As we have studied above, the balance sheet is one of the two most common statements produced by all varieties of enterprise vendors. The balance sheet accommodates a set of confusing terms that can be difficult to understand for business owners with limited acumen of accounting terms and what they mean in an economic context. The most frequent phrases used in the stability sheet and their definitions are:
Accounts Payable
Accounts payable defines all the expenses a business incurs but hasn’t yet paid. The accounts payable balance is recorded as a legal liability in the balance sheet, and the debt owed due to it has to be paid back. Accounts payable include payments to vendors and other lenders, which haven’t but been made.
Accounts Receivable
Accounts receivable are the exact reverse of accounts payable. These accounts include all the sales that a business has made but haven’t but collected payment on. An example of this from a property manager’s perspective would be uncollected property management fees from a landlord for a period that you have provided your services. This account is listed on the balance sheet as an asset and can easily be converted to cash on a short-term basis since you have already provided the services required.
Accrued Expenses
An accrued expense contains all expenses that have been incurred by a business but haven’t been paid. Property managers tend to come through a lot of accrued expenses, as they pay for expenses after they have been incurred. An instance of this would be the cost charged by an electrician for working repairs on a property. The expense has been incurred, but if it hasn’t been paid for, it will be recorded as an accrued expense.
Asset
Assets are an integral part of the balance sheet and consist of something the business owns and has a monetary value. Assets are listed in the kind of liquidity, with the most liquid assets being mentioned on top and others following. Since cash on hand is the most liquid asset a business can own, it is almost always mentioned near the top of the balance sheet.
Book Value
Every asset owned by the business is depreciated over time to adjust for the value it loses over its period of use. The associated net publication value of the asset is computed by deducting the accumulated depreciation of the assets from the original value to mark the asset at its original value at a given time. For instance, a property manager purchased a laptop for their workplace 2 years ago. The laptop will be valued at far less now than when the property manager first purchased it. Hence, this depreciation is adjusted for in the balance sheet through an appropriate net book value.
Equity
Equity consists of the money invested into the business from interior and exterior sources. Internal sources include capital investments from the owner and shareholders, whereas exterior sources include long-term loans and debentures from personal and recognized lenders. If you can recall the accounting equation, you can tell that equity is what is left after liabilities are deducted from assets. Equity is the portion of the company owned by vendors and investors.
Inventory
Inventory is the term used to classify all assets purchased by a company to sell to their customers but stay unsold. Inventory can come in three different forms for most manufacturing businesses. The first includes finished goods, which is common for some retailers, the second type includes work in progress, which consists of inventory nonetheless in the manufacturing process at the time of recording these entries; and the final style consists of raw materials, which are but to enter the manufacturing process but are currently in possession of the business.
Liability
Legal responsibility is the accumulation of all accounts owed by an organization. Liabilities include accounts payables, loans, payroll loans, and accrued expenses.
Terms in the Income Statement
The revenue assertion or the revenue and loss assertion is the second of the two most frequent financial statements recorded by organizations today. Some of the terms most commonly used in a revenue assertion include:
Cost of Goods Sold
The rate of items sold, or COGS, are all expenses immediately associated with manufacturing or procuring a product or service. The cost of goods sold measures the direct costs of manufacturing items ultimately sold for earnings new release. An instance of COGS in most companies would be the rate of supplies incurred or the rate of direct labor done for delivering a service or for manufacturing goods.
Depreciation
Depreciation is recorded as an expense in the revenue assertion and accounts for the value misplaced in an asset over time. Generally, depreciation impacts both the income statement and the balance sheet, so it is recorded as an adjusting entry rather than being mentioned in the trial balance. The depreciation for a period is calculated through either the straight-line method or by reducing the balance method. Both methods use a fixed percentage to calculate the value an asset has lost over a year, which is then recorded in the income statement as an expense. This is a non-cash expense, which is why it does not have an almost immediate impact on the financial standing of an organization.
Gross Profit
The Gross Profit measures an organization’s direct profitability in dollars without considering the other overhead expenses incurred by the business. The Gross Profit is calculated by subtracting the total cost of goods sold from the revenue generated during the same period.
Gross Margin
Gross margin or GM is a percentage ratio calculated by taking your gross profit for a period and dividing it by the revenue for the same period. The Gross Profit Margin represents the profitability that a company has achieved through revenue.
Net Income or Net Profit
The net income or net profit of a business is also earned in dollars and is usually the final profit that the owner keeps to themselves, is shared among partners, or is paid as dividends to shareholders – based on the organization’s structure. The net profit is calculated by taking the gross profit (calculated by subtracting COGS from total sales) and subtracting all expenses recorded during the given period, including overheads, wages, energy costs, depreciation, and taxes. A net income is reported if the resulting profit is a positive value, while a loss is reported if the final figure is negative. A loss means that the organization has failed to generate any profit during that period and that expenses are more than the sales generated.
Net Loss
The net loss of a business is usually the final loss that the owner bears by themselves or shares among partners – based on the organization’s structure. The net loss is calculated by taking the gross profit (calculated by subtracting COGS from total sales) and all expenses recorded during the given period, including overheads, wages, energy costs, depreciation, and taxes. A net income is reported if the resulting profit is a positive value, while a loss is reported if the final figure is negative. A loss means that the organization has failed to generate any profit during the period and that expenses exceed the sales generated.
Net Margin
The net margin is the percentage of the net profit from its revenue or sales figure. The net margin is calculated by dividing the net income for a period by the net sales for the same period and multiplying it by 100. The final percentage will display the profitability of a business about its sales.
General Terms
There are several other normal phrases used in accounting apart from the ones pointed out in the two most important financial statements. Some of these important general phrases include:
Accounting Period
An accounting period is mentioned in all financial statements – balance sheet, statement of profit and loss, and statement of cash flows. The accounting period is usually used to communicate to stakeholders and other readers the period to which the financial statement relates.
Allocation
The term allocation describes assigning funds and investments to different financial periods and accounts. For instance, a cost can be allocated across several periods or multiple departments. An expense like insurance must be allocated over multiple months, while administrative costs must be assigned across all departments in a multi-department firm.
Business Entity
A business entity is a legal term used to refer to a business. Business entities can come in all shapes and sizes and feature different legal structures, types, and profit-sharing structures. Common company formations followed in organizations today include partnership, sole proprietorship, S-Corp, C-Corp, and Limited Liability Corporation or LLC. Every one of these entities carries a unique set of laws, requirements, and tax implications.
Cash Flow
Cash flow is the term used to describe the inflow and outflow of money within a business. The net cash flow for a given period can be calculated by taking the beginning cash balance for a year and subtracting it from the balance reported at the end of the year. A positive cash balance indicates that more cash has flown across a business during a given period. A negative balance indicates the opposite – more cash has flown out of the business than what has come in.
General Ledger
The general ledger is where an accountant would record all your entries. When recording these entries in your general ledger, all debit entries will be on the left, and all credit entries will be on the right. All of these entries are then summarized in your trial balance, which shows the total of your credit and debit balances. If you have performed the entire double-entry method correctly without any errors, then your debit side of the trial balance should be the same as your credit side.
Recording transactions through the double-entry method gives you a comprehensive and detailed view of your financials. You can use this view to improve your understanding of these entries.
Bookkeeping
The term bookkeeping dates back to the days before computers were mainstream in accounting management. During this period, books would be used to record statements daily. Bookkeeping is defined as maintaining your day-to-day transactions, regardless of whether they are transcribed in a book or a computer.
Cash Accounting
Cash Accounting is a various methodology of accounting to accrual accounting. In this method, you file funds when you truly pay expenses for them, not when the expense is incurred. Most property managers primarily follow this accounting methodology at this time, and is in play throughout companies in the industry.
by Andrea Carson | May 31, 2023 | Entrepreneurship
Entrepreneurs yearn for the struggle to manage their own companies. The battle often leads to many benefits but can sometimes lead to a corridor of endless darkness. Thus, while launching your well-thought-out startup, you must plan a sparkling exit strategy for the tough times.
Most startups often start their new organization without a proper exit strategy. Everybody likes the period of high, with the money flowing in and the finances meeting all expenditures. However, business plans can only succeed by outlining a proper exit strategy for all.
An exit strategy only comes in handy when things go south. Your exit strategy can be helpful in several places. For instance, you can use your exit strategy to find the best ways to jump from one startup to another. We might have the resource for all entrepreneurs looking for an exit strategy.
For all those who plan for the future and those who don’t but should because planning is the best way out, the following four exit strategies are deemed to give a feasible return on the effort and capital that you invest:
Liquidation
Liquidation is the process of finishing business. It means selling the company’s assets and realizing all the tangible and intangible gains. The money made from selling the assets and realizing the profit would be used to repay all the business loans. The remaining leftovers will be distributed amongst the owners and the shareholders.
The process is straightforward and free of any hassles. There is no transfer of power, so everything phases out simply for you.
Just Bleed the Company Dry
One exit strategy gaining popularity amongst entrepreneurs is to bleed the company dry. That would mean that you shower yourself with a luxurious salary and bonuses of all sorts. It cannot turn out perfectly in a public company, but it is all okay in a private company.
Rather than having to bear the hassle of reinvesting the money into the business, a decent exit strategy can be to take out a satisfying chunk and enjoy the spoils of your brainchild.
Plan an Acquisition
An acquisition is when another company buys yours at a mutual selling price. The acquisition price is set after a detailed dialogue and includes calculating the working capital and the goodwill the acquisition would bring. Considering that the person from the other party doing the discussions for the purchase is not necessarily the owner, you can bargain a deal with them, making the acquiring company flex their bank accounts.
Put a Friendly Person in Charge
Handing the business to a friendly friend can be a decent exit strategy. One such example can be giving the company to your children, who will, in the worst-case scenario, eventually fight for it amongst each other and lead the company to its downfall. This option ensures you keep making money even after implementing the exit strategy.
Suppose you have become emotionally attached to a business. In that case, the best way to plan an exit strategy is to put a friendly person who shares your passion in charge of the business rather than selling it to someone else. It will broaden your attachment without burdening you in any way.
