29November
2018
Keep Your Gear in Top-Notch Condition and Save Money

If your company has contracts for maintaining and servicing your equipment and vehicles, chances are, you’re spending more than you need to. A sure-fire way to save money is to hire your staff to do the work for you. Not only will in-house maintenance cut costs, it’s more convenient and boosts efficiency. For example, your business will be more productive if your vehicles and equipment continue to run during normal hours and are serviced by staff mechanics after hours. Survey Skills Before you move to in-house maintenance, though, take an inventory of your employees’ skills. Then, assign them to jobs…

29November
2018
Keep Your Company Running Smoothly With a Smart Strategy

In any company, making employees familiar with more than one job is critical to developing the business and dealing with the unexpected. A sure-fire strategy for coping with unforeseen circumstances is a cross training program. Learning more than one job gives team members a look at the whole operation and keeps them motivated. It also saves money and builds a solid succession plan. Above all, cross training makes your staff more valuable and helps ensure that your company will never be held hostage by employees who regard themselves as “indispensable.” So train your filing clerk to fill in for the…

29November
2018
The Benefits of Philanthropy

If you own a family business, there’s a good chance the company and your family are an integral part of the community. And that means public relations aren’t just part of the job — they’re fundamental to your company’s success. As a result, volunteering or donating to local organizations can benefit not only the community but your company’s long-term relationships. That, in turn, can improve your competitive edge. Philanthropy can bring several benefits. According to one study, the majority of consumers would switch to a brand or retailer associated with a good cause when price and quality are equal. In…

15November
2018
Think You Don’t Need a Written Contract? Think Again

You’ve probably heard the old saying, “a verbal contract isn’t worth the paper it’s written on.” Yet many business owners and executives still enter into handshake deals. For example, consider the case of a successful Irish pub with a 10-year lease. The property had a great location with lots of foot traffic and a loyal clientele from the neighborhood. The lease expired but the restaurant owner and the landlord orally agreed to an extension. A short time later, the pub owner received a notice to vacate the premises. The landlord had signed an agreement with another restaurant. The Irish pub…

15November
2018
The Great Debate Continues: Active versus Passive

Whether it’s sports, music or politics, life holds any number of “great debates” — debates that never seem to reach a conclusion. In investments, one great debate asks the question: “Which is better — active or passive investing?” The fascinating aspect of this debate is that equally intelligent people can argue polar opposite positions, leaving the rest of us to wonder what the answer is — if one even exists. Passive Pointers The case for passive management is anchored in the evidence that the preponderance of money managers have failed consistently to beat their comparative index. This, the argument goes,…

15November
2018
What is the Value of Your Business?

In the third quarter of 2017, more than 2,500 small businesses were sold. The median sale price was $225,000, up from $200,000 the year before.1 As a business owner, ascertaining the value of your business is important for a variety of reasons, including business succession, estate tax estimates, or qualifying for a loan. There are a number of valuation techniques, ranging from the simple to the very complex. Outlined below are three of the different approaches to valuing a business. 1. Asset Based: Calculates the value of all tangible and intangible assets held by the business. This approach ignores the…

01November
2018
Tuition Reimbursement: How to Prevent Fraud

Investing in employee education and training is crucial to the long-term success of most companies. In order to remain competitive, many employers offer tuition reimbursement programs to attract and retain talented employees. The programs also provide tax benefits. The vast majority of employees that participate in tuition reimbursement programs do so in compliance with their companies’ rules. However, these programs can also fall victim to fraudulent activity in ways that might surprise you. For example, in one case, four employees submitted more than $400,000 in fraudulent expense requests to a company for college classes they never even enrolled in. (See right-hand…

01November
2018
Don’t De-Worse-ify When You Diversify

For an investor, managing money is a lot like managing manure for a farmer. Both live by the credo, “spread it around and it will grow.” But as both successful investors and farmers know, you’ve got to know how and where to spread money and manure, or they end up yielding stinky results — or even getting flushed away. While we can’t help with a manure problem, we do have definite thoughts about spreading money around — in a way that doesn’t cause your portfolio to take a turn for the worse when you try ma king it more diverse….

01November
2018
Plan Ahead to Make Disability Benefits Tax-Free

If you’re employed by the family business, you may receive company-paid long-term disability insurance coverage as a tax-free fringe benefit. Sounds good but here’s the problem: Most long-term disability policies limit benefit payments to only 60 or 70% of your normal salary before taxes. That’s generally enough coverage — as long as you don’t owe income taxes on the benefit payments. But if you do owe income taxes, you’ll probably have to cough up at least 30 to 40% to the IRS and your state tax collector. When benefits are already limited to only 60 or 70% of your usual…

18October
2018
A Trust to Help Fund the Payment of Estate Taxes

Consider this dilemma faced by a high-net worth individual: He doesn’t want his heirs to be burdened with estate taxes so he takes out a life insurance policy to cover the tax bill. But then the proceeds of the insurance policy wind up as part of his estate — only to be included for estate tax purposes. In this case, the individual might solve the problem by setting up an irrevocable life insurance trust (ILIT). What Are ILITs and How Are They Used? There are many estates that are subject to estate taxes, either the federal estate tax, or an…

18October
2018
Beware of Deductions Claimed for Certain Business Expenses

To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your field of business. A necessary expense is one that’s helpful and appropriate for your business. The IRS sometimes challenges deductions claimed for certain types of business expenses. In doing so, an examiner might claim that payments made by a corporation to a shareholder for personal items or that are above or below fair market value constitute “constructive dividends.” Reclassifying business expenses as dividends has adverse tax consequences, as a recent case demonstrates. No Deduction for Dividends…

18October
2018
Retirement Accounts and Your Estate Plan

Successful estate planning generally involves passing on your assets to your heirs at a low tax cost. To help achieve that goal, there are a few things to keep in mind about retirement accounts. First, tax-favored retirement accounts, such as traditional IRAs, Roth IRAs, SEP accounts and 401(k) plans, are not good candidates to use for funding bypass trusts. These trusts, which are sometimes called credit shelter trusts, are set up by married couples as estate tax minimization tools. The main advantage of a bypass trust is that the assets used to fund the trust are not included in either…

04October
2018
A Legally Binding Contract

The success of your business depends to a great extent on the quality of the contracts you sign. A good contract protects everyone, while a bad contract could ruin you. Every time you promise to exchange services or property, you create a contract — either written or unwritten. Oral contracts present several problems. They can be ambiguous, difficult to enforce and hard to prove in court. “Contracts of choice” are always written to help eliminate potential disputes. They contain precise terms about the people or companies involved, the property or services offered, and of course, the agreed-upon price. Contracts may also include…

04October
2018
Make Your Workplace Drug Free

Employee drug and alcohol abuse can cost your company in many ways, including increased absences, workplace accidents and high health costs. In addition, studies show that drug users are five times more likely than other employees to file a worker’s compensation claim. To protect themselves, many companies now routinely administer drug and alcohol tests to job applicants and employees. If your firm isn’t among them, the Department of Labor (DOL) warns that you may become an “employer of choice” for drug abusers who are unable to get — or keep — a job with employers that do drug testing. In…

04October
2018
‘Partnership’ Culture is Best for Success

Certain workplace culture characteristics consistently bring about higher financial performance, according to a study done by one researcher. Organizational psychologist Dr. Richard Petronio surveyed 200,000 employees at 50 companies in a cross-section of industries — high-tech, health care, insurance, transportation, manufacturing, finance, services and retail. The study identified the workplace culture characteristics that correlate with financial success. It categorized five major types of employer-employee culture styles: Entrepreneurial (“leader-follower”), Paternal (“parent-child”), Mechanical (“machine-part”), Exploitive (“master-slave”) and Partnership (“partner-partner”). Although many companies aspire to an entrepreneurial style, the study found the partnership style is the one where employers outperform. Certain employers consistently…

20September
2018
The Concept of Asset Allocation

If you live in or have visited a big city, you’ve probably run into street vendors — people who sell everything from hot dogs to umbrellas in carts on the streets and sidewalks. Many of these entrepreneurs sell completely unrelated products, such as coffee and ice cream. At first glance, this approach seems a bit odd, but it turns out to be quite clever. When the weather is cold, it’s easier to sell hot cups of coffee. When the weather is hot, it’s easier to sell ice cream. By selling both, vendors reduce the risk of losing money on any…

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