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Sunday, June 29, 2014

Small Business Defined

Is your business a Small Business? Please note that there are more details than I am presenting in this article. Here is one definition from the US Government:

U.S. CodeTitle 15Chapter 14A › § 632

The United States Code is a consolidation and codification by subject matter of the general and permanent laws of the United States

Title 15 is identified as Commerce and Trade

Chapter 14A is identified as Aid to Small Business

Section 632 is identified as Small Business Concern

(1) In general

A small-business concern, including but not limited to enterprises that are engaged in the business of production of food and fiber, ranching and raising of livestock, agriculture, and all other farming and agricultural related industries, shall be deemed to be one which is independently owned and operated and which is not dominant in its field of operation: Provided an agricultural enterprise shall be deemed to be a small business concern if it has annual receipts not in excess of $750,000.

(2) Establishment of size standards

(A) In general

In addition to the criteria specified in paragraph (1), the Administrator may specify detailed definitions or standards by which a business concern may be determined to be a small business concern for the purposes of this chapter or any other Act.

(B) Additional criteria

The standards described in paragraph (1) may utilize number of employees, dollar volume of business, net worth, net income, a combination thereof, or other appropriate factors.

(C) Requirements

Unless specifically authorized by statute, no Federal department or agency may prescribe a size standard for categorizing a business concern as a small business concern, unless such proposed size standard—

(i) is proposed after an opportunity for public notice and comment;

(ii) provides for determining—

(I) the size of a manufacturing concern as measured by the manufacturing concern’s average employment based upon employment during each of the manufacturing concern’s pay periods for the preceding 12 months;

(II) the size of a business concern providing services on the basis of the annual average gross receipts of the business concern over a period of not less than 3 years;

(III) the size of other business concerns on the basis of data over a period of not less than 3 years; or

(IV) other appropriate factors; and

(iii) is approved by the Administrator.

(3) Variation by industry and consideration of other factors

When establishing or approving any size standard pursuant to paragraph (2), the Administrator shall ensure that the size standard varies from industry to industry to the extent necessary to reflect the differing characteristics of the various industries and consider other factors deemed to be relevant by the Administrator.

Now, did that help?

Steve Koenig, SCORE Counselor


Wednesday, June 25, 2014

SBA definition of a Small Business

The following is taken from the Small Business Association web site:

Am I a Small Business?

You may take it for granted that your company is a "small business." The distinction is important if you wish to register for government contracting as a small business. To be a small business, you must adhere to industry size standards established by the U.S. Small Business Administration. As you register as a government contractor in the System for Award Management (SAM), you will also self-certify your business as small.

The SBA, for most industries, defines a "small business" either in terms of the average number of employees over the past 12 months, or average annual receipts over the past three years. In addition, SBA defines a U.S. small business as a concern that:

Is organized for profit

Has a place of business in the US

Operates primarily within the U.S. or makes a significant contribution to the U.S. economy through payment of taxes or use of American products, materials or labor

Is independently owned and operated

Is not dominant in its field on a national basis

The business may be a sole proprietorship, partnership, corporation, or any other legal form. In determining what constitutes a small business, the definition will vary to reflect industry differences, such as size standards.
Size Standards

Because all federal agencies must use SBA size standards for contracts identified as small business, you need to select NAICS codes that best describe your business and then determine if the business meet size standards for the selected NAICS codes. Use our Size Standards Tool to find out if you qualify as a small business. Once you have determined you are indeed a small business, you can then certify your business as small by registering as a government contractor.

For more SBA information go to:

Steve Koenig, SCORE Counselor



Friday, June 20, 2014

Ideas for Opportunity

I have worked with some clients that believe they have a good idea that will make them a fortune. Some of these clients try to “sell” the idea to a company that will simply “pay them” for it. Some clients have not actually built the product they try to sell. You may not have people with ideas knocking down your door. And surely you cannot be the only idea person in your industry. So where can you find ideas for your business? Try these:

1. Your competition.  Where are they going? Check the patent applications.

2. Your Employees. They often have great ideas You should find and reward these.

3. Product reviews. Check out website reviews.  Can you develop a better solution?

4. Trade shows. Great places to find opportunities.

5. Your Customers. What kinds of problems are they having?

6. Online search. Writers often report on opportunities.

Identifying ideas is the first step. Now you need to come up with solutions. In order to keep coming up with great new ideas, you need to stay current and constantly repeat the processes.

What are you doing to keep abreast?

Steve Koenig, SCORE Counselor




Tuesday, June 17, 2014

Cyber Threats and YOU

A recent article published in a southern city business journal focused attention on the status of cyber threats and small business. The article by Mike W. Thomas in the San Antonio Business Journal states:

Small businesses are increasingly worried about cyber threats today but are still doing little to address those concerns, according to a new survey. The survey of small businesses with fewer than 100 employees shows a disconnect between awareness of the cyber threat and actions that would address the problem.

A majority of small businesses owners, 63 percent, reported that they are worried about undetected malware, while 38 percent are worried about phishing attacks and 41 percent are concerned about breaches caused by human error. Nevertheless, 31 percent of small businesses still reported that they are not doing anything to protect against these threats.

What are you doing to protect your business?

Steve Koenig, SCORE Counselor






Friday, June 13, 2014

2014 Hurricane Season. Are you ready?

It only takes one Hurricane to do a lot of damage to your business. How ready are you?

After a disaster hits, your insurance can help get your back into business. How soon often depends on your preparedness. So here are a few things you can do to make recovery easier:

1. Copy, copy, copy. – Your available records are a key to moving the process forward.
Scan records, tax returns, deeds, and insurance documents. List all financial account information. You can put all the information on a flash drive and store the drive away from the business location. Consider the idea of storing the information in a lock box somewhere for quick access.

2. Video Records can help. – Create a video of the business possessions. Show serial numbers where possible and describe the items and condition with a voice-over. Store the video with the flash drive noted above.

3. Cash and information is King. – Put together what boaters call an “overboard bag”. Pack it with enough cash to hold you over for 2 weeks (yes it is hundreds of dollars), along with key phone numbers like insurance broker, banks, etc., a few weeks of prescription drugs and some clothes. Put the bag in an easily accessible location.

4. Backup business information as often as possible and store them in a remote location. There are many options available.

Are You Ready?


Steve Koenig – SCORE Counselor



Friday, June 6, 2014

7 Common Small Business Tax Misperceptions

One of the biggest hurdles you'll face in running your own business is staying on top of your numerous obligations to federal, state, and local tax agencies. Tax codes seem to be in a constant state of flux making the Internal Revenue Code barely understandable to most people.
The old legal saying that "ignorance of the law is no excuse" is perhaps most often applied in tax settings and it is safe to assume that a tax auditor presenting an assessment of additional taxes, penalties, and interest will not look kindly on an "I didn't know I was required to do that" claim. On the flip side, it is surprising how many small businesses actually overpay their taxes, neglecting to take deductions they're legally entitled to that can help them lower their tax bill.
Preparing your taxes and strategizing as to how to keep more of your hard-earned dollars in your pocket becomes increasingly difficult with each passing year. Your best course of action to save time, frustration, money, and an auditor knocking on your door, is to have a professional accountant handle your taxes.
Tax professionals have years of experience with tax preparation, religiously attend tax seminars, read scores of journals, magazines, and monthly tax tips, among other things, to correctly interpret the changing tax code.
When it comes to tax planning for small businesses, the complexity of tax law generates a lot of folklore and misinformation that also leads to costly mistakes. With that in mind, here is a look at some of the more common small business tax misperceptions.

1. All Start-Up Costs Are Immediately Deductible

Business start-up costs refer to expenses incurred before you actually begin operating your business. Business start-up costs include both start up and organizational costs and vary depending on the type of business. Examples of these types of costs include advertising, travel, surveys, and training. These start up and organizational costs are generally called capital expenditures.
Costs for a particular asset (such as machinery or office equipment) are recovered through depreciation or Section 179 expensing. When you start a business, you can elect to deduct or amortize certain business start-up costs.
Business start-up and organizational costs are generally capital expenditures. However, you can elect to deduct up to $5,000 of business start-up and $5,000 of organizational costs paid or incurred after October 22, 2004. The $5,000 deduction is reduced (but not below zero) by the amount your total start-up or organizational costs exceed $50,000. Any remaining costs must be amortized.

2. Overpaying The IRS Makes You "Audit Proof"

The IRS doesn't care if you pay the right amount of taxes or overpay your taxes. They do care if you pay less than you owe and you can't substantiate your deductions. Even if you overpay in one area, the IRS will still hit you with interest and penalties if you underpay in another. It is never a good idea to knowingly or unknowingly overpay the IRS. The best way to "Audit Proof" yourself is to properly document your expenses and make sure you are getting good advice from your tax accountant.

3. Being incorporated enables you to take more deductions.

Self-employed individuals (sole proprietors and S Corps) qualify for many of the same deductions that incorporated businesses do, and for many small businesses, being incorporated is an unnecessary expense and burden. Start-ups can spend thousands of dollars in legal and accounting fees to set up a corporation, only to discover soon thereafter that they need to change their name or move the company in a different direction. In addition, plenty of small business owners who incorporate don't make money for the first few years and find themselves saddled with minimum corporate tax payments and no income.

4. The home office deduction is a red flag for an audit.

While it used to be a red flag, this is no longer true--as long as you keep excellent records that satisfy IRS requirements. In fact, so many people now have home-based businesses that in 2013, the IRS rolled out the new simplified home office deduction, which makes it even easier to claim the home office deduction (as long as it can be substantiated).
Because of the proliferation of home offices, tax officials cannot possibly audit all tax returns containing the home office deduction. In other words, there is no need to fear an audit just because you take the home office deduction. A high deduction-to-income ratio however, may raise a red flag and lead to an audit.

5. If you don't take the home office deduction, business expenses are not deductible.

You are still eligible to take deductions for business supplies, business-related phone bills, travel expenses, printing, wages paid to employees or contract workers, depreciation of equipment used for your business, and other expenses related to running a home-based business, whether or not you take the home office deduction.

6. Requesting an extension on your taxes is an extension to pay taxes.

Extensions enable you to extend your filing date only. Penalties and interest begin accruing from the date your taxes are due.

7. Part-time business owners cannot set up self-employed pensions.

If you start up a company while you have a salaried position complete with a 401K plan, you can still set up a SEP-IRA for your business and take the deduction.
A tax headache is only one mistake away, be it a missed payment or filing deadline, an improperly claimed deduction, or incomplete records and understanding how the tax system works is beneficial to any business owner, whether you run a small to medium sized business or are a sole proprietor.
And, even if you delegate the tax preparation to someone else, you are still liable for the accuracy of your tax returns.
If you have any questions, don't hesitate to give us a call today. We're here to assist you.
Barry Eisenberg, SCORE Counselor

Thursday, June 5, 2014

Intellectual Property

In general there are multiple ways to protect your interest in intellectual property. A qualified Intellectual Property Attorney can help you through the processes needed to provide the best protection for your intellectual property. Here is a rough summary:

Patent: A grant made by a government that confers upon the creator of an invention the sole right to make, use, and sell that invention for a set period of time.

Trademark: A name, symbol, or other device identifying a product, officially registered and legally restricted to the use of the owner or manufacturer.

Copyright:  a legal concept giving the creator of an original work exclusive rights to it, usually for a limited time. Generally, it is "the right to copy", but also gives the copyright holder the right to be credited for the work, to determine who may adapt the work to other forms, who may perform the work, who may financially benefit from it, and other related rights.

Trade Secret:  a formula, practice, process, design, instrument, pattern, or compilation of information which is not generally known or reasonably ascertainable, by which a business can obtain an economic advantage over competitors or customers. In some jurisdictions, such secrets are referred to as "confidential information", but are generally not referred to as "classified information" in the United States, since that refers to government secrets protected by a different set of laws and practices.

Are you making the right choices for your business?

Steve Koenig, SCORE Counselor



Monday, June 2, 2014

Doing Business with Florida's Government


The Florida Department of Management Service issues, 5,000 purchase orders each month.

The state agencies use three methods:

1. Formal purchases - greater than $35,000 which require competitive bidding;

2. Informal purchases - less than $35,000 with no requirement for competitive bids;

3. State contracts. provides tools to support procurement for the state.

If you want some of this business, determine which level is best for you. Then register in the MyFloridaMarketPlace system.

Steve Koenig, SCORE Counselor