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Sunday, January 25, 2015

Value of Trust

A customer is in the habit of shopping for most of the family consumables in a nearby store each week taking advantage of the advertised sale items. A periodic scan of the receipts begins to show a pattern of not providing the sale prices for some items each week, overcharging as much as 15%.The customer returns to the shop and regularly obtains credit for these obvious “mistakes”. 

The on-site management attempts to push back with a series of excuses like: “Someone mismarked the sale item; that was yesterday’s sale and the price marked was wrong; the computer made a mistake; and, you must have moved the items to the sale priced locations”. The customer has lost faith in the store and is frustrated with the excuses, accusations and attitude of its personnel. While continuing to use the store due to its convenience, she has shifted as much of the volume as possible to other shops.

While no one is perfect, a consistent pattern of deception has led the customer to use the phrase “theft” to describe the situation, and does so to friends and neighbors. Eventually this store may close due to lack of sales volume.

How does your business handle situations like this?


Steve Koenig, SCORE Counselor



Thursday, January 22, 2015

Investment Gains and Losses

This year, and in the coming years, investment decisions are likely to be more about managing capital gains than about minimizing taxes per se. For example, taxpayers below threshold amounts might want to take gains; whereas taxpayers above threshold amounts might want to take losses.

If your tax bracket is either 10 or 15 percent (married couples making less than $73,800 or single filers making less than $36,900), then you might want to take advantage of the zero percent tax rate on qualified dividends and long-term capital gains. If you fall into the highest tax bracket (39.6 percent), the maximum tax rate on long-term capital gains is capped at 20 percent for tax years 2013 and beyond.

Minimize taxes on investments by judicious matching of gains and losses. Where appropriate, try to avoid short-term capital gains, which are usually taxed at a much higher tax rate than long-term gains--up to 39.6 percent in 2014 for high-income earners ($406,750 single filers, $457,600 married filing jointly).

Where feasible, reduce all capital gains and generate short-term capital losses up to $3,000.

Tip: As a general rule, if you have a large capital gain this year, consider selling an investment on which you have an accumulated loss. Capital losses up to the amount of your capital gains plus $3,000 per year ($1,500 if married filing separately) can be claimed as a deduction against income.

Tip: After selling securities investment to generate a capital loss, you can repurchase it after 30 days. If you buy it back within 30 days, the loss will be disallowed. Or you can immediately repurchase a similar (but not the same) investment, e.g., another mutual fund with the same objectives as the one you sold.

Tip: If you have losses, you might consider selling securities at a gain and then immediately repurchasing them, since the 30-day rule does not apply to gains. That way, your gain will be tax-free; your original investment is restored, and you have a higher cost basis for your new investment (i.e., any future gain will be lower).

Net Investment Income Tax (NIIT)

The Net Investment Income Tax, which went into effect in 2013, is a 3.8 percent tax that is applied to investment income such as long-term capital gains for earners above certain threshold amounts ($200,000 for single filers and $250,000 for married taxpayers filing jointly). Short-term capital gains are subject to ordinary income tax rates as well as the 3.8 percent NIIT. This information is something to think about as you plan your long term investments. Business income is not considered subject to the NIIT provided the individual business owner is materially active in the business.

Barry Eisenberg, SCORE Counselor


Sunday, January 18, 2015

Business Plan Content


Look at click on Business Advice at the top and view a lot of business plan advice. My personal view is to put more time on competition, market analysis, marketing, finance 3-5 years out and the operation itself. Consider that these plans are living docs intended to be updated as more information becomes available and/or things change, so they will not be "written in stone". A great plan can help potential investors and employees you depend upon understand the business.

Steve Koenig, SCORE Counselor

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Thursday, January 15, 2015

Tips for Self-Employed Taxpayers

If you are an independent contractor or run your own business, there are a few basic things to know when it comes to your federal tax return. Here are six tips you should know about income from self-employment:

Self-employment income can include income you received for part-time work. This is in addition to income from your regular job.

You must file a Schedule C, Profit or Loss from Business, or Schedule C-EZ, Net Profit from Business, with your Form 1040.

You may have to pay self-employment tax as well as income tax if you made a profit. Self-employment tax includes Social Security and Medicare taxes. Use Schedule SE, Self-Employment Tax, to figure the tax. Make sure to file the schedule with your tax return.

You may need to make estimated tax payments. People typically make these payments on income that is not subject to withholding. You may be charged a penalty if you do not pay enough taxes throughout the year.

You can deduct some expenses you paid to run your trade or business. You can deduct most business expenses in full, but some must be 'capitalized.' This means you can deduct a portion of the expense each year over a period of years.

You can deduct business costs only if they are both ordinary and necessary. An ordinary expense is one that is common and accepted in your industry. A necessary expense is one that is helpful and proper for your trade or business.

Questions? We have answers. Give us a call!

Barry Eisenberg, SCORE Counselor



Monday, January 12, 2015

Bowling for Business

I usually suggest using a "bowling pin" approach to business. That is, do one thing, get it right, then move to the next logical adjacent pin not go for a strike at the start. This applies to both offerings and geographies (e.g. take one manageable geography followed by an adjacent one, etc.). Get it right each time and the word of mouth rewards will help. Get it wrong one time and.....

Getting a strike can place you in a position that you are unable to deliver or support your offerings. This is not a good viable business strategy.

The "pins" nearest when you have a great business plan and in search of funding, deal with methods of testing the plan which depends on how much you are seeking to raise and how much you are willing to give up to raise it. Some examples: If Crowd funding is possible, look at some of the sites and put together a proposal for one site. If it works you may consider added sites. Bank funding may be possible where the element(s) to be used as collateral need to be determined and test with one bank (there are different types of banks as well). If private funding is the way to go, put together a proposal and test with one investment banker or friend/family member if you select that approach. So these are 3 "pins" to consider. When the testing is done, evaluate the alternatives available ("pins") and move forward to the next level.

We are not looking for a 300 score in this bowling game. But we are searching for the best available alternative for our business needs.


Steve Koenig, SCORE Counselor



Tuesday, January 6, 2015

Brazilian Boom

A recent article in the Sun Sentinel focused on the Brazilian Boom happening in South Florida. Here are some of the points made in the article:

Brazilian companies are reaching into South Florida, using the area's growing Brazilian community as a stepping stone. Brazil can do this because its economy has grown to the world's seventh-largest. It attracted the 2014 World Cup and 2016 Summer Olympics.

South Florida provides the businesses with one of the largest concentrations of Brazilians in the United States, many around north Broward and south Palm Beach counties. From that core, Brazilian companies can build out to the hundreds of thousands of South Americans in the area.

Among those testing U.S. waters in South Florida are banks, restaurants and airlines. Perhaps the biggest entrant recently is Banco do Brasil, which now has five branches, including spots in Pompano Beach and Boca Raton. It plans three more.

Brazil's restaurant chain The Shrimp House opened its first outlet in Coral Springs in December and now operates five locales, including one at Boca Raton's Town Center. It's goal is to develop 30 restaurants across Florida.

Also expanding is fast-casual restaurant chain Giraffas Kitchen & Grill, which now has about a dozen stores statewide, including one in Fort Lauderdale, and upscale seafood restaurant Coco Bambu, which plans a spot in Miami Beach.

In South Florida, more than half of residents over age 5 speak a language other than English at home. Census data also shows the number of Brazilians in South Florida jumped 65 percent between 2000 and 2012, with the total in Palm Beach County up nearly fourfold.

To be sure, Brazilian companies expanding in Florida must adapt to U.S. tastes. Yet the newcomers are eager to meet the challenge, especially as Brazil's economy slows.

How can this impact your business?


Steve Koenig, SCORE Counselor

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Sunday, January 4, 2015

Encryption and your business

There are a series of recent examples of hackers gaining access to records and disrupting various businesses. Banks have had to issue thousands of new debit and credit cards to help. Now there is a cry by government officials that Apple and Google are using sophisticated encryption techniques with their new phone products that stop even law enforcement from gaining access, even with search warrants.

The argument for fast access by law enforcement suggests it is critical to find and protect victims of certain crimes such as kidnapping, sexual predators, etc.

The argument against is to protect privacy and business.


Where do you stand on the issue?


Steve Koenig, SCORE Counselor



Thursday, January 1, 2015

Special Counselor of the Month

Special Counselor of the Month

We are delighted to shine the spotlight on a distinguished member of our staff who by his or her efforts brings great credit to our organization. This month we are honored to salute:


 One of the great pleasures of serving on the committee that elects our Special Counselor of the Quarter every 3 months is the opportunity to reflect on the quality of service and commitment to our mission that has become a hallmark of our outstanding team. This month we are delighted to announce that our colleague Gerry Schoenberg is our unanimous choice for this honor.
So, of course you have noticed Gerry in the everyday ebb and flow of Chapter issues. In the past several months Gerry undertook to prepare himself to train all of us in the new CORE system. That has taken countless hours of learning and serving to accomplish, and we have all benefited from it.
Additionally Gerry has served first as interim Chair of our CTT, and recently succeeded to the chairmanship. As a member I can tell you that a day does not go by without yet another important communication on chapter matters. Gerry’s commitment is outstanding.
Add to all the above the fact that Gerry also serves on the Executive Committee, with additional duties there, and you begin to see the profile of yet another outstanding team member.
 So, take a well-earned bow, Gerry. You have richly earned the designation of our Special Counselor of the Quarter  for January, February and March 2015.