The goWholesale Blog

Fuel-enomics: 10 Tips for Small Businesses as Prices Continue to Rise

April 22nd, 2008

Crude oil prices are up 16% already this year and show no signs of slowing down. So without further ado and straight from the dailybreeze.com here are 10 great tips on how small businesses can deal with the soaring gas prices:

1. Add a separate fuel fee. Call it a fee, call it a surcharge - call it whatever you want. But more and more small businesses are tacking on a special charge to offset the cost of gas. Customers may not be happy, but most understand since they’re dealing with the same situation themselves. They don’t expect small businesses to absorb gas price increases forever.

2. Restructure your pricing or territories. Some businesses are restricting the areas they serve, or charging more to go out of area. Others are raising minimum charges or putting tiered pricing in place to compensate for having to travel greater distances.

3. Use an outside shipper. Small businesses that once delivered small supply orders themselves are finding it cheaper and more efficient to send things via UPS or the postal services. In many cases, items arrive in just a day or two. Shipping services Web sites such as RedRoller.com can help you find the lowest-cost carrier.

4. Leverage the Web. Show customers how buying online and by mail order can save them money by not having to visit your location. Use Web-based collaboration sites to “meet” with clients, freelancers, partners and others rather than meeting in person. A few choices include Zoho, Basecamp and WebEx.

5. Hop into a hybrid. A few years ago, there were only a couple of hybrid models to choose from. Now there are dozens, including SUVs and vehicles suited for small-business needs. Even if you don’t get a hybrid, lighter-weight vehicles and those with smaller engines may be far more fuel efficient than what you have. If you plan to switch, a great place to compare fuel efficiency information is at FuelEconomy.gov.

6. Charge by the mile. If your business or profession allows for it, a per-mile charge might work best. This allows for small adjustments whenever needed. The standard IRS mileage rate for 2008 is 50.5 cents per mile, up from 48.5 cents in 2007.

7. Drive less. Have your suppliers deliver items you need to your business rather than picking them up yourself. Use online map-routing services like MapQuest.com to plan service and delivery routes better, for maximum fuel and time efficiency. Group jobs together to reduce travel.

8. Get rebates on gas purchases. Gas rebate credit cards are increasingly popular with small businesses and can net you cash back of up to 6 percent on what you spend. The higher fuel prices go, the more you get back. Just be sure you pay the bill on time, or interest charges will more than eat your savings. Find gas rebate cards at CreditCardGuide.com or PumpandSave.com, which currently lists the Discover Open Road card as the best deal with 5 percent cash back on all gas and auto maintenance.

9. Find the cheapest gas. While it doesn’t make sense to drive far to save a few pennies, there can sometimes be a surprisingly large price difference just a short distance away. GasBuddy.com and GasPriceWatch.com are two Web sites that specialize in helping find the cheapest gas in your area.

10. Follow fuel-efficient driving tips. You’ve probably heard them - avoid jackrabbit starts; keep tires properly inflated; run air conditioners less, keep vehicles tuned and air filters clean, etc. WikiHow.com has a long list of ideas for “How to Save Money on Gas.” Search the title at the site.

For more tips check out Oil prices are going up–ways to cut down on the business energy bill and Little Cost-Cutting Tips that Add Up to Big Savings.

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Whose Side Is Your Accountant Really On?

April 10th, 2008

How would you feel about hiring an accountant who puts the interests of the IRS before those of you or your business? What’s that you say? You wouldn’t like it? That’s what I thought you’d say…but what if I told you you had to?

Unfortunately, that may be the case.

(I mean, I won’t force you to but a much stronger influence might…what was their name again?…..oh right! The Government.)

The Small Business and Work Opportunity Tax Act of 2007 stipulates that those who prepare returns containing an understatement of tax due - which the preparer “knew or reasonably should have known” - will be subject to penalties amounting to “the greater of $1,000 or 50% of the income” the preparer received for that particular federal return.

The act also expands the definition of tax-return preparer to cover those handling any federal return, including those for estate, gift, excise, and employment tax.

According to a recent Fortune Small Business article there are a bevy of downsides to this new legislation including:

So it sounds a bit like intimidation doesn’t it? And it would appear that the government would end up with a lot of free (and somewhat covert) auditors. How do you plan to handle this new legislation? Are you going to write your congressman? Did you even know this tomfoolery was afoot?

And for those of you who do end up getting audited this tax season (for real) check out How to Survive an Audit of Your Business- And Live To Tell About It

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10 Ways to Avoid Judge Judy…besides changing the channel.

March 24th, 2008

It ranks right up there with getting your wisdom teeth pulled or surviving the first anniversary of your 29th birthday (for those who haven’t had their coffee yet, that would be your 30th birthday-the horror!). And yet, much like getting your wisdom teeth out (probably inevitable) and turning 30 (definitely inevitable), if you run a business, odds are you’ll eventually have to deal with the unpleasantness known as a lawsuit.

Your best defense is a good offense and you can create a good offense by taking some preventative steps to reduce the risk of being threatened with a lawsuit according to a presentation covered by the Beaufort Gazette recently:

• Rule No. 1: Incorporate. Going alone often provides poor asset protection and poor tax benefits. Have an attorney or accountant review corporate records once a year.

• Rule No. 2: Know the law. Ignorance is no defense, and in fact it’s a good way to get sued. Small-business owners should particularly focus on employment and tax laws. Good record-keeping and proactive tax planning are key.

• Rule No. 3: Maintain adequate insurance. Conducts an “insurance physical” every few years. Business owners should be aware that it’s possible to be over-insured. Employment-practices liability insurance can help businesses respond to claims of employment discrimination.

• Rule No. 4: Manage fairly and wisely. Business owners should beware of falsified résumés, have detailed job descriptions, tackle poor performance early and consistently enforce policies.

• Rule No. 5: Prohibit harassment. A 2007 Texas case indicates “some male supervisors are still truly clueless.” Case in point:

A male director of nursing was accused of quizzing female employees about their sex lives two to three times a week in front of other employees, including asking them if they took men home the previous night. When the women asked him to stop, he threatened to fire them.

At trial, he admitted he was questioning the women this way because he thought that if they had a lot of sexual activity the night before, it would affect their work performance because they would be tired — that’s what he said. I can’t believe this case even went to trial. The jury awarded each woman $7,500.

• Rule No. 6: Catch and correct wage and hour violations. Failure to pay overtime is “the new food for plaintiffs’ attorneys.” Since 2003, federal court filings involving wage actions have surpassed employment discrimination cases, and settlements have reached into the tens of millions of dollars.

• Rule No. 7: Be careful with independent contractors. Conduct regular reviews of independent contractor classifications and careful consideration of how much control business owners have over contractors.

• Rule No. 8: Watch out for workers’ compensation claims. Adequate training and maintaining a drug-free workplace can prevent accidents. If they do occur, immediately reporting claims and having a return to work commitment helps. Signs of possible fraud include claims by a disgruntled or new employee, an employee on leave who is difficult to contact, or accidents to which there are no witnesses.

• Rule No. 9: Hire an attorney. Interview several before making a selection, and hold regular meetings to compare case progress with budget constraints and requiring authorization for expenses exceeding $200.

• Rule No. 10: Document, document, document. Keep tax-related records for at least eight years, employee records for the term of employment, plus five years, and shred papers before disposal.

SmallBusinessNewz.com also has prepared this short video clip with a few more tips the keep you “out of the the dog house.”

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Credit Card Fair Fee Act

March 11th, 2008

For years now, consumers have enjoyed the benefits of being able to use their Visas, Mastercards, American Expresses, etc. practically anywhere there are things to buy. Consumers sign up for credit cards to pay off other credit cards and with the ease and accessibility of online shopping, the credit industry is booming.

What consumers don’t know (or didn’t) is that the cozy relationship between merchants and credit card companies, isn’t really all that cozy. Up until now, credit card companies have imposed what is called an “interchange” fee on merchants every time a consumer uses a credit or debit card to make a purchase. These fees are calculated independently by the credit card companies and are effectively hidden from the consumer who also ends up paying the fees in the form of product mark ups. The average cost per household is $350 a year. The total amount of interchange fees Visa and Mastercard collected in 2007? $42 billion.

Well, now congress is involved and things are looking up for merchants and consumers alike. Last week, House Judiciary Committee Chairman John Conyers, D-Mich. introduced the Credit Card Fair Fee Act. This proposed legislation according to the National Retail Federation website (who is, in fact, leading the campaign for the approval of this legislation):

“The Conyers bill would require credit card systems possessing “substantial market power” to negotiate with merchants to reach a voluntary agreement on credit card terms and conditions. If an agreement cannot be reached, both sides would be required to submit to binding arbitration by a three-judge panel appointed by the Department of Justice and Federal Trade Commission.

The arbitration proceedings would take place with a limited 60-day discovery period and other statutory deadlines, and the judges would be required to apply a market standard reflecting a perfectly competitive system where neither side had market power. Terms and conditions set by the panel would be in effect for three years, at which time the process would repeat itself. Both sides would receive limited immunity from antitrust laws in order to participate in the process.

The legislation requires that terms and conditions set under the process be available to any merchant regardless of size, industry or location. Individual merchants or groups of merchants would remain free to negotiate voluntary arrangements with credit card companies and their banks.”

The legislation is coming about in response to a hearing in July 2007 where the NRF argued that the credit card interchange fees violate antitrust laws. If it goes through, consumers and businesses alike could see an impact on how much money they save. Stay tuned…

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Online accounting tools reviewed

February 29th, 2008

There are a number of very good accounting software applications that you can buy and install on your computer. These are tried an true programs that are specifically designed to make your life easier when it comes to keeping the books.

But what if I told you that it could be even easier? That’s right. You can save time (and maybe a little money) by using online applications to do your finances.

FreelancerSwitch reviews 7 of these bad boys so check em out!

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Microsoft helps out the little guys

February 28th, 2008

Attention all small businesses (50 employees or less, that is)!!!

Microsoft announced at the beginning of February, they will offer further discounts to small businesses on their software. The original plan, called the Open Value Subscription program offered special services and features to small business owners but the new plan will help cut costs even further with up front discounts and flexible payment systems. The plan will cost about a third of the license-only expense currently available to small businesses.

Along with the new licensing aspect, they are also offering a partner program called “Big Easy” that will give money back to small businesses who buy products from specific partners that they can, in turn, use to buy other products later on.

Sign up for the program begins in March so put it on your calender!

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3 Online Business Calculators for Accounting & Taxes

February 26th, 2008

Whether you’re starting a business or just needing a quick reference, online business calculators are the entrepreneur’s best friend! There are many available online and below you’ll find some helpful calculators for the current tax season.

Accounting and Taxes

When it comes to the health of any company, the day-to-day monies coming in and going out are important to keep tabs on. There also needs to be a good amount of planning to make sure you know what you should be putting aside for Uncle Sam, so you are not unpleasantly surprised at the end of the year.

Working Capital Needs Calculator - Working capital is the money you need to have in the bank to be able to pay all the bills that come into your accounts payable department. This calculator can show you what is happening with your cash flow and what you need to be bringing in to keep your head above water.

Self-Employment Taxes Calculator - If you are self-employed, there are all sorts of tax and deduction rules that may apply to you. This calculator will help you find out what you will end up paying when it’s all said and done.

Gross Pay Calculator - If you have employees, you need to make sure you are taking the right amount out of their paychecks to cover all tax and federal deductions, as well as any benefits. This calculator will make sure your number crunching is correct.

For more calculators check out our article “We’ve Got Your Number - Business Finance Calculators“

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Tips for Surviving the Slow Down

February 21st, 2008

Small businesses are some of the most affected by economic downturns. While these practices can and should be implemented during times of prosperity as well, they will help businesses survive during a recession.

Get involved: Don’t just join local organizations and charities–get on the committee board! This not only will help you stand out and make a name for yourself, but it will also get you meeting and working with more people. Also always keep in mind that strangers you strike up conversations with at the grocery store or fellow parents at a PTA meeting can be new customers/clients. It’s good old fashioned networking.

Reach out to existing clients: These are people you already know need your goods and/or services. Chances are they like doing business with you and are willing to do more if you take the time to think of new ways to serve their needs. If you can’t think of anything yourself, call them up and ask.

Do NOT cut your marketing budget: You need to market yourself more than ever when consumers are shy about where they are spending their money. You are competing even harder to make the sale over other competitors so you need to reinforce your brand, products and services as things people still need, despite the economic downs.

Offer a special service or discount: It may seem counter intuitive to charge less when you need to be making more, but this tactic will get people buying and let’s face it, customers buying at a discount are better than no customers at all. Also a little extra customer service should cost little to nothing at all and the benefits could be very important to keeping your business afloat.

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Tax Breaks for Small Businesses…whew!

February 5th, 2008

Here’s a quick run down of some tax breaks small businesses may be eligible for (courtesy CNNMoney.com):

1. File as a shareholder/owner–Available to LLCs and corporations with S-status, this federal tax break keeps the small business from having to file as a corporation thus, avoiding a double tax situation (since they would have to file as a shareholder/owner level in addition, otherwise.)

2. Section 179 small business expensing–Allows a business to take a current deduction up to $125,000 for the cost of assets placed in service during the year for use in the business, not including real estate. Without this benefit, the business owner would need to capitalize the asset and deduct the cost over many years through a depreciation deduction. For example: if a small business purchased a copy machine for $2,000, the entire amount could be deductible in the first year. A larger business would be required to deduct the cost over five years, which is what the IRS considers the life of the asset.

3. Home office deduction–Provides some savings if you legitimately qualify as a home based business. (read more on this in Tax Write-Offs for the Home-Based Business)

4. Retirement plans/commuter benefits/educational assistance–payments are non taxable for employees and deductible for employers.

5. Charitable contributions of inventory–depending on the type of business you own these might be deductible. The major stipulation is that what you donate must be used by the charity specifically for it’s charitable function (ie. food for a food bank).

For more information please read:

4 Easy Steps To Getting Your Business Ready For Tax Season

Small Business Tax Write-Offs You Need to Know About

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Ahhh the Almighty Company Card….

December 28th, 2007

“With great power comes great responsibility,” a great man once said… that great man was none other than Spiderman’s Uncle Ben. My apologies for using the word “great” 4 (count ‘em) times in that sentence. Regardless, the statement is true and applies in business as much as anything else.

Many businesses will have a company credit card (or two or three or….) that is designed to be used for business related expenses. Now, what your business constitutes as a “business related expense” is clearly up to whomever is responsible for those cards. In general, employees should be able to use their best judgment when using the card but it would be wise to have in place a written policy on what acceptable use of the card is and what is not. Far too often employees get themselves into trouble by using the company card for personal expenses but the businesses get themselves in trouble by not clearly drawing the line. So by having the rules in place and easily accessible, you should be able to avoid any messy situations.

Here are some things to think about:

We’d all like to believe our employees are perfect little angels but the truth is that no matter how nice and honest they are, it is a part of human nature to push the limits and perhaps abuse privileges. So take a moment to make sure your company credit card is in good hands (or at least is protected from the bad ones) and you will save yourself a lot of time and money in the future.

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