Certification For Your Women Owned Small Businesses?

Quite often one of the topics of discussion among small business owners is “certification”. To push the thought process a little further, I will usually ask; “What type of certification are you seeking and who are you planning to do business with?”.

For example, if you are seeking to grow your business with federal contracting you should explore certifications with The Small Business Administration (SBA). Yes, you can certify with the SBA as a Women Owned Small Business, Economically Disadvantaged Business and Veteran Owned Small Business. The certification process with the SBA is free and you can do it yourself. Since the federal government has ‘set asides’ for both contract and bid opportunities, certification may be quite beneficial for your small business.

If your goal is to work within the private sector, perhaps with a major corporation, you may want to consider a national certification. However, there are fees associated with third party certification councils including fees for annual renewals.

Your certifications should align with your business strategy. I always stress to business owners that it is important to do their research related to the types of certifications that would best support their business strategy.

Prior to making any investment of your time or money in pursuit of certification, I cannot stress the importance of doing your research. Also, as a contractor or supplier, you should become familiar with the terminology of contracting. If you are pursuing federal contracting, you should become familiar with acronyms. For example, if you are seeking contracts in the private sectors understand the agency’s meaning of terms such as vendor, supplier diversity programs and contracting tiers.

Utilize online information and websites to equip you with vital information related to the company, its goals, its commitment to diversity, and any other strategies that can help you prepare for contract opportunities.

View their “Supplier Diversity” programs specifically targeted toward women and minority owned businesses. Leveraging your status as a women owned small business can have its advantages. The Federal government, corporations, state and local governments have established goals that commit a certain percentage of business for women owned companies. This commitment provides you with the opportunity to leverage yourself as a women owned business.

Home Based Business Tax Tips – Do the Hobby Loss Rules Apply to Your Home Business?

Do you know how the hobby loss rules apply to your home business? There are many aspects of the income tax law that are important for a home business, but an area of the law that is often overlooked are the hobby loss rules.

The IRS is always on the lookout for taxpayers who engage in activities which reduce their income from other sources. You might say that such activities are a “red flag” for an IRS audit. It is up to the IRS examiner to make a factual determination as to whether an activity is engaged in for profit, such that losses from the activity are deductible. As you may guess, the IRS often denies such deductions.

With respect to your business venture, it is up to you to prove that the activity you’re engaged in has an actual and honest objective of making a profit.

When an activity isn’t engaged in for profit, the “hobby loss” rule applies to disallow any loss from the activity.

In this case you can only deduct expenses from a home business to the extent of the gross income it generated. In such a case, the expenses from the activity must be applied in a specific order to offset the gross income from your home business.

Here are some of the factors taken into account in determining whether you are engaged in your home business for a profit:

1. The manner in which you transact your business.

Do you operate your business in a business-like manner and maintain complete and accurate books and records.
Do you run your home business in a manner substantially similar to the manner in which you run other profitable activities of the same nature; or
Do you change operating methods, adopt new techniques, or abandon unprofitable methods in a manner consistent with an intent to improve the profitability of your business?

2. Your expertise and the expertise of your advisors.

The fact that you prepared for your business with extensive study of its accepted business, economic, and scientific practices, or by consulting with advisors who are experts in such practices, and you carry on your business in accordance with such practices, may be evidence that you have a profit motive for carrying on your business.

3. The time and effort you put into the activity.

Did you quit a job or other business activity to start your new venture? Do you devote most of your personal time and effort to carrying on your business and your business does not have a substantial personal or recreational aspect?

By now you are probably thinking that this is boring and legalese. You may be correct on both counts. But, as you start your new business venture, it is wise to know the tax provisions as they may apply to you.

I found that the more knowledgeable my client was, the easier it was to give correct advice. In all my years as an accountant and involvement in home based businesses, I have yet to see anyone drive many miles to meetings, call people, spend money on conventions and personal growth literature just for the tax deduction. These rules don’t seem logical to me either.

You should make a mental check list and see if any of these provisions apply to you. If so, make a prompt visit to your tax preparer.

In my next article I’ll look at two more provisions relating to hobby losses and look for the silver lining for your home business in all these rules. There is one!

*This article is written to provide accurate and authoritative information in regard to the subject matter covered. The author is not hereby rendering legal, accounting or other professional services. If legal advice or other expert assistance is required, the services of a competent professional should be sought.

Hot Dog Cart Business Plan

First things first, what is a business plan?

A business plan is a blueprint for your business. It is the foundation that keeps your business solid. It prepares you for conundrums such as what goals should I set for myself and for the business? Are they attainable? Is the business economically viable? How do I allocate resources? What are the problems and opportunities that I am bound to encounter?

A business plan is needed in order to streamline your aspirations for your business, which, in this case, is a hot dog cart. By making one, you would be able to assess the pros and cons in putting up a business. For instance, why pick a hot dog cart as your business? Surely, the answers you come up with are all pros. However, the cons are also needed in order for you to be able to objectively view your foray into the business.

What is your vision for the business? Saying that you plan to expand to 10 more carts in 1 month may be getting way ahead of yourself. A properly drawn up business plan keeps you in line by presenting you with projections grounded in facts. Do you actually understand your market? Ask yourself who your prospective customers are. It should state the type of people who would most likely be your customers, so that you would be able to secure a location that your target market frequents. Is your business long term, or is it just a stepping stone for yet another venture into wholly different industry? Most importantly, how much do you think would you be earning on a given basis? Remember that profit is distinctly different from cash. And that the lack of any of the two would undoubtedly bring the business down. A business plan helps address these vital concerns. How about, what if the trend changes? What if, at your usual spot, a burger joint opens and you find your target market taking a turn that way? The best thing about hot dog carts is, they are MOBILE. You don’t have a lot of rearranging to do when it comes to just picking up and leaving the formerly lucrative location. You may think of all these without a business plan handy, but having one allows you to streamline your thoughts.

A business plan is most helpful at the initial stage of the business. It is the first step to undertake in the development of a business. It is your guide, your compass. And don’t we all need that, in one way or another?