Category Archives: Small business

MOBILE DEPOSIT BANKING

Howard Lipset of Progressive Management and thecfo.wordpress.com discusses his mobile deposit banking and how it can be improved.I am so proud.  I have entered modern times with my business. I have become technologically  savvy. I now make bank deposits by using my iPhone.

Congratulations to those people who figured out how to let me take a picture of the check, and then read the amount and compare it to what I said it would be. That is really clever.

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INTERNET SALES TAX

Howard Lipset of Progressive Management and www.thecfo.wordpress.com explains the State of New York's Sales Tax Form and how it will cost small businesses money and burden them with a lot of paperwork.Once again, the United States Senate has demonstrated that it comes from another planet.

They have no concept of what it takes to run a business and the havoc that their so-called “good intentions” will bring.

Is it just me, or does anyone else wonder if it is just “good intentions” or if there is some underlying benefit to a political contributor that drives them?

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How Congress Writes Laws to Guarantee There Will Be Lawsuits

Now, do not get me wrong.  This is not a knock at the Americans with Disabilities Act (ADA).  It is a reminder of how badly Congress writes laws and then allows an incompetent bureaucracy to administer and enforce them.

When George Bush signed the ADA, he might have thought that most of the discrimination complaints would come from those who were deaf or blind or wheelchair bound.  However, the most claims come from those claiming back problems (the tort lawyer’s dream come true).

Nor could he have imagined that the definition of disability under the law is so broadly interpreted as to include drug and alcohol abusers.

Then, since Congress did not properly define a mental illness (schizophrenia, manic depression, severe depression obsessive compulsive disorder and generalized anxiety disorder), Bill Clinton’s Equal Employment Opportunity Commission has so broadly interpreted the law that the following disorders now constitute a mental illness and this is how the employer might be required to deal with it.

Narcissistic personality disorder: Give the employee a mirror so they can look at themselves all day.

Sex addiction: Watch porno films during a coffee break.

Here is another, equally ludicrous, possibility.  An individual with a sex addiction, who can not be fired under ADA, is also a sexual harasser and creates another type of discrimination lawsuit against the company.

The EEOC advises employers that they should be understanding of workers who are chronically late, who exercise poor judgment or who display hostility to fellow workers –because those traits may be linked to mental impairment. Here is an act that is no longer a possibility, it is a reality.

This type of unreasonable mandate creates unproductive businesses and puts our country in a position where we can only compete worldwide in the lawsuit category.

What Small Businesses and Individuals Should Know About The New Credit Card Reform

February 22, 2010 marked the day when Congress allowed credit card reform to take affect.  Why they waited so long when they passed the bill over nine months earlier is a mystery to me.  What is also a mystery to me is why they could not see the abuses in the credit card industry before then.

Howard Lipset - What Small Businesses and Individuals Should Know About The New Credit Card ReformYes, changing the interest rate without notice is an abuse.  So is being able to change the rate on balances already in existence.  And charging you for going over the limit when they know and you don’t is totally unfair.  And interest rates of 29% are worse than the Mafia.  But all of that is small potatoes.

Think about this.  Why did they love that $39 late charge?  If you had a minimum payment of $10 and you were one day late, they could hit you with a $39 late charge.  That is an effective rate of 1,423%.

The new laws have made all of this tougher for the credit card companies.  You should expect them to raise their annual fees and raise their balance transfer fees as well.  If you are carrying a small business card from American Express or Visa or a personal card from any credit card company, you should expect to see the credit card companies act more like the airlines.  That is, fees go up and charges for “extras” such as a meal or a blanket, that were previously free.

We have been successful in the past negotiating these fees for clients; small businesses and individuals should be able to do the same if you start to find the fees outrageous.

Let me know if you need my help.

The IRS and Their “Do Right” Department

These are tough economic times for everybody.  But when you owe the Internal Revenue Service money, this is especially so.  I thought I would share some advice with you.

Howard Lipset - The IRS and Their “Do Right” Department I have a client who has been on a pay-out with the IRS for a number of years.  The effect of the pay-out is that he has paid his tax for the year involved, but now owes the penalty and interest for that year.

Nine months ago, he lost his job and he has court ordered payments which leaves him nothing to pay the IRS with.  I wrote to the IRS explaining the situation and asking for the penalties and interest to be expunged.

They ignored my letter and instead, sent a notice of lien, which implied that he violated their agreement.  They ignored subsequent letters that I wrote as well.  I had to take this further and did.

If you find yourself in this situation, as my client did, where the IRS is not listening to you,  be advised there is a Taxpayers Advocates Office within the IRS.   I got resolution through this process.

They have a Form 911 which allows the Advocates Office to step in and try and remedy the situation.

It’s been several weeks since I contacted this Office.  Today, I was informed that not only did I get the current penalties and interest forgiven, but I also received a refund for my client for prior penalties and interest that were previously paid as well.

Do Right or Due Rights?  Doesn’t matter, the problem was handled.

Our government and its affiliated agencies can be big, bureaucratic, and scary to any individual or small business.  But, when you look hard and have the right advice, these too can be navigated so that you can be heard and your problems handled.

How The Government Can Quickly Stimulate the Economy

Entrepreneur Magazine once published an article entitled “Where to Get a Small Business Loan“.

These are tough times for a small business (or any business for that matter) to borrow money.  Why?

Strange as it seems, our government has not given the banks any incentive to lend money to new and old businesses.  The banks can borrow from the Federal Reserve at three quarters of one percent and lend to consumer credit cards at 19- 29%, or just buy no risk Treasuries and make a couple of points.

A primary stimulus for the economy is getting small businesses funded again.  If the government was serious about forcing the banks to issue credit and getting the economy rolling again, then they would have created a formula that would penalize the banks for not issuing loans.

It’s simple: If the penalty were large enough, the banks would have to take the risk and lend the money.

Simply put, just taxing the banks does not create the loan incentives needed to re-energize the economy.  After all, why did the taxpayers bailout the banks, if not to help the economy in the first place?

THEIR Hands Are In YOUR Pockets

Whose hands? The scammers.

How do they try to get there? The Internet is the first obvious way.

They are always phishing for your personal information. Through direct emails, telling you that you are a winner, or that there is a package waiting for you, or through cleverly disguised emails using a bank’s stationery or even the stationery of the Internal Revenue Service.

The IRS will never contact you via email. And neither will the security department of your bank. Do not respond to these emails. Print them and forward them to the real IRS and bank involved.

What if you get a phone call at home from your bank, claiming that there is a problem with your credit card? Don’t answer any questions from that person. Hang up, get your credit card and call back the phone number on the card. Ask if there was a problem that they would have been contacting you about. If no, report the phone call. If yes, resolve the problem.

Have you encountered scammers?  Share your experience with me in the comments.

Budgets and Capitalization

You have a dream.  Your own business.  You understand how to run the day to day operations, how to market it, how to interact with and sell the customers.

It would be a shame if your dream never got off the ground because you did not understand the financial reality of making it all happen.  Yet that is what happens to the vast majority of start up businesses in this country every year.  They die in the womb.  Or from Sudden Instant Death Syndrome.

You know that you have started with an entity that limits your liability.  You have heard that you should never sign personally for a corporate debt.  But the reality is that unless you are going to give ownership of your company to a lender, no one is going to lend to your new corporation without your personal guarantee, and that guarantee has to be worth what you will be borrowing.  In order to succeed you will need the resources to sustain your business and yourself through the start up stages and into profitability.

Note that I included yourself in the equation.  Another important aspect is time.  Budget wise what is your business overhead going to be per month.  Add to that your personal overhead.  That is what you will need monthly to survive.  Now, how long will it take you to sell enough to break even against that total monthly overhead?  8 months?  One year?  Multiply your monthly overhead by the number of months required to break even and that is your capital requirement.

If you do not have clear access to your capital requirement, you may want to re-think your current entrepreneurial desires.

And, don’t forget to add contingencies for problems.  In the real world, if something can go wrong, it will.

In developing a budget, you have to know about all of the expenses.  Especially, the ones that the Federal, State and Local Governments will require you to spend.  Taxes.  Insurances.  Permits.  Ways you will have to comply to do business.  Even if you do not want to.