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Archive for March, 2011

Is Facebook Headed Down the Same Path as MySpace?

Facebook Changes 

In recent months Facebook has implemented many changes.  These changes were not embraced by the users I interviewed, although most users are doing their best with the information and misinformation that has come from the experts of Facebook.  The gurus have been guilty of giving users information that is incomplete at best.  If you have made decisions based on these tidbits of information, my heart goes out to you but, if you are waiting for the dust to settle, I applaud you.  

MySpace issues

MySpace has had its share of issues with pages being extremely slow to load, pages not displaying correctly,  and downloaded music that wouldn’t load, all happening after a MySpace website overhaul.  It was reported that MySpace lost 10 million users in a month after the site overhaul when users felt enough was enough and the complaints were falling into the black hole of cyberspace.

FB issues with changes

Is Facebook headed in the same direction as MySpace?  Facebook has made many changes that have not been embraced by the users.  Prior to February 2011, users could post and comment on the walls of other pages.  Currently, there is no option for an administrator of a page to ban another page for spam-like behavior, which can be part of social behavior.  Facebook and users on Facebook have opened themselves up to a new game where the rules are unclear.

Private Information

Users on Facebook, including businesses, give their information freely; information that most users consider private.  Users on Facebook have perceived that there is security, when in fact, nearly all information can be seen by any user.  It is a matter of time before people realize all this information can be used for things that are not in their best interests

Information for sale -cheap

Places such as Spokeo and WhitePages  are now selling your information that has been gathered from social media sites like Facebook to anyone willing to pay $2.95 a month.  Things like:  pictures you have posted on Facebook, your credit score, home value, income, age, and even a picture of your home. 

The New Virus 

Here’s the thing.  Social media has been all the rage for a several years.  The new “virus” has become social networking.  While being social, it seems we have forgotten about the boundaries that need to exist in our network.  We share a lot of information on our profiles.

Looking legitimate

I remind you that anyone can put up a website in a matter of minutes,  make a Facebook page and get people to befriend them and set up an email address and look legitimate.  What has happened to  protecting our own information?  When did protecting your information become a social media site’s responsibility?

The Only Private Information

The bottom line is that if you don’t want this information public, keep it to yourself.  Yes, this is public information but once you see all your current information in one place it can and should  be concerning.  Knowing that almost anyone can afford $2.95/month for a ton of information on thousands of people is amazing, and not in a good way.

Freely given information 

Lots of people are more than a little overly protective of their email address when opting-in a website to get a newsletter or a free eBook.  Many people have confessed they MUST see the privacy statement before they will give their email address.  Yet, on social media sites, the same people freely give, not one, but many email addresses and phone numbers for themselves.   No one has to steal our information; we give it to them freely. 

Privacy on FB

Should we be concerned about privacy on Facebook?  Absolutely.  Remember, if you put the information out there, it can be compromised.   Most people are aware of security, but when something happens to your information, you are responsible, not a social media site.   Facebook is a company with 600 million users.  If you have a security issue, you can expect large corporation behavior.  Do you know the laws about a breach of information? 

Paranoid or Cautious

Should you be paranoid?  No.  But you should be cautious when it comes to your information. When your information gets compromised, your blissful nights come to an end very quickly.  When that happens, the finger-pointing begins quickly and the responsibility is slow to come to the surface.

Small Business Can Have BIG Headaches

 After Tax Season, I wanted to lighten it up a bit!  I need a laugh…hope you do to.

Entrepreneurs put in some “crazy” hours, don’t we?  Somehow, those 1440 beautiful moments we have in a day weren’t supposed to be like this.  Some days, we can’t even remember our own name.  The other morning, I went to make my coffee and I’m not kidding you…opened the refrigerator door expecting a hand to offer me my already made hot cup of coffee.  Ok, I was really tired but it was so real, I actually stood there and waited.  When nothing showed up, I finally shut the door and made my own.  I am sure you have had days that start off like that too. 

Having your own company is like having a newborn child.  There is never enough time to sleep.  Just like a newborn’s stomach is always hungry; entrepreneur’s brains are always thinking of something that has to be done.  We have to focus on: a new product launch; an article that needs a new slant, a tough client that took out their bad day on you (that one lingers way too long in our mind.)

If you are a write for a living, you understand how little time there is in a day.  Good writing takes time.  Blogs take time.  Quality takes time.  Communication takes time.  Social media takes time.  Information gathering takes time.  Research takes time.  Surveys take time.  Reading takes time.  Scheduling takes time.  Ok, you understand.  It is a time-consuming process.  A process we writers generally enjoy… as crazy as that sounds.  It is our contribution to the world, whether the world is ready for it or not.

Writers need an audience.  It doesn’t have to be large, although that is nice, we just need one person every once in a while that appreciates what we write.  We are not ego maniacs; quite the opposite, in fact.  We work for morsels of compliments and continue to write even when we receive none.  We forge through writers block…eventually.  We are like small children with abusive parents (except the abuse can come from our audience) throwing out a compliment now and then…We are insecure and shy, trying to write for an audience that may or may not be there tomorrow, awaiting for that  glimmer of “niceness” to come our way.

There must be some form of masochism in our core.

Mentors: The One Person You Need for Small Business

 

We all know we can’t go it alone in business.  We need the ability of others to help us through the ups and downs of our business.  We need help with a variety of things.  We need someone to tell us, “it will be okay” when things are not going well.  We all have drama moments.  We also need them to tell us if something sucks so we don’t go down that road, or at least help us see that it sucks and show us another path.

Here are five things a mentor can do for you and your business

1.)     A mentor can help you through your “drama moments” when your business day seems too heavy to carry alone.  This doesn’t happen often but when it does, you may need to hear a real voice instead of the one in your head.

2.)    If you have been lucky enough to have found a mentor that lives in your area, the mentor is invaluable when you are doing something new.  They remind you of all your successes and give you the perspective that you need. 

3.)    If something you are doing sucks for your business, they tell you.  They are your accountability partner in your business.  If you are doing something that goes against your core values, they have the tough conversation with you instead of allowing you to self-sabotage your business or yourself.

4.)    A mentor can save you time.   Time is one thing we could all use more of in small business.  Mentors are business people to and their experience is invaluable when it comes to saving yourself some time.

5.)    A mentor can also be your cheerleader and help when it comes to marketing your company; helping you grow into the leader you want you are.

Mentors want you to succeed; they help you be better than you think you are.  They can help you balance your life better.  We all need help with that now and then.  One of the biggest joys of having a mentor is that they can help you find the best medicine; laughter.  We all need more of that in our lives and it is the glue that holds relationships together.

Tax Time Again: Don’t Miss a Deduction

 

Looking for those missed tax deductions?

None of us are big fans of tax time and preparing for it sometimes requires more time than what a tax professional expends. Here are some deductions that are generally missed on tax returns. You may be entitled to these and more when you are ready to file.

They may make the difference in whether you will have to write a check, or the IRS will be writing you a check for your return this year.

Mileage calculations

You can deduct mileage for medical care. The 2009 deduction is 24 cents a mile but with small children, this can add up quickly. Don’t forget if you do charitable work at a 501 c 3 community, the mileage is also deductible.

Expenses for your job search

If you have searched for a job in the same field before your layoff, you can deduct the expenses for your job search. This can be quite significant since you may be like so many workers that have been out of work for most, if not all of the year.

Cut gambling losses

Save your receipts! Gambling losses can be deducted to the extent of gambling winnings reported on Form 1040, line 21. They must be clearly identified on the dotted lines next to line 28.

Claim dependent parents

If you are responsible for one-half of your parent’s living expenses, they can be a dependent. Don’t forget to calculate medical expenses, housing and insurance, food as well as transportation. The parent(s) don’t have to live with you. If you paid less than 50 percent of their care, you may still be able to use the Multiple Support Declaration.

Financial Advice

If you paid for some financial advice, deduct it.

Summary

You spend about 100 days a year working just to pay your taxes. There is no joy in having to pay more taxes, so lessen the burden. Get as many deductions as you are entitled. Don’t forget that you can file amended tax returns for up to three years. Again this year, many of the large tax companies will take a look at your last tax return to determine if you are entitled to more deductions than you received.

Business Entities: Corporations

This is the last of our four-part series on Business Entities.

Today, we will cover Corporations.

  

Corporations

A corporation is a body –it is a legal person in the eyes of the law.  Which means it can bring lawsuits, buy and sell property, contract, be taxed, and even commit crimes.  The most notable feature of a corporation: a corporation protects its owners from personal liability for corporate debts and obligations –within limits.

Of all the entities, corporations are the most formal.  The shareholders, director’s, officer’s, and managers must observe particular formalities in operating and administering the corporation.  For example, decisions regarding a corporation’s management must often be made by formal vote and must be recorded in the corporate minutes.  Meetings of shareholders and director’s must be properly noticed and must meet quorum requirements.  Corporations must meet annual reporting requirements in their state of incorporation and in states where they do significant business.

Advantages of the Corporation

  • Owners are protected from personal liability for company debts and obligations
  • Corporations have a reliable body of legal precedent to guide owners and managers
  • A corporation is the best vehicle for eventually public companies
  • Corporations can more easily raise capital through the sale of securities
  • Corporations can easily transfer ownership through the transfer of securities
  • A corporation can have an unlimited life
  • Corporations can create tax benefits under certain circumstances, but note that C corporations may be subject to “double taxation” of profits

 

Disadvantages of the Corporation

  • Corporations require annual meetings and require owners and director’s to observe certain formalities
  • Corporations are more expensive to set up than partnerships and sole proprietorships
  • Corporations require periodic filings with the state and annual fees

 

 This concludes our Business Entities series of  posts.  I hope this has been helpful to you.  If you feel your business is the incorrect entity, see your CPA and or attorney immediately.

Limited Liability Corporations (LLC)

This is the third of a four-part series on Business Entities.

 

Limited Liability Corporations

The LLC is often described as a hybrid business form.  It combines the liability protection of a corporation with the tax treatment and ease of administration of a partnership.  As the name suggests, it offers liability protection to its owners from company debts and liabilities.  Most of the laws governing this type of business were passed in the 1980’s and 1990’s in the United States.

The cost of setting up an LLC is roughly the same as setting up a corporation. 

If the company grows too large for an LLC, it is easily converted to a corporation. 

Advantages of the LLC

 

  • LLCs do not require annual meetings and require few ongoing formalities
  • Owners are protected from personal liability for company debts and obligations
  • LLCs enjoy partnership-style, pass-through taxation, which is favorable to many small businesses

 

Disadvantages of the LLC

  • LLCs do not have a reliable body of legal precedent to guide owners and managers, although LLC law is becoming more reliable
  • An LLC is not an appropriate vehicle for businesses seeking to become public eventually or to raise money in the capital markets
  • LLCs are more expensive to set up than are partnerships
  • LLCs usually require annual fees and periodic filings with the state
  • Some states do not allow the organization of LLCs for certain professional vocations

 

Next up:  Corporations

Business Entity: Partnerships

 This is the second part of a four-part blog series

Partnerships

Partnerships are formed when two or more people carry on as co-owners of a business for profit.  Partnerships are often formed with nothing more than a hand-shake.  However, responsible partners will seek to have their partnership arrangement memorialized in a partnership agreement with an attorney.

How Partnerships are Managed

The partner that has the majority of the percentage of the business generally rules.  The other partners go along with the majority owner.  Partnerships do not require formal meetings of their partners like corporations do.  Overall, the management and administrative operation of partnership is relatively simple.  Like sole proprietorships, partnerships often grow and graduate to LLC or corporate status.

Varieties of Partnerships

There are several varieties of partnerships and they range from the general partnership to the limited liability partnership.

The General Partnership

The standard partnership, by default, is call the general partnership.  General partnerships are the simplest of all partnerships.  In a general partnership, all partners share in the management of the entity and share in the entity’s profits.  Matters of running the business are decided by the majority of the partners. All partner’s are responsible for the liabilities of the general partnership.

The Limited Partnership

The limited partnership is more complex than the general partnership.  The limited partnership is owned by two classes of partner; general partners manage the enterprise and are personally liable for its debts: limited partners contribute capital and share in the profits but normally do no participate in the management of the enterprise.

Limited partnerships seem to be on the edge of extinction because of the limited liability company.  Both the Limited partnership and the limited liability company share partnership-style taxation and partnership-style management but the LLC offers greater liability protection because it extends liability protection to all of its managers. 

The Limited Liability Partnership

Another form of partnership is the limited liability partnership.  A limited liability partnership is one composed of licensed professionals, such as attorneys, accountants, or architects.  The partners in the LLP may enjoy personal liability protection for the acts of other partners, but each partner remains liable for his or her own actions.  State laws generally require a LLP to maintain generous insurance policies or cash reserves to pay claims brought against the LLP.

As you can imagine, the complexity of this form of partnership is full of legalities and are best covered by a qualified attorney.

Advantages of the Partnership

  • Owners can start partnerships relatively easily and inexpensively
  • Partnerships do not require annual meetings and require few ongoing formalities
  • Partnerships offer favorable taxation for smaller businesses
  • Partnerships often do not have to pay minimum taxes that are required of LLC’s and corporations

 Disadvantages of the Partnership

  • All owners are subject to unlimited personal liability for the debts, losses, and liabilities of the business (except in the cases of limited partnerships and limited liability partnerships)
  • Individual partners bear responsibility for the actions of other partners
  • Poorly organized partnerships and oral partnerships can lead to disputes among owners

 Note:  An S-Corp is considered a corporation with different tax liabilities

 

Next up:  Limited Liability Company (LLC)

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