ReportWire

Tag: Money & Finance

  • Want To Run Your Business Better? Then Run These 3 Reports. | Entrepreneur

    Want To Run Your Business Better? Then Run These 3 Reports. | Entrepreneur

    [ad_1]

    Opinions expressed by Entrepreneur contributors are their own.

    As a lifelong accountant, I have what may be surprising news for you: your monthly financial statements aren’t very effective.

    Sure, they can help. It’s good to look back at the prior month and the year-to-date results so that you can determine if your company is profitable and also where there may be overspending. Don’t ignore your monthly financial statements. But take them with a grain of salt: they’re usually prepared well after the fact (for many of my clients, it’s weeks after the month ends). So although they serve as a good post-mortem review of results, they’re not so useful to run a business in real-time.

    So what is useful? I’ve found that these three reports are core for the managers of my best clients who run profitable businesses. Why? Because they tell the manager what’s going on right now and what is likely to happen in the near future.

    Related: The 5 Most Important Accounting Reports for Your Small Business

    The flash report

    Maybe you’ve never heard of this report because it’s not a common name among accountants. But for my best clients their “flash report” is a critical tool for keeping their real-time pulse on the business.

    The flash report is an aggregation of data from many different sources. It’s usually produced 2-3 times a week and put together not necessarily by a finance person but by a good administrative person who has access to the data needed. I have clients where the administrative person creates this report manually (literally) on a piece of paper and leaves it on the desk of the owner. I have others that do it by spreadsheet or via email. The report brings together numbers from various places that are key to the current operations of a business.

    These numbers vary by industry, but for the most part, they include current cash, receivables and payables. The report also shows year-to-date sales, backlog, purchase orders and open quotes. It shows year-to-date hours and overtime. Some of my clients like to see updated data about specific ongoing jobs or product lines.

    The most important thing about this report is benchmarking. Every current number has a corresponding number from its prior period. For example, if cash on hand is $500, what was cash on hand at the end of last year? Or if year-to-date sales are $10,000, what were the same sales at this point last year? Are we ahead or behind? You have to benchmark your current numbers against a similar period to put things into context.

    The pipeline report

    Where the flash report takes numbers from different sources, the pipeline report should be taking numbers from your customer relationship management (CRM) system — which is an application every company should have. When you’re using your CRM system the right way, you will be tracking quotes and opportunities, as well as tasks and emails connected to those things.

    My best clients leverage this data weekly and review a pipeline report. The pipeline report lists all open opportunities usually by “hot,” “warm” and “cold” designations, which are internally defined. It shows the dollar value of the opportunity, the date it’s estimated to close and the “weight” or chance it will turn into a sale. It also shows who’s working on the opportunity and the historical and future tasks that need to be done to complete the opportunity.

    When used the right way, the pipeline report is a tool for managing the sales team and seeing who is doing what and how effectively. This report is a sales forecast and serves as a critical instrument for knowing whether growth or contraction is in the cards. If you produce this report every week, you’ll not only be able to better direct your under-performing sales people towards more productive activities, but you’ll also have your thumb on the blood flow of your business: your expected revenues.

    There are other great reports you can run from your CRM system, but that’s a topic for another day. Relying on the pipeline report will not only help to increase and manage your company’s expected revenues but also increase the usage of your CRM system.

    The rolling cash forecast report

    If you’ve got a great pipeline report, then good for you — you are forecasting your revenues. But just forecasting revenues isn’t enough. My best clients forecast their cash flow. Why? Because successful people are always looking ahead. They don’t like surprises. They want to know what’s coming, so they can make decisions in advance and better manage the future to the full extent. Sales are important, but in the end, it’s all about cash. Do you know what your cash will be just 90 days from now? You probably don’t. But you should. And to know this, you’ll need to have a rolling cash forecast report.

    Putting this report together isn’t so tough. Here’s how:

    First, estimate your overhead over the next 90 days. You know this: it’s your payroll, utilities, rent, internet: all the recurring costs you’re already paying.

    Next, estimate your typical margin on a sale, which takes into account the direct materials and labor needed. I realize that this may differ based on many factors, from the product line to the time of year. But this is not science — it’s just an estimate. So come up with a reasonable number.

    Assuming you’re producing a reliable pipeline report, you’ve got your sales forecast for the next 90 days. There are sales that are not on this report because they’ve already closed and are considered open orders. Add this. Then talk with your sales team to further refine this 90 days sales forecast.

    Now, take your estimated sales, multiply the estimated margin and deduct your estimated overhead. You’re almost there!

    Think about any anomalies over the next 90 days — an estimated tax payment, a big supplier check that will be due, etc. — and figure that in. Take your beginning cash, add/deduct the net results from the above and you’ll have your ending cash in 90 days. Voila! You’ve now done a rolling cash forecast.

    Do a rolling cash forecast every month. It’ll be tough at first, but easier after you get it down. Trust me when I tell you it will change your life. No longer will you be running your business in the dark. You will have a better idea of the future and can make better decisions because of it.

    In summary, there are lots of reports that are great for a business. But most involve analyzing the past. My best clients do this. But the reports that really help them focus on the present — and the future — are the reports I’ve listed above. Get in the practice of producing these reports and you’ll find yourself running a more profitable, sustainable organization.

    [ad_2]

    Gene Marks

    Source link

  • Should You Consider a High-Yield Savings Account? Here’s What You Need to Know. | Entrepreneur

    Should You Consider a High-Yield Savings Account? Here’s What You Need to Know. | Entrepreneur

    [ad_1]

    Opinions expressed by Entrepreneur contributors are their own.

    As an entrepreneur, it is essential to have a solid financial plan in place to manage business cash flow and prepare for unexpected expenses. One option to consider as part of this plan is a high-yield savings account. A high-yield savings account offers a higher interest rate than a traditional savings account, allowing money to grow faster.

    There are both positives and potential negatives associated with high-yield savings accounts that will impact whether an individual should consider one.

    The high-yield savings account basics

    As the name suggests, high-yield savings accounts offer a higher yield on account balance compared to standard savings accounts. While on the surface a high-yield savings account may appear the same as a traditional savings account, there are some differences. For example, there may be a restriction on the number of withdrawals per month or year. There may also be a higher minimum balance requirement.

    However, with rates that can be ten times more than a traditional savings account, a high-yield savings account is certainly worthy of consideration.

    Related: The 8 Best Places to To Stash Your Retirement Savings

    Reasons to consider a high-yield savings account

    There are several good reasons to open a high-yield savings account.

    Access to higher rates. The typical rates on traditional savings accounts are on the rise, but they still cannot compete with the rates offered by a high-yield saving account.

    Less risk. While wanting a higher return on funds is typical, an individual may not be prepared for the higher risk associated with other investment methods. Most providers of high-yield savings accounts are FDIC insured. This means that there is up to $250,000 of coverage, so should there be a problem with the bank, an individual is guaranteed to get their money back.

    Diversification. As an entrepreneur, it’s always wise to diversify investments. A high-yield savings account can be a great complement to other investments, such as stocks or real estate, providing a stable and safe place to store some cash.

    Online flexibility. A high-yield savings account is a flexible option for entrepreneurs as it allows access to funds quickly and easily. Since most high-yield savings accounts are online-based, it makes it very easy to manage money using the bank’s online platform or app.

    Minimal fees. High-yield savings accounts typically require a low minimum deposit and have no monthly maintenance fees, making them a cost-effective option for entrepreneurs. For example, the Amex high-yield savings account has no account minimums and no monthly maintenance fees. Always check the account terms to make sure there are no fees, but generally speaking, the fee structure is more generous compared to traditional brick-and-mortar savings accounts.

    Related: 6 Best Savings Accounts of 2023

    Reasons why a high-yield savings account may not be right for you

    As with most financial products, there are some circumstances where a high-yield savings account may not be the right choice.

    Limited earning potential. While high-yield savings accounts offer a higher interest rate than traditional savings accounts, the earning potential is still limited compared to other investment options such as stocks or real estate. Entrepreneurs looking to grow their wealth quickly may want to consider other investment options.

    Maximum withdrawal limit. While the savings account is still accessible, individuals will only be able to make a maximum number of withdrawals before incurring a fee. Most banks restrict the number of times individuals can access their money each month. The only way to transfer money out is via wire transfer, electronic transfer and check, or by withdrawing funds up to six times per calendar month without incurring a penalty fee or putting the account at risk of closure.

    Lack of physical branch access. Most online high-yield savings accounts are associated with banks that don’t have physical branch locations. This means that should a problem arise with the account, individuals will need to rely on online or phone support.

    Minimum deposit requirements. Some high-yield savings accounts require a minimum deposit, which may be too high for some entrepreneurs. Without having enough money to meet the minimum deposit requirement, there is no option for opening an account.

    There could be transfer delays. While it’s possible to transfer funds from one bank to the new high-yield savings account, there may be some transfer delays. The typical wait time is 24 to 48 hours for funds to be credited to the new savings account.

    How to choose the right high-yield savings account for you

    As an entrepreneur, choosing the right high-yield savings account can be a bit of a challenge. There are many options to choose from.

    Once someone has decided that they would like to open a high-yield savings account, it’s time to consider choosing the right account. With so many high-yield savings accounts on the market, it can seem a little daunting to choose the right one. However, there are some key factors to consider that will help with making an account decision.

    Does it offer high rates?

    High-yield savings accounts offer a higher interest rate than traditional savings accounts, but the rates can vary greatly between different accounts. It’s essential to compare interest rates and choose the account that offers the highest rate.

    Is there an existing relationship with the bank?

    The first thing to look at is if your current bank offers a high-yield savings account. Many banks offer access to high-yield accounts, and you may be able to access better terms if you link the account to your checking account or other bank products.

    Are there fees?

    You will also need to check if there are any fees or charges associated with the account. If the high-yield savings account has a monthly maintenance fee, check to see if there are waiver criteria so that you don’t need to pay the fee.

    Does the bank offer other attractive products?

    Finally, look at the other products the bank offers to see if they appeal to you. For example, some banks have an entire banking product line designed to help their customers improve their credit. In addition to a high-yield savings account, there might be a checking account with no overdraft fees, no monthly fees and a credit-builder-secured credit card.

    [ad_2]

    Baruch Mann (Silvermann)

    Source link

  • 6 Steps to Make Tax Season As Painless as Possible | Entrepreneur

    6 Steps to Make Tax Season As Painless as Possible | Entrepreneur

    [ad_1]

    Opinions expressed by Entrepreneur contributors are their own.

    Q1 marks the beginning of a critical time for businesses — tax season. As you know, it can be a busy and stressful time of year for most businesses, regardless of their age, industry or profitability. No one wants any surprises after they file, so it’s important to start preparing sooner rather than later.

    By planning ahead, you’ll ensure your business is organized and ready to file on time. You may never enjoy tax season, but there are ways to make it as painless as possible. Here are six steps to ensure your business is ready — come April 15.

    Related: These 6 Tax Tips Will Help Make Tax Season Easy for Your Business

    1. Prepare throughout the year

    Getting ready for tax season starts long before you’re ready to file your tax return — you should be preparing throughout the year. This starts with having an accounting system in place where you can keep track of your finances.

    There are tons of free and inexpensive options when it comes to accounting software, including QuickBooks, Xero and ZohoBooks. The software is more comprehensive than anything you can do with an Excel spreadsheet, and most give you the option to collaborate with your accountant.

    In addition, businesses should be paying their quarterly tax obligations throughout the year. The exact filing schedule will vary depending on your business entity. Once you get on a schedule, you’ll likely find that paying your taxes as you go will make your life easier and help you avoid any fines or penalties.

    2. Make sure your books are balanced

    You don’t want to run into tax problems because of mistakes or missing transactions. Make sure all of your business transactions are recorded and accurately categorized. Take the time to reconcile your accounts and ensure that your financial software matches what your bank account says.

    You should also make sure that you’re separating your personal and business transactions. Otherwise, you’re going to create a lot of frustration for yourself.

    3. Gather your paperwork

    Start gathering your paperwork together at the beginning of the year. You’ll need to provide receipts for any deductions you took in case your business gets audited. It’s a good idea to digitize your receipts, so you don’t have to worry about anything getting lost or damaged.

    You’ll also need the following documentation to bring to your accountant:

    If you have employees, you’re required to file W-2s with the Social Security Administration by Jan. 31.

    Related: 5 Steps to Tax Season Success

    4. See what tax credits you qualify for

    Next, you want to see what kind of tax credits your business qualifies for. Tax deductions reduce your taxable income, while tax credits reduce your total tax bill. You can look for industry-specific tax credits or see if there are any state-specific tax credits you qualify for.

    One of the most advantageous tax deductions for financing is Section 179, which allows you to write off nearly the entire value of an equipment purchase on the current year’s tax return.

    The IRS provides information on its website about available tax credits and eligibility requirements. It’s a good idea to work with a tax professional to ensure your business actually qualifies for any credits you identify.

    5. Work with an accountant

    If you’re in the early stages of building your business, you may be tempted to file your taxes on your own to save money. However, the short-term benefits often lead to longer-term problems, and most entrepreneurs find more benefits in working with an accountant.

    Tax laws and regulations are constantly changing, and it’s impossible for the average business owner to stay on top of these changes. Accountants understand all of the relevant tax laws and filing requirements and can help you minimize your tax liability.

    Plus, filing your taxes can be time-consuming and tedious, especially if you don’t know what you’re doing. Using an accountant will save you time and help you avoid costly mistakes. Plus, you’ll have peace of mind knowing that your business taxes are filed accurately and on time.

    The upside of working with an accountant extends well beyond tax season; Your accountant can work with you throughout the year to develop strategies to minimize your tax burden.

    Related: 3 Ways to Save Money on Taxes That Most Entrepreneurs Miss

    6. File early if you can

    April 15 is commonly thought of as Tax Day, but the exact filing deadline depends on your business entity. Sole proprietors, single-member LLCs, and corporations that ended their year on Dec. 31 have to file taxes by April 15.

    But if you’re a partnership, multi-member LLC, or S-Corp filing Form 1120-S, you’re required to file by March 15. The IRS begins accepting tax returns beginning in mid to late January, so it’s a good idea to file early if you can.

    By filing early, you’ll avoid processing delays with the IRS and save yourself the stress of attempting to file at the last minute. If you wait too long to get the process started, you may have a hard time getting in with your accountant.

    Scheduling an appointment with your tax pro early ensures you can file on time. Otherwise, you may have to request an extension.

    [ad_2]

    Joseph Camberato

    Source link

  • How to Build a Million-Dollar Social Media Business | Entrepreneur

    How to Build a Million-Dollar Social Media Business | Entrepreneur

    [ad_1]

    Opinions expressed by Entrepreneur contributors are their own.

    Every time I speak to entrepreneurs and brands, they always seem to complain about a lack of reliable and skilled social media managers. A quick glance at your social media feed will show you how even 8- and 9-figure companies are lost when it comes to posting online.

    This is why, if you have a Wi-Fi connection, a phone, and you know how to write and schedule a few Instagram posts, you could easily replace your current 9-5 job with something that allows you to work from anywhere, whenever you want.

    Related: 12 Tips and Tools for Managing Multiple Social-Media Accounts

    But where should you start?

    The first thing you should do is create a portfolio that shows potential clients your skills when it comes to managing social media accounts.

    If you don’t have any experience yet, you could reach out to friends or family members who have a social media account and ask them if you can manage it for them for free. You only need to do this for three months to have a substantial portfolio that will put you ahead of anyone who has a degree in communication, social media management or marketing but no practical experience.

    Another way to build a portfolio is to apply for beginner paid gigs. The best platforms to do this are Upwork or Fiverr. Sure, the pay might not be the best in terms of compensation, but you’d be building a portfolio in no time and get testimonials that you can use once you start approaching bigger clients.

    Once you have gained some experience managing social media accounts, it’s time to attract clients that can pay you $500-2000 a month to manage their accounts.

    Here, most aspiring social media managers will usually resort to cold emailing or cold calling to find potential prospects and initiate a conversation. And while this approach might work for some, it puts you in a weaker position and makes negotiating a higher rate more difficult.

    That’s because, when it comes to negotiating, you always want to come from a place of authority. Contacting a client that has never heard of you can work if you’re already an established figure. But if you’re just a beginner, it will just show that you’re desperate to work.

    So, what’s a better approach to finding those clients that pay you premium fees?

    Related: How This 18-Year-Old High School Student Built a 6-Figure Social Media Consulting Business

    How to attract high-paying clients

    One way is to keep using platforms like Upwork and Fiverr. If you started there, it’ll be easier to keep searching for clients there, as you’d have collected good reviews and will have built a reputation as a trustworthy professional.

    But a better way is to post on social media platforms to build your authority. This has two advantages. First, it will show potential clients that you aren’t just claiming you can manage a social media account. You are practicing it, which is the strongest form of social proof you can have. Second, it will help you attract potential clients that will see you as an expert in your field and will happily pay you your fee without any hassle.

    Once you have attracted four to five clients this way, it’s time to turn them into repeat customers. The simplest way to do it is to overdeliver so much that they’d be crazy to not continue working with you. If you do so, you simply need to create an offer to manage their social media accounts that can last between three to nine months that gives you some predictable revenue.

    The goal when working with a client on a retainer basis is to keep communications tight and constantly remind them of the wins you are providing them (like increasing their followers or monetizing their platforms). Doing so will also help you routinely raise your rates without losing too many clients and can even make those clients refer you for more work.

    On top of maintaining good relationships with your existing clients, you should still actively search for new clients by posting on your pages (or using other lead-generation methods). This will put you in a stronger position when it comes to raising your rates or negotiating different packages.

    Still, there is always a cap on how much money you can make working 1-1 with a client. This is why every smart social media agency will eventually package the solutions, frameworks, templates and any other assets they use with their clients in a format that can be sold to many people at the same time.

    Related: 6 Tips to Start Your Million-Dollar Business From Scratch

    If your clients all share the same struggles, and you have a solution for it, you can easily turn that into an ebook, a video course or anything else that can be sold digitally. This will allow you to break through the freelance income barrier and scale to a million dollars a year.

    It might take some time to get there, but these are the steps that 99% of successful social media agencies have followed. The earlier you begin building your social media agency, the sooner you will reap the benefits.

    [ad_2]

    Rudy Mawer

    Source link

  • Pat Flynn Teaches You How to Build a Revenue Generating Audience | Entrepreneur

    Pat Flynn Teaches You How to Build a Revenue Generating Audience | Entrepreneur

    [ad_1]

    You know that building an audience is important. Whether it’s on LinkedIn, YouTube, your newsletter – you want to grow the base of people who know, like, and trust you, and will eventually buy from you.

    But, knowing that an audience is important is entirely different from having the skills to build an audience that lasts. So how do you do it? How do you build an audience of engaged, vocal followers who will not only buy your product but spread the word on your behalf as well?

    For this week’s podcast episode I sat down with Pat Flynn to discuss just that. Pat is the co-founder of SPI Media, a podcast, and owns several successful online businesses – when it comes to audience building, he’s the real deal.

    You can read the key takeaways from our discussion below and listen to the full episode here.

    Being an expert isn’t enough to find success

    Just scroll Instagram or Linkedin for a few minutes, and you will find people with way less skill and knowledge than you who have an audience hanging on their every word.

    Here’s a tough truth: You can be the most skilled expert in the world, but if you don’t know how to communicate that skill in a way that resonates with your audience, you’re going to be outdone every time.

    How do you build a presence that creates lifelong fans? Good question, we’ll cover that next.

    Be the audience before seeking an audience

    Pat advocates for becoming part of your target audience before you start to build a presence there. This gives two big advantages:

    1. You speak the language – by the time you’re ready to sell, you’re using the same vocabulary, know the inside jokes, and know who key players are. If you come in with no background knowledge, you aren’t offering expertise or a unique perspective. You’ll just be white noise to that audience.

    2. You can empathize with your audience. When you’ve been a part of a group, you know the problems they deal with, what motivates them, what slows them down. And that enables you to solve problems for an audience more effectively.

    Master one platform before expanding to others

    While you’re joining the audience, notice what platform they gather on. Then start with mastering just that platform.

    Pat said that if your effort is distributed across five platforms with five different sets of best practices, you’re going to fail. Instead, pick one platform and take courses on how to best utilize it.

    Invest in your community there. Learn about the individuals that follow you, care about their lives, decide how you’re going to show up on that one specific platform.

    Calculating Return on investment

    This part is tricky, because most business owners would like to know for certain that if they put in a certain number of hours, they’ll get a certain number of dollars out.

    Pat says ROI is the wrong way to look at it – when you discover who the people are, and what they need, you have an infinite number of ways you can solve their problems.

    He also points out that knowing your audience increases the impact of other areas in your business – copywriting, lead magnets, sales. All of those are infinitely more effective when you know your audience.

    Another note on ROI: If you measure it after your first project launch, it’ll feel lousy. The value of investing in your audience compounds over years.

    Next Steps

    Want to learn more from Pat? First, listen to the full interview Pat Flynn Teaches You How to Build a Revenue Generating Audience.

    Then, check out SPI Media’s All-Access Pass. In addition to gaining access to interactive DIY courses, you’ll also join a community of entrepreneurial peers of all levels who are committed to learning and improving their skill set.

    And, here are a few ways I can support you.

    Either way, I wish you the best of luck and feel free to connect with me on LinkedIn or Instagram.

    To hear the full conversation and get access to additional resources tune in to this week’s episode of the Launch Your Business podcast.

    [ad_2]

    Terry Rice

    Source link

  • Don’t Need Your Life Insurance Policy Anymore? Sell It. | Entrepreneur

    Don’t Need Your Life Insurance Policy Anymore? Sell It. | Entrepreneur

    [ad_1]

    Opinions expressed by Entrepreneur contributors are their own.

    You signed up for life insurance in an effort to provide a financial safety blanket for your loved ones after your death, but what if you don’t need it or simply can’t afford it anymore?

    Did you know that it can be turned into cash while you’re still alive to get you out of a financial crisis? You could even use it to build supplemental income for your golden years.

    That’s right. You can sell your life insurance policy just like any other private property. This transaction is called a life settlement.

    Maybe you need the cash to cover a major (and unexpected) expense or simply want to rid yourself of paying the monthly premium. Often, a life settlement is the only lifeline for many older adults struggling to cover heaps of medical bills after they fall critically ill or need long-term care in retirement.

    Those unaware of this option end up selling their cars or homes or pile up huge debts while paying for care, not knowing that their insurance policy could get them the same amount (or more) of cash than what their vehicle is worth or the total equity in their property.

    If you ever think of going down the same route, please don’t. Selling your life insurance policy to an individual or entity may be a smart move, depending on your unique circumstances. Knowing how to sell it and determining if it’s even the right move for you is critical to your financial future.

    Related: Life Insurance: What to Consider As a Business Owner

    Understanding life settlement: What is it and how does it work?

    A life settlement is when you sell your life insurance policy to a third party for a lump sum that’s less than the net death benefit but more than the cash surrender value.

    Sellers usually receive a lump sum, and afterward, the buyer assumes responsibility for the policy, paying the premiums and receiving the full death benefit when the policyholder passes away.

    As the policy owner, you can avail several advantages from a life settlement. Some of these include the following:

    • It provides an immediate source of cash that you can use for any purpose, from paying off debts to funding a business venture and covering major expenses that may have arisen unexpectedly.
    • You no longer have to keep track of the premiums that must be paid to the life insurance company.
    • You no longer have to stress over saving to pay for the premiums if you can’t afford the policy anymore and don’t want it to lapse.
    • You can use the lump sum to create a retirement fund or supplement your retirement income by purchasing an annuity.
    • You can reserve the cash to pay for long-term care needs that may arise.

    A life settlement is also an attractive option for those who have a policy with a high cash surrender value but don’t need the death benefit. For example, you may have purchased a life insurance policy to secure the financial future of your spouse or children, who are no longer dependent on you. With them becoming financially independent, the policy may no longer be needed.

    The same goes for seniors who may have purchased a policy when they were in good health, but now, with their deteriorating health, they may be struggling to afford the premiums. A life settlement can help them eliminate this burden and improve their quality of healthcare and life.

    Related: Why Life Insurance Has to Be Part of Your Wealth-Building Plan

    Eligibility requirements for a life settlement

    Generally, you must be 65 or older and your policy must have a minimum face value of $100,000 to qualify for a life settlement. This is because investors wouldn’t want to pay premiums on a policy for you if you could continue to live for decades.

    Also, many states require you to wait at least a couple of years after a life insurance policy is issued before you can sell it. In some states, the waiting period is five years.

    Are there any drawbacks to a life settlement?

    The only drawback of a life settlement is that you’ll no longer have life insurance coverage. But if your family’s financial future is secure and you don’t need the policy, there’s nothing to lose in a life settlement transaction.

    Ready to make the big decision?

    Whether you need the cash or want to free yourself of the premiums, life settlements are a big decision.

    You must carefully assess your circumstances and consider all the benefits and drawbacks of selling a life insurance policy before making the final decision. Also, make sure you fully understand the laws in your state regarding life settlements to avoid getting into trouble.

    If you think a life settlement is the best way forward for you, get in touch with a life settlement broker or financial advisor to discuss your options. It really helps to shop around before sealing the deal because some companies tend to make less than lucrative offers. A professional can help you make sure you get a fair price for your policy.

    As soon as a suitable prospect is found, you and the buyer will have to sign a contract outlining the terms of the sale. Once the contract has been signed, you’ll receive the agreed-upon amount in a lump sum from the buyer.

    [ad_2]

    William Schantz

    Source link

  • The Pros and Cons of Big Brands Launching Web3 Projects | Entrepreneur

    The Pros and Cons of Big Brands Launching Web3 Projects | Entrepreneur

    [ad_1]

    Opinions expressed by Entrepreneur contributors are their own.

    If you’ve been watching blockchain news, you likely saw the troubling figure that Web3 startup funding fell 74% in 2022. Yet megabrands such as Starbucks, Mastercard and Nike, all launching Web3 or Metaverse projects this year paints a conflicting image of Web3’s current status and future development.

    This may seem like deja-vu from the big-brand NFT craze in 2021 and early 2022, but these projects seem to be much more grounded in providing tangible value instead of manufacturing exclusivity. Major mainstream companies clearly see value in certain aspects of Web3, but with larger infrastructure still a work in progress, is this grand re-entry premature?

    Related: 4 Things to Consider Before Investing in Web3

    Big brand benevolence

    Large companies debuting and re-entering Web3 benefit the space by granting an undeniable cachet to the industry as a whole. Where blockchain-based developments have often been marked as gimmicks or marketing ploys, lower-profile launches show that Web3 technology can function with less fanfare by putting concrete user benefits at the forefront of product launches.

    A stamp of approval from companies outside the blockchain realm, and even the tech bubble, can solidify which Web3 use cases are viable. Gamer outrage drove gaming companies to backpedal on NFT integrations seriously, but we’ve seen virtually no public backlash to Starbucks transitioning its already incredibly successful rewards program to an NFT-based framework. Yes, it is essentially the same technology, but utilized in a way that enhances a service that non-crypto users already love instead of a useless distraction from a main product.

    Another key point of difference this time is the focus on the more tech and innovation-centered aspects of Web3, such as augmented reality (AR). Yes, Meta has long been the leader in this space with Oculus, but the details surrounding Apple launching its own “mixed reality” headset this spring gives a new level of prestige to AR progress. This news creates an even bigger splash considering Apple’s reputation for observing tech developments from the sidelines until it’s a clear win.

    If we’re measuring Web3 progress by a constant influx of VC dollars, then the state of the industry doesn’t look rosy in the short term. But the clear sustained interest from giants outside the industry shows that there is a solid curiosity and desire for Web3 technology. That being said, with big players entering the fold, there is room to question if Web3’s skeletal infrastructure and limited interoperability are ready for it.

    Related: Venture Capitalists are Pouring Money into Web3. Here’s Why.

    Too much too soon?

    A vote of confidence is vital for any industry’s growth, especially for smaller projects looking to get off the ground and build something revolutionary. But outside support doesn’t always guarantee that a platform or industry can succeed in the long term. Just look at the number of companies with an outpost in the primordial Metaverse project Second Life.

    Large-scale Metaverse infrastructures are still more of a sketch than a completed portrait. While big brand investment certainly fuels more frameworks to exist, it might not always have the best interests of a community at heart. What could end up happening is brands painting themselves into a corner, developing siloed Web3 worlds that only serve their customers and mimic the type of “walled garden” ecosystem that describes many internet platforms now.

    Companies that ignore the need for community-based frameworks do so to their detriment. Silicon Valley’s infamous “move fast and break things” mentality somewhat backfired on Web3 projects that didn’t realize you need an infrastructure to exist first before breaking it.

    By creating ecosystems that are not conducive to community growth, Web3 development and infrastructures become a black box, inaccessible to other projects or developers. This is where projects such as SendingNetwork, a software development kit (SDK) with tools that Web3 developers of all sizes can use to create community-centric platforms, step in to form an interconnected digital landscape. These sector-crossing initiatives are just as vital to creating a common Web3 foundation with projects trying to form the industry in its image.

    Related: They Say Web3 Is the Future of the Internet. But How?

    Making sure Web3 infrastructures are solid before courting larger projects can also help secure their interest in the long term. Companies of a certain stature have no qualms about experimenting in a new, potentially revenue-driving space, only to retreat after one bad quarter or plateaued growth. We’ve seen this happen in the blockchain space before, so it would be wise not to retread this path.

    Ultimately, there are clear benefits and drawbacks to megabrands hauling Web3 back into the mainstream. Where certain companies can lend legitimacy to the Web3 space, it’s important not to disregard the less glamorous yet vital strides smaller projects are taking to create common ground. Essentially, while brands invest in their projects, they should consider taking a big-picture approach to become fixtures in Web3 that bring in new communities outside their own corporatized space.

    [ad_2]

    Ariel Shapira

    Source link

  • Make Recession-Proofing Your Finances Part of Your Tax Season | Entrepreneur

    Make Recession-Proofing Your Finances Part of Your Tax Season | Entrepreneur

    [ad_1]

    Disclosure: Our goal is to feature products and services that we think you’ll find interesting and useful. If you purchase them, Entrepreneur may get a small share of the revenue from the sale from our commerce partners.

    Tax season is a frustrating time for most entrepreneurs. Sure, you might get a refund that you can pour back into your business, but you also might end up owing money. With the potential of the recession still looming in 2023, you need every dollar you can get. And while you might have taken steps to recession-proof your business, have you done the same with your personal finances?

    During our Gear Up For Tax Season event, we’ve dropped prices on all kinds of finance courses, including A 9-Course Guide to Recession-Proofing Your Finances. This comprehensive bundle includes courses from some of the web’s top business and finance instructors, and it’s available for just $29.99.

    With this bundle, you’ll learn how to create a budget that works, get an introduction to the stock market and real estate investing, and much more. There’s a course on generating passive income with dividend investing, a course on online residual income business models, one on investing with partners to raise your potential, and others designed to help you turn the disposable income you have into more money.

    In addition, you’ll learn how to maximize your credit and savings potential even in economic downturns and discover the best tax benefits to leverage with your retirement account and other investments. There’s even a financial analysis course taught by award-winning business school professor and author Chris Haroun. And with five stars online, one verified purchaser wrote, “This is good value for [the] money.”

    Gear up for tax season by preparing for a recession. From February 24 through 11:59 p.m. Pacific on March 2, you can get A 9-Course Guide to Recession-Proofing Your Finances for the special price of just $29.99 (reg. $1,800).

    Prices subject to change.

    [ad_2]

    Entrepreneur Store

    Source link

  • This $19 Budget Management Course Could Help Your Business Thrive | Entrepreneur

    This $19 Budget Management Course Could Help Your Business Thrive | Entrepreneur

    [ad_1]

    Disclosure: Our goal is to feature products and services that we think you’ll find interesting and useful. If you purchase them, Entrepreneur may get a small share of the revenue from the sale from our commerce partners.

    Nearly one in five small businesses fail in their first year. That may be daunting as a new business owner, but learning to manage your money and use it wisely could help your business thrive. The Essential 2023 Money Management Bundle has lessons on everything from investing to budgeting to personal finance—and lifetime access is on sale for $19.

    It’s time to start feeling confident about your business’s financial future. If that means earning passive income to back up your normal revenue streams, then study long-term investment strategies taught by full-time trader, investor, and entrepreneur Travis Rose. See how you can build value by investment and learn to read charts and analysis indicators to make informed investments.

    No investment is a sure thing, so you may want to craft a finance tracker to stay informed about how much your business spends monthly. This model also works as a personal finance tool, but scaling it up for your business may help you make informed decisions if the time comes to limit expenses.

    Many personal finance skills may also apply to your business finances. Up to 82% of businesses that fail can attribute that failure to poor cash flow management. In principle, managing your business’s cash flow is similar to operating a personal budget, and Budgeting 101 could show you the basics. From creating a monthly budget, setting debt repayment goals, and creating a cash flow schedule, your business’s finances may not be that much different from your own.

    Set yourself up for a year of growth that you can reflect on next tax season. Get the Essential 2023 Money Management Bundle for $19 (reg. $1990) from February 24 through March 2 at 11:59 p.m. PT.

    Prices subject to change.

    [ad_2]

    Entrepreneur Store

    Source link

  • 4 Ways to Prepare Your Product Business for a Recession | Entrepreneur

    4 Ways to Prepare Your Product Business for a Recession | Entrepreneur

    [ad_1]

    Opinions expressed by Entrepreneur contributors are their own.

    Have you ever gone through a severe weather warning? Whether it was preparing for a blizzard, a hurricane or maybe even needing toilet paper during a pandemic, the panicked rush to the local grocery store is a sight to behold. Shoppers frantically drive carts and carry bags piled with canned goods, paper towels, toiletries, batteries, water gallons, pet supplies and so many “essentials.” The checkout lines are swarming, the urgency of the situation creating an “every man for himself” mentality.

    It’s chaos preparing for potential chaos.

    [ad_2]

    Katie Hunt

    Source link

  • What Is a Beneficiary? Here’s Everything To Know. | Entrepreneur

    What Is a Beneficiary? Here’s Everything To Know. | Entrepreneur

    [ad_1]

    Naming a beneficiary is an essential step in estate planning that allows individuals to determine how their assets will be distributed in the event of their death.

    By understanding the different types of beneficiaries and the importance of naming them, individuals can ensure that their assets are passed on to loved ones or causes that matter to them.

    Read on for everything you need to know about beneficiaries.

    What is a beneficiary?

    A beneficiary is a person or entity legally designated to receive the benefits or proceeds of a trust, will, insurance policy or retirement account.

    The specific rights and responsibilities of a beneficiary will depend on the type of instrument, which can include:

    • A trust: Trusts are legal arrangements where grantors transfer property to trustees, managed for the beneficiary’s benefit. The trustee is legally obligated to manage the property and distribute the income to the beneficiary per the trust agreement terms.
    • An insurance policy: The beneficiary may be a person, like a spouse or a child, or an entity, like a charity or living trust. The death benefit is paid out tax-free to the designated beneficiary and can be used to cover expenses such as funeral costs, outstanding debts or financial security.
    • A will or estate: The person who writes the will, the testator, can specify who the beneficiaries will be and how much each will receive. If the testator dies with no will, the property will be distributed per the laws of the state where they lived.
    • A retirement account: An IRA or 401(k) account will provide the beneficiary with the remaining account balance in the event of the account holder’s death.
    • A bank account: Financial accounts, such as savings accounts, checking accounts and certificates of deposit, can be held in payable on death (POD) or transfer on death (TOD) designation. This allows individuals to name beneficiaries who will receive the funds in the account in the event of their death without going through probate court.
    • Investment accounts: Investment accounts, like brokerage accounts, can be held in TOD designation. This allows individuals to name beneficiaries who will receive the assets in the account in the event of their death without going through probate court.
    • Real estate: Real estate can be held in joint tenancy with the right of survivorship designation, which allows the surviving joint tenant to inherit the property in the event of the death of the other joint tenant.

    Related: What Is a Trust Fund and How Do They Work?

    In addition to that, different types of beneficiaries include:

    • Primary beneficiary: The primary beneficiary is the person or organization receiving the benefits first. If the primary beneficiary dies before the owner, the secondary beneficiary will receive the benefits.
    • Secondary beneficiary: The secondary beneficiary is the person or organization receiving the benefits if the primary beneficiary dies before the asset owner.
    • Contingent beneficiary: The contingent beneficiary is the person or organization that will receive the benefits if the primary and secondary beneficiaries die.
    • Per stirpes beneficiary: The per stirpes designation is a way to specify how the benefits will be distributed if the primary beneficiary dies before the asset owner. With a per stirpes designation, the benefits will be distributed to the descendants of the primary beneficiary.
    • Per capita beneficiary: The per capita designation specifies how the benefits will get distributed if the primary beneficiary dies before the asset owner. With a per capita designation, the benefits will be distributed equally among the descendants of the primary.
    • Totten trust beneficiary: A Totten trust is a type of savings account used to pass on small amounts of money to a named beneficiary after the account holder dies.
    • Charitable beneficiary: A charitable beneficiary is a nonprofit organization that will receive the benefits of the asset after the owner dies.
    • Special needs beneficiary: A special needs beneficiary is a person with a disability who will receive the benefits of the asset after the owner dies. The benefits may provide financial support while preserving the individual’s eligibility for government benefits.
    • Business entities: Business entities, such as partnerships and corporations, can be named as beneficiaries. This can be useful for individuals who own a business and want to ensure its continuation after death.

    Related: 4 Lessons on Succession Planning for Entrepreneurs

    What if a person does not name a beneficiary?

    If an individual fails to name a beneficiary, their asset distribution will be determined by the laws of the state where they live.

    This means that the assets will be distributed according to the state’s laws, which typically prioritize family members such as the spouse, children and other close relatives. If the individual has no relatives, their assets may be distributed to the state. Failing to name a beneficiary can also result in a loss of certain benefits and protections.

    For example, if an individual has a retirement account but does not name a beneficiary, the assets may not be eligible for a tax-free rollover to the surviving spouse.

    Related: Everything You Need to Know About a Retirement Plan

    What are 5 reasons people assign beneficiaries?

    1. Estate planning

    Estate planning involves making arrangements for the distribution of property after death. By designating beneficiaries for their assets, individuals can ensure that their property is distributed according to their wishes, avoid probate and minimize estate taxes.

    Probate is a court-supervised process used to settle a deceased person’s estate, which can be time-consuming and expensive. Minimizing estate taxes can help to ensure that more of the deceased person’s property gets passed on to their beneficiaries rather than being lost to taxes.

    Related: Why is Estate Planning More Important Now Than Ever Before?

    2. Insurance planning

    Insurance planning involves making arrangements to provide financial protection for loved ones in the event of their death. By designating beneficiaries of insurance coverage, individuals can ensure that their loved ones receive the policy’s death benefit promptly.

    The death benefit can cover expenses like funeral costs or outstanding debts or provide financial security for the beneficiary.

    Related: Busy Parents: Sign up for Life Insurance with This Speedy Provider

    3. Retirement planning

    Retirement planning involves making arrangements for financial security upon retirement. By designating beneficiaries of retirement accounts, individuals can ensure that loved ones receive the remaining balance of the account after their death.

    The remaining balance of the account can be used to provide financial security for the beneficiary, like helping to pay for living expenses or education costs.

    Related: What Is a Pension? Types, Benefits and More

    4. Charitable giving

    By designating a charitable organization as a beneficiary, individuals can make a lasting impact and support a cause they care about.

    5. Special needs planning

    Special needs planning involves making arrangements for the financial security of a family member with special needs.

    By designating a person with special needs as the beneficiary of their assets, individuals can provide for their beneficiary while still preserving their eligibility for government benefits.

    Related: Why Business Executives with Disabilities Must Take Back Control of Their Health Care Now

    What should you consider when naming a beneficiary?

    1. Purpose: Is it to provide for a loved one, support a charitable organization or fulfill a specific need or obligation? Knowing the purpose can help guide the decision-making process.
    2. Estate planning goals: Consider the individual’s estate planning goals, such as tax planning, creditor protection or avoiding probate, as these goals may impact the choice of beneficiary.
    3. Age and health: Consider the age and health of the potential beneficiaries, as younger beneficiaries may need the assets for a more extended period. In comparison, older beneficiaries may have more immediate needs.
    4. Family dynamics: It is essential to consider who may need the assets the most and who would be the best caregiver for any minor children.
    5. Trustworthiness: Will the beneficiaries be responsible for the assets and use them as intended?
    6. Flexibility: Can the designation be changed in the future if circumstances change?

    Related: Annuity Options for Retirement Savings – No Fuss, No Jargon, No Gimmicks

    How do you name a beneficiary?

    The beneficiary naming process varies depending on the type of asset considered, but it typically involves a step-by-step process similar to this:

    1. Review the terms and conditions: Before naming a designated beneficiary, it is crucial to understand the asset’s terms and conditions with a financial advisor’s help. For example, the process for naming life insurance beneficiaries will differ from the process for naming a beneficiary for a retirement account.
    2. Identify potential beneficiaries: Once you have reviewed the terms and conditions, identify potential beneficiaries like family members, friends or charitable organizations.
    3. Choose the appropriate form of beneficiary designation: The appropriate form of beneficiary designation will depend on the type of asset. For example, life insurance companies typically require a written designation on the life insurance policy, while retirement accounts may allow for an electronic designation.
    4. Complete and sign the beneficiary designation form: Once you have chosen the appropriate form of beneficiary designation, you will need to complete and sign the form. This may involve providing legal documents, like Social Security Number and birth certificate, for your designated beneficiaries.
    5. Submit the completed form to the appropriate party: The completed form should be submitted to the relevant party, such as the insurance company or retirement plan administrator.
    6. Review and update your beneficiary designations regularly: It is essential to review and update your beneficiary designations regularly to ensure they are current and reflect your current wishes. Major life events, such as the birth of a child, the death of a spouse or a spouse becoming an ex-spouse, may require you to update your beneficiary designations.

    What do you need to know about beneficiaries?

    Beneficiaries play a crucial role in the distribution of assets after an individual’s death. When naming a beneficiary, it is vital to consider the different types of beneficiaries, the specific circumstances and the individual’s goals.

    By understanding the importance of naming beneficiaries, individuals can ensure that their assets are passed on to their loved ones and the causes that matter most to them.

    If you’re looking for additional information on personal finance, estate planning and more, visit Entrepreneur.com.

    [ad_2]

    Entrepreneur Staff

    Source link

  • Is Life Insurance Taxable? Here’s Everything To Know. | Entrepreneur

    Is Life Insurance Taxable? Here’s Everything To Know. | Entrepreneur

    [ad_1]

    As people grow older, life insurance is a topic that becomes more and more important, especially for people who have children or dependents. Life insurance is a method for helping the security of others once someone dies.

    Some fast facts about life insurance include:

    • Approximately 172 million Americans own life insurance.
    • 34% of Americans ages 18 to 24 report they own a life insurance policy.
    • 46% of Americans ages 25 to 44 own a life insurance policy.
    • 53% of Americans ages 45 to 64 own a life insurance policy.
    • 57% of Americans ages 65 and older own a life insurance policy.

    With so many people holding life insurance policies, you might wonder: Is life insurance taxable? Read on to find out.

    What is life insurance?

    Life insurance is a contract between a policyholder and an insurance company through which the policy owner agrees to pay a designated beneficiary a sum of money in exchange for a life insurance premium upon the insured’s death.

    Life insurance is an insurance product meant to provide financial security to that beneficiary after the policyholder passes away to help cover expenses such as funeral costs, outstanding debts and other living expenses. The amount of life insurance a person needs will depend on several factors, including income, debt and dependents.

    Related: Busy Parents: Sign up for Life Insurance with This Speedy Provider

    What makes a strong life insurance policy?

    Several factors contribute to a strong life insurance policy, including:

    • Coverage amount: The policyholder should choose an adequate amount for their loved ones’ financial needs. When deciding upon coverage, the policyholder should consider the cost of living, funeral costs, outstanding debts and future expenses like college tuition.
    • Policy type: A policy should always meet the insured person’s needs. For example, if they want affordable coverage for a specific period, term life insurance may be a good option. If they are looking for a long-term investment, whole life or universal life insurance may be a better fit.
    • Premium payments: The policy’s premium payments should always be affordable and within the policyholder’s budget. It’s essential to review the policy terms and conditions to understand the premium payments and any potential increases or decreases in the future.
    • Death benefit: The policyholder should choose a life insurance death benefit that is adequate to meet their loved ones’ financial needs. The death benefit distribution should be consistent with the policyholder’s wishes, whether through an accelerated death benefit or other suitable means.
    • Policy riders: The policyholder should consider adding riders to their policy, such as a living benefit rider or a conversion option, to provide additional protection and flexibility.
    • Insurance company: Always choose a reputable and financially stable insurance company with a history of paying claims.

    Related: Why Life Insurance Has to Be Part of Your Wealth-Building Plan

    What types of life insurance are there?

    There are several types of life insurance, so before choosing one, one must understand what each entails and the positives and negatives of each.

    Term life insurance

    Term life insurance covers a specific term ranging from ten to thirty years.

    With a term life insurance policy, the policyholder pays a premium to the insurance company. If the policyholder dies within the policy’s term, the death benefit is paid to the designated beneficiary.

    If the policyholder does not die within the term, the policy will expire and the premium payments will not be refunded.

    • Pro: Term life insurance is typically the most affordable form, making it accessible to many people. It also provides a straightforward and easy-to-understand way to provide financial protection to loved ones in the event of the policyholder’s death.
    • Con: If the policyholder does not die within the policy’s term, the policy will simply expire and the premium payments will not be refunded. This can make term life insurance less appealing for those looking for a long-term investment component.

    Whole life insurance

    Whole life insurance provides coverage for the policyholder’s entire lifetime as long as the premium gets paid. With this type of life insurance, the policyholder pays a premium to the insurance company, and the policy builds up a cash value component over time.

    In the event of the policyholder’s death, the death benefit gets paid to the designated beneficiary. The policyholder can access the cash value component during their lifetime through loans or withdrawals.

    • Pro: Whole life insurance provides lifelong coverage and a savings component, making it a good option for those looking for a long-term investment. You can also use the cash value component to help cover premium payments or other expenses.
    • Con: Whole life insurance is typically more expensive than term life insurance, and the premium payments are often higher. The returns on the cash value component may also be lower than what could be achieved through other investment options.

    Universal life insurance

    Universal life insurance provides a death benefit and a savings component, with more flexibility in premium payments and death benefit amounts.

    The policyholder pays a premium to the insurance company, and the policy builds up a cash value component over time. The death benefit gets delivered to the designated beneficiary during the policyholder’s death.

    • Pro: Universal life insurance offers more flexibility in terms of premium payments and death benefit amounts, allowing the policyholder to adjust the policy as their needs change. The policy also provides a savings component that you can use to help cover premium payments or other expenses.
    • Con: Universal life insurance can be complex, and there is a chance that the returns on the cash value component may be lower than what could be achieved through other investment options.

    Variable life insurance

    Variable life insurance provides a death benefit linked to the performance of a portfolio of investments. The policyholder pays a premium to the insurance company, and they can choose to allocate their premium payments to different investment options.

    The death benefit is paid to the designated beneficiary if the policyholder dies. Still, the amount of the death benefit will depend on the performance of the investments.

    • Pro: Variable life insurance allows the policyholder to potentially earn higher returns.
    • Con: The policy’s cash value component is subject to market risk. The value of the investments in the portfolio can fluctuate, and if the investments perform poorly, the policyholder’s cash value and the death benefit are susceptible to a negative impact.

    Do you have to pay taxes on life insurance?

    Yes, certain aspects of life insurance can be taxed, but it depends on the type of life insurance policy and how it is structured. Generally, the death benefit from a life insurance policy has an exemption from income taxes for the beneficiaries.

    However, there are some situations where life insurance may incur tax consequences, including:

    • Cash value withdrawals: If a policyholder withdraws money from the cash value of a permanent life insurance policy, such as whole life or universal life policies, the withdrawal may get taxed as ordinary income.
    • Policy loans: If a policyholder takes out a loan against the cash value of a permanent life insurance policy, the loan may be subject to standard tax implications if it exceeds the policy’s cost basis, which is the premium paid into the policy.
    • Premiums: The premiums paid for a life insurance policy may be tax-deductible in certain situations, such as when the policy provides business-related life insurance coverage.
    • Investment gains: If a life insurance policy has a cash value component invested in securities, such as stocks or bonds, any investment gains may be subject to capital gains tax if the policy owner makes withdrawals or loans against the policy.

    Related: How to Put Your Tax Return to Work for You

    What types of taxes apply to life insurance?

    Just like there are different types of life insurance, there are also different types of life insurance taxes. Keep reading to find out more.

    Income tax

    If a policyholder withdraws money from the cash value of a permanent life insurance policy, such as a whole life or universal life policy, the withdrawal may be subject to income tax.

    This means that the withdrawal is treated as regular taxable income and is subject to the same federal and state income tax rates as an individual’s salary or wages.

    Related: What Is Adjusted Gross Income? Everything You Need To Know.

    Capital gains tax

    If a life insurance policy has a cash value component invested in securities, such as stocks or bonds, any investment gains may be subject to capital gains tax if the policyholder makes withdrawals or loans against the policy.

    Capital gains tax is a tax on a policyholder’s profit from the sale of a security. In the case of a life insurance policy, the policyholder realizes a gain when they make a withdrawal or loan from the policy that exceeds the policy’s cost basis, which is the amount of premium paid into the policy.

    Related: Are Unused Travel Card Benefits Actually a Bad Thing?

    Estate tax

    If the death benefit from a life insurance policy gets paid to the policyholder’s estate, it may be subject to federal estate taxes, depending on the size of the estate and applicable federal and state estate tax laws.

    The estate tax, also known as the inheritance tax, is a tax on transferring wealth from one generation to the next. It is calculated based on the policy owner’s estate value at the time of death.

    Related: Why is Estate Planning More Important Now Than Ever Before?

    Premium tax

    Some states impose a tax on the premiums paid for life insurance policies, known as a premium tax. The premium tax is a percentage of the premium that states generally use to fund various insurance-related programs and services.

    The amount of premium tax owed will depend on the state in which the policy is issued and the premium paid.

    Related: How to Make the Most of Tax-Free Money

    Does the type of life insurance payout affect the way it is taxed?

    There are two types of life insurance payments: lump sum and income stream.

    A lump sum payment is the more common of the two, and with this option, the policy’s total death benefit gets paid out in one single payment soon after the policyholder’s death.

    An income stream, like an annuity life insurance policy, will provide a series of payment installments over a set period.

    With a lump sum, the death benefit is generally not taxed as income to the beneficiary or beneficiaries. However, if the policy has a cash value component, such as a permanent life insurance policy, the amount of the death benefit that exceeds the policy’s cash value may be subject to income tax.

    With an income stream, the payments received may get taxed as income to the beneficiary. The taxation of annuity payments depends on several factors, including the type of annuity, the policyholder’s tax bracket and their investment earnings.

    Generally, annuity payments are taxed as income, which means they get taxed at the recipient’s marginal tax rate.

    Related: What Is a Trust Fund and How Do They Work?

    What do you need to know about life insurance taxes?

    If life insurance is on your mind, it can be a great benefit to leave behind once you’re gone.

    While there are some financial considerations to make and some taxes to be aware of, life insurance is an asset to consider. Always consult a tax professional for the very best legal advice.

    For more information on taxes, the IRS or finding the right life insurance company, visit Entrepreneur.com.

    [ad_2]

    Entrepreneur Staff

    Source link

  • Free Webinar | March 22: What Entrepreneurs Should Consider Writing Off | Entrepreneur

    Free Webinar | March 22: What Entrepreneurs Should Consider Writing Off | Entrepreneur

    [ad_1]

    Tax season is here (hooray?) and to make sure that you don’t leave a single penny on the table, we have called in our resident tax experts to walk you through the specifics of write-offs for entrepreneurs. Whether you are a full-time small business owner or making extra money with a side hustle, this webinar is essential to making sure you wind up with the best tax bill or refund possible.

    Mark J. Kohler — author, CPA, attorney, and cohost of the podcast “Refresh Your Wealth” — and Mat Sorenson — author, attorney, and CEO of Directed IRA & Directed Trust Company — have been at this for years, and these self-described “tax geeks” have all of the answers to your write-off questions. During this webinar, they’ll teach you:

    • Commonly missed home office deductions
    • Auto and travel write-offs
    • Changes to meals and entertainment rules
    • Red flags that can trigger audits
    • Changing your entity (LLC, S-corp) structure to save taxes
    • And more!

    This free webinar can save you a lot of dough on Tax Day — don’t miss it! Register now and join us on March 22nd at 3:00 PM ET.

    About the Speakers:

    Entrepreneur Press author Mark J. Kohler, CPA, attorney, co-host of the Podcast “Refresh Your Wealth”, and a senior partner at both the law firm KKOS Lawyers and the accounting firm K&E CPAs. Kohler is also the author of “The Tax and Legal Playbook, 2nd Edition”, and “The Business Owner’s Guide to Financial Freedom.

    Mat Sorensen is an attorney, CEO, author, and podcast host. He is the CEO of Directed IRA & Directed Trust Company, a leading company in the self-directed IRA and 401k industry and a partner in the business and tax law firm of KKOS Lawyers. He is the author of The Self-Directed IRA Handbook.

    [ad_2]

    Entrepreneur Staff

    Source link

  • What Is a Living Trust? Here’s Everything to Know. | Entrepreneur

    What Is a Living Trust? Here’s Everything to Know. | Entrepreneur

    [ad_1]

    Opening a living trust is an essential option in estate planning. By understanding the different types of living trusts and the opportunities they provide, you may be inspired to open one. Read on for everything you need to know about living trusts.

    What is a living trust?

    A living trust is a type of trust created and funded while the grantor is alive.

    The primary purposes of a living trust are:

    • To manage and distribute assets and trust property to named beneficiaries without probate court involvement.
    • To provide a smooth transfer of assets to named beneficiaries in the event of the grantor’s incapacity.
    • To provide financial stability to family members through assets.

    Related: What Is a Trust Fund and How Do They Work?

    What types of living trusts are available?

    There are several types of living trusts, each with unique features and benefits. However, the two main types of living trusts are revocable living trusts and irrevocable living trusts. Read below for more information.

    Revocable living trusts

    A revocable living trust is a trust that can be amended or revoked by the grantor at any time during their lifetime. This type of trust provides flexibility and allows the grantor to change the trust as their circumstances change.

    A revocable living trust can be a helpful estate planning tool, as it can avoid probate, provide privacy and allow for the management of assets if the grantor becomes incapacitated.

    Irrevocable living trusts

    An irrevocable living trust is a trust that cannot be amended or revoked once established. This type of trust is often used for tax planning or asset protection purposes.

    While the grantor cannot make changes to the trust, they can still receive income from the trust and use the assets in the trust for their benefit during their lifetime.

    Related: A Succession Plan Can Protect You, Your Family, and Your Employees. Here’s How.

    Who are the key players in the living trust process?

    There are four key players in the living trust process, which include:

    1. Grantor: The grantor establishes the living trust and transfers ownership of their assets to the trust. The grantor may also act as the initial trustee, retaining full control over the trust assets and making decisions about how they are managed and invested.
    2. Trustee: The trustee is responsible for managing and investing the trust assets and distributing them to the beneficiaries according to the terms of the trust document. The grantor may serve as the initial trustee but can also appoint a successor trustee to take over in the event of their incapacity or death.
    3. Beneficiaries: The beneficiaries are the individuals or organizations named in the trust document who will receive the benefits of the trust. The named beneficiaries may receive income from the trust assets or an outright distribution of the assets.
    4. Attorney: An attorney can be involved in the living trust process by drafting the trust document and providing legal advice to the grantor on legal and tax issues related to the trust.

    Related: Gift Deed Or Will: What Is the Best Way To Pass On Your Assets To Your Beloved?

    How do living trusts work?

    Living trusts work by transferring ownership of assets from the grantor to the trustee or co-trustee by a process that will generally follow these steps:

    1. Asset transfer: The grantor transfers ownership of their assets, such as real estate, bank accounts and stocks, into the trust.
    2. Trust agreement: The grantor creates a living trust document, which outlines the trust terms and the trustee’s responsibilities. The trust agreement should specify the purposes for which the assets in the trust will get used and how the assets will be managed and distributed after the grantor’s death.
    3. Trustee: The grantor selects a trustee responsible for managing the assets in the trust. The trustee must follow the terms of the trust agreement and act in the best interests of the beneficiaries.
    4. Beneficiaries: The grantor selects one or more beneficiaries who will receive the assets in the trust after the grantor’s death. The trust agreement specifies when and how the assets will be distributed to the beneficiaries.
    5. Management of assets: During the grantor’s lifetime, the trustee manages the assets in the trust according to the terms of the trust agreement. This may involve investing the assets, paying bills and making distributions to the beneficiaries.
    6. Transfer of assets: After the grantor’s death, the assets in the trust are transferred to the beneficiaries without going through probate court.

    Related: 5 Ways to Professionally Manage Your Financial Assets

    How is a living trust different from a will?

    A will is a legal document that specifies how a person’s assets will be distributed after their death and can be used to appoint a guardian for minor children. A will only takes effect after the person’s death.

    In contrast, a trust is a legal arrangement in which a trustee holds and manages assets for the benefit of the trust’s beneficiaries.

    With a living trust, the grantor transfers ownership of their assets to the trust while they are still alive, and the trust’s terms dictate how the assets will be distributed after the grantor’s death.

    Why do people open living trusts?

    There are several reasons people choose to open living trusts. Keep reading for more information on those reasons.

    To avoid probate

    Probate is the legal process that occurs after a person dies, during which the court oversees the distribution of the deceased person’s assets.

    By establishing a living trust, the assets in the trust pass directly to the beneficiaries named in the trust document without the need for probate court.

    To continue control over asset management

    A living trust allows the grantor to retain control over the management and distribution of their assets during their lifetime. The grantor can act as the initial trustee, making decisions about how the assets are invested and managed, and they can change the terms of the trust at any time.

    To transfer assets in the event of incapacity

    In the event of the grantor’s incapacity, the successor trustee named in the trust document would take over the management of the trust and make decisions about the assets on behalf of the grantor.

    This can help ensure a smooth transition of assets to the named beneficiaries and avoid needing a court-appointed guardian or conservator.

    To ensure privacy

    Because it provides more privacy than a will, individuals with significant assets or those who wish to keep their financial affairs private have more options and avenues to keep their information confidential instead of on the public record.

    To plan for estate taxes

    You can use a living trust as a tool for estate tax planning, as certain types of trusts can be structured to minimize estate federal estate tax liability.

    This can help to preserve the value of the grantor’s assets for their beneficiaries and minimize the impact of estate taxes on the overall estate.

    To plan for loved ones with special needs

    For a beneficiary with special needs, living trusts allow for the management of assets for their benefit without affecting their eligibility for government benefits.

    To avoid contest

    A well-drafted living trust can help avoid contests over a grantor’s assets, as it spells out the grantor’s wishes for the distribution of their assets.

    This can help reduce the likelihood of disputes among named beneficiaries and ensure that the grantor’s wishes are respected.

    Related: Real Estate Management Could Be a Game-Changer for Your Income

    Who can open a living trust?

    Anyone with mental and financial capacity can open a living trust. There is no age requirement, although it is typically more common for older individuals to establish a living trust.

    To open a living trust, you must have assets to transfer into the trust and have a clear understanding of your goals for the trust.

    It is essential to consult with an attorney or a financial advisor when considering a living trust, as they can help you determine whether a living trust is appropriate for your situation and provide guidance on the legal and financial considerations involved in establishing a trust.

    Related: Is Your Financial Advisor Right For You? Here’s A Simple Test To See If It’s Time To Move On.

    What assets can be put in a living trust?

    You can transfer most types of assets into a living trust.

    Some common assets you can put into a living trust include:

    • Real estate: primary residence, vacation homes, rental properties and land.
    • Bank accounts: checking and savings accounts, certificates of deposit and money market accounts.
    • Investment accounts: stocks, bonds, mutual funds and retirement accounts such as 401(k)s or Roth IRAs.
    • Business interests: partnerships, limited liability companies and closely held corporations.
    • Personal property: jewelry, art, collectibles and other valuable items.
    • Life insurance policies: whole life and term life insurance policies.
    • Vehicles: cars, trucks, boats and airplanes.

    Related: 5 Ways Business Owners Can Use Trusts to Benefit Their Company

    What are the pros and cons of a living trust?

    A living trust can be a helpful estate planning tool, but it is essential to consider the pros and cons before deciding.

    Pros of a living trust

    • Avoids probate: A living trust can avoid probate, the court-supervised process of distributing a deceased person’s assets to their heirs. Probate can be time-consuming, expensive and public, while a living trust can help avoid these drawbacks.
    • Privacy: A living trust provides privacy, as the terms of the trust and the assets in the trust are not a matter of public record.
    • Assets management in incapacity: If the grantor becomes incapacitated, the assets in the trust can be managed by a successor trustee without the need for a court-appointed guardian or conservator.
    • Control over the disposition of assets: The grantor can dictate how their assets will be managed via the trust’s terms after death.
    • Flexibility: A revocable living trust can be amended or revoked at any time by the grantor, allowing for changes in their circumstances.

    Cons of a living trust

    • Cost: The cost of establishing a living trust can be substantial, including attorney fees, trustee fees and the costs of transferring assets into the trust.
    • Complexity: A living trust can be a complex legal document. Working with an attorney with experience with living trusts is vital to ensure the trust is properly established and funded.
    • Ongoing maintenance: A living trust requires constant maintenance, including annual tax filings, the appointment of a successor trustee and periodic reviews of the trust’s terms.
    • Permanence: Once an irrevocable trust is established, it cannot be amended or revoked. This lack of flexibility can be a drawback for some people.
    • Transferring assets into the trust: Transferring assets into the trust can be a time-consuming and complicated process, and it is crucial to work with an attorney to ensure that all necessary steps are taken.

    Related: Why is Estate Planning More Important Now Than Ever Before?

    How can you open a living trust?

    Depending on goals and resources, everyone’s trust-opening process will vary slightly.

    However, here is a general step-by-step process for opening a trust.

    1. Determine your estate planning goals.
    2. Consult with an estate planning attorney.
    3. Choose the type of living trust.
    4. Gather information about your assets.
    5. Choose a trustee.
    6. Transfer assets to the trust.
    7. Prepare the trust agreement.
    8. Sign the trust agreement.
    9. Fund the trust.

    Related: The Importance of Estate Planning When Building Your Business

    What do you need to know about living trusts?

    A living trust is a valuable tool for estate planning, as it can benefit beneficiaries.

    By transferring ownership of assets to the trust while you’re still alive, you can ensure that your assets will be distributed according to your wishes without the time and expense of the probate process.

    If you think you are ready to set up a living trust, be sure to work with an estate planning attorney or financial advisor to determine the best type of trust for your needs and goals.

    If you want more information about financial planning, retirement planning, investments and more, visit Entrepeneur.com.

    [ad_2]

    Entrepreneur Staff

    Source link

  • 3 Strategies That Helped My Business Survived 2 Recessions | Entrepreneur

    3 Strategies That Helped My Business Survived 2 Recessions | Entrepreneur

    [ad_1]

    Opinions expressed by Entrepreneur contributors are their own.

    Last year, the U.S. reached its highest rates of inflation since 1981—8.5% in July — shocking American consumers and bottlenecking the economy. Additionally, the U.S. Bureau of Labor Statistics reported a 4.5% increase in labor costs last year, which helps workers keep up with inflation costs but places small businesses in a challenging position of losing out on profits and growth.

    While business owners grapple with price increases on goods and services, fallback in American spending and increased labor costs, the question of how to effectively market during a downturn becomes prominent.

    Since I founded my business PostcardMania in 1998, I’ve encountered many different challenges along the way, including establishing an in-house direct mail printing facility and beating out my competitors. I’ve also survived two recessions; each one resulted in different outcomes for my company.

    Today, I share the lessons I learned during those economic setbacks with anyone and everyone who wants to build a strong business that can withstand anything thrown at it. I’m relieved to say that PostcardMania grew last year despite terrible economic conditions — we had 15% growth in annual revenue and 7% growth in hiring.

    I’ve narrowed these life lessons down to three key principles you should follow during an economic downturn. These principles have also been verified by extensive research on the subject, which I’ll share below as well.

    Related: 5 Ways to Sustain Company Growth During a Recession

    1. Maintain (or even increase) your marketing

    Whatever you do during an economic crisis, do not stop marketing. If there is anything you take away from reading this article, it’s that.

    I learned this firsthand during the recession of 2008. Back then, 46% of our revenue came from clients in the mortgage and real estate industries. When the housing market plummeted, we lost thousands of clients, and our revenue dropped instantly. For the first time in the history of my company, we weren’t growing; in fact, we were contracting — fast.

    By 2009, our situation was looking dire. I didn’t want to lay anyone off, so my advisors suggested cutting back on our marketing budget and mailing fewer postcards every week. So, I listened and ended up regretting it big time.

    Our revenue shrunk 15% — a seven-digit loss — and we had fewer leads coming in, making it harder to bounce back. So, I took a big pay cut and fixed my mistake by increasing our marketing spend back to pre-crash totals. I also funneled more of my marketing budget into other industries (aside from real estate) that were buying from us.

    Thankfully, after I corrected our marketing, our numbers recovered quickly, and 2010 became a new highest-ever year in our revenue.

    When the pandemic hit in 2020, I wasn’t going to make the same mistake. I was dead set against cutting my marketing spend.

    At first, our average weekly revenue fell 41% from mid-March to the end of May. We used our reserves to keep operations and payroll going. But since we held strong, July 2020 became a new highest-ever revenue month for us. Once again, the decision to keep marketing paid off.

    Since 2020, my company’s revenue has grown an average of 17.5% annually. Previously, between 2009 and 2019, our annual revenue growth averaged only 4.6% — a huge difference!

    I share this with everyone because continuing my marketing was one of the biggest lessons I learned as a business owner. But you don’t have to go on my word alone — there is also extensive research to back up my experience.

    A McGraw-Hill research study analyzed 600 companies from 1980 to 1985 and concluded that businesses that chose to maintain or raise their level of advertising during a recession had significantly higher sales after the economy recovered. Not only did the companies that marketed during recessions perform better in the long run, but they also had 256% higher sales post-recession than the companies that didn’t maintain their marketing.

    I know firsthand that spending money when you are barely surviving an economic crisis is challenging, but consider how much harder you’ll have to work to recover your losses because you stopped investing in communicating with potential customers.

    The better option is to find smart ways to continue marketing your products and services rather than stop marketing completely.

    Related: Why You Shouldn’t Drop Your Marketing Budget in a Recession

    2. Find ways to reduce expenses and maximize efficiency

    You’ll have to get clever to weather an economic storm and come out strong. Review all areas of your business, and find ways to cut expenses, maximize efficiency and keep marketing consistently.

    The key is to achieve the right balance in cutting costs, making smart investments and marketing to gain market share and increase profit margins. The Harvard Business Review did a study on effective business strategies during three different global recessions and grouped all 4,700 businesses they studied into four distinct categories: prevention-focused companies, promotion-focused companies, pragmatic companies and progressive companies.

    Prevention-focused companies prioritize making defensive moves and are more concerned with avoiding losses and minimizing risks. Examples would be conducting mass layoffs, cutting expenses and reducing marketing and expansion. Promotion-focused companies do the complete opposite and spend a lot more on advertising and expansion to try to beat their competition. The pragmatic and progressive companies, on the other hand, do a combination of both offense and defense.

    Researchers discovered that the progressive companies found a sweet spot and made some reductions in spending but continued their marketing. As a result, they had a 32% higher chance of outperforming their competition by 10% or more following a recession. Progressive companies also surpassed pragmatic companies by 4% in sales and more than 3% in earnings and did twice as well as the entire group.

    You’ll have to take some time to analyze your business to find areas of change, but here are some to get you started:

    • Remove unnecessary expenses

    • Renegotiate repayment terms or prices with vendors

    • Consider going remote to save on office expenses

    • Examine your product or service to see if you can offer a lower-priced entry point

    • Save energy by reducing usage or changing work environments

    • Reduce business travel

    • Automate certain operations to save staff time on specific tasks

    I mentioned that during the pandemic, I refused to stop marketing because I had learned my lesson years before. But the other hill I was ready to die on was not doing any layoffs, which is a common first move many companies make to save money.

    I’m not saying “don’t ever do any layoffs,” because only you can determine what makes sense for your business. What I am saying is that you can look into other avenues to save money first before you eliminate team members already trained and experienced in your industry.

    Since I didn’t lay off any staff in 2020, we didn’t have to re-hire and train new talent once businesses re-opened. PostcardMania was ready to rock ‘n roll and bring in leads while other companies were busy trying to get staff back up to speed. Avoid that setback by trying your hardest to keep your employees first.

    Related: Worried About a Recession? Do This to Prepare Your Company.

    3. Assess your messaging and adjust if needed

    My final recommendation on how to market effectively when the market is down is to take more time crafting the right messaging to your audience. During a crisis, many families are forced to go into survival mode because the cost of basic necessities like eggs and milk has gone up, and they have to cut back in other areas to compensate. The worst thing you can do is say something alienating to them, so keep your messaging relevant to their needs.

    For example, LG Electronics’ slogan is “Life’s Good,” but they didn’t use it in their marketing during the 2008 recession because they did not want to seem out of touch with members of their audience who could be struggling.

    Most people spend less during an economic downturn, but they will spend whether it’s out of necessity or desire to escape from the stressful conditions. It may mean your customers will act choosier in their purchases and will also need the right motivation to make a move.

    For example, a gym membership may seem like a luxury when times are tough, but reframing your message to say that exercise helps families cope with stress and maintain health and happiness will sit with them more comfortably.

    With that in mind, not everyone is broke when the economy is crashing. There will still be people who can afford your products or services, so don’t forget about their needs either. The key is to know your audience well and speak to them as if you were walking in their shoes. The more relatable you can be in your marketing, the more they will trust you and remain faithful customers, whether their wallets are skinny or fat.

    Applying these three principles has sustained my business through the most difficult setbacks over two decades. With that said, the best way to learn is to do — and over the years, I’ve tried many different approaches to business and received different results. Don’t be afraid to try different strategies during an economic crisis. The experience you gain is priceless.

    [ad_2]

    Joy Gendusa

    Source link

  • The Landlord’s Complete Guide to the Eviction Process | Entrepreneur

    The Landlord’s Complete Guide to the Eviction Process | Entrepreneur

    [ad_1]

    Opinions expressed by Entrepreneur contributors are their own.

    If you’re like most landlords, evictions are a last resort. However, despite the cost and trouble, some evictions are inevitable.

    According to a recent White House Summit, the eviction rate in the U.S. was 14% in 2022. This means nearly three out of every 20 tenants were evicted in the past year. It’s safe to say that if you didn’t experience eviction this year, you will at some point in your landlord career.

    When you need to evict a tenant, it pays to be prepared. By understanding the eviction process and best practices, you can save yourself time, trouble and expense. Read on to learn everything you need about evictions, from the basics to a step-by-step guide and the cautions to heed during the process.

    Related: How to Manage Your Real Estate Business Like a Pro

    Eviction basics

    Eviction, or unlawful detainer, is the legal process of removing a tenant from a rental property. It involves not only physically expelling the tenant, but also the legal documentation, filing and court hearing for eviction.

    Evictions are both time-consuming and expensive. An average eviction costs around $3,500, but the entire process (including legal and court fees, lost rent, repairs and cleaning, tenant screening, etc.) can total up to $7,000. Evictions can also take around three weeks to a month or longer to complete.

    Due to their costs, you should avoid evictions when possible. Some strategies for preventing eviction include performing thorough tenant screening and automating rent collection.

    A caution: Even if it seems easier, never attempt a self-help eviction. You should never try to regain possession of your property without going through the proper legal steps. Instead, carefully educate yourself on the eviction process in your state. If it’s your first time evicting a tenant, or if the eviction gets complicated (e.g., your tenant filed for bankruptcy, hired a lawyer, etc.), it’s a good idea to have a lawyer walk you through the process.

    Reasons for eviction

    There are several reasons you might file for eviction. The most common is late rent. If a tenant does not pay on time, and you’ve waited for any grace periods required by law or included in your rental agreement, it’s time to initiate eviction.

    Here are the other acceptable reasons for eviction:

    • Lease violations — e.g., smoking, unapproved pets, subleasing, long-term guests, etc.

    • Property damage — e.g., graffitied walls, shattered windows, deliberately broken appliances, etc.

    • Illegal activity — e.g., manufacturing or selling drugs, theft, violence, etc.

    • Holding over — continuing to live in the unit after the lease has expired.

    Related: 4 Changes Every Landlord Should Consider

    Step 1: The eviction notice

    If you’ve decided an eviction is warranted, the next step is to deliver the eviction notice.

    There are three main types of eviction notices:

    1. Pay-or-quit notices are for when the tenant has not paid the rent. In general, these notices require you to give the tenant between three and seven days to pay rent before eviction proceedings officially begin. This notice may also be called a rent demand notice or notice for nonpayment.

    2. Cure-or-quit notices are for violations of the lease agreement. The tenant generally gets a certain number of days to correct or “cure” the violation before eviction proceedings begin. This notice may also be called a notice for lease violation.

    3. Unconditional quit notices are for severe breaches of the lease or the law (e.g., selling illegal drugs). The tenant does not get any opportunity to correct their violation and must quit the unit immediately or within a few days.

    The exact length of each notice varies by state, as does the terminology for eviction notices. In general, a plain “quit” notice does not allow the tenant to correct the violation, while a “pay-or-quit” or “cure-or-quit” notice requires you to wait the number of designated days before filing for eviction.

    Remember that quit notices differ from grace periods, which are mandatory in some states. For example, landlords in Tennessee must wait a 5-day grace period before applying late fees and an additional 14-day pay-or-quit period before they can file for eviction.

    Lastly, send the eviction notice by certified mail and also post it on your tenant’s front door. This way, you can request a receipt and get confirmation that they received it.

    Step 2: Filing for eviction

    In many cases, the threat of eviction is enough to resolve the issue. The tenant will often cure their breach or move out without going past the notice stage.

    However, if you’ve delivered the appropriate eviction notice, and your tenant still hasn’t cured their breach within the notice period, it’s time to officially file for forcible detainer.

    After you file a complaint at your local court, an eviction case will be created. The court will set a date for the hearing and send a summons to your tenant, informing them of the eviction case and their hearing date.

    Step 3: The hearing and judgment

    The next step is the hearing itself. Prepare for the hearing by gathering the necessary documentation:

    • The rental agreement

    • Proof of the lease violation or nonpayment, such as payment records, bounced checks, photographs or tenant communications

    • Copies of the eviction notice and USPS receipt

    In essence, bring any documentation that will help prove the tenant’s noncompliance and support your case for eviction.

    At the hearing, a judge will review the case, look over the materials you provide and issue a judgment for repossession of the property, assuming the court rules in your favor.

    Related: 5 Real Estate Mistakes That Could Make You Lose Money

    Step 4: Evicting the tenant and regaining possession

    After the hearing, a local sheriff will give your tenant notice to quit within a set number of days (typically several weeks). If the tenant does not move, the sheriff may physically remove them from the property.

    Only after the tenant has permanently left the premises can you remove the tenant’s belongings, change the locks and re-list the property.

    If the evicted tenant still has unpaid bills, you do have options for getting your past-due rent. Your landlord insurance may cover unpaid rent, or you can file a claim in small claims court to retrieve your funds. It’s also possible to take the judgment to your tenant’s employer to garnish their wages or use a private debt collector.

    Eviction mistakes

    Despite the carefully designed procedures for eviction, landlords can occasionally get ahead of themselves.

    Here are some things you should NEVER do during an eviction:

    • Attempt a self-help eviction: If you forgo the formal eviction process, you may be required to pay damages or return the entire security deposit.

    • Accept partial payments: This may delay the eviction process. Once you begin, do not accept any payments from the tenant.

    • Neglect proper notice: Always wait the appropriate number of days.

    • Remove tenant belongings before the judgment: Landlords may not infringe on tenant privacy or touch their belongings before the tenant is removed.

    • Shut off utilities or change locks: Do not turn off utilities or change the locks before the tenant has been removed. These constitute a self-help eviction and are illegal.

    • Harass the tenant: This is also illegal.

    Evictions can be difficult, especially if you know your tenants well. However, you must remember that evictions are not personal, but rather part of running a rental business. Following the steps outlined above will help make evictions as smooth and painless as possible.

    [ad_2]

    Dave Spooner

    Source link

  • Entrepreneur | 5 Tips for Building Business Credit for Your New LLC

    Entrepreneur | 5 Tips for Building Business Credit for Your New LLC

    [ad_1]

    Opinions expressed by Entrepreneur contributors are their own.

    Starting a new LLC (Limited Liability Company) can be a great way to establish your business and build a strong financial foundation. One of the key elements to building a successful business is developing good business credit. A strong business credit score can help you secure financing, negotiate better terms with suppliers, and create a professional image for your company. Here are five ways to build business credit for your new LLC:

    1. Get an Employer Identification Number (EIN)

    The first step in building business credit is to get an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). This number serves as a unique identifier for your business and is used to open bank accounts, apply for business loans and establish business credit.

    An EIN is crucial in separating your personal and business finances, which is important for both tax purposes and building a strong business credit profile. The process of obtaining an EIN is straightforward and can be completed online or through the mail in a matter of minutes. It is important to note that having an EIN does not automatically establish business credit, but it is a crucial step in the process.

    Related: 4 Steps to Establishing a Good Business Credit Score

    2. Open a business bank account

    Once you have an EIN, the next step is to open a business bank account. This will help you separate your personal finances from your business finances, which is important for both tax purposes and building business credit. By keeping your business finances separate, it is easier to track your business’s cash flow and financial history, which will be important when it comes time to apply for credit.

    Having a separate business bank account is crucial in separating your personal and business finances, and it helps you create a clear financial history for your business. By keeping track of your business’s cash flow and financial history, you’ll be able to provide lenders and credit bureaus with a clear picture of your business’s financial health, which will be important when applying for credit. Additionally, having a separate business bank account will make it easier for you to manage your business’s finances, track expenses and stay organized.

    3. Register your business with business credit bureaus

    To build your business credit, you will need to register your LLC with business credit bureaus. These bureaus, such as Experian, Dun & Bradstreet and Equifax, keep track of your business’s credit history and credit score. By registering your business, you are allowing the bureaus to collect information about your business, which they will use to calculate your business credit score.

    Registering your LLC with business credit bureaus is a crucial step in building your business credit. The credit bureaus collect information about your business from various sources, including your business bank account, trade lines and payment history. They use this information to calculate your business credit score, which is a numerical representation of your business’s creditworthiness. A good business credit score can help you secure financing, negotiate better terms with suppliers and establish a professional image for your business. It is important to note that while registering with the credit bureaus is important, it does not guarantee that your business will have a good credit score. To build a strong business credit profile, it’s important to use credit responsibly and make timely payments.

    Related: Funding Your Business: Building Credit and More

    4. Establish trade lines

    Trade lines are a key factor in determining your business credit score. Trade lines refer to the relationships you have established with suppliers and creditors, such as loans and credit card accounts. By establishing trade lines with suppliers, you are demonstrating to creditors that your business is financially responsible and can be trusted to repay its debts. You can establish trade lines by paying bills on time and using business credit cards to purchase goods and services.

    These relationships demonstrate to creditors and credit bureaus that your business is financially responsible and capable of repaying its debts. By establishing trade lines and making timely payments, you can build a strong business credit profile and increase your chances of securing financing in the future. Additionally, using business credit cards can help you establish trade lines and build credit, as long as you use them responsibly and make timely payments.

    5. Use credit wisely

    Finally, it is important to use credit wisely when building your business credit. This means paying bills on time, using credit cards responsibly and avoiding high levels of debt. By using credit wisely, you are demonstrating to creditors that your business is financially responsible and can be trusted to repay its debts. A strong business credit score will give you better access to financing, lower interest rates and better terms with suppliers, all of which will help you grow your business and achieve long-term success.

    Using credit wisely is a critical factor in building and maintaining a strong business credit score. Late payments, high levels of debt and mismanaging credit can all have a negative impact on your business credit score, making it more difficult to secure financing and establish trade lines. On the other hand, paying bills on time, using credit cards responsibly, and keeping debt levels low demonstrate to creditors and credit bureaus that your business is financially responsible and trustworthy. A strong business credit score can open up many opportunities for your business, including better access to financing, lower interest rates and favorable terms with suppliers. So, it is important to use credit wisely and keep an eye on your business’s financial health and credit score to ensure continued success.

    In conclusion, building business credit for your new LLC takes time and effort, but it is well worth it. By following these five steps, you can establish a strong financial foundation for your business and secure the financing you need to grow and succeed.

    Related: 5 Tips for Securing the Business Credit You Need to Start and Scale Your Business

    [ad_2]

    Jose Rodriguez

    Source link

  • Entrepreneur | How to Avoid a Downfall Like Toys

    Entrepreneur | How to Avoid a Downfall Like Toys

    [ad_1]

    Opinions expressed by Entrepreneur contributors are their own.

    Toys “R” Us was once a household name, thanks to several innovative practices, including stocking iconic toy brands, utilizing big-name celebrities for promotional events, negotiating lucrative contracts with different toy production companies and developing Geoffrey the Giraffe, who would remain the face of the brand’s advertising campaigns for decades.

    Despite all this, the company struggled to deal with the ever-changing tide of consumer expectations and the rise of ecommerce platforms. By 2017, the company filed for bankruptcy. Now, with the five-year anniversary of the store closures in June, what lessons can be learned from the once-beloved brand’s fall from the spotlight?

    The answer is a lesson in building a solid, modern and agile brand. Here are three ways Toys “R” Us could have not only survived but maintained its iconic status to this day:

    Related: 5 Strategies You Need to Build Your Brand

    1. Encourage people to experience and connect with your brand

    The average size of a Toys “R” Us store was approximately 30,000 square feet. The company used this space to stock the shelves with the latest and greatest toys and activities for children. In fact, the company often overstocked, providing “significant inventory offerings” between Thanksgiving and Christmas in order to attract last-minute shoppers.

    This type of “big-box” structure and approach made the company a store rather than a destination. To create a true brand experience, I would have carved out 10,000 to 15,000 square feet of each location and turned it into a one-stop shop for birthday parties. Amenities would have included a bounce house, trampoline zone, learning stations, an arcade and more.

    This way, the store would have become a destination for customers. Rather than a place to “run into,” creating a brand destination would have provided Toys “R” Us customers an experience. And research shows that experience drives results. A Salesforce study found that 80% of customers believe the experience a company provides is as important as the products it sells.

    Additionally, the company could also have built a kitchen to serve food and sell drinks for birthday parties, in turn driving more revenue. When parents booked a party, one of the beneficial requirements would have been to fill out a birthday registry for items sold in the retail store. This all-in-one business model would have separated the brand from its competitors.

    Related: 4 Things That Make for Unforgettable Customer Experiences

    2. Understand your customer’s pain points

    A changing retail landscape and an increasingly competitive landscape were a few of the many reasons Toys “R” Us closed. But I would argue Toys “R” Us ultimately failed because its leadership didn’t understand the changing needs of its customers.

    As a destination for toys, the company missed the pain points facing its primary target audience: The parent. Take birthday parties, for instance. A recent study found that 55% of parents are stressed out by the time it takes to plan a birthday party and how to keep it affordable. At the core, today’s consumers prioritize convenience — and by providing a seamless, one-stop-shop, party and gifting program, the iconic retailer could have captured the attention of busy parents by amplifying the benefits of saving time, money and energy.

    The creation of a robust online gift registry system where parents could create, track and purchase gifts from the store would also have addressed key parent pain points. Then, the gift would be wrapped and placed at the birthday party when guests arrive, again saving a busy parent’s time and energy.

    Providing convenience and peace of mind is critical to customer retention. In fact, our 2023 Subscription Commerce Industry Outlook Report preview notes that the top three ways to keep customers include:

    Related: How to Identify the Pain Points That Make Customers Decide What They’re Going to Buy

    3. Foster a community

    By creating the infrastructure necessary to make its stores destinations, Toys “R” Us could have ultimately created a true community experience for kids and parents alike. On the days when parties weren’t being held, a monthly membership system would allow regular engagement in the space, exclusive access to the play area and food at discounted rates.

    After all, building a returning customer base of happy, long-term customers is essential to business growth within recurring revenue and membership models. In fact, research has shown the best subscriptions generate more than 20% of their revenue from existing subscribers.

    The most successful brands will find ways to foster engaged communities that feel a personal connection and brand affinity. As Brian Mac Mahon of Expert DOJO says, “If you’re looking to build a company, it has to be a vision that makes people stop and that lasts forever.”

    As Babies “R” Us, the sister company to Toys “R” Us, attempts a comeback in the coming year, I hope they’ll take these lessons to heart. Entrepreneurs should not be about building a business, but rather a brand with deep loyalty and community engagement. As consumer habits continue to evolve, brands that build exclusive experiences for well-researched customer audiences will zoom ahead of the competition.

    [ad_2]

    Chris George

    Source link

  • Entrepreneur | 5 Steps to Prepare Yourself for Selling Your Online Business

    Entrepreneur | 5 Steps to Prepare Yourself for Selling Your Online Business

    [ad_1]

    Opinions expressed by Entrepreneur contributors are their own.

    Ever wondered how you would go about selling your online business? With endless information on how to start and grow your online business, when it comes time to sell your online business, it’s normal to feel a little stumped. The reality is, the majority of business owners don’t start their new venture with the intention to sell, and if they do decide to exit their business, it’s usually a confidential process.

    So, what steps should you be taking to become more familiar with the process of selling your online business? Read on for five important steps you need to learn today, regardless of whether you’re ready to exit your business or not.

    1. Valuation

    Step 1 is the valuation. A good place to start is by looking at your online business’s last 12 months’ net profit and then multiply this, depending on individual circumstances, from 1 through 5. Based on this model, most businesses realistically sell at a multiply of 2-3.

    For example, if your online business made a net profit of $100,000 in the past 12 months, and you were looking to sell your business for a fair price (based on the net profit it is currently generating today), then you’d be looking to multiply by three, resulting in a valuation of $300,000.

    Of course, you would then need to consider any additional value factors such as stock on hand, operational equipment, email lists, social followings and customer reviews.

    Typically, the higher the valuation, the longer it will take to sell your online business, so you need to be mindful of this. If you are looking for a quicker exit of one to six months, you may need to consider valuing your business off a 1-2 multiply to ensure a faster sale. If you’re happy to realistically keep running the business for the next 12+ months, you could opt for a higher 3-5 multiply.

    Once you have a general idea of what your business could be worth and how much you would be willing to sell for, it’s time to move to the next step.

    Related: 3 Signs It’s a Smart Time to Sell Your Online Business

    2. Where to list

    Deciding where to list your online business will directly impact your final walk-away price, so it’s essential to have a solid understanding of your listing options. The two most popular options are:

    • Broker sale: Brokers will offer support in helping you value your business and set the sale price. They will handle the entire sale process and vet potential buyers on your behalf. This is ideal if you are time-poor or you need the extra sales support. The downside to this option is brokers often require a substantial up-front fee (which doesn’t guarantee a sale) plus a high success fee, normally around 20% of the sale price. For smaller businesses with valuations less than $500,000, this could significantly impact the profit you make from the sale. However, for online businesses valued at $500,000+, enlisting the help of a professional broker may be necessary to reach higher net worth buyers.

    • Flipping websites: Flipping websites are online marketplaces for buying and selling businesses. They work similarly to a brokerage in the sense that there’s a listing fee and a success fee, but the fees are often significantly less (with listing fees starting as low as $49 USD). You can also choose the level of assistance you require, making the whole process tailored to your specific needs.

      • With free valuation tools and built-in tech to sync data directly from your online store, accounting software, etc — the whole process is extremely user-friendly. Most platforms also provide same-day support, ensuring a smooth and safe transaction for both buyer and seller.

      • Reputable flipping websites include Flippa and Empire Flippers, so if you are eager to begin planning your exit, research these popular marketplaces and compare them against any brokerage firms you may be considering to ensure you list in the right place for your business.

    3. CC someone you can trust

    Selling your online business requires a lot of time and energy. For this reason, it’s always a good idea to keep another person in the loop that isn’t as heavily invested in the sale. This will help to provide an outside perspective on any tough decisions during the sales process.

    There may be a lot of back and forth with your broker or potential buyers, so having someone close to you who knows your business well, is level-headed and has your best interest at heart CC’d into all communications will be a game changer. Let them know you value their opinion, and if they have strengths you know will aid the sale, don’t be afraid to let them step in if required.

    Related: 5 Tips to Successfully Sell Your Company

    4. Consistency is key

    The majority of businesses realistically take 6-12+ months to sell, so it’s crucial to maintain “business as usual.” Letting your finances, operations or marketing efforts slip because your mind is already starting to think of what’s next is a quick way to hinder the sale.

    Having standard operating procedures (SOPs) in place across all areas of your business will help clearly outline your current systems and processes to serious buyers in the final stages of negotiation. An organized backend can add thousands of dollars to your final sale price, so it’s definitely worth the extra effort to prepare SOPs well in advance.

    5. Post-sale support

    Last but not least, it’s important to mentally prepare yourself for post-sale support. Unlike selling a car or house, most new business owners will expect you to provide a period of support post-sale. So, once you’ve finally found your buyer, don’t expect to be jumping on that plane just yet!

    Post-sale support can be negotiated as a short-term contract (usually 3-12 months) where you’re paid a handover salary, separate from the sale price, to stay on and support the new owner with all tasks until they find their bearings.

    Alternatively, the buyer could ask to withhold a portion of the sale amount in Escrow to ensure you continue to assist them throughout the agreed-upon support period. Although post-sale support is not legally required, offering some form of post-sale support as part of your listing will significantly boost your chances of a successful sale.

    While selling your online business can feel overwhelming, following the steps above will ensure a smoother sale and help you achieve the best price possible. Staying up to date with the latest trends and strategies as well as podcasts like Female Startup Club will guide you to understand the current marketplace and gain the insights you need to make that perfect exit.

    Related: How to Sell Your Business for 10x or More

    [ad_2]

    Doone Roisin

    Source link

  • Entrepreneur | Top Challenges for Founders in 2023 — and How to Solve Each

    Entrepreneur | Top Challenges for Founders in 2023 — and How to Solve Each

    [ad_1]

    Opinions expressed by Entrepreneur contributors are their own.

    The past decade ushered in technological advancements that have beguiled us. Some have successfully offered solutions to the problems they posed to solve for the common human. Others have taken more from the public than they offered. However, none of these advancements have made running a business any less risky.

    As we ease into the year, founders will likely experience challenges on multiple fronts. While there are several technological solutions available to help solve these challenges, it is quite daunting to figure out the most effective solution. Also, having to deal with multiple issues at a time, keeping it together may be a tad difficult.

    Throughout the year, I see the following common challenges among founders, and I offered the following practical solutions to help ease their transition through 2023 and beyond.

    Related: How This Founder Overcame Challenges He Never Saw Coming

    1. Cash flow and funding troubles

    Cash flow is the lifeblood of a business, and many fail when they are unable to maintain it. Also, most startups take a while to start generating cash flow. So, they have to find a way to float the expenses before the money starts flowing in. This is why many early-stage businesses seek out investor funding. However, it may not be the best direction to go.

    Founders often have cash savings when they set up their venture. It’s normal to plan around this cash savings, and they often overestimate the chances of the business turning a profit in no time. As a result, founders (first-time founders, especially) are very likely to incur high overhead costs and accommodate more payroll expenses than necessary. As reality sets in, they may start seeking out external funding.

    While it’s a popular practice to secure investor funding, it’s something you should think through. Founders often make the mistake of giving out too much equity to investors in their bid to close funding fast. Early-stage investors can sense your desperation for money and exploit it to demand ridiculous equity.

    To avoid this, you should keep your overhead costs low and reduce your payroll expenses to a minimum. Only hire talents when needed. If a role opens up, and you don’t see it being relevant in a few months, it’d be smarter to work with an independent contractor.

    As an alternative to investor funding, consider reaching out to a local bank for a business line of credit early enough. This will give you some level of liquidity to keep your venture afloat. Mind you, financial institutions don’t really provide a long line of credit, especially to startups. So, the lower your overhead and operational costs, the more useful a line of credit will be for you.

    2. Marketing/advertising

    Marketing, as we know it, is crucial to the success of a business, but it’s often capital-intensive. A majority of startups are spending up to $15,000 per month on marketing. If you’re a startup founder, your mouth is probably agape about how much money other startups are pouring into marketing.

    Well, more marketing spend doesn’t always guarantee high returns. Almost every startup is strapped for money. So, your ability to find clever workarounds will be immensely helpful.

    Instead of creating expensive marketing campaigns, you should consider guerrilla marketing approaches. They often cost next to nothing to create and can be insanely effective.

    Also, maintaining a consistent, high-quality blog can help you attract more organic traffic to your website. If done right, this traffic can be converted to hot leads. There is lots of marketing that you can do on a very tight budget. Just get creative.

    Related: No Money? No Problem. 30 Low-Budget Marketing Ideas for Your Business

    3. Transparency

    A lot of founders are against complete transparency in their dealings. However, you need transparency to build a successful company. It doesn’t matter whether you raised investor funding or not.

    With investors, there have been cases where bad investors have used complete transparency against founders in subsequent rounds. On the flip side, non-transparent startup founders are likely to arouse suspicion.

    With popular cases, like Elizabeth Holmes (Theranos) and Sam Bankman-Fried (FTX), investors have become more watchful of opaque founders. This can often cause them to demand significant control over your business. Adopting a culture of transparency can facilitate their due diligence and enable trust.

    Speaking of trust, a study by the HBR revealed that founders are more likely to attract top talents if they build a more transparent workplace culture. So, why not consider laying your activities bare and maintaining all-hands meetings that encourage collaboration and foster belongingness?

    4. Burnout epidemic

    When you’re building a startup, you can easily find yourself working unusually long hours. Most startup founders work about 80 hours per week. The body needs some rest, food, sleep and distraction to function properly. Sadly, most founders are not giving their bodies enough of these.

    The interesting reality is that this unhealthy behavior rubs off on employees. When employees see their leader working long hours, they are challenged to do more. Soon, this unhealthy behavior becomes a culture in the workplace, and productivity may take a nosedive.

    Alternatively, you set out designated work hours for yourself and the team. Ensure that everyone on the team gets adequate rest. Also, you should prioritize your health. A simple solution is to leave your computer at work and keep work inaccessible outside work hours. This way, you can get some time to rest and find balance.

    Related: 3 Ways to Stop Founder Burnout In Its Tracks

    5. Diversity and inclusion

    There have been fewer movements better than the need to have a diverse and inclusive workforce, especially from the onset. However, many startups are making this an obsession. Leave the DEI initiatives for established organizations. Instead, focus more on hiring objectively.

    As a startup, you need talents for the value they bring to the team regardless of their race, culture, or gender. Don’t get bogged in the need to be inclusive that you start losing valuable talents in the process. If you hire on merit and find your team becoming diverse, great. Otherwise, leave the DEI initiative until further down the road.

    [ad_2]

    Judah Longgrear

    Source link