Tips on self-employment and working from home

If you have been following employment trends over the last few years, then you are probably aware of two important trends.

1. People in their 50's, 60's, and even 70’s aren't retiring. They are reinventing. They are taking their skills and changing careers. A few recent books such as Encore: Finding Work that Matters in the Second Half of Life by Marc Freedman make this point. There are also a variety of resources such as BoomersNextStep.com that provide services directly to the “Boomer” generation.
2. More people are working from home. This may be because companies are developing flexible work arrangements. It may be because of increased use of contractors.

One thing that links these trends is that many of the “encore careers” that boomers are pursuing involve working at home. Whether this is because a successful career has become the springboard for a second career as a consultant or because the boomer has the experience, knowledge, and skill to negotiate a non-traditional working arrangement, many older workers are not going into an office every day.

This new way of work brings some challenges though, and as Bill Vick from BoomersNextStep.com writes in Self-Employment and Working From Home Legal Facts:

Working from home can be a lot of fun and quite lucrative but there are a lot of things that you need to know from a legal standpoint that will help keep you out of trouble. Things such as managing finances, paying appropriate taxes, and following laws that the IRS has created are all important things that you’ve got to learn.

These are just a few of the question you should ask.

• Am I an employee or a contractor?
• If I am self-employed, how to I handle my bookkeeping and taxes?
• What other laws or rules affect me?

Check out this excellent article from BoomersNextStep.com to get started on the answers to these questions and others. Self-Employment and Working From Home Legal Facts

Improve your firm's data security

Worried about data security? An article in the Journal of Accountancy by Ron Box, CPA/CITP/CFF, CISSP provides a handy list of data security best practices. To read the article click on this link. Firm Up Your Data Security

• Ensure that senior management will support the security policy.
• Consider using a security policy template or other authoritative guideline.
• Include consequences for noncompliance.
• Thoroughly review applicable laws.
• Use clear and concise ideas to communicate the security policy.
• Require a regular review process.
• Review all internal controls for any appropriate modification, including all audit reports since the previous review.
• Test the system.
• Use the security policy as an opportunity to establish an ongoing security-training program.

401k and IRA Rollovers Provide Tax-Free Business Start-Up Funding (Does this sound to good to be true?)

Have you heard of Rollovers for Business Startups or ROBS? It sounds like a great idea, except for one small problem which I will get to in a minute. With ROBS, you use a 401(k) or IRA distribution to fund a new business and avoid taxes and penalties on 401(k) or IRA distributions. The idea is to form a new corporation, set up a new 401(k), rollover the funds into the new 401(k), and then use the funds to purchase stock in the new corporation.

Sounds like a great idea doesn’t it? Here is the small problem I mentioned earlier. The IRS is examining these plans, and in October 2008 even issued a memo saying that some of these plans may violate tax law. The plans may also violate some rules affecting pensions, so the IRS and Department of Labor are working together.

Read this article posted on the Tax Prof Blog for more details.

401k and IRA Rollovers Provide Tax-Free Business Start-Up Funding

Book Review: The Four Principles of Happy Cash Flow

The Four Principles of Happy Cash Flow
By Leita Hart, CPA

Cash is king! This is a simple three word sentence, but it is very powerful, and forgetting that cash is king can have severe consequences for business owners. Business owners that do not understand cash flow can actually find themselves in the odd position of making a profit while going out of business!

Knowing that cash is important, however, is only the first step. Business owners need to know how to generate cash, and they need to know how to manage their cash once they get it. The good news is that understanding cash flow does not have to be hard.

In The Four Principles of Happy Cash Flow Leita Hart has condensed cash management into four basic principles, and she describes them in simple easy to understand terms. She demonstrates the concepts by using examples from familiar companies such as Dell and Wal-Mart, and she explains how the principles can be applied to businesses of all types and sizes. The book includes ideas for:

• Maximizing cash balances,
• Getting money in the door faster,
• Managing or controlling inventory,
• And more.

Click here to see a review of the book on Amazon.com.

National Small Business Week

WASHINGTON - The nation's top entrepreneurs will be honored at the U.S. Small Business Administration's National Small Business Week events to be held May 23-25, in Washington, D.C. A series of events and educational forums will mark the 57th anniversary of the agency and the 47th annual proclamation of National Small Business Week.

More than 100 outstanding small business owners from across the country will receive awards while gathering for three days at the city's Mandarin Oriental Hotel. They will meet with top agency officials, congressional representatives and national business leaders. The highlight of the celebration will be the announcement of the National Small Business Person of the Year.

Men and women also will be recognized for their involvement in disaster recovery, government contracting, and their support for small businesses and entrepreneurship. Awards also will be presented to SBA partners in financial and entrepreneurial development, including best SCORE Chapter, Small Business Development Center and Women's Business Center during 2009.

The State Small Business Award Winners and recipients of the Champion and other Entrepreneurial awards are nominated by local trade associations, chambers of commerce, other business organizations and government agencies. Co-Sponsors include: SCORE - Counselors to America's Small Business; VISA; Ford; Administaff; Google; eBay; Raytheon; Cbeyond; Intuit; Northrop Grumman; Lockheed Martin; Verio; NADCO and NAGGL.

Additional information on the Small Business Week 2010 events is available at http://www.nationalsmallbusinessweek.com/.

The source for this post is a US SBA press release.

Green is good business!

The green movement has grown tremendously, and it has become mainstream. This is a trend you need to understand. If you have been reading the business pages over the last several years, you have probably seen a lot of terms such as green building, renewable energy, and sustainability. Not too long ago, conventional wisdom said that going green cost too much. It turns out that conventional wisdom was wrong.

Green is good business!
Who knew? It turns out that it makes sense to conserve energy. Energy costs are high and going higher. It makes sense to conserve raw materials. Reduce, Reuse, and Recycle are not just buzzwords. They are tools to reduce costs. They reduce the cost of hauling away garbage and of storing garbage in land fills. Green also means using renewable resources and local sourcing. These practices can reduce costs too.

Customers like it too. As more people become aware of what it means to be green, they are demanding that the companies they do business with become green. In fact, green has gone from a niche market to mainstream. Customers may even be willing to pay more for green products.

Green has gone mainstream.
If you have any doubt, do some quick research on major corporations that have announced green initiatives. Among the companies that are going green are CSC, BP, GE, Marriott, Verizon, Wal-Mart, and more. Local governments across the country are announcing green initiatives.

What does this mean for your business?
The growing green movement is an opportunity for you. You should think about doing two things.

1. Understand what it means to be green.
2. Figure out how to satisfy your customers' desire to be green.

Understand what it means to be green.
Understanding what it means to be green is both easier and more difficult than you might imagine. There is a lot of really bad information floating around. Get your information from a variety of reputable sources. One place that you can start is on my Help being green blog. There are a lot of resources posted on the right side of the page.

Don't be afraid to ask questions, and be assured that you know more than you realize. You will learn that a lot of things that have to do with being green are pretty simple.

Figure out how to satisfy your customers' desire to be green.
This could be as simple as letting your customers know about  your green practices. However, depending on the type of business you have, you may also want to evaluate your product mix. Leaning what your customers want may be a challenge, but you can begin by looking at approaches used by other businesses. In addition, if your customers know you are thinking about going green, some of them will be happy to tell you what they want. Ask them.
 
Remember that conventional wisdom that going green cost too much? It turns out that not going green might cost you even more.

Slow Money

Have you heard of Slow Money? Does it even make sense to you? Modern life is supposed to be fast paced, and business is supposed to be about getting deals done. If we even think of the speed of money, then we think back to introductory macro economics courses where the professor droned on and on about velocity of money, and faster was supposed to be better. The Slow Money movement has been around a while, and it has been building slowly. (How else?) It is a trend small business owners need to understand.

So what is Slow Money?
According to John Tozzi, in his post Big Ideas for 2010  on the Successful Entrepreneur Blog, Slow Money is an example of two emerging ideas:

1. New ways to finance social ventures
2. Local capital markets

Tozzi in an earlier article, Slow Money, Local Business, and Social Capital, described the slow money movement and observed:

The emerging model involves several trends we’ve been tracking for a while: crowd funding, community development capital, buy local movements, and for-profit social enterprise.

The idea behind Slow Money is that people ought to do business where they live and eat and work and play. In many ways, the movement is a reaction against growing globalization. In addition, people are beginning to question whether it was a good thing to replace family farms with giant industrial agriculture factories.

This is what the Slow Money Alliance has to say on their website.

Slow Money's mission is to build local and national networks, and develop new financial products and services, dedicated to:

• investing in small food enterprises and local food systems;
• connecting investors to their local economies; and,
• building the nurture capital industry

What might this all mean to you and your business?
The values that are the foundation of the Slow Money movement are embodied in the belief that people are part of a place. That belief is not at odds with the idea that individuals are part of a broader national or even global community, but it does question whether bigger is always better and whether the constant search for cheaper and faster is worth the tradeoffs in quality that sometimes occur. The many “shop local” movements springing up around the country are evidence of a desire for the things the Slow Money movement describes. So too are the twin movements to reclaim small town America and to create livable cities. Small villages and towns all over the United States died as large corporations displaced locally owned stores agribusiness took over family farms. It is up to small business to get back into the marketplace. In many places, as people rediscover small town or village life, some of these places are coming back to life. This is not just a rural or suburban movement. In cities, corner grocers and soda fountains and drugstores with lunch counters were displaced by giant chains. Today, however, locally owned stores are returning.

The reason that this is important for small business owners is that locally business is small business. The Slow Money movement is all about supporting small business and “connecting investors to their local economies.” You need to know all about Slow Money, because Slow Money is all about you.