Small Steps to Save Your Business on Workers Compensation:

– Take the time and hire good employees.  Use a formal application process and always perform background checks in order to prevent hiring someone who had problems at other jobs.

– Try and make arrangements with a nearby medical facility to treat employees in case of an injury.  This can reduce confusion and minimize problems after an accident.

– Make sure independent contractors have their own workers compensation policies and request a copy for your records.

– Establish safety practices to ensure a better working environment.

– When an incident does occur, report it immediately to your carrier.

Top 5 Items VC’s Look For:

1). Size of the opportunity

2). Quality of the Team

3). Long-term competitive differential

4). Reasonable capital requirements

5). Opportunity to make 3 to 10 your money (depending on the risk profile)

Questions to Ask Before Buying a Franchise:

General:

– Is it a good product or service? 

– What is the reputation of company?

– Who are my competitors?

– What will my market share be?

Ask Yourself:

– Do I have the skills needed to run this franchise on a daily basis?

– Do I have the temperament to follow the franchisors directions?

– Do I have the financial means to purchase, grow and reinvest in this business?

– Will the franchise help me reach my business and personal goals?

Ask Existing Franchisees:

– What degree does the franchisor exert operational control over the franchisee?

– Ask “given what they know today, would they purchase the franchise again?”

– What did it actually cost them to develop the business in both money and time.

– Was the working capital identified in the Franchise Offering Circular sufficient?

What Is a Cost Segregation Study and How Could It Help Your New Business?

We have a guest blogger today – Amanda from ELB Consulting. You can contact her at amanda@elbcostseg.com or visit their website at elbcostseg.com.

Starting a new business is an exciting time, but it is also a time when it is critical to figure out the steps that will need to be taken in order to keep the business alive in the future. The initial start-up costs of a business are high and it may take time to begin to see a profit. This equation causes about 50 percent of businesses to fail within the first three years. If your business will be operating out of a newly acquired or constructed building, a cost segregation study may help you to avoid becoming part of this statistic.

Cost Segregation Accelerates Depreciation

Without cost segregation, most building values are listed as a lump sum amount on the business tax filing, with depreciation being calculated over the course of 27 to 39 years. A cost segregation study breaks down different components that make up the building into different classifications, allowing these components to be depreciated over a shorter period of time. These higher up front depreciation deductions during tax filing translate to lower tax obligations immediately and for several years.

May Accelerate the Break-Even Point

The most difficult time for any new business is generally the time leading up to the break-even point and many businesses never make it this far. Since a cost segregation study can help to lower the amount of taxes due, the revenues brought in during this period can go to the bottom line as opposed to being allocated to income taxes. This may accelerate the break-even point and allow your business to become profitable faster.

Can Increase Liquid Capital Available

By decreasing the taxes due for the first few years, a cost segregation study can free up liquid capital available. This can be very helpful during the first few years of operations as unexpected expenses pop up and you work towards perfecting the way that your business operates. By establishing your business in an impactful way during the early years, you may solidify the value of your business to the community in which it operates and generate a loyal customer base.

Could Allow the Business to Grow Faster

When a business becomes profitable and popular quickly, it can be conducive to growth. The additional cash flow available may help you to market in meaningful ways and expand the customer base, or may even allow you to open a second location or begin a chain. By maximizing your cash flow and profitability as early as possible, you improve the chances that your business with thrive.

To find out whether a cost segregation study could help your new business save money, contact a local business consultant or cost segregation expert today!

Raising Capital via Crowdfunding:

Crowdfunding is a method of collecting many small contributions, by means of an online funding platform, to finance or capitalize an enterprise.  Examples include Kickstarter, Indiegogo and GoFundMe.  With the changes to Regulation D, Rule 506(c) now allows general solicitation to accredited investors.  The previous Rule 506(b) did not allow general solicitation.  In addition, Title IV of the JOBS Act now allows non-accredited investors to invest in “Regulation A+ Offerings,” expanded the limit from $5 million to $50 million on Tier 2 offerings and it preempts blue sky review (i.e. no need for approval by every state in which the offering is made).  Please note Blue Sky review is still needed for Tier 1 offerings.  When Title III is enacted, this will allow non-accredited investors to participate in private security offerings (this has not become effective yet).  Below is a summary of the kinds of equity offerings on internet-based platforms:

                                                Online             Raise Limit     Investors         Investors

                                                Launch            Per Year          Status              Limit              

Reg. A+ Tier 1                        2015                $20 million      All                   No

Reg. A+ Tier 2                        2015                $50 million      All                   Yes

Reg. D Rule 506(b)                 2011                No limit           Accredited      No

Reg. D Rule 506(c)                 2013                No limit           Accredited      No

Intrastate Crowdfunding        2013                $1M-$2M        All                   Yes

Title III Crowdfunding           Maybe 2016    $1M                 All                   Yes