Small Business Planning

10 Tips to Being a Happily Self-Employed Person

A friend who recently left her corporate job and is now self-employed asked me how I manage to run a business while still enjoying an active, interesting life outside of work.  She wanted some suggestions, which made me reflect on what has been most important for me in achieving a healthy and happy work-life balance.

I focus on these ten goals – and I must emphasize that it is always a work in progress – I succeed at some better than others, but I’m always trying.

1. Be flexible about when you work and when you play.

Schedule your day creatively: wake up early to finish a project so you can slip out of the office for a long lunch with a friend, or work later in the evening so you can enjoy a daytime activity.

I find that fitting everything into a strict 8 AM-to-5 PM time frame is not my most effective or productive schedule. And hey, flexibility is one of the perks of self-employment people report valuing the most!

2. Don’t be afraid to say No.

If you receive an invitation to do something interesting – whether it be moderating a panel, traveling to a conference, becoming a member of a board, or chairing a committee – don’t say yes immediately.

Stop and think about how the request fits in with or enhances your priorities. No one can do everything, and you can quickly be overwhelmed if you say yes too often. If you get burnt out from being overcommitted you are no good to anyone.

3. Take great care of your physical self.

Regular exercise and healthy eating contribute to the energy, endurance, focus, and confidence of a successful career.

I make sure to schedule daily exercise and subscribe to Michael Pollan’s philosophy: “Eat food. Not too much. Mostly plants.” I prioritize my physical health, which results in increased motivation and productivity. It’s a
win-win.

4. Quiet your mind.

For years I have been told that meditation reduces stress and anxiety and can increase productivity along with a multitude of other benefits. But I was too busy to slow down and try it.

I am now working on meditating in the morning – sometimes just going into a quiet room and taking a few deep breaths before starting the morning routine. I can now see where this habit is just as important as exercise and eating healthfully to having a balanced life.

5. Systematize everything you can.

This saves not only time, but the mental energy required to complete certain tasks and jobs. This applies to workflows at the office as well as household chores like paying bills.

Related: Financial Housekeeping: What To Do with Those “Old” 401(k)s

6. Spend time with people who lift you up.

Conversations and connections with positive, energetic people naturally make me feel positive and energetic, and those are the influences I choose to surround myself with. Seek out others to lift up – as a mentor, colleague, or friend – and empower optimism.

7. Work smarter, not longer or harder.

I used to sit at my desk until late in the evening, spending hours at my computer — which often resulted in a sore neck and shoulders (and being cranky when I got home) rather than my best work.

I am happier and more productive working in spurts – I work as a sprinter runs, with high-intensity, uninterrupted periods followed by a break to renew and refresh. I think more clearly and creatively, and stay fully engaged.

8. Develop support systems.

I am very lucky to have an extremely supportive spouse. We work as a team to manage the household, business, and pleasure aspects of our lives, and we outsource the tasks that we have neither the time or energy to do ourselves.

It’s tough to do it all, so play to your strengths and outsource what you need – personal assistant, tech support, housekeeper – delegate tasks so you can focus on that work-life balance.

9. Find a way to schedule uninterrupted work time.

If you are surrounded by people you are vulnerable to distractions. I find it’s much simpler to achieve a ‘flow’ state when I’m in a quiet space – and sometimes feel I accomplish a full day’s work in two hours when the flow is working.

If you have to, leave your office or home and go sit in a library, coffee shop or other alternative space to get some uninterrupted time.

10. Know yourself and where you want to put your energy.

When you can identify what makes you happy, and what is meaningful, you’ll be able to seek out the activities that support those interests and values.

I have a strong desire to live a varied and interesting life, and that knowledge drives me to stretch my limits by challenging myself and re-defining what’s possible — while focusing on taking care of myself so that I can continue to do more.

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A Little Year End Tax Planning with Your Holiday Punch

HD-200911-r-pomegranate-punchOr,  8 Year End Tax-Related Deadlines and Things to Think About

With the busyness of the holiday season, it’s easy to forget about things like tax planning. After all, we’d rather focus on having fun with our friends and family! However, there isn’t much you can do to improve your tax situation after December 31st for 2015, so now is the time to do a little planning so as not to miss out on tax-saving or retirement saving opportunities and avoid penalties. (After all, the IRS has ways of knowing who has been naughty!).

1. Roth IRA Conversions: There were income limitations on converting regular IRA’s to Roth IRA’s, but no longer, now anyone can convert IRA’s to Roth’s as long as they are able and willing to pay the tax on the conversion. Why would you want to do this? Because converting to a Roth IRA will guarantee you will owe no income tax on the funds if withdrawn during retirement because you pay the tax now. For example, if your income dropped in 2015 due to a job change, you might consider converting some of your IRA to a Roth because you will be in a lower tax bracket and pay less taxes than you might in future years. The deadline for conversions is December 31, 2015, but you will want to do this by at least December 22nd to make sure the paperwork gets processed with your custodian.

2. Establishing a New Qualified Retirement Plan:  If you are self-employed and want to establish a qualified plan such as a 401(k), money purchase, profit-sharing or defined benefit plan, it must be set up by December 31st. Many people confuse this deadline with the SEP IRA deadline that can go into the next year, including extensions.

3. Max Out Qualified Plan contributions. If you contribute to a 401(k) or 403(b) at work and have not contributed the maximum and are able to, talk to your payroll department to increase your contribution before December 31st. For those under 50, the maximum contribution is $18,000 and for those over 50, the maximum contribution is $24,000. At the very least, try to contribute up to any employer match.

4. Take RMD’s (Required Minimum Distributions) on retirement accounts if you have reached age 70 ½. The minimum distribution rules apply to traditional IRA’s, SEP IRAs, SIMPLE IRAs, 401(k) plans, 403(b) plans, 457(b) plans, profit sharing plans and other defined contribution plans. If you don’t take the distributions or don’t take enough out, you may have to pay a 50% excise tax on the amount not distributed as required.

5. Take MRD’s From Inherited IRAs. If you have inherited an IRA from someone other than a spouse, you must take minimum required distributions beginning in the year after the year of death of the original owner and by December 31st of that year. To calculate the MRD, the IRS has a Single Life Expectancy table and each year you would subtract one year from the initial life expectancy factor. Fortunately, there are on-line calculators to help you do this!

6. Review Your Charitable Contributions. If you itemize deductions and are charitably minded, you will want to donate what you plan to before December 31st . You may deduct an amount up to 50% of your adjusted gross income, but 20% and 30% limitations apply in some cases. Good to know: donations made by check are considered delivered on the day you mailed it.

7. Donate Highly Appreciated Assets To Charity. Any long-term appreciated securities, such as stocks, bonds or mutual funds may be donated to a public charity and a tax deduction taken for the full fair market value of the securities up to 30% of the donor’s adjusted gross income. In addition to the tax deduction, the donor avoids any capital gains taxes. Probably the easiest way to do this is to set up a donor-advised fund –it’s like a charitable savings account: a donor contributes to the fund as frequently as they like and then recommends grants to their favorite charity when they’re ready.

8. Do Some Tax-Loss Harvesting. This is the practice of selling a security that has experienced a loss. By selling the security and taking the loss, an investor can offset taxes on capital gains or up to $3000 on ordinary income. The sold security can be replaced by a similar one, maintaining the optimal asset allocation and expected returns. When doing this, watch out for the wash-sale rule: your loss is disallowed if, within the period beginning 30 days before the date of the loss sale and ending 30 days after that date, you acquire a substantially identical security.

And, don’t forget to take a sip of that punch!

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Book Review: Small Business Taxes Made Easy, 2nd edition, by Eva Rosenberg.

Small Business Taxes Made Easy book cover As a financial advisor, I’ve read my share of tax books. So, I poured myself a strong cup of coffee, made sure I wasn’t too comfortable and opened Small Business Taxes Made Easy by Eva Rosenberg. After reading the first few pages, I realized that this tax book was different. First of all, I enjoyed Eva Rosenberg’s voice. She is friendly, knowledgeable, and savvy. She has obviously worked with many small business owners and understands us. You feel like she really cares about your business – No wonder she is referred to as the “TaxMama.”

But it’s not only her unique voice. The book is organized in a very logical and helpful way. Each chapter, beginning with Chapter 1: The Small Business Checklist, has a To-Do List and Questionnaire to review before you read the chapter. At the end of each chapter is a complete list of resources to make it easy to get even more information and do research on the topic at hand. If you are short on time, you could get a lot of information by just reading these two sections. However, it would benefit you to read through the chapters. Rosenberg is a tax expert and there are many gems of tax wisdom contained in the chapters where you will find yourself thinking, “Oh, I didn’t know that,” or, “Great idea, I think I will incorporate that tax strategy into my business.” It’s a workbook, so get out a pen and take notes where needed!

The book is really a small business bible, not just a tax book. The chapter titles tell the story: Business Plans You Know and Trust; Entities; Record Keeping; Income; Common Deductions; Office in Home; Vehicles: Everyone’s Favorite Deduction; Employees and Independent Contractors; Owner’s Fringe Benefits, Retirement, and Tax Deferment; (the dreaded) Estimated Payments; Online Businesses; and Audits. Ms. Rosenberg really wants you to set up your business right, from the start, for growth and profit! And we all know that taxes play a big part in the outcome.

You can download worksheets from www.YourBusinessBible.com that will help you stay on track as you complete the tasks in the book. She provides a different password to the site each month that you can only retrieve by owning the book. Clever!

I plan to keep this book nearby as a reference for those questions I often get from my business-owner clients. And if you are a business-owner yourself – whether you’re just starting out or not –  This book is a must-read.

Please note: This book was provided to me free of cost by McGraw-Hill. Even so, this is an honest, objective review of the book!

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To Hatch Or Not To Hatch

Hatch Network CrewLast week I had the pleasure and satisfaction of watching six women entrepreneurs present their business stories to their peers and loved ones at the Slate Gallery in Oakland’s Temescal District. Each woman had just completed a 12 week course in entrepreneurship developed by the Hatch Network, a new, San Francisco-based company whose mission is “to be the absolute best provider of entrepreneurial education and services for women in the world.”

What the Hatch Network does, besides provide the curriculum, is to establish a network that connects experienced business veterans – the mentors – with ambitious business owners – the students.  Once those connections are established, the teaching/mentoring begins.

When Hatch Network co-owners, Allie Covarrubias and Claire Fontana asked that I become a mentor in their network, I didn’t hesitate. I was already familiar with their skills as leaders and visionaries and I wanted to become a part of their new venture.  Mentoring women entrepreneurs seemed like such a great complement to my financial planning practice, where I focus on women, their families and businesses.My initial concerns about time committments (I’m a solo practitioner, self employed) proved to be premature. This was a rich and rewarding experience.

So, back to the graduation celebration at the Slate Gallery in Oakland. The 12 weeks of classes are structured so that at the end, students are prepared for and required to present their business story as if they were presenting to investors or clients. They outline the who, what, when, why and how much of their business. The challenge is meant to help them achieve clarity over important business questions. Who are we? What do we provide. Who are our clients? Why are we unique? What benefits accrue to our customers? How much does our service cost? How much will we sell? And most important, how much will we make?

As you might expect, each of the six women were as nervous as a long-tailed cat in a roomful of rocking chairs. Public speaking was a daunting prospect, added to the writing and technical skills needed to pull together a dynamic  8-10 minute presentation. But when they each took their turn, it was as if they had been practicing for days….each more polished and professional than the next. It was truly gratifying to watch them and to have been a part of their story.

Who are these ambitious women and what are their businesses?

Pascale Teysseire
Owner, Funding for College
Provides a personalized college funding search to assist students/parents in attaining financial aid: scholarships, fellowships, and grants –  necessary to attend the college of their choice.

Jane Inch
Owner, Jane Inch Life Coaching:  Reveal Your Inner Sparkle (website coming soon!)
Provides lifestyle and business design programs for the midlife/empty nester who is seeking clarity and is ready to launch “what’s next” in her life.

Linzi Oliver
Owner, Doggy & Me Fitness
Provides an outdoor fitness class for you and your dog.

Feleciai Favroth
Owner,  The Art of Bathing
Provides handcrafted creams and soaps with the finest natural ingredients including shea butter
olive, jojoba, coconut and essential oils.

Elizabeth Husserl
Owner, Inner Economics
Facilitates  processes of awareness and change around people’s relationship to money.

Anne Cavazos
Owner, Cavazos Environmental Consulting
Provides high quality and cost effective environmental consulting services.

Congratulations, ladies!

If you’re interested in becoming a Hatch Network student, my next class starts in January and will be held in Oakland, California. Here’s an abbreviated course syllabus:

Week 1:  Evaluating your Entrepreneurial Opportunity
Week 2:  Identifying Your Ideal Customer
Week 3:  Scoping Out The Competition
Week 4:  What Are You Selling
Week 5:  Building your Brand
Week 6:  Your Company Message
Week 7:  What To Charge
Week 8:  Marketing Focus
Week 9:  Sales 101
Week 10: Finding  the Money
Week 11: Book Keeping, Briefly Legal, Insurance 101
Week 12: Be the Boss Lady:  Team Building, Leadership
Week 13:  Your Business Story

If you would like more information, go to The Hatch Network’s website or email Cathy Curtis
at cathy at curtisfinancialplanning.com

Hatch away!

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The Best Laid Plans

Back in July, I talked about a fantastic group of Bay Area women business owners. Kathy Wiley, Christine Doerr, Malena Lopez-Maggi and Mindi Fong are all involved in the food business and each had a different take on the value and importance of having a business plan. The original post is here, Women and Money – Women in the Food Biz Talk Business Plans. In that post I shared some thoughts of my own on why business plans are so important. As the article below describes, assumptions and circumstances change and having a plan can help you stay flexible to deal with an ever changing environment.

The Small Business Blog
The New York Times has blog for small business owners called You’re the Boss. As of this writing the lead post is, “Six Ways to Deal with Small-Business Stress”. The Small Business Blog is a valuable resource for every small business owner with all kinds of wonderful stories and it has a rich mix of comments.

My So-Called Business Plan
I love stories about food, restaurants, money and yes, business plans, so I was fascinated by a recent post on You’re the Boss. The post is titled, My So-Called Business Plan (Enter Laughing) by Bruce Buschel. Mr. Buschel is a writer who bought a restaurant – an old, beat up place in Bridgehampton, NY called The Wild Rose.

The Original Wild Rose
The Original Wild Rose

It’s a lively story with a lot of ingredients: one part lifelong dream, two parts bank loan (for 1.5 million), one part contractor nightmares, three parts local bureaucratic snafus and yes, at least two parts business plan. And it has the requisite blog that details all of his ups and downs on the way.

 

Curious Bits and Bites
Mr. Buschel has a list of 100 things his waiters must never do that include never announcing your name, (??) no perfume, no touching the patrons and so on. Mr. Buschel waited an entire year to get his permits and he has no restaurant or liquor experience.  His restaurant will serve only fish. Mr. Buschel’s local planning board required that he bring to their office samples of the actual roof shingles he was planning to install. Opening is tentatively scheduled for April Fool’s Day 2010.

The Plan, What About the Business Plan?
Oh, yes the plan. Here is an excerpt from his blog post.

 

“Do I have a business plan? You think a man with 100 rules for a waiter wouldn’t have one business plan for himself? In fact, I have had, like a fecund humpback whale, two in two years and another one on the way.”

 

Mr. Buschel crunched numbers with an expert who had owned, run and built half a dozen restaurants. They used the best available data. A major conclusion: Based on the evidence, a clever, well-run restaurant could be successful in the Hamptons. Not exactly earth shattering information, but useful.

Then, right after he purchased The Wild Rose, the recession kicked in. Shortly thereafter, Lehman brothers failed. And to cap things off, the food writer Mark Bittman wrote in the New York Times that if fish are so endangered, maybe we shouldn’t be eating them at all. Oh dear…

So the business plan changed and changed again.  Here, is Mr. Bruschel’s current plan for a restaurant in the Hamptons.

– Avoid a hefty key fee and a long, ever-increasing lease by buying a place with important permits in place. Eateries are finite around here and therefore always in demand. Every penny spent will come back one way or another. If the restaurant fails, change the concept or rent the space or sell the property.

– Create a folksy place with funk.

– Assemble a crackerjack team.

– Open the best fish restaurant in the Hamptons (where none exists west of Montauk).

– In October, after your first full summer season, sit down and read the numbers, not the tea leaves. You will know where you went astray and where true you stayed. Adjust.

The new Wild Rose under construction
The new Wild Rose under construction

Should be great fun to watch this project unfold. Good luck Bruce, we’ll be watching with great anticipation!

You’re the Boss Blog
My So-Called Business Plan (Enter Laughing)

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