If there is anything that the Covid 19 pandemic has taught us, it’s that small businesses that do not have a strong network of support are susceptible to major economic events. All across the US we watched as restaurants, beauty salons, construction companies, and almost any other type of small business you can imagine closed their doors for good. These tips will help you prepare your business to withstand major economic downswings by helping you network with your clientele to keep them spending their money in your business.
Social Media Is Your Friend
The days of MySpace and learning how to build an attractive profile on social media sites are long past. There are a plethora of social media platforms available to small businesses, which allow those businesses to reach their target market without spending thousands on TV and radio ads.
Taking advantage of sites like Facebook, Twitter, YouTube and TwitchTV is a major key in being able to reach potential customers. This is especially true of the 20 and 30 something crowd, as these age groups thrive on what they see on social media.
Public opinion can rapidly be swayed with a few well placed posts on social media sites, and while this becomes painfully clear during election season, it is also true of small business influence. If you manufacture niche items for clients, then a streaming platform like TwitchTV is a great way to promote your products to the clients you intend to sell them to. They can watch as you make their orders live. This builds up your reputation and begins to draw new followers, which equals more potential customers.
Sharing things like daily specials or promotions on Facebook is another great way to reach potential customers. This lets them know when their favorite dish is offered at a special price, and it keeps them checking your social media feeds for other great deals you have to offer.
Not taking advantage of social media in today’s market is the equivalent of financial suicide.
Network With Other Business Owners
This can be accomplished using social media, as well as in person meetings. Find other business owners who are active in your field, or in fields that are closely related and work together to grow your clientele.
For instance, if you own a flooring company, you should be looking to network with plumbers, electricians and drywall specialists. You may wonder why this would be a wise idea and the answer is quite simple. Here is a hypothetical situation to consider.
John Doe is a drywall repair specialist who gets called out to a house to fix a hole in a wall. While he is there the homeowner asks him if he can replace hardwood flooring as well. Now, John Doe doesn’t want to take on the responsibilities of the flooring, but he passes your information on to this client and she calls you to do the job.
You can also use sites like LinkedIn to connect with other business owners in your area. Take the time to take a few of them to lunch and build a rapport. You never know when one of them might throw you that dream contract you have been thinking about for years.
Chamber Of Commerce Membership
Many business owners might overlook this step in building their network of potential clients. However, the Chamber of Commerce is a very powerful tool. Many people still call the Chamber of Commerce to get recommendations for quality businesses in their local area.
Attending the Chamber of Commerce meetings can really help put your name out to other members, as well as to the local population. That, coupled with membership, will put your company’s name on the tips of other members’ tongues when someone needs the services you have to offer.
Sponsor Local Sporting Events
This is another avenue of advertising that often gets overlooked by small businesses. In many cases it is very affordable to purchase ad space on the local high school football field. This gives you a sign that potential customers see during every home game, making you an easy choice for upcoming projects.
You can also choose to sponsor an entire little league team for multiple sports seasons in many towns. This gives you huge audiences, not only for the games they are playing in, but for everyone they walk past on the way to their field in the park. Those uniforms with your business name will stand out and people tend to remember companies that sponsor teams in their league.
Get To Know Your Customers
The single biggest step you can take to build your clientele is to build a relationship with your existing customers. If you own a restaurant, meet some of the regulars and shake their hands. Thank them for their business and ask them how they enjoyed the food. This type of attention from a business owner creates a lasting impression and makes them want to tell their friends about the incredible service they received at your business.
This is true, no matter what line of work you are in. Electricians, gas station owners, pool service companies, and many more can all benefit from friendly owners and management taking the time to get to know their customers.
My grandfather bought a brand new 1977 Ford pickup truck from a local car dealership in 1977. The owner of the dealership came out to meet him after the salesman had finished up the paperwork. He asked my grandfather if there was anything else he could do and he replied “Yes, I would like the $500 cash back your television ad promised.”
The salesman began to stammer as he said “Sir, that was rolled into the purchase price of the truck.”
My grandfather replied that this had not been explained to him. The owner of the car lot walked him into his office, opened a small safe and counted out $500 and handed it to him.
Because of that customer service my grandfather bought every single new car from that time on at the same car lot. I bought my first truck there, with my grandfather as the co-signer on the loan.
Customer service and knowing your customers is how you build lifelong clients who are faithful to your business.
Use The Tools To Build The Bank Account
These tips are not the blanket answer for every situation. However, these tips will work for every business in America. No matter what your company retails to its clients, building a network is the key to keeping that client base actively spending money in your establishment. Don’t let the next economic downswing catch you unprepared.
This article was produced and syndicated by MediaFeed.org.
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Home business tax deductions to take as a small business owner
Small business owners take on a considerable amount of responsibility. Beyond serving clients, they must also take care of all the minutiae of running a business, including keeping track of expenses they can deduct as a small business owner.
Fortunately, small business owners and entrepreneurs who use their home for work can benefit from various home business tax deductions that help them reduce their taxable business income. Common deductions include office supplies, software and internet access, but deductions can vary widely depending on the type of home business you run.
- Who qualifies for home business tax deductions?
- 25 home business tax deductions for your small business
- How to write off home business expenses
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If you run your business out of your home, you may be able to deduct expenses for the use of your residence on your taxes for your small business. The home office deduction can be utilized by homeowners and renters, and any type of residence can qualify (single-family home, condominium, manufactured housing, etc.).
To qualify for the home office deduction, your home business activities must meet the following criteria:
- Regular and exclusive use. According to the IRS, you must “regularly use part of your home exclusively for conducting business.” In other words, you must have a space in your home that you use only for business purposes, such as a home office or extra room that is used only for business and never for personal use.
- Principal place of business. To qualify for the home office deduction, your home also must be the principal place your business operates from, although there are exceptions. The IRS reported that you may qualify for the home office deduction if you also have a business location outside of your home, provided you use your home for a substantial component of your business. For instance, if you conduct business in another location but have meetings with clients or patients in your home, the IRS allows you to deduct expenses for the part of your home that you use “exclusively and regularly” for business purposes.
There are some exceptions to these rules, including for those who run a home daycare. If your small business involves watching children in your home, then it would be impossible to meet the “exclusive use” criteria if you’re watching children in your own living area. To qualify for this exception to the exclusive use rule, you must provide daycare for children, persons age 65 or older or persons who are unable to care for themselves. Additionally, you must have “applied for, been granted or be exempt from having a license, certification, registration or approval as a daycare center or as a family or group daycare home under state law,” noted the IRS.
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If you’re eager to reduce your taxable income this year, figuring out which home business tax deductions you can take is a smart first step. Here are 25 common deductions you may be able to qualify for.
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Business supplies and office expenses, such as office furniture, printer paper, pens, calculators and business cards, are deductible provided they are for business use. According to the IRS, business expenses must be both ordinary and necessary, meaning they are “common and accepted in your trade” and “helpful and appropriate,” though not necessarily indispensable.
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Small business computers and software you need to purchase for your business, including small business accounting software, should be tax-deductible business expenses provided these purchases are ordinary and necessary for your business to remain in operation.
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You may also be able to deduct home repairs and maintenance performed on your place of residence, but only for the part of your residence that is used exclusively for business purposes. According to the IRS, an example could include “painting or repairs only in the area used for business,” like a new coat of paint or replacement flooring in your home office.
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You can deduct the business portion of your rent as an expense if the property you rent is for use in your trade or business. However, you cannot deduct rent as a business expense if you have or will receive equity in or a title to said property. Per the IRS, rent is defined as “any amount you pay for the use of property you do not own.”
In terms of depreciation, the IRS said that you can typically deduct depreciation on the business use portion of your home as well, in an amount up to the gross income limitation over a 39-year period.
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If you have a home office, your house utilities will also be required for your business. As a result, you can deduct a portion of your utility bills, such as gas and electric bills. However, you can only deduct a portion of these expenses since, obviously, part of your utility bills are for personal use.
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If you use your car for business purposes, you can deduct auto-related expenses for the business use of a car. The IRS also reported that, if you use your car for both personal and business use, you must divide your car expenses based on the mileage you drive for personal and business purposes.
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You can also deduct mileage for all travel related to business. The IRS offers a table of standard mileage rates and mileage deduction rules you can refer to for the last several years, including mileage expenses for 2020.
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You can also write off employees’ pay as a small business owner. This is true even if you operate your business out of a home office.
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You can also deduct contributions to retirement plans, including tax-advantaged retirement plans for the self-employed or small business owners, such as an SEP IRA or a solo 401(k).
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If your business is paying interest on a credit card or loan that you borrowed for business activities, you should also be able to deduct this interest as a business expense.
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According to the IRS, you may be able to deduct various federal, state, local or foreign taxes that are directly related to your trade or business.
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You can typically deduct the cost of business-related insurance products you pay for, provided they are applicable to your trade or profession.
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If your business creates products or purchases them for resale, you can typically deduct the cost of these products or the costs involved in manufacturing them. This can include the cost of raw materials, freight, shipping, storage, direct labor and more.
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Thanks to the Tax Cuts and Jobs Act of 2017, you may be able to deduct up to 20% of your qualified business income on your taxes. This deduction does have limitations based on your trade or business as well as how much you earn, however. Specifically, joint tax filers with incomes below $315,000 and other filers with incomes below $157,000 can claim this deduction in full provided they work in a qualifying industry. For 2018, joint tax filers with incomes between $315,000 and $415,000 and individuals with incomes between $157,000 and $207,500 were subject to phase-outs.
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If you use your home for business purposes, you can generally deduct cleaning services and supplies that you purchase for the business-related portion of your home.
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If you own your home and have a home mortgage, you can deduct a portion of your mortgage interest on your business taxes. Deductions are based on the percentage of your home that you use for your business. If your lender requires mortgage insurance, part of that can be deducted as well.
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Business-related travel expenses can also be taken as a business expense. This could include travel to meet with clients or to professional education or training events.
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If you pay for professional services, such as legal advice or tax preparation, these expenses can be deducted as business expenses.
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If you pay for marketing help or a business coach, these expenses can be deductible from your business income.
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If you ship items for business purposes, shipping costs can be deductible on your taxes. The same is true for postage when used for business purposes.
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A security system that protects the doors and windows in your home from intruders can also be partially deductible as a business expense, provided part of your home is used for business purposes.
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Professional memberships you pay for and subscriptions to business-related publications can also be tax-deductible.
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The IRS said that while the first local telephone landline in your home is not a deductible business expense, “charges for business long-distance phone calls on that line, as well as the cost of a second line into your home used exclusively for business, are deductible business expenses.”
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Health insurance for yourself and your family is deductible as a business expense when you’re self-employed, although you do not have to have a home office to qualify for this deduction.
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If you pay for or reimburse education expenses for an employee, you can deduct the expenses if they are part of a qualified educational assistance program, per IRS rules.
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If you’re feeling overwhelmed by all of the home office business expenses you might have to keep track of, you should know that the IRS also offers a standardized home office deduction that requires less legwork upfront. Here are the two options you have when it comes to how to write off home office business expenses this year:
- Simplified home office deduction: Since the 2013 tax year, taxpayers have been able to access a simplified option for computing the home office deduction. This option lets you determine a standard deduction based on the square footage of your home office space, thus letting you avoid tracking and reporting all of your individual home office expenses. Of course, the simplified method isn’t perfect since you can’t take some deductions like depreciation. You also cannot carry over a loss from a previous year, which is a departure from the regular method.
- Regular method: If you keep excellent records and prefer to deduct business expenses the old-fashioned way, you are still able to do so. With this method, you would need to keep detailed records of all your actual expenses for your home office including mortgage interest, utilities, depreciation and more. From there, your deduction will still be determined based on the percentage of your home used for business purposes.
If you’re using the regular method, you should plan on using IRS Form 8829 for certain business-related tax deductions when you file your taxes. But be aware that some business expenses don’t fall under the home office deduction, so they would be deductible within other areas of your taxes, such as Schedule C or F. Examples include telephone expenses, dues and salaries.
Also note that if you use the simplified method and itemize deductions, you can deduct some expenses for your home that are otherwise deductible, including mortgage interest and property taxes, as itemized deductions using Form 1040 or 1040-SR, Schedule A.
When choosing which method to use for your home office deduction, keep in mind that both options have pros and cons. The regular method requires a lot more work, but you have the potential for a larger deduction if you have a lot of qualified expenses within a year. The simplified method is easier, but not necessarily ideal if you want to recapture depreciation when you sell your home, or if you want to be able to carry over losses. Make sure you understand each method and its limitations so you can make an informed decision.
This article originally appeared on LendingTree.com and was syndicated by MediaFeed.org.
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