Happy First Day of Spring! This is one of my favorite days of the year. I hope yours is going really well.
Today I wanted to do a bit of a combination of posts today – combining this week’s Not me Monday and Tips on Tuesdays. I’m doing this for two reasons:
The tip I wanted to share today is not mine originally
I’m a little overwhelmed with lots of projects going on – so yes, this is a bit of a cheat to combine these two.
A few years ago I read an article in Real Simple Magazine. I wish I had the exact article or at least the magazine issue to reference, and while I don’t have that information – the lesson learned from the article really stuck with me.
Basically, the article talked about a guy who saved every five dollar bill that ever made it into his wallet and after a couple of years, he was able to take his family on a great vacation. I want to say to Disney or someplace like that.
I love this idea because it shows how the little bit adds up over time. And by sticking to something, the payoffs are really great.
After reading this article, I starting doing my own version of this. And while I’m not saving for anything in particular, I collect one dollar bills and place them in an envelope in my office labeled “the dollar fund.”
I don’t typically have a lot of cash in my wallet, I normally use my debit card and/or working from home, I don’t find a huge need to have cash on me. But every few days, I’ll clean out my wallet and any dollars go right into my envelope.
Like I said, I’m not saving for anything in particular – but boy is it nice to have a few dollars available should you need them.
we pay our son $2 a week for his allowance
I bought a box of Thin Mints from a Brownie who knocked on my front door last weekend
whenever we are a couple of dollars short for the babysitter
if I’m feeling like I want to treat myself to a Chai before a meeting.
The fund sometimes adds up and I’ll have upwards of $50 in there. But it probably sits around $25 on any given day.
It has really come in handy.
Do you have a secret stash like the $5 vacation fund or like my dollar fund? Please share!
My hairdresser said something to me one day that has stuck with me since the day she said it. While I didn’t really apply the thought to her statement at the time, I have started applying it to my life these days and it is something to think about.
As part of my appointment, J, my hairdresser, would always ask “do you want to try any of the products out front?”
Not one to really go for the “up-sale” , I usually would graciously decline and say something like “I’m good, thanks.” Usually this was all and I appreciated the fact that J. didn’t push it any harder.
But one day she asked me – “Amy, why do you spend so much money on getting your hair colored and styled and then wash it all away with cheap shampoos and conditioners?”
Well – truth be known, because I was spending so much on getting my hair done, I was trying to cut costs by not buying the overly expensive products for sale there.
Now, this isn’t about whether or not you should buy those professional hair products, that is a matter of personal choice (one of which I still use my beloved Pantene products).
This is about “why would you go through all this trouble only to throw it all away.”
As I mentioned, I’ve been mulling over her words and have been applying them to different facets in my life – and it seems to be changing my line of thinking a little bit. Here are a couple of expamples:
If you are going to get up at 5:30am and run around the block four times and then come home and do thirty minutes of yoga, why would you waste that by having a fast food lunch and candy bar snack?
If you are going to spend four hours cleaning your house, which includes scrubbing the floors on your hands and knees, why do you let the dogs in from the rain without wiping them down first.
If you spend hours setting up your budget and are diligent about saving money and paying off bills, why do you leave all the lights on or run the dishwasher half full.
Give it a try! Can you see how it might change you way of thinking.
Your time and money are valuable – don’t just throw them away!
Send me your thoughts – – on this or any blog I’ve written. I love hearing back from everyone and love to get comments.
Rock On! You are a small business owner! Now let me ask you a question – what type of business do you have?
I don’t mean – what does your business do, or what product do you sell or what service do you offer.
I am asking –
Are you a Sole Proprietor or a Corporation?
There are some very distinct differences between how your business is filed with the US Treasury and the Secretary of State. The biggest differences are those between a Sole Proprietorship and a Corporation.
The important thing to remember – A Corporation is a separate entity. This means it files taxes separately, has shareholders and will protect your personal assets in most cases.
It is my philosophy that any business regardless of size or age can be a corporation. But whether or not your business should become a corporation should be decided based on recommendations from your CPA and your attorney.
Here are a couple of things to consider:
Shareholders are not responsible for corporate debt.
Corporations can offer self-employment tax savings.
Corporations offer protection of personal assets.
There is more of a cost associated with setting up a Corp and you will be required to do certain things annually such as conduct a Shareholder’s meeting.
SP’s offer easier start-up abilities and simple tax filing.
An SP is a bit easier to operate and make changes instead of dealing with shareholders.
What sort of businesses should be incorporated? Like I said above, this should be based on the recommendations of your CPA and attorney. But here are a couple of examples to consider:
If you own a small hair salon I would highly recommend becoming incorporated. Imagine if someone tripped and fell in your parking lot of your building. Someone could easily sue for medical expenses, lost wages, etc. If you are not incorporated – they can draw money from your personal assets – meaning your home, savings and retirement funds. By setting up the business as a corporation – they will only be able to go after the business assets.
Maybe you offer house cleaning services in your client homes. What if you accidentally clean a stain in the carpet with a cleaner that ruins not only the carpet but also the sub-flooring. Most likely your insurance will cover this damage, but if you aren’t insured or are under-insured, the client could come after your personal assets to pay for the damages if you are not incorporated.
Assuming you are paying yourself a salary (which you should be as a small business owner) one way to help save costs is by being incorporated. Your CPA can tell you which sort of Corporation would be best for your situation.
It is very easy to just put off the decision of whether or not to become incorporated, maybe because you don’t really understand this whole thing. Or maybe because you believe you will always be diligent and not have any accidents.
The latter line of thinking – while optimistic, is very dangerous. Accidents happen and sometimes they happen despite our best intentions.
If you are unsure or you really don’t understand the whole Corporation -v- Sole Proprietor – – a call into your CPA or attorney will help answer this question. Fifteen minutes on the phone with either of them can save you tons of time and money in the long run.
I’m available to bounce ideas around if you are uncertain of what sort of business entity you should be. I can offer examples of potential situations which might make your decision easier to make. Shoot me an email and let’s talk about it (there is no charge for this service). firstname.lastname@example.org
Happy Wednesday ~ amy
PS – I realize that this is a day late – but I didn’t want to skip this week’s edition to Word Up Wednesday. Thanks
Asset: (n) – A resource with economic value that an individual, corporation or country owns or controls with the expectation that it will provide future benefit.
There are many types of assets – in both business and personal.
Current assets are those which are expected to be used within one year’s time. They include deposits, negotiable currency (checks, money orders), inventory, receivables and prepaid expenses.
Long term investments are assets that are held over a long period of time and they include stocks, bonds, securities, land, and long-term savings.
Fixed assets are items used by a company that will help the business operations and eventual bottom line. Such items that are fixed assets are building equipment, property, furniture, etc.
Intangible assets are those assets in which it is difficult to place a dollar value on, yet still bring value to a company. Things like copyrights, patents, goodwill, and trade names.
Examples of assets in small businesses:
the equipment owned to operate the business – eg. a carpenter can count his woodworking equipment (saws, drills, power tools) as assets. A hairdresser would consider her property as well as her equipment and inventory of hair products as an asset.
money that is considered a receivable is considered an asset. eg. outstanding payments that are due from a sale or a provided service. Short or long-term receivables that are owed the company for outstanding sales or service.
deposits or cash in the bank is considered an asset. If this money is invested in short or long-term notes, it is also considered an asset.
An asset can be used to describe a person’s wealth and value
Any cash in the bank is considered an asset.
Investments such as IRA’s, 401K’s college savings, etc. are considered assets.
The value of the home after the amount owed is considered an asset.
It is always good to remember the basic accounting formula:
assets = liabilities + owner’s equity
This is important information to know for both your small business and your personal value.
Have further questions – send me an email or write a comment. I’m happy to explain more.