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At age 65, Harland “Colonel” Sanders took a $105 social security check, an old family fried chicken recipe and launched Kentucky Fried Chicken.
At age 55, Ray Kroc bought McDonalds, a fledgling restaurant chain and grew it into one of the largest, most influential fast food chain in the world.
Nearly 80% of baby boomers want to work in retirement at least part-time, and many of them intend to go into business for themselves.
What are you doing with your Golden years?
We are looking for a few retired CPAs, bookkeepers and business people to help volunteer/mentor the next generation along. Interested? Drop us a note at numia.biz at (the @ symbol) gmail.com.
Either way numia.biz can help keep your sales receipts and expenses organized. The nice advantage a business has over a hobby is that it can deduct expenses like meals & entertainment, travel and other marketing costs. The Internal Revenue Service looks at two things to determine if you are a business or a hobby.
- If you make a profit in three out of five years.
- If you can demonstrate that you are in business to make a profit. That is, do you manage the business in a professional manner, how much time & effort do you put into the business, if you depend on its income and your level of expertise.
The key point the IRS will tell you again and again in proving you manage the business in a professional manner is good recordkeeping. You should have a bank account for the business separate from your personal one. You should record all business transactions and retain all your records (receipts).
Imputing your sales and expenses into numia.biz fulfills the “record all business transactions” IRS requirement. That was easy!
Also, make sure your business has a tax ID number called a Employer Identification Number or EIN. It’s just like your Social Security number except for businesses. You can get one from the IRS in the USA here:
https://sa1.www4.irs.gov/modiein/individual/index.jsp
But beware; even though it is an online application, the computer only works Government hours as of January 15, 2009:
Monday – Friday: 6:00 a.m. to 12:30 a.m. Eastern time
Saturday: 6:00 a.m. to 9:00 p.m. Eastern time
Sunday: 7:00 p.m. to 12:00 a.m. Eastern time
Many new small businesses keep their financial records in “the glorified checkbook” system: they write down the money that comes in, the amount paid out, and if anything is left in the checking account at the end of the month, great, a profit!
They make due even though a more detailed accounting system would benefit them rationalizing the decision not to change with “if it ain’t broke, don’t fix it”.
Well, one small business that finally started using an online accounting software discovered his administrative assistant had been charging personal items on the company credit card—over $15,000 worth this year, alone. Before then, all all the person had ever looked at was the monthly balance on the card and signed the check to cover it.
The old check book system lacks the checks and balances necessary to ensure that a small business is not over-charged by vendors, underpaid by clients, or in the worst case, the victim of financial fraud. What’s more, it doesn’t give the financial information needed to make successful decisions about where to direct resources to grow a business, or maximize profits. In fact, inadequate accounting is a leading cause of the high failure rate amoung small businesses. Good bookkeeping isn’t rocket science—and once in place, it’s actually easier than patchwork “systems”.
Sorry to trick you with the headline, but there is NO ONE right way to run a business.
You can be a mean employer or a kind one. One who dedicates your life and business to making sure everyone is treated equitably (always a good thing to do anyway), who gives back to the local community and does well by the Earth or not. You can be religious, only deal with others like yourself or not work on the Sabbath. You may work in an office or outside. In groups or alone. You may be in a business that has not changed in 100 years or one brand spanking new. There is no one right way to run a business except this…
Make a product someone would want to buy at a price that makes you a profit.
As the motto at my local aggregate company says- “Find a need and fill it”.
Now go out there and make some sales and profits!
numia.biz
Now is a difficult time to start a business. We may be in a recession. Unemployment is up, interest rates are up, prices of many many commodities are up up up.
On the other hand, starting a business during difficult times may be the BEST time. In fact:
- 16 of the 30 corporations that make up the Dow Jones industrial average got their starts during recessions.
- Disney began during the recession of 1923-24.
- Hewlett-Packard was begun during the Great Depression (in 1938).
- Microsoft began during the 1975 recession.
More new businesses are started by small entrepreneurs during difficult times then during good times. Why?
Well for one thing, more people (including you?) may be unemployed now. Why not start your own firm while continuing to look for a “real” job. If someone hires you then put the new start up on hold, if not, continue with the new idea and see if it takes off.
Resources like cheap rent, flexible terms on supplies and other people willing to work for free are more available during hard times then good. Take advantage of them.
People are looking for new solutions to help them. During good time, people are relatively flush with money. They spend without thinking or comparison shopping. Just doing the same routine that has worked well for them to date. When difficult times strike, it makes people reevaluate their incomes and lifestyles. Foreign vacations become “Visit the USA”, Friday Night Out becomes Family Night and SUVs become Hybrids. People’s behaviors are more prone to change during hard times. Take advantage of this by offering solutions the make their lives easier.
Offer something FREE, like numia.biz. Saving money is always appreciated.
In 1995 I was working for Bank of America in a small 3 person group when word came down from on high that we had to rightsize (I hate that term) by 1/3rd. Being the youngest and last in, I was the first out.
It was not fun being fired and I decided then & there that the only person who would fire me from now on would be me. Which meant going into business myself. I started the Ameristock Mutual Fund out of my home that year and have never looked back. We now employ 8 people and manage over $2 billion in assets.
Kemmons Wilson, that man who founded Holiday Inn tells this story about how he became an entrepreneur.
I was working at a brokerage for $12 a week. When everyone else went home for the day, Kemmons stayed behind and made friends with the bookkeeper. “I got him to show me how to do it, and when he left he recommended me to succeed him. They gave me the job, but after three weeks I was still making $12 a week. The other bookkeeper made $35 a week. I asked for a raise, but they only gave me another $3 a week. So I quit, and that was the last first and last full-time job I ever had working for someone else”.
Whats your story?
