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Make Bookkeeping Changes to Comply with New US Tax Law
Few things in life are more complicated than US congressional attempts at making things simple. This principle holds true for the latest tax simplification. To adhere to newly established standards, business owners must make some straightforward adjustments and some less-than-clear changes.
  • Businesses may no longer deduct expenditures primarily connected to entertainment or recreation (ballgames, theater tickets, fishing outings).
  • Manufacturing businesses no longer receive a domestic production activities deduction.
  • Enterprises with $25 million or more of gross receipts now have a limit on deduction of interest expense to 30% of taxable income.
The good news is that businesses will also benefit from new allowances in 2018. Specifically, bonus depreciation of 100% is allowed on purchases of both new and used assets placed in service from 2018 through 2022. Additionally, the Section 179 deduction for property purchases is now allowed for items costing up to $1 million. When applying these deductions, entrepreneurs would be wise to rely on the judgment of their tax professionals for accurate reporting.

Tax experts will certainly aid in handling the new 20% deduction of pass-through income from business entities. Company owners must navigate income threshold limitations, disregard shareholders' salaries, and weigh business assets and wages paid-all to determine deduction limitations. Accurate accounting is now more crucial than ever for tax planning. To keep up with congressional efforts, business owners should stay in close communication with their accounting professional.

Make the Most of Networking Opportunities with Some Practice
We all know people who are charismatic, interesting, and fun to be around. These individuals have a knack for making others feel comfortable and relaxed, and always seem to know just what to say. They seem to have an innate gift that enables them to make friends easily and connect effortlessly with others.

If this doesn't come naturally to you, you aren't alone. The good news is that with preparation and practice, you too can be that interesting person. Here are some tips and conversational topics that will help you make the most of your next meeting, social encounter, or networking event.

Listen actively: Make eye contact and use positive body language to show that you are listening attentively and actually hearing what is being said to you. It's amazing how being a good listener equates to being a good conversationalist in people's minds.

Do some research: Facebook, Twitter, LinkedIn, and other social media platforms can provide a wealth of information about people's interests and activities. Use shared passions and interests to strike up a conversation and connect. You may also discover that you have mutual friends or colleagues.

Ask, ask, ask: Most people love to talk about their jobs, their families, their pets, their hobbies, their vacations, and their favorite hangouts or restaurants. With a little prompting, people will often open up, and a rich conversation can flow from there.

Every successful business encounter starts with a conversation that grows into a connection - which may eventually become a solid relationship.

Branding Essentials: What Your Logo Says about You
Your logo speaks volumes about your business - its identity and position in the market, and the personality of your firm. Before you get down to the nitty-gritty of selecting the design, think about your target market and the essential message you want to convey to them. Also, take time to research the logos of other companies, particularly those of your competitors.

Next, give careful thought to these important elements:

Colors: Colors elicit emotional responses, so you should try to align the color(s) of your logo with the image you want to convey. For example, blue conveys trust, dependability, and strength; red is a color of action, energy, and passion; yellow suggests warmth and optimism; green evokes nature and serenity; purple speaks of creativity and sophistication; pink suggests femininity and youthfulness. It's best to stick to bold colors and use no more than three colors in your logo.

Typography: Typography is another important element. There are three main types of fonts.

Serif fonts are those with little lines at the end of each stroke; they convey a traditional or professional sense. By comparison, sans serif fonts look clean and modern. The third type, script, can look creative, elegant, or casual, but script typefaces can also be difficult to read.

Beyond these essentials, keep the following basics in mind as you develop a logo:
  • Study all design components carefully - both singularly and together.
  • Use clean lines and simple shapes.
  • Make sure your logo is scalable, easy to reproduce, and multifunctional.
  • Compare samples of your desired logo in color and in black and white.
  • Avoid anything trendy. Remember, your goal is to use this logo for many years to come.

Simple Steps to a Simplified Financial Forecast
Operating a small business is like a hike in the woods where the trail is mostly familiar, but sometimes referring to a compass is key.

The entrepreneur's compass is the financial forecast. These projections guide you in the course you want to take. And when the path twists you in a different direction, the forecast shows where you're offtrack and how to get your bearings back.

Your forecasts allow you to set goals and milestones. More importantly, they permit you to measure progress toward your objectives. Many entrepreneurs avoid making financial forecasts because the process entails a lot of numbers, which seem cumbersome to calculate. However, forecasting can be a simple process. Use a spreadsheet to identify a few basic factors, with which you're probably already familiar. These factors create your financial forecast.

1. Resources

The top line in your financial forecast is sales revenue. But determination of this figure requires an initial step of identifying your available resources. These elements are cash and time.

Cash: Assess available funds for inventory and other costs that must be paid before you collect from customers. The money on hand for these things represents a curb on how much you can sell.

Time: Your revenue is limited by the time you have to contribute to the business. Selling more than you can deliver individually means adding staff, and that brings you again to a cash need.

2. Direct Costs

Once you've determined your resources, start identifying direct costs. Begin with all direct costs, such as inventory or materials. Labor cost is also commonly a major direct factor in generating sales. For solo-operated service providers, the only direct cost is typically the entrepreneur's time. The key dynamics are how much output the individual can accomplish every month and the amount of personal income desired for the effort. This owner compensation target is the major direct cost in many basic business models.

3. Sales Revenue

When your direct costs are identified, sales revenue is projected as a multiple of those expenditures. All you need is your ratio of direct costs to sales revenue. This may be calculated using historical data. Or you might simply identify a markup you aim to achieve. For example, you might have prices that are twice your direct costs - yielding a ratio of 0.5, or 50%.

Divide your forecasted costs by the ratio. The product is your sales revenue forecast. Subtracting direct costs from sales revenue results in an amount for gross profit.

4. Overhead Expenses

Every business has general overhead expenses. Even the solo entrepreneur working from home must at least cover the cost of internet and cell phone use. Larger organizations of course incur expenses for rent and office administration. Don't forget costs for advertising and marketing, even if that's only website development and maintenance. Subtract these expenses from your gross profit to obtain net profit.

Over time, update your financial forecast. Poor results will necessitate cutting overhead and capital expenditures. On the flip side, beating expectations gives you extra funds for expansion.
Michele Ball
Perfect Additions
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Worth Reading
Science Has Some Suggestions for Making Meetings Productive
By John Rampton-Chan
We've all been to the company meetings that drag on for too long and feel like a waste of time. But your meetings don't have to feel like a chore that your colleagues dread attending. Scientific research has pinpointed five actions you can do right now to boost efficiency, increase productivity, and make your important meetings matter to your team. Learn the five steps here.

Want to Be a Better Leader? Stop Giving Orders and Do This Instead
By John Eades

You might be surprised to learn that "command and control" is not the most effective leadership style for today's workplace environment. Instead, the most successful leaders are those who inspire, empower, and serve their team. One way to do these things is to connect with your team on a human level and focus on helping each person reach his or her highest potential.

How to Know Whether That Business Book Is Worth Your Time
By Will Hoekenga


There's a reason you shouldn't judge a book by its cover. Too often we find a book with an attention-grabbing title and glowing testimonials, and we think, "This holds the key to my success." But just as often, we learn that the book is full of fluff. So how do you filter out the books that are actually worth reading from the books that should have just been a blog post? These six techniques will show you.

Giving and Receiving Feedback
For many, the word feedback evokes feelings of fear and dread. No one enjoys receiving negative feedback, and few enjoy dishing it out. Even positive feedback can be challenging to give or receive. To enjoy business success, it's important to overcome these hurdles. Use the following guides to become a feedback aficionado:

Studies have shown that being a great leader means being great at feedback. Learn the secrets here:
Being A Great Leader Means Giving And Receiving Feedback

Negative feedback can be discouraging - or motivating. Discover how:
To Stay Motivated, Seek Positive and Negative Feedback

Want to give productive feedback? Use these five tips:
5 Steps for Giving Productive Feedback

Want to receive feedback effectively? Use these five tips:
How to Receive Feedback Effectively

Feedback should make your workplace more productive and pleasant. Here's how:
Giving Feedback Boosting Your People's Confidence and Ability
This newsletter and any information contained herein are intended for general informational purposes only and should not be construed as legal, financial or medical advice. The publisher takes great efforts to ensure the accuracy of information contained in this newsletter. However, we will not be responsible at any time for any errors or omissions or any damages, howsoever caused, that result from its use. Seek competent professional advice and/or legal counsel with respect to any matter discussed or published in this newsletter.
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