Financial Wellness and Sustainability for Entrepreneurs

Recently I was watching  this video about time orientation and it reminded me of something I’ve been wanting to talk about: time and money.

I get to watch a fair number of entrepreneurs work. There’s a variety of styles are time use and time orientation. But time and again I see a theme emerge. The business owners and entrepreneurs who set reasonable work hours and take time for themselves (including vacations, meditation, relaxation) are consistently more productive, high earners and happier than those who work constantly. In fact, check out Chief Happiness Officer’s The Cult of overwork.

I’ve read more than one study that talks about decreasing effectiveness of work as hours increase. There was one I read years ago and that said that efficiency decreases after 6 hours and dramatically after 8. Working more doesn’t actually help get things done. It does make you tired and keep you from your best ideas. I realized this again myself today. I’ve been working and traveling the last couple of weeks and this morning I was totally beat. So I took some time outside on the swing in my parent’s backyard (where I’m visiting right now) and just relaxed in the sun. Within about 20 minutes an idea surfaced for a project that has been plaguing me for months. I know exactly what I want to do about it. But I hadn’t been taking time to just relax and allow myself to re-coooperate from all the hard work so there’s no energy for creativity and problem solving. This is, of course, related to the big theme of this blog: self-care.

When we take good care of ourselves, amazing things happen. How can you take good care of yourself right now?

Here’s a head’s up a recent IRS ruling about scanned documents. The gist is that you have to keep hard copies.  So if you’re using Neat Receipts or some other software/hardware configuration, you are still responsible for  all those hard copies and can’t just chuck ‘em when you’re done.

Q13. Will scanned documents be accepted as substantiation for expenses in an
audit? If not or if there are further requirements, please explain and cite the
reference. Also, please relate to Revenue Procedure 98-25 & 97-22.

A. Scanned documents are not accepted as substantiation for expenses. A record is the
actual document, such as a receipt or invoice that proves an expense was incurred. If an
auditor is presented with only scanned documents, he will be obligated to at least sample
these documents for accuracy and substantiation. This will include tracing back to the
original source document through a third party source such as your distributor/wholesaler.

Revenue Procedure, 98-25 prescribes basic requirements that the Internal Revenue
Service considers essential in cases where your records are maintained within an
Automatic Data Processing system. Rev Proc 98-25 section 11.01, Hardcopy Records,
says, “These procedures do not relieve you of your responsibility to retain hardcopy
records that are created or received in the ordinary course of business as required by
existing law and regulations.”

Here is a link on information for individuals for filing an extension.

It’s super easy.

If you think you’ll owe money, send in some money. If you don’t owe that much, you’ll get it refunded. It’s better than paying penalties.

If you think you’ll owe CA as well, here’s there extension form. I don’t have the informaiton for other states.

http://www.taxbrain.com/taxcenter/extensions/downloads/2009/ext_ca.pdf

You only need to file the CA extension if you think owe CA money.
Otherwise it’s automatic when you file your federal extension.

If you think you owe no money, put down zeroes on the extension form
along with your name, address, and social and send it in. You don’t
even have to sign, it’s that easy.

Extensions must be postmarked by April 15. Send certified to prove
you filed it in case the IRS / Post Office looses the form. (It’s
rare, but it happens. Don’t ask me how I know)

I’ve watched all manner of people and clients freak out about audits. This seems to get especially bad around tax time. One of my colleagues writes a great newsletter and I thought I’d share some of her wisdom to help get you get back to business.

From: The CPA Newsletter: www.irynacpa.com
Surviving a Business Tax Audit

A tax audit might be the ultimate nightmare scenario for many business owners. Therefore, I thought it might be helpful to provide some audit survival tips for small businesses. These tips apply whether your business is being conducted in a business entity or as a sole proprietorship.

1. Remember what an audit is all about – An audit means the IRS needs to reconcile what they think you owe to what you’ve paid. It doesn’t mean you are being accused of something or that you have done anything wrong. Many audits end with the happy letter stating that no change is necessary to your tax payment. It’s even possible that an audit can result in a refund. Therefore, don’t assume you’ve done anything wrong.

2. Provide only what is asked for – Prior to the commencement of the audit you, or your representative, will receive a letter requesting certain documents or other information to have available at the initial meeting. Provide specifically what is requested and nothing more. Make sure your receipts and invoices reconcile with each other and with your tax return. Reconciliation is an automatic procedure in every audit. If the records integrate with the return, it may well prevent the agent from expanding the original scope of his audit.

3. Some patience and understanding is in order – In recent years the IRS has been doing compliance audits for certain industry market segments. At times these audits can be prolonged. The companies in these industries are generally selected at random, so if your company is one of the chosen, it doesn’t mean that the IRS has concerns about your company in particular. However, if you know that you have been pushing the envelope with the numbers and deductions, you may need all the help you can get.

4. Be properly represented – It has been said that one who represents himself in court has a fool for an attorney. The same is true in dealing with the IRS. Your interests would best be served by a tax professional who understands the language, rituals, and even the games that can be played when one interacts with the IRS. For example, skilled IRS agents often ask questions that seem innocuous, but can have ramifications you’re not aware of. Casual, seemingly harmless conversation can be trap bait for the unwary.

5. Give the impression of total organization from the outset – Even if you are well represented, the agent at some point will likely want to question the business owner at his place of business. This should be done only with your representative present. In many cases, a tour of the facility would be Included in this visit. Not only is it important for you and your representative to be organized and prepared regarding the books and records,, but also from the standpoint of the appearance of the physical place of business. Good impressions can score many advantage points.

Here’s an article about one of my clients (Igigi.com). It talks about the line being named after a goddess among other things. Their clothes are amazing and I wear them all the time these days because they are so well made.

I love celebrating my client’s successes! Congratulations Yuliya and Igigi!

While this quote is attributed to Mother Teresa and inscribed on the wall of her home for children in Calcutta, the original version (called the Paradoxical Commandments) was written by Dr. Kent Keith in 1968.

“People are often unreasonable, irrational, and self-centered. Forgive them anyway.

In the final analysis, it is between you and God. It was never between you and them anyway.

I’ve been poking around a little about banks and banking relationships. This morning I found this article which is all about Citigroup. This site has good information about banks, where they invest, and what kinds of practices they hold as well as information about sustainable banking.

Have a read and let me know what you think!

A few months ago in working with a client on the edge of giving up her consultancy, she said to me, “But I don’t see you making a million dollars. How do I know I’ll be successful?”

I laughed – she thought my game was “make a million dollars” because that’s what all the marketing books and “How to’s” assume: that you’re in it solely or mostly for the money.

My game is “Spend time with my son.” As a result, my work is structured so that I can often work at home, work remotely, work part-time and be flexible while still making enough money to sustain us. My son is my priority – he is what I value. So I work to make sure I can be with him as often as possible.

Once she really got that, her attitude changed – she actually went into a bit of shock. She had been assuming that “success” meant huge sums of cash. In that moment she realized that she could define her success conditions any way that suited her. Within 2 weeks her income doubled and her hours going way down and she decided to take a two week vacation to see her family – which is what she values.

Exercise:
How do you define success?
What assumptions are you making that no longer suit you?
If you knew you could not fail, how would you define success?

I hear people and groups talking about wanting to promote their events and things but lack information and training, so here’s your chance to get some. And it’s free.

This is an invite to a professional group that I run with Tia Paquin. We are having a marketing expert come give our consultancies some support and we’ve opened it up to our community. John’s great and the group itself is a font of knowledge on all things financial and very friendly. Outside of the presentation, we introduce ourselves and our work, eat good food and share resources or problem solve. It’s fairly caual as professional groups go. But very helpful.

Let us know if you want to come! You can respond below with contact information or email me: briana at infinitelypossible dot net.
Briana

Happy Fourth Quarter Everyone!

This is a new updated invite for the Roundtable. We got an offer we just couldn’t pass up! A special 3- month FREE series on marketing by expert marking coaching John Van Dinther. We’ve all been looking at how to bring in new clients and John’s offered to help us.

He will present a three part workshop series on marketing for small businesses, giving simple and easy to use tips on how to create a marketing plan, generate sales, and present or update your business on the internet. John Van Dinther, the owner of 2hats Consulting, is a small business marketing consultant based in San Francisco. You Can visit his blog at: http://2hats.blogspot.com

Monday, October 5, 2009: How To Build A Strategic Marketing Plan
Time: 7pm
Where: Frjtz
590 Valencia Street, San Francisco
http://www.frjtzfries.com/
Creating Measurable Goals
Using Effective Marketing Channels
Tracking Your Progress

Nov. 2, 2009: How To Market In-Person
Viceroy’s in Berekeley
7pm
Finding Great Networking Events
Building Effective Presentations
Making Sales & Landing Clients

Dec. 7, 2009: How To Develop A Compelling Online Presence
San Francisco, TBA
Setting Up Blogs & Websites
Delivering Useful Emails & Newsletters
Accessing Online Communities
__________________________________________________________
The Bookkeeper’s Roundtable
Open to any financial professional interested in networking or finding resources for clients, primarily for bookkeeper support and development.

Purpose: To share information and resources for problem solving for clients. To further our studies, our consultancies, bring resources to the table like books we read, online and print and human resources. Refer other legal & professional contacts like lawyers, tax accountants, CPA’s. Refer clients to each other.

We begin with introductions, a short discussion of our consultancies and then additional resources and current issues/challenges we are facing sections.

Please RSVP to tia@noir.com so we can arrange sufficient seating.

This is one the biggest, most often asked question in my field. So I’ve gathered some information for you so that you can get those questions answered.

IRS page on the different between an employee and contractor

More information about the 20 point check list

IRS 20 point check list

Template for a form you can fill out for each person you hire

Let me know if you find any others that are particularly helpful!