Tag Archives: CBS Review

Setting Up a Business Phone System

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Don’t wait for your landline to be set up by the phone company. You can set up a business Phone system in a matter of minutes. That you only need an internet connection is the finest part.

A dependable and easy-to-use internet phone service such as Nextiva provides more than 35 features for business phones. The setup and installation of a fully functional VoIP (Voice over Internet Protocol) phone system involve the following processes.

1.   Log into Your Administrator Dashboard

The first thing you ought to do when joining a new service provider is for you to go into your administrator dashboard. Have a good understanding of the features of your phone system that are at your disposal. Make a list of possible questions to put to your point of contact.

You can manage your business lines and create your team through this platform. As a result, you need to decide who you want to serve as the phone service’s backup or a principal administrator.

2.   Define Hours for Business

It could take some time initially to design and implement a timetable for your vacations and business hours.

It’s clear that the job isn’t the most pleasant. However, these schedules are followed by automatic features like auto attendants and call forwarding. Create them early to save a ton of time and work later.

You won’t have to be concerned about managing phone lines during lunchtime or vacations. Have the appropriate call routing and message at the appropriate time without ever pressing a button.

3.   Configure Voicemail and Team Extensions

You can set an extension for every feature and everyone with your Voice over Internet Protocol (VoIP) system. This could be perplexing. A structured system for extensions might be beneficial in this situation.

The placement of the initial digit can be defined. The warehouse has 3000s, Satellite Office has the 2000s, and HQ has 1,000s, etc.

If you have fewer than 200 people in each office, limit user extensions to 1–200. Make 300-call groups and automated attendants. Additionally, you can create 999 group page numbers for all offices and call centers.

4.   Create Call Flows

Business experts like www.cbs-cbs.com say that it is critical to have a good understanding of how callers feel when they contact your business. Making the experience pleasant will result in repeat business and happier callers.

Ask yourself the following questions:

  • What would happen if a caller dials my primary toll-free number?
  • Do customers receive a message?
  • Is a live receptionist handling their call?
  • How can I reduce transfers of calls before a problem is fixed?
  • What could aid in making a sale in a single phone call?
  • How can I turn a call center experience into a lifelong client?

Create your call flow using a drag-and-drop interface on a canvas. Additionally, save your call flow so that you have a record.

5.   Enable Advanced Auto Attendants and Call Routing

Let’s now look at more sophisticated features, like hunt groups with numerous agents active at once.

Once an agent is available, calls can be held in call queues. Many callers can continue their conversation rather than terminate or leave a voicemail.

6.   Forward Calls to Local and Toll-Free Numbers

Contact your former supplier as soon as you’ve implemented your call flow. Request that they route any incoming calls to the temporary numbers provided by your new service provider from your business’s phone numbers.

Doing this allows you to utilize your new calling system before your phone numbers are transferred from your current carrier to your new one.

7.   Turn On Call Recording and Custom Greetings

Do you want to give your business calls more style? Here are some ideas:

  • Before your agents pick up the phone, purchase recorded audio tracks that are professional for your auto attendant.
  • Include customized greetings for your small business phone systems to appear more sophisticated and larger.
  • You can store call recordings for up to six months by enabling call recording. On request, longer durations are available.

Conclusion

That is for setting up a business phone system. With all these tips mentioned above, you can set up a professional business phone system.

How to Strengthen Effective Communication among Your Employees

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We can all agree that open, cordial, and effective communication among your employees and collaboration should be the norm in the workplace. Questions would be openly posed and addressed adequately promptly. Projects would be accomplished on schedule. Each team member would have a complete understanding of their duties. The wheels would all turn flawlessly like a well-oiled clock. Here is the point where the “but” comes in.

Unfortunately, most workplaces do not run smoothly and effectively. The tension that results from missed deadlines, disagreements, misunderstandings, and arguments is felt by all team members involved. It’s worthwhile to strive toward the ideal, right? So how can you strengthen communication and encourage your team to function as a team?

Although we can’t guarantee your employees will reach communication perfection as a result of reading this post, the tips will undoubtedly strengthen communication among your employees!

5 Simple Ways to Strengthen Effective Communication among Your Employees

1.   Maintain Open-Door Policies since It Fosters Trust

Open-door policies establish the expectation that anyone can inquire, express problems, and offer suggestions anytime. Building trust among your employees begins with doing this. Junior employees receive the impression that they are not as important when management is made unreachable. It’s essential to keep the lines of communication open.

Open actual doors as well while you’re opening metaphorical ones. Eliminating physical barriers between colleagues fosters mutual trust and promotes the free flow of ideas and communication. Rather than waiting for the weekly business meeting, issues can be brought up and fixed immediately.

2.   To Increase Transparency among Your Employees, Use Project Management Software

Everyone appears to be using cloud-based software and storage these days for a good cause. Thanks to one streamlined system, everybody has access to the project’s specifications and the option to post comments for other users to see. Transparency across the board is made possible by cloud-based project management software, which enables employees to monitor their progress, work together, and double-check information and deadlines.

3.   Identify the Leaders of a Group and Give Them Support Them

In most projects, there is a principal leader and several mid-level executives who oversee smaller groups. It is easier for employees to know who to turn to with issues or questions if those leaders are made apparent from the outset. The workload is distributed more equitably among the leaders when tasks are delegated, and it is less stressful on the team. This can strengthen effective communication among team members.

4.   Clearly Define Tasks So That Everyone Understands Their Responsibilities

Anyone unsure of their responsibilities cannot productively complete a task. Make sure that everyone on the team is aware of the project’s parameters and understands the role that they are expected to play.

5.   Be Honest and Open With Every Member of Your Team

Corporate Business Solutions Inc and other experts highlight that creating a culture of trust among every team member is the most efficient strategy to enhance workplace interpersonal communication. Transparency is essential in this situation; if team members feel that secrets are being withheld from them, any sense of trust you have established is immediately destroyed.

Naturally, sensitive material should be handled accordingly. Still, every team member has a right to be aware of situations in which they are not given access to such information. Assure your team members that they can be honest and open with you by acting in the same manner. In any connection, including one that is work-related, there must be mutual trust.

Conclusion

You may unite your team, strengthen effective communication among your employees, and generally create more fun and stress-free work environment by applying these 5 tips. These elements result in better budgetary management, project quality improvement, and client satisfaction. Group cohesiveness through effective communication leads your team members to be most productive when the office becomes a home away from home and employees become a second family.

How to Plan the Perfect Business Meeting

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Business meetings are the bloodline of any organizational setting. Business meetings are proven valuable tools used to keep track of the actions taken by companies to achieve their objectives and goals. Well-planned business meetings foster teamwork, aid in the exchange of ideas, fix issues among team members, and produce business growth.

No matter the size of your company, business meetings can help you evaluate your progress toward achieving your objectives and goals. Since organizations cannot thrive without business meetings, the ideal approach is to think about how to plan perfect business meetings that will be beneficial to the organization.

Below are five tips on how to plan the perfect business meeting:

1.   Decide If a Business Meeting Is Truly Necessary

First of all, determine whether planning a business meeting is essential first. We frequently believe that the best method to have a discussion or exchange information is in a formal setting. If you can simply gather a few individuals in your office for 15-20 minutes to give the news or deliver it through email, conference call, or other means, it’s generally best to forego the formal business meeting entirely.

2.   Invite Only Those Whose Presence Is Genuinely Needed For the Business Meeting

Have you ever been invited to a business meeting and wondered why you’re there halfway through? Inviting individuals to a business meeting they don’t need to attend wastes their time. That business meeting won’t be productive. Does an accounting representative have to be present at a business meeting to respond to questions about the budget? Invite one accounting employee who is well cut out for budgeting.

You don’t have to invite a supervisor or colleague to the actual business meeting if, at the end of the meeting, you will have to let them know what was discussed during the business meeting. All you need to do is write up a meeting recap and send it to them later. They will enjoy the time-saving benefit. You can rest assured that they are fully informed of the things discussed in the meeting because you put the information in writing.

3.   Send Out Reminders for the Business Meeting

Life is jam-packed and scheduled activities fill calendars quickly. Send a reminder for the follow-up meeting three days before the business meeting. The people who will be around for the meeting can then confirm their attendance or let you know if they have changed their plans. If need be, this will help you reschedule the business meeting.

4.   Have a Clear Agenda for the Business Meeting

You should establish what will be discussed to plan perfect business meetings. What is the meeting’s purpose? What goals do you have in mind? Prepare a meeting agenda in advance and give it to those attending the business meeting. Include a short list of topics to be covered along with the start time. Avoid creating a lengthy, excessively comprehensive agenda for your own meeting. Name any personnel who will be in charge of reporting on a specific topic.

Keep in mind that this is vital not only for the attendees but also for you. It would be easier for you to stay on a specific topic if you have an agenda in place.

5.   Be Specific with Expectations

Experts at Corporate Business Solutions recommend that you be specific about the meeting’s goals and expectations when you initially announce them. Will there be a power-point presentation at the meeting? Will attendees be required to take notes? Or is every employee required to attend a brainstorming session and bring suggestions and ideas?

Interacting and exchanging ideas are encouraged and often the primary goal of meetings in today’s collaborative workplace environments. Employees may not be required to participate in certain company cultures; they may only listen and return to their desks. In other businesses, employees are free to participate.

You should send out any necessary reading or other materials you want the attendees to review at the same time you’re outlining your expectations. Thus, when they arrive at the business meeting prepared, there will be no surprises.

Conclusion

The perfect business meetings keep you motivated and engaged, offer accurate information, and point you in the right direction to accomplish your goals. The tips mentioned above will enable you to accomplish that and improve the effectiveness and efficiency of your business meetings.

 

 

 

How to Create Healthy Competition among Your Employees

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Humans naturally want to share, compete, and work together. Businesses that have effectively cultivated a positive workplace culture capitalize on this social desire. They accomplish this by encouraging healthy competition at work.

According to research and Corporate Business Solutions Reviews, healthy competition among your employees inspires them to work more. The competition also improves psychological skills, forcing the body and mind to work harder.

Workplace competition can be healthy or unhealthy. Here are some tactics to make sure that healthy competition is implemented among your employees. Before delving into that, let’s answer an important question first.

What Does Healthy Competition At The Workplace Mean?

This is the kind of competition that prioritizes individual success and considers team success as the ultimate aim. A competitive spirit comes from a growth mindset and encourages an optimistic outlook.

Tips To Create Healthy Competition among Your Employees

1.   Gamify the Competition among Your Employees

The application of game mechanics to a non-game setting is known as gamification. Make it more enjoyable by including components like points, scores, leaderboards, scores, and incentives.

For instance, research demonstrates that a fun work environment inspires people and lessens stress. Workplace fitness competitions are a great example of gamification. Employees can view their performance on the leaderboard and receive points for working out.

2.   Prioritize Rewarding Your Employees Rather Than Humiliating Them

You should encourage healthy completion among your employees by prioritizing rewards instead of humiliating them. The fear of being criticized for poor performance or subjected to public humiliation produces an atmosphere of worry and stress.

In such stressful environments, employees do not thrive. The competition’s goal is to inspire employees to work hard rather than to demotivate them.

3.   Setup a Culture That Fosters Open Communication

Healthy competition among employees in the workplace depends on open communication. People should be able to discuss their opinions, engage in productive arguments, and express themselves freely.

Competition at work is a means of uniting the workforce. An open-door policy will enable workers to learn from each other. Additionally, it promotes workplace learning and improves visibility.

4.   Give Unbiased and Honest Feedback

The competition among your employees should include feedback. Feedback controls the quality of work, while competition increases output. Every business needs to have a mechanism in place for providing unbiased and honest feedback. Employees desire to do better, but they can’t unless they understand what needs to be improved.

5.   Set Measurable Goals

A company employs a diverse collection of individuals with a range of skills. Goals that are too ambiguous, like “the highest-selling representative,” might demotivate people who are still improving.

To level the playing field, it is crucial to set measurable goals like “the first representative to sell five products.”

Benefits of Healthy Competition among Your Employees

Employee performance is influenced by healthy competition in the workplace.

1.   Enables Employees to Adopt Challenging Goals

In the workplace, competition among employees is not limited to competition with coworkers; it may also be competition with oneself. Because of this, a company with a competitive workplace regularly raises the performance benchmark and challenges people to meet it, creating a habit of consistently aiming for greater objectives.

2.   It Improves Collaboration among Your Employees

Competition among employees inside the company can be developed through team activities. For example, the Homes of Clayton, a significant home builder in the United States, organized a contest for their sales crew.

3.   It Encourages Innovation among Your Employees

Your employees are more likely to come up with novel solutions to win in a competitive setting that is exciting. According to research by HBR, employees said they would use innovative methods, like developing new technological processes, in a healthy competitive atmosphere.

Conclusion

Healthy competition among employees at work has excellent benefits, which depend on its primary goal. The ultimate objective is to increase revenue growth while attracting clients and boosting sales.

But the goal of building a competitive atmosphere is to encourage open communication, flexible corporate culture, and innovation. Long-term success results when competition among employees in the workplace inspires an ideal culture.

 

 

How to Motivate Your Employees to Work Better

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In any company, there will be days when managers or employees lack motivation; nevertheless, by following these 10 simple actions, you can prevent creating demoralized employees. Making your employees feel excited and passionate about working every day and spending time with you and their colleagues are proven ways to motivate them to work better.

Achieving a high level of employee participation and work engagement doesn’t have to be a challenge anymore. Here are 10 wonderful strategies you can use to motivate your employees to work better:

1.  Create a Friendly and Comfortable Work Environment

Your team members spend a significant portion of their lives at work. Therefore, make an effort to make the office as inviting and welcoming as possible.

Your employees would be extremely happy to go to work daily if you provide a friendly, comfortable work environment.

2. Acknowledge the Achievement of Your Employees

Every individual wants to be acknowledged for what they have accomplished, whether for a company or personal accomplishment. An employee will value upper management praise for a job well done more than you may imagine. Never forget to acknowledge others when they deserve it.

3. Reward Your Employees

Sometimes it will require more than just a slap on the back. When rewarding active employees, consider using clear incentives.

Rewards do not always have to be monetary. Simple things such as a week of having a designated parking space at work would suffice. Employee rewards may also be included in the extra benefits offered by the business.

4. The Secret Is Positive Communication

Everyone talks to each other at work, so talking to your employee is likely the simplest thing you can do. However, it might also be the most challenging. Spend a brief time daily talking to your staff members and addressing anything from ideas to individual concerns.

In addition to making your employees comfortable, doing this will give you access to their valuable business expertise.

5. Promote Healthy Competition

Friendly competition among employees wouldn’t hurt. A competitive work environment promotes productivity. Encourage your employees to take part in challenges or competitions since they are fun and can foster a sense of teamwork.

Friendly competition between teams promotes employee participation and staff engagement.

6. Have a Worthwhile and Meaningful Goal

Company owners should ensure that their companies have an individual and corporate vision and goal. Employees can strive toward a goal if they have a path laid out in front of them that could result in promotion. These achievable goals are particularly beneficial since they motivate employees to work harder on their own initiative.

7. Create a Well-Defined Career Path for Your Employees

Team members are more motivated when they know the benefits or incentives offered. This will result in an increased commitment and dedication to their employer. When you allow your employees to develop new skills, both your company and they as individuals will benefit more.

Give your staff the training they need to grow in their careers and get acquainted with industry news and the latest technologies.

8. Be a Leader That Others Want To Follow

Business experts like Corporate Business Solutions Inc. have proven that employees look up to their employers as leaders to act as role models for the rest of the team. Leaders typically set the company’s values and tone. This could have a significant impact on the employees’ mentality. Positive thinking is contagious, so if managers lead by example, staff members will copy them, and the workplace environment will become more inspiring and motivating.

9. Encourage Collaboration

Work to eliminate any hierarchy and bureaucracy within the organization. Foster openness to fresh ideas at all levels and encourage collaboration to keep people engaged.

10. Welcome All Ideas from Your Employees

Everyone is unpredictable and unique, and each person has different desires and, in some cases, complex ideas. No matter how absurd or pointless they seem, never dismiss ideas or proposals.

No one technique can ever be expected to satisfy all of your employees at once. Sooner or later, a seemingly foolish idea might be developed into something spectacular.

Conclusion

With these 10 simple strategies, you now understand how to motivate your employees to work better. Remember, never underestimate the value of an employee who looks forward to going to work. Your employees should be motivated to work.

 

Business 101 – How to Properly Manage A Small Business

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It’s thrilling yet risky to start or manage a new small business in the cutthroat business world. Every day, small businesses are launched by an entrepreneur with a burning desire to tackle a particular need.

Running a business requires more than just having a solid idea. Every company, regardless of size, is constantly worried about management. Every business must have an effective management system to survive.

To make their enterprise a success story, small business owners must be well-equipped with managerial skills and talents. Keep reading to discover helpful techniques for effectively managing a small business.

1.  Proper Time Management Is the Key

You should be aware that time is your most valuable resource as a small business owner. Money can be lost and then recovered. However, you cannot recover time.

Every day, keep a proper record of the activities you spend your time on and aim to eliminate any that are not producing or contributing significantly to your organization. This can help you identify your biggest time wasters.

The 80/20 Pareto Principle rule is a good technique for deciding where to invest more time. The 80/20 rule essentially states that only 20% of your efforts will provide 80% of your results.

2.  Have a To-Do List and Be Organized

You must maintain extreme organization as a small business owner. To help you stay on track, develop the practice of making a to-do list. It’s pretty simple to manage and keep track of daily activities, including those of your staff, with a To-Do list.

Three categories should be considered while creating your to-do list: one for tasks you must complete today, another for things that require your attention but can wait. Create a final category for quick chores and commitments you can complete when you have extra time.

3.  Hire Based On Attitude and Train for New Skills

We live and operate in a world where a company’s ability to thrive depends on hiring staff members who will stop at nothing to keep prices down and quality up and constantly be on the hunt for fresh opportunities to provide value for the company’s clients.

Even in the most technically demanding positions, skills alone are only one component. Many companies have made the error of selecting employees based more on competence than attitude because they believe they can re-engineer any negative attitudes through advanced training programs.

Don’t misunderstand this point; if you need to hire a technically trained person, ensure they have the fundamental technical abilities needed for the position. However, you also need to make sure the person has the correct attitude and fits the company’s culture.

4.  Assign Tasks When It Is Necessary

Business management experts like Corporate Business Solutions always recommend that business owners give up control of the things they’re not good at. Do what you do best and ask for help with the things you don’t enjoy doing.

The desire to outsource some of your tasks so you can concentrate on expanding your business is the first step towards effective delegation. Many small business owners struggle with delegation. It’s a complete departure from what most business entrepreneurs do when their companies are just starting out.

5.  Make Adequate Marketing Investments

While expensive to maintain, marketing is also unquestionably vital. However, you must invest in marketing your company if you want it to expand in any way.

What if you don’t have a lot of money to spend on marketing? You can utilize a lot of marketing strategies that won’t break your tight budget, so don’t panic.

Word-of-mouth marketing is effective if you have a quality product or service, but it’s frequently insufficient on its own. Other proven and effective digital marketing techniques can strengthen it, such as Search Engine Marketing, Content Writing, Media Marketing, and many others.

Conclusion

Nothing is more frustrating than a manager or business owner who lacks management skills. Managing a small business requires you to wear multiple hats and maintain your attention on a variety of tasks. These techniques would assist you in maintaining your attention on the most crucial elements of your small business and keep you moving in the right direction.

 

 

Why Cash Management Is Key to Business Success

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Have you ever struggled to satisfy your financial obligations because your business was cash-strapped?

Cash shortages may be a clue that something is wrong with your business. Because cash is the business’s lifeblood, running low on it prevents you from fulfilling your financial commitments.

If you cannot pay your debts, the business may close. One of the reasons 85% of businesses fail is a lack of cash.

Lack of money is a highly stressful and uncomfortable situation. Effective cash management has several advantages, including less stress, the assurance that you will be able to meet your financial responsibilities, and knowledge of the timing of client payments to your bank account. Establishing a cash management strategy reduces risk to your business, resulting in business success.

3 Reasons Why Cash Management Is Key to Business Success

1.   You Make Wiser, More Informed Decisions

Who likes being surprised by their business’s cash flow? No one. When you’re caught off guard, you frequently scramble for answers, which forces you to react and frequently settle for compromises you didn’t expect to make.

Once your cash management plan has been developed, you can start making more strategic, intelligent business decisions to help your business grow.

Making a projected cash flow that allows you to track where your cash flow is today, and the growth plan you intend to adopt should be a part of a cash management strategy. Planning out prospective financial requirements and monitoring the cash flow for the upcoming month or year is quite beneficial.

When the cash flow is too low for comfort, look for danger zones and make modifications to keep the cash within a healthy range. Imagine being strategic and confident about how to increase your cash flow.

You make better decisions every day when you strategically invest in your company, whether that investment is in marketing, your staff, mentors, or overall expansion. You now have the luxury of considering and getting ready for both the positive and negative outcomes.

2.   Financial Stability and Confidence Are Attractive

Have you ever been in a situation when you were scrambling for a client and voiced your need for one when you approached the table?

You probably didn’t land the client. Or, even worse, you ended up with the customer and had the worst encounter imaginable. Imagine conducting the same client interview with the assurance to end the conversation early if it isn’t a good fit.

Having a cash management approach will cause you to become more financially stable and cause changes in your life.

  • Your body language.
  • Your approach to the discussion.
  • Your general sense of confidence

Financial stability and confidence are attractive and have the benefits of attracting and keeping teams and new customers. Every individual wants to be a part of a winning team because they desire the same stability and security that you do.

3.   You Become More Appealing To Potential Funding Sources

Greater business expansion necessitates cash to support it. It seems that finding such funding is a crucial ability. Many businesses management services like Corporate Business Solutions Reviews agree that a lack of sound cash management procedures makes you less appealing to financiers and funding.

An adage goes, “The ideal time to ask for money is when you don’t need it. “Unfortunately, people frequently forget to consider this in advance.

As a result, they will apply for loans and get turned down, which is demoralizing. You don’t want that for yourself; thus, you must start implementing cash management techniques for your business’s success.

Conclusion

With adequate cash management, you can have time to allow your plans to bear fruit. You don’t need prior knowledge of accounting or finance background to do proper cash management. You can always hire professionals or start learning the ropes yourself. Get your hands dirty and start looking for ways effective and easy to manage your cash today!

 

How To Get the Most Out of Your Business Tax Returns

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Here is a trick that not a lot of business owners know about. Tax returns. As a business owner, it is well known that you must play distinct roles to keep your profits coming in. However, it is impossible to be a free-kicker and a goalie at the same time. You must complete different tasks, on a daily, weekly, and monthly basis. But some of these tasks must be completed for you, usually by a third-party provider who knows what is best for your business. An expert strategic tax planning company can help you out. Here’s how it goes and why you should work with a third-party provider like Corporate Business Solutions Inc. to get the most out of your business tax returns.

Tax Expertise

The most crucial factor why you should be working with a third-party provider is their expertise. There are tax professionals out there that simply know the ins and outs and all the loops of business tax returns. They can easily represent you to the IRS concerning taxes, as they stay updated with all the new state and federal tax laws and policy changes. The policies change every year, and as busy as a business owner is, it is time-consuming to keep updated.

When you work with a well-versed strategic tax planning provider you always stay on top of your game, as you are also making sure you come clean through every audit, and you do not miss any tax opportunities. An expert will help you get the most out of your business tax returns while also assuring that you do not pay more than you should be paying.

Business Credits and Deductions

Your local CPA is focused on tax preparation and by nature is looking at past transactions to keep you right with the IRS.  However, there are often opportunities for tax savings by working with a firm that utilizes attorneys who specialize in tax matters who bring an entirely different level of expertise than the CPA who prepares your returns.  These specialized attorneys can prepare a strategic tax plan that can take advantage of certain tax credits and deductions for future returns by making changes to the operation of the business.  Sometimes this may involve creating multiple entities that can provide both asset protection and tax savings that result from the re-organization. Business owners may also find tax savings in changing the way they compensate themselves from a simple paycheck.  Tax attorneys can provide a level of expertise that is now available to small business owners which heretofore were only available to large corporations.

Donations

Donations to any charitable organization that qualify under the law are usually deductible. So, consider developing a list of charitable organizations the business would like to support to contribute to the social good of the community. Receipts are mandatory for all the donations that you make for cash or goods, as evidence of the value of the cost of the materials that you have donated.

Tax Returns

Keeping track is a must if you are to get the most out of your business tax returns.

Every business owner should consider getting a strategic tax plan done by a firm that specializes in tax planning for small and medium-size businesses by tax attorneys.  The IRS is not going to tell you what credits and deductions you may be missing!

What Should Happen if Your Business Partner Passes Away

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Your business partner’s death is probably the last thing you think of when you start in business together.

However, it is generally believed that one of the key aspects of starting a business is planning for when you leave the business.

Most people expect to leave a business they own either when they retire, or when they sell their share to move on to another venture.

While most businesses end with the existing business owners still alive, that is not always the case. While most people live beyond the usual age of retirement, it is a fact that some do not, and some of those who do pass away at a younger age will be business owners.

Normally when a business owner decides to leave a business, they part own, they will sell their share of the business to one or all the remaining business owners, or with the other partner’s agreement, they may find someone else to buy their shares off them.

Some sort of valuation formula will be agreed upon so that a fair price is struck. One of the problems facing business partners is how to fairly evaluate the worth of the business. Disagreements often arise when the selling partner believes the business is worth more than the other partners who are interested in buying his shares are willing to pay. One of the fairest ways to resolve differences in the worth of the business is to have the business valued by a Certified Valuation Analyst with the National Association of Certified Valuators and Analysts (NACVA).  This removes the partners with differing interests in the transaction from determining the value of the business and puts it in the hands not only of a neutral party, but one who has been certified to determine the fair worth of a business.

Once the value of the business has been ascertained in manner fair to all, the departing business owner walks away from the business with a fair monetary exchange for the value of their share of the business.

In the event of a business partner dies, the outcome should be almost the same.

It is unlikely that a new owner has been sitting waiting for one of the business owners to die, so it is more likely that the deceased’s share of the business should go in equal shares to the remaining business owners.

The valuation formula will then pay for these shares to the estate of the deceased.

Simple?

No, not always.

Just as the death had probably been unexpected, the need to front up with the money to buy the deceased’s shares is equally unexpected for each of the remaining business partners.

Let’s assume there are five business partners, each owning 20% of the business.

When one partner dies the remaining business partners must each buy 5% of the value of the business and pay this to the deceased’s estate.

What if three of the remaining partners can’t afford to buy the shares at the time of death. But the other partner can afford to buy the full 20%.

That partner now owns 40% of the company and the other three partners only own 20% each. The previously even ownership status of the business has now changed markedly. Decisions over the future of the business will have a far greater effect on one business owner much more than the others.

The solution is reasonably simple and includes three steps and the purchase of life insurance policies to fund the transfer of ownership and the payment of a fair value to the heirs of the deceased partner.

1) A formula is created on how to value the shares at any time and the value of shares is reviewed at least annually – everyone knows what the fair value price of each share in the business is worth.

2) A formal (and legal) agreement is signed by all business owners that in the event of the death or permanent departure of any single business owner, the remaining four partners commit to paying the departing business owner – or their estate – their 20% ownership (5% each) of the business, based on the valuation formula.

3) A Life Insurance policy is taken out on the life of each of the five business owners for the current value of a 20% share of the business. The value of the Life Insurance cover is adjusted each year to remain the same as the current business valuation.

Each Life Insurance policy is owned equally by the four other business owners.

With this plan in place, if a business owner dies, the remaining four business owners have agreed to buy the deceased’s shares off the deceased’s estate, at an agreed price. The Life Insurance policy ensures the right amount of money is received by each of the remaining business owners at the right time. The agreement commits them to pay that money to the deceased’s estate. The deceased’s estate is committed to selling the shares at that agreed price.

This plan keeps everyone happy (in financial terms) upon the death of any of the business owners, at the time of death, and into the future. It also avoids the complication of the four remaining business owners being forced into business with the deceased’s estate or their spouse, who most likely can provide no positive input into the business but would naturally want a maximum income from the business.

Instead, the deceased’s estate has been paid a fair price for the deceased’s shares, the remaining owners have each gained an extra 5% ownership in the business at no cost to themselves, and the balance of the ownership of the business has remained the same.

If you want to know how to plan for the transfer of shares when one partner dies, contact Corporate Business Solutions for a confidential consultation.  You can find more helpful information by consulting Corporate Business Solutions Reviews.

What you Need to Know About Starting a Business Partnership

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Going into a business partnership is like going into a marriage but without any of the “fringe benefits’’.

You could argue that you should know more about your future business partner than you need to know about your future spouse!

Before the partnership begins

You need to know if your partner has any skeletons in their background, as well as why they want to get into this business with you, and what their vision is for it.

You will almost certainly vet any employees you hire, so vetting your business partner is even more crucial.

If there are issues, make sure you are fully aware of them and discuss each one fully. If you and your partner cannot get on the same page over each of the issues, walk away.

Make sure you both understand all the paperwork you are signing and use different lawyers.

If any business partner is married, or they get married, ensure their spouse also signs all partnership and operating agreements. This is to protect both partners and the business in the event of a divorce.

The partnership agreement

Make sure all parties clearly understand who is responsible for what, and what each can and cannot do on behalf of the business. These duties and responsibilities need to be written down and agreed to.

Make sure that all contributions of capital are noted and updated, who receives the profits, distributions, compensation, and losses from the business, and under what circumstances might a vote on some issue occur.

Exit strategies and buy-sell agreements are prepared and fully understood. Don’t forget to utilize the various insurances developed to protect small to medium-sized businesses.

Be aware of what situations might trigger expulsion from the business, and if a partner does leave, will a non-competing provision be put in place, and how will that work.

Successful partnerships

Businesses that do operate successfully are usually set up as limited liability companies as this provides many protections for all parties concerned with the business.

Other common features of successful partnerships include accurate recording of all communications and retention of all documentation. It sounds boring, but it can be a real business saver when things might seem to be turning sour.

Ensure all tax information and bookkeeping duties are handled professionally and legally. Don’t ignore this. Too many businesses have run into problems because of a trusted employees taking 100% responsibility for all the money transactions and secretly pocketing a small fortune for themselves.

This leads to the most important factor in achieving a successful business partnership.

Do not think that the business will ever get to a point where it practically runs itself. Once you take your eye off the ball of running the business something unexpected will almost certainly crop up and you will be unprepared for it.

Checks and balances must be maintained, each partner must keep an eye on the other partners to ensure they are still pulling their weight and taking their business responsibilities seriously.

For professional advice to make sure your business will always stay on the right track, you can always talk to Corporate Business Solutions Inc. for assistance.