Feeding Your Start-Up: How to Garner Enough Capital

Cash is one of the first things you will need for your business, whether it is your first start-up or if you are expanding. There are many ways of going about gathering this cash, including using your own savings and borrowing from the bank. The following is an outline on the pros and cons of each path.

Dipping into your savings

It is difficult for many small businesses to find a bank that will provide them with a loan; this is especially true if you do not have any previous sales information or data to back them up. Depending on the amount of cash needed, it might be a quicker way to revenue to use your own cash.

The best and safest way to invest your money wisely is to take it slow and steady; instead of purchasing your premises, spending money on advertising and employees all at once, make sure that your idea is viable first. One inexpensive way of checking the viability of your idea is to do market research; this may seem expensive, but in actuality, all you have to do is ask friends, family or even strangers on social media as to whether or not your idea will fly.

Once you know your idea will work, and people will purchase it, you can start working on a prototype of your product. For example, if you are trying to sell a new holistic type of dog food, make sure that all the right ingredients are in the food – and that the dog will actually eat and enjoy it. You should also recruit professionals to help you – in this case, a veterinarian would be an excellent idea, as they can provide you with the hard data on what a dog needs to be healthy. You can move onto packaging, advertising, and the like.

This “small steps” approach will ensure that you are spending money within reason, in ways that make sense – and will give you a better return of capital later on.

Asking the bank

If you have a really good business idea, and you have completed the research and have the information to back it up, garnering a bank loan might be the best logical step. Just keep in mind that many banks are very particular on who they lend to – they do want their money back, after all. Here are some tips on making sure you have the best chance of receiving that loan.

1)     Know your business. A loan officer will ask you many questions about your potential business – when asked about revenue projections, being able to answer right away will leave a better impression than having to go through scads of paper.

2)     Have the data to back it up. If you know that in 2012, 62 percent of households had at least one pet (Human Society), have the link or the document to prove it.

3)     Financials. This is probably one of the more important documents you must bring to the table when meeting with the loan officer – if you are able to, outline the revenue projections for your business, and how you will go about implementing your business plan.

Bitcoins: Not Just On-line Any More

On June 30, 2014, the state of California rescinded its ban against Bitcoins and other alternative currencies. This in turn paved the way to the first Bitcoin ATMS in California – now located in two Locali Conscious convenience stores in Los Angeles.

Although far from taking over the U.S. dollar, Bitcoins are garnering traction. The cryptocurrency first appeared in 2009, and in 2012, over 1,000 merchants were accepting Bitcoins. As well, the price of a Bitcoin has also increased – in February, 2011, the exchange rate was 1:$1; it is now about $600 per Bitcoin, down from a high of $1,000 in January, 2014.

The ATMs in Los Angeles are managed by ExpressCoin, and created by Robocoin. They allow users to purchase and sell Bitcoins in exchange for U.S. or other forms of paper currency. The ATMs themselves include a palm scanning technology, and also require the user to enter a valid e-mail address for verification.

Will Bitcoins still be as popular in a year — or five? The fall from $1,000 to $600 per Bitcoin directly results from the shutdown of MTGOX, one of the larger Japanese Bitcoin exchanges, and the uncertainty as to whether or not the Chinese government would try to ban the currency exchanges.

On the other hand, Robocoin has created a lot of interest in the ATMs. Chief executive officer Jordan Kelly said in the L.A. Times that over 100 other potential L.A. operators have expressed interest in the ATMs. From the first ATM launch in 2013 in Vancouver, Robocoin now has six Bitcoin machines in the U.S., with others in Tel Aviv, Hong Kong – a total of 13 countries.

One of the more well-known instances of large items being sold or traded for Bitcoins is an Alberta, Canada, man offering to sell his house for Bitcoins, also followed by a woman in the same province. One of the more endearing qualities of the Bitcoin is the fact that there are no middle men involved – you are not charged a fee for the bank to hold onto the currency, and you do not have to pay a fee to get it exchanged.

Some countries have already made their stance on Bitcoin obvious. Ecuador has banned the Bitcoin, and is planning its own digital money as an alternative. Europe has many exchanges available for the digital currency, and Amsterdam was the location of the Bitcoin 2014 conference – building the digital economy – from May 15 to 17.

Whether it sticks around or not, the Bitcoin is definitely an interesting subject to think about. It may seem illegal, but in many countries it is quite legal indeed. Many larger companies are jumping on board and accepting the Bitcoin, including Dell, Newegg, WordPress,, Amazon, Target, even Subway and Victoria’s Secret. In London, England, there’s even a pub that accepts Bitcoins – the Pembury Tavern.

The Bitcoin is an entirely new animal in the world of currency, as it is the first start-up currency – ever. It will be interesting to see if this cyroptocurrency increases its price – or falls off the map entirely.

Advertising for Start-Ups; Getting Your Business Off the Ground

Owning your own business can be invigorating, but it can be frustrating as well. You have invested a lot of time and energy into your superb product – whether it be the latest, greatest in web design or a bricks-and-mortar outfit like a flower store. There you are, sitting in front of your computer awaiting e-mails, or in your store patiently waiting for your next customer to walk in. How do you get the word out about your new endeavor?

Word-of-mouth Word-of-mouth is probably one of the simplest, and least expensive, ways of advertising. All it takes is one great customer who tells their family, who then tells their friend, and so on it goes … soon you will have multiple clients knocking on your door. The downside to this strategy is that you need a few customers to start off with. If you’re struggling to get people in the door, why not ask your friends and family to come browse around? Or if you have an on-line company, ask them to provide input on your website?

Social media Social media ties in quite nicely with word-of-mouth, as it has been said that social media is “word-of-mouth on steroids.” The family and friends you have praising your services and your product? Ask them to post on their Facebook or Twitter; or even better, create your own business pages for these mediums and ask them to review you on there as well. Social media campaigns are better started simply; instead of creating profiles for every medium out there, focus on one that fits best with your service or product. If you’re a flower store, you’d best be served with a Facebook site, as you can post as many pictures as you’d like. If you are selling web design, Twitter might work better. It all depends on which medium your customers are flocking to.

TV, radio and newspaper Called “traditional advertising,” TV, radio and newspaper are the mainstay in the advertising world. The costs for these types of mediums are usually far out of a start-up company’s price range, but there are options. Some radio stations will exchange advertising time for items they can auction; some newspapers have more reasonable costs, if you’re looking at a community newspaper rather than a larger city. It’s worth doing a bit of footwork to see what the costs and the benefits are.

Community visibility Second to word-of-mouth, community visibility is one of the easier ways to advertise. This can include having a booth at your local trade show, to attending mixers at your area’s chamber of commerce. If you have the energy, you can also visit businesses that you think may be interested in your product. Before you appear at any of these events, be sure to have your “elevator pitch” down pat. This is a 30-second speech that puts across what your business is and what it provides, all in a concise manner. Be sure to run your elevator pitch by a few friends to ensure that it makes sense.

Reaping the Rewards of a Sunny Life – and Other Green Initiatives

Sunshine seems to be a given in California, as there is even the rumor of a law that grants sunshine to all citizens. (Unfortunately that law is just that, a rumor, and may be based on the Sunshine Act, which refers to government transparency.)

According to the Current Results website, downtown L.A. receives an average of 292 days of sunshine in a year – that’s an 80% chance of sunshine! Even the lowest ranked, Eureka, receives 179 days of sunshine – or almost 50%.

The high chance of sunny days makes California the perfect place for solar power. And for small- and medium-sized businesses, solar power can not only cut down your electricity bills, it can increase your standing in the community by that much more.

Solar Power – the Fiscal Returns

In California, residents – and businesses – can receive a guaranteed return on investment from their solar installation, because of a feed-in tariff. The tariff is similar to a power purchase agreement (where the government or the local electrical utility buys back electricity at a certain rate) but at a much higher rate. At the end of 2012 (according to Wikipedia) California had 364 megawatts of concentrated solar power and 2,559 megawatts of photovoltaics.

An article on the Clean Technica website from earlier this year ( shows a very interesting info-graphic – even though California is at the low end of the spectrum, it is estimated that you can save just under $40,000 over 20 years – that’s an average of $2,000 a year!

Increase Your Social Stock

Solar power isn’t just about cash flow, either. By installing “green” devices in your small business, you are shown to care about the environment – and the environment is very “sexy” nowadays. Customers will flock to you because you have a sustainable model – and word of mouth will make your social stock soar.

There are other ways to be more “green” in your business. Instead of sending out paper invoices, use e-invoicing – it can also save time, and make filing your taxes a lot easier. But you must advertise that you do this – at the bottom of your e-invoice, state, “We save X number of trees per year with our paperless invoicing.” Any kind of replacement of paper with e-mail is a good idea; you can send out e-cards instead of Christmas or announcements, send out an e-blast or an e-mail newsletter instead of paper advertisements. E-mail can replace many types of communication.

No matter what kind of business you run, small or medium, there are always ways to make your organization greener. From something as simple as planting trees near your business’s office (or planting them elsewhere and advertising that you are planting them) to going for LEEDs certification, every little bit counts. LEEDS – Leadership in Energy and Environmental Design – has different levels of certification, and includes solar power installations, construction of the building to let in the most light (without use of office lights) and much more.

It’s all up to you – greener is better; it can save you money and increase your standing in the community.


Balance Your Books? Hire An Accountant!

The running of a business, whether large or small, can take a huge amount of your time. From managing employees to the day-to-day activities of your company, balancing your book and dealing with payroll can be a real frustration. If you are having problems making time to handle your finances, why not hire an accountant?

An accountant can take over simple but mind-numbing jobs such as payroll processing and bookkeeping – whether monthly, quarterly or annual. By giving these tasks to a professional, you are not only saving time, but also ensuring that everything is done correctly. After all, an accountant is in the business of providing financial services; it’s their job!

General ledger and financial statements are extremely important in running a business. A balance sheet shows that you have a good idea of where you stand, a cash flow statement outlines the amount of money coming in and leaving your business, and a statement of earnings or net income statement provides the bottom line of your business – whether you are earning money or posting a net loss. Simple mistakes in these financials can be quite harmful to your business, so it is imperative that each part is done correctly.

Payroll is one of the most involved tasks of owning and running a business, especially if you have multiple employees. This is also important of course to the employee themselves – everyone expects timely payment of their salary or wages; a mistake or missed payment can cause unhappy employees, which in turn creates tension in the workplace. An accountant can take all of the information needed to pay your employees, including overtime needing to be paid, vacation pay and sick pay, and make sure that everyone gets paid on time.

If you have difficulty budgeting your money in your business, or have no idea why at the end of the day you’re in the red, an accountant can help! He will go through your cash flow statement – or create one if you do not have one – and show you where most of your money is going, and what you can do to either increase your revenue or lower your expenses. An accountant’s best asset is their experience and knowledge, and no matter your industry or how small or big your business is, he will be able to provide you some guidance.

Do you have employee benefit or a profit-sharing plan? Are you interested in setting one up for your business? This is also something an accountant can help you with, whether you just want to hand over the details or want some more information on if this is a valid option for you. If you are having to deal with legal issues, an accountant is also someone you can go to for advice on this point as well.

A good accountant is someone you can count on to help you in any part of your financial situation, whether you are a large business, an individual or a sole proprietorship.

The Education Initiative – Facts and Thoughts

In November of this year, Nevada residents will go to polls to vote; included on the ballot, as question No. 3, is the “Education Initiative” – also called a margin tax. This tax will add a 2-per-cent margin tax on all businesses with over $1-million in revenue in Nevada. Although the topic has been discussed a lot over the past few months, it is still gaining strength – and will until the tax is either dropped, or passed.

According to the Americas for Tax Reform website (, this tax would, in effect, make Nevada’s business tax rate the highest in the West, and almost double the amount of California’s tax rate. The same website says these taxes will affect the everyday person, in the form of higher groceries, electricity and health care, as those businesses try to relieve the tax burden by passing it along to the consumer.

It seems those to be hardest hit with this tax will be those who run their business at a loss; just because a company pulls in $1-million of revenue doesn’t mean they do not have $1.5-million of expenses. Start-ups are especially at risk, as it usually takes a few years for such a company to run in the black. If you are a start-up, or a company that does normally run at a loss, there are some things you can do if the tax goes through.

The first thing is to analyze your balance sheet to figure out where the bulk of your money is going. Is it our labor force? Are you spending a lot of money on advertising? What about the overhead if you have a bricks-and-mortar business?

If it’s your employees that are causing your cash bleed, the simplest way is to either lay off some employees, or cut down their hours. Try and trim as much “fat” as possible – if you don’t need an executive vice-president of marketing, than take out that role. The leaner a company is, the better it runs.

Advertising can be a key point in your marketing strategy, but only if that advertising actually works. Are you spending thousands on newspaper ads, but never getting any traction? Try using social media, as the cost to run Facebook or Twitter campaigns is more in the time spent than actual cold-hard cash.

Are you spending a lot of your hard-earned revenue on rent, heat and keeping the lights on? If you can get away with it, a virtual business, or one that’s run from home, can have essentially no overhead. Of course, companies that must have a storefront would be exempt from this.

Even if you are only thinking about starting your own company, and don’t plan on making your first million any time soon, a streamlined business will make more money, so the above steps and tips can help pretty much anyone. A business that only uses the necessities, and uses them to the best of their ability, will be more successful in the long run.

Nevada Wins Bronze for Lowest Tax Rate

It’s good to live in Nevada – especially when you look at our low tax rate. WalletHub, a financial social media community, recently released a list of states ranked by the amount of taxes they charge the average citizen. Nevada came in third, behind Wyoming and Alaska.

Wyoming has an average tax rate of $2,365, Alaska a tax rate of $2,791 and the Silver State came in at $3,370 — 52 per cent better than the nation’s average.

Our lack of local or state income tax helped us jump in the rankings, and our 7.97-per-cent tax on telecommunications was tied for the lowest in the country (WalletHub).

We seem to be pretty famous for our low taxes; an article on eHow giving 10 reasons to live in Nevada has taxes as the top reason why you should move here. (Also included are our culture, scenery, entertainment and food.)

The highest places to pay taxes in the U.S.? They are Nebraska ($9,450), California ($9,509) and New York ($9,718). For the lowest real estate taxes, you’d have to move to Hawaii (0.28 per cent) or Alabama (0.43 per cent). Alaska and Oregon have the lowest vehicle sales taxes.

As mentioned in a previous blog, Nevada is currently celebrating its 150-year anniversary. March 21, 1864, is the date that President Abraham Lincoln signed legislation, allowing Nevada to become a part of the United States of America. To mark this occasion, on March 21, 2014, first lady Kathleen Sandoval used a sword – yes, a sword – to cut into a 1,300-pound angel food cake that marks the sesquicentennial. The sword was previously owned by Nevada’s fifth governor, Charles Clark Stevenson.

The cake was in the shape of Nevada, and comprised 170 sheet cakes and 520 pounds of white citrus frosting. It is an exact duplicate of the one created for the state’s 100-year anniversary. Volunteers spent four days to bake the cakes, and seven hours to assemble them in the shape of Nevada. The icing was completed early Friday.

In 1864, when Nevada became a state, taxes were completely different – and much lower. The Revenue Act of 1864 required those who made less than $600 to pay 0 per cent; $600 to $5,000 to pay 5 per cent; $5,000 to $10,000 to 7.5 per cent; and $10,000 and above to pay 10 per cent. When translated into more current dollars (2008, to be exact), the tax rates were 0 per cent for $13,260; 5 per cent for $13,260 to $110,496; 7.5 per cent for $110,496 to $220,993 and 10 per cent for $220,993 and above.

That same act – which expired in 1873 – also included taxes on matches and photographs.

If current taxes are on your mind, feel free to give me a call. My expertise is in financial guidance for both individuals and business, something I have been involved in since 2002. I am available for basic tax management and accounting, and more in-depth services like financial statements and financial planning.

The Margin Tax Initiative: What Exactly Is It?

In November, Nevada voters will be asked their opinion on the margin tax initiative, in conjunction with the 2014 statewide general election ballot. In plain words, this tax, also called the “Education Initiative,” there institute an extra 2-per-cent tax on revenues of over $1-million. Now, this amount is on revenue, not on profit – so many small businesses, as well as many of the unions, are opposing this new tax.

As well, there is no “pass” for your first $1-million; so if by chance a company has $1,000,001 in revenue, they are taxed on the entire amount, not just the $1. On that amount of money, the tax would be $20,000; for small businesses and franchise owners, this could mean the difference between being able to pay oneself – and not.

The included industries in this tax would be: “family owned restaurants, medical clinics, daycare centers, repair shops, veterinarians, janitorial services, ranches and farms.” These types of businesses, most especially family owned restaurants and the like, usually have an especially small profit margin. Even ranches and farms may have a decent profit in one year, but they usually have to bank that profit for a “rainy day” – they often fail to break even in years where the weather is affected, or the industry they’re dealing with is down.

The big issue here is that many small businesses are struggling as it is – according to the Nevada Small Business Development Center, four out of five businesses fail within five years. This new tax may make that ratio four out of five businesses failing within three years. It would also give Nevada businesses one of the highest tax burdens in the country.

What about franchisees? Although they may have $1-million of revenue, they definitely do not keep their full profit. A large portion of that amount gets paid to the franchisor, leaving them with a dwindling pay check. The website ( mentions a restaurateur who makes $2.1-million in two restaurants. That may seem like a lot, until you run the numbers … at a 20-per-cent margin, he estimates a profit of $400,000. The 2-per-cent tax – which is based on the $2.1-million, not on the profit – would be $42,000. This actually amounts to the franchise owner receiving 10.5 per cent less on his profit – not 2 per cent.

This tax also does not take into consideration businesses that cannot pay the tax; and in fact, are actually losing money. There is a dedicated website – – against the margin tax initiative that goes into more details.

“Overall, it would dump a massive $750-million increase on the costs of doing business for Nevada employers. That would severely damage our state’s already struggling economy and job market.” (taken from the website)

This is a huge amount of money on the everyday people in Nevada. One million dollars in revenue may seem a lot to those of us who are salaried employees. But again, it bears to be repeated – this amount is based on gross revenue, not on gross profit.

What is your opinion on the margin tax initiative?

Small Business in Nevada; a Growing Trend

In December of 2013, the Small Business & Entrepreneurship Council ranked Nevada as the second-most friendly policy environment for small businesses. The council takes into consideration policy measures and costs; this is the second year in a row that Nevada has been granted “silver” status.

Nevada also came in third place in a poll on Best Places to Do Business. Why is Nevada topping the charts for small business owners? Simply, there is less taxes and less regulation. Unlike other states, Nevada is not expecting small business owners to carry the onus of overspending; they have responsible budgets that are followed closely.

According to the Small Business Association (, the state of Nevada had 45,000 small employers (less than 500 employees); 2,076 large employers (more than 500 employees); and 177,181 non-employers. ( Most of Nevada’s small businesses are very small, as 78.9 per cent do not have any employees.

What does this mean for you? If you are thinking of running your own business, it is not necessary to hire employees and become “large” all at once. A successful small business starts small; think about what you’re talented at. Do you love working with your hands? Do you have a trades license? Do you love being around kids? Even if your small business starts out as a hobby, it is always a good feeling to build something with your own two hands; your time and investment will result in something that gives people joy, or a useful service or product. The sky is the limit!

What are the benefits of running a small business?

Be your own boss

One of the biggest and most enticing benefits of running a small business is the fact that you are your own boss. If you think that something within the company should be done differently, you do not have to go to “management” to make changes – you are the boss. You are the driving force behind the company.

Better chance for profit

Being self-employed can be scary, but if you have a good idea and the smarts to follow through, you can go a long way. Instead of having to share a profit with others, or being paid only depending on how many hours you’ve put in, you can participate in your company’s success directly. If you have landed a large contract, you get the benefit – not someone else. Your hard work directly pays off.

Create your own hours, vacation time

How many times have you requested time off and been denied? How often have you run out of vacation time because of sick leave? When you run your own small business, you do not have to worry about getting approval for time off. If necessary, you can even run errands or complete necessary tasks during the day all via your phone or e-mail; it’s your business!

If you are thinking of starting your own business, or if you are looking to move your small business, Nevada is one of the best places to be!

Shoebox Accounting Made Simple and Less Chaotic

The end of the year is almost upon us; have you begun preparation to file your taxes as of yet? Are you guilty of “shoebox accounting?” Many small businesses find it convenient to throw all of their receipts and documents into a shoebox, but this doesn’t necessarily mean shoebox accounting is wrong. In fact, if done properly, shoebox accounting can be quite helpful to an accountant. Here are some tips on keeping your shoebox organized.

  1. Compile your credit card statements. If all of your necessary expenses were paid with a credit card, ensure that you have all of your receipts in one place. If you have copies of the original receipts, staple them to the credit card statement.
  2. Categorize your receipts. For those who do not use credit cards exclusively for business expenses, make sure you have all of the receipts and categorize them into files such as travel, food, entertainment, equipment, office supplies; anything that makes sense. For example, if you did not travel during 2013 for business, it does not make sense to create a travel category.
  3. Add notes. Anything that gives your accountant more background or information regarding your spending can be helpful. You can note that one entry on your credit card was for personal reasons, or that the equipment you purchased in June was exchanged for a newer model in August.
  4. Make a list, check it twice. Santa’s not the only one who needs to double check lists; go through all of your correspondence and ensure that you have records of all the purchases you made during the year, and all of the expenses as well. This includes travel for business, entertaining of clients, anything that you spent money on that was beneficial to your business. Key items many people forget are advertising (including anything on-line); gas for travel to client meetings, etc.; and of course, office supplies. Everything adds up and it is essential that you gather everything together .
  5. Ask your accountant. If you are ever in any doubt as to what you need to include in your shoebox, feel free to ask your accountant. Depending on your business, they will be able to make more specific suggestions as to what to include in your shoebox, and may have a format to follow. Your accountant is there to help you, and anything that makes their job easier is of benefit to them as well.

Tax season may be looming, but it doesn’t need to be stressful. As long as you have all the necessary information for your accountant to use, it will be a breeze. Getting started early on compiling all of your information is an excellent idea as well, which will allow you to do the legwork needed to find anything you do not have easily accessible. Preparation is key to surviving the tax season in a calm, relaxing way.