The VA Says

Credit Rule Changes

Credit rule changes will begin taking effect this week as a result of the recent passage of the Credit Card Act of 2009 according to Marketplace. This will impact anyone who relies on credit cards as many solo-preneurs do.

The law is aimed at preventing some of the worst abuses of the credit card industry such as mailing a bill at least 21 days before its due date (instead of the current 14) and giving 45 days notice of significant rate changes. Other changes include being given the option to avoid rate increases and paying existing debt under the expiring terms. 

Most of the changes go into effect in February 2010.

But that hasn't prevented credit card companies to get in rate increases and hikes in fees, and other changes before new laws take effect. 

One strategy being used by many companies to thwart the reforms is changing fixed interest rate cards to a variable rate.

The bottom line is that you have to watch credit card notifications like a hawk, or better yet find some way that you don't have to carry a balance.

  

Sure beats reinventing the wheel

The beauty of a system is that you don't have to reinvent the wheel every time you begin again. Systems are used in all kinds of places for all kinds of things.

Whether you are a busy Mom running the household or a manager running a business, you can't function without systems. Even my cat has me on a system--he gets me up early to give him breakfast and he reminds me when I need to feed him dinner.

Michael Gerber wrote a book a number of years ago called the "E-Myth." In a nutshell, he describes the necessity for the self-employed and other small business owners to have systems that are spelled out and easily duplicated.

This is no less true for internet entrepreneurs. Most people considering starting an internet business tend to get overwhelmed by the plethora of information and technology. But the key to success is to create a system that you can duplicate over and over again.

Many people selling information products will repurpose their material. A tweet, a blogpost, an article may come from the same germ of information. And then the articles and blogposts are tweaked and teased into an ebook.

These days with the availability of private label rights products, someone else can do the heavy lifting of the writing process for you.

This Wednesday, Dr. Jeanette Cates and Connie Ragen Green will teach a webinar that will show you how to create an online business even if you have little or no online experience. The core of the information is teaching you to create a business model that you can use over and over. http://budurl.com/DCJump

Sure beats reinventing the wheel.

Self Employed? A Solo-preneur? You're a Pioneer

If you are self-employed, a SOHO business owner, a solo-preneur, slash careerist... you are a pioneer. In many ways you are blazing a path for cubicle dwellers and others who find themselves on the receiving end of a W-2. 

That is because as an independent, you are engaging in capitalism and free enterprise in its purist form. No Unemployment Insurance for you if the economy's downturn shrinks your paying customer base. And no TARP money for you either--unlike AIG and Goldman Sachs, you're not big enough and you don't have a strong lobby working on your behalf. That's right, no welfare for you.

No, you get to engage in capitalism in its purist form--you walk a tightrope with no safety net, except the one you build yourself. 

But it seems that the cubicle dwellers are not so far behind. Their supposed security gets more precarious by the day. Witness the case of Lou Carlozo, a reporter for the Chicago Tribune. He was asked to write about his family's finances for the paper's blog called “The Recession Diaries.” 

As Carlozo describes it, "it involved me telling very tough stories about my own family finances–stories that led me and my wife to squabble many times over which details to withhold, which to print, and which ones looked inappropriate in print after the fact."

His thanks for his thankless task? The paper took down his final post explaining that he had just been laid off due to the very recession he covered. You can read the story here http://tinyurl.com/cyhkpo

While he did land another job, for many of us, we land our jobs by creating them. Welcome to the New Economy.

Taxes, Taxes... the Subject Just Doesn't Go Away

Taxes... April 15th is gone. For those of you who are not filing an extension, it is easy to put the files away and the very thought of the subject back on the backburner.

But the savvy entrepreneur and business owner is thinking about taxes year 'round. After all, early in the tax year you have far more flexibility to devise and implement tax savings strategies than April 14th. So say business advisors and tax planners.

Joyce Rosenburg writes in The Salt Lake Tribune that it is easy to miss out on some of the new deductions or beneficial changes in tax legislation if your planning strategy doesn't accommodate them. And in this economy many of us need all the help we can get.

Ms. Rosenburg cites recent federal tax law changes that help cash flow such as: 

• Companies that incur net operating losses can carry them back five years instead of the usual two, applying those losses against taxes paid in the past and obtaining refunds.

• When making estimated tax payments, businesses are required to pay only 90 percent of their previous year's taxes, down from the usual 110 percent.

She suggests that small businesses not only use tax advisors, but that they should be business advisors as well. And don't wait until April to pay them a visit. You should touch base with your tax advisor at least every six months or more frequently than that. 

LLCs (Limited Liability Companies) Pitfalls

LLCs are a smart way to go if you are self-employed or part of a small company and want to protect lawyers and creditors from going after your personal assets like your house.

But after you pay an attorney to draw up and file the papers, you also need to take some steps to make sure that no one can "pierce the corporate veil."

For starters, you will need separate bank accounts for your business. It not only makes it easier to cash checks made out to the business name, but it keeps business assets separate. Same with credit cards.

And while you're at it, you need to ensure your bookkeeping separates your personal and business affairs. 

Banks and credit card issuers have gotten wise to this--you can expect your credit card issuer to ask you to personally guarantee your obligations to them. Be very aware that in your dealings with that institution, that your LLC status will NOT protect you.

This post is based on my personal experience--I am not an attorney and for specific advice, you'll want to speak to one. 

Nonetheless, I sleep a little better at night knowing I have taken some steps to protect myself by setting up an LLC.

LLCs (Limited Liability Companies) Continued

In the last ten or fifteen years, there have been some changes in the laws that make limited liability companies a practical choice for very small and single-owner businesses. 

I used to think that incorporating meant mountains of paperwork and bureaucratic rules at tax time. But now you can be self-employed, a single-owner business as it is called, set yourself up as an LLC and file the same Schedule C as you did when you were a sole-proprietorship. 

But what is even cooler is that you can set up your limited liability company to have as many businesses as you want under the LLC umbrella. This is particularly handy for many self-employed people who are slash people,ie. actor/waiter, VA/party entertainer/artist--you get the picture. 

And you can create and file business names for each entity under your LLC umbrella. For eg., I have a fictitious business registration for my party entertainment business that reads Ellen M Zucker, LLC d/b/a Faces & Fortunes. And I can have separate fictitious registrations for other businesses or just use Ellen M Zucker, LLC.

At any rate, you get the idea. For fine points, talk to your attorney. But if you are self-employed, in a partnership or owner of a small business, having a limited liability company is a smart way to go.

Limited Liability Companies (LLCs), Solo-preneurs, and Small Businesses

A limited liability company, or LLC, is a wise move if you are self-employed or a small business. 

In the US at least, I can't speak for the legal climates elsewhere, it is prudent to take steps to protect your assets. People sue for all kinds of reasons, reasonable or not, and even a fair and prudent business can be faced with a lawsuit. 

The first line of defense is to carry appropriate liability insurance. That protects the assets of the business. But that is not enough.

I am not a lawyer and this post isn't intended as legal advice per se, but it doesn't take a rocket scientist to conjure up a scenario where a plaintiff's attorney goes after the personal assets of a self-employed person or very small business, particularly if the business itself does not have the volume of assets the lawyer is looking for. That means your house, investments and personal property. 

Melissa Gordon writes about this topic and adds that your personal assets are protected if your business goes bankrupt or defaults on a loan. 

Your limited liability company filing is done through your state. You will need to create an EIN number with the IRS. You can find kits to help you, but when I set up my own LLC, I chose to use a local attorney. Imo, it was worth a few extra dollars to make sure it was done correctly.A limited liability company, or LLC, is a wise move if you are self-employed or a small business. 

In the US at least, I can't speak for the legal climates elsewhere, it is prudent to take steps to protect your assets. People sue for all kinds of reasons, reasonable or not, and even a fair and prudent business can be faced with a lawsuit. 

The first line of defense is to carry appropriate liability insurance. That protects the assets of the business. But that is not enough.

I am not a lawyer and this post isn't intended as legal advice per se, but it doesn't take a rocket scientist to conjure up a scenario where a plaintiff's attorney goes after the personal assets of a self-employed person or very small business, particularly if the business itself does not have the volume of assets the lawyer is looking for. That means your house, investments and personal property. 

Melissa Gordon writes about this topic and adds that your personal assets are protected if your business goes bankrupt or defaults on a loan. 

Your limited liability company filing is done through your state. You will need to create an EIN number with the IRS. You can find kits to help you, but when I set up my own LLC, I chose to use a local attorney. Imo, it was worth a few extra dollars to make sure it was done correctly.