Greener Business Bureau

Archive for the ‘Business Section’ Category

1031 exchanges are most often associated with investment real estate as a way to defer taxable investment gains. However, section 1031 of the Internal Revenue Code (“IRC”) is NOT limited to real estate transactions. A number of other assets qualify, including most tangible business assets.

Section 1031 provides that “No gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held either for productive use in a trade or business or for investment.”

To qualify for a 1031 exchange:

- The sale of the relinquished property and the replacement property must be identified within 45 days and the acquisition completed within 180 days of the qualified sale.

- The replacement property must be of equal or greater value than the relinquished property.

- All proceeds from the relinquished property must be reinvested in the replacement property.

Nowhere does the IRC limit the use of section 1031 to investment real estate. So, let’s consider its application in the exchange of like kind business assets.

The most important distinction made by the Internal Revenue Service (“IRS”) is that the sale or exchange of a business is not considered the sale or exchange of one single asset (i.e. the business). Rather, it is considered the sale or exchange of individual asset classes that comprise the business. Therefore, each class of asset must be exchanged with an asset of equal or greater value, in the same class and subject to the above requirements to qualify for section 1031 deferment.

In most cases, depreciable tangible property (real estate and equipment) are the most likely to qualify for deferment under section 1031. Although, intangible property can qualify for “like kind” treatment, it is often difficult to prove that intangible assets are like kind based on the nature and character of the rights involved. For this same reason, a business’s going concern value or goodwill is never considered by the IRS to be like in kind to the going concern value or goodwill of another business.

As you may imagine, 1031 business exchanges can become very complex based on the assets involved. For this reason, they are best left to the tax professional. However, it is important for you as a potential business seller to understand that 1031 exchanges are not limited to real estate transactions. They are available to business sellers with the same requirements and restrictions.

There’s been a recent rise in the number of Adult Daycare Home Businesses springing up everywhere around the world, what with an estimated one in four families providing care for an elderly relative today. Before you decide to jump on the group home business bandwagon, though, you need to know as much as possible. This brief guide will help.

Some questions you should ask yourself before starting an Adult Daycare home business, or any other home business for that matter, are:

What are your talents and skills? Are you looking for a home based career or just to supplement your income? Do you have space in your home for an office? Is your family willing to support you in having a business based in their home? Are you willing to put in the necessary work it takes to get a business off the ground and to sustain it once you have? Do you want to help people?

The last question is particularly important when it comes to operating and starting an Adult Daycare home business for the elderly. Because if you’re just doing it for the money, you’re likely to be overwhelmed by the personal interaction required for this business.

Some people are happier working all day long at a computer, not having to deal with other people face to face. Or they prefer detailing people’s cars or doing their lawn care to providing personal service that demands constantly interacting with people.

Everybody’s different, and that’s a good thing. Just understand that even if you set up an Adult Daycare home business across town from your own home, you’re going to have to deal with people on a daily basis.

If you decide that starting an Adult Daycare business for the elderly is just the type of business you’re looking for, you’ll have to find out what the laws and regulations are, as well as what licenses are necessary in your state. There are certain to be some, and you need to know what they are in case you have to obtain any special certifications. CPR and first aid certifications are two that most states are likely going to require you to personally have.

Another thing that you’ll have to look into before you buy or rent that house that you think would be just perfect starting an Adult Day Care home business, are the area’s zoning regulations. This can be a sticky situation in many places, and even if there are no zoning laws or regulations against your opening a group home business where you’d like to, you could well find yourself up against a lot of resistance. It’s mandatory that you know this upfront.

You can look for another location for starting a group home business for the elderly, or you just might decide that this is not the business for you.

Funding for group home businesses is not as hard to find as you might think. The Small Business Association, as well as many banks and other financial institutions, can point you in the direction you need to go to find the money you need to purchase a home for starting a group home business.

You’ll want to understand all the terms, conditions, and financial obligations. You’ll also want to find out if you must use your current home as collateral. Putting your own house up as collateral may be more than you’re willing to risk for any new venture.

Insurance for your elderly group home business is something you’ll definitely have to have. Liability insurance is mandatory. You’ll also need fire and theft insurance. If you plan to offer any type of medical assistance to the people in your elderly group home, you may even need malpractice insurance.

Other insurance requirements may also be involved. Learn everything you can about the different types of insurance coverage you’ll need, and then shop around for the best prices to obtain the necessary policies you’ll need for starting a group home business.

Unless you plan to live in your Adult Daycare business and do everything yourself you’ll need assistants and a concierge service for senior citizens. Planning for meals, transportation to doctors, dentists, hairdressers, and events, cleaning, and activities are other things that need to be considered before starting an Adult Daycare.

You will also want someone to oversee medications and ensure that people receive and take them at the proper times.

Starting a Group Home Business for the elderly is not for everybody, but if it’s for you, then you’ll find it tremendously rewarding. And in huge demand. Going into the elderly group home business with your eyes open and doing your homework first will assure that your Adult Daycare Home Business is a successful one.

Listening to high level vocabulary in another language is not an easy task. If you want to improve your understanding of business English you need to practice listening to a lot of that. Here are some things you need to do.

1. Make sure that your vocabulary is good enough. There are a lot of advanced concepts and if you do not understand them, spending a lot of time listening will not help you at all. You need to learn the majority of common vocabulary words used in business to even have a chance.

2. Once your understanding is good enough, watch business news on TV. Listen to the hosts. They use a lot of buzz words all the time. If you are already familiar with these terms, it will be a lot easier to improve your listening. 30 minutes a day is a lot if you are consistent.

3. Practice talking about business with someone who is interested and educated in the subject. Ask them to speak at their regular speed and stop them when you have a question. If you level is too low, do not do this activity for too long because it is a burden on the other person. Make sure you are learning on your own as well as listening.

4. Read the business section of the newspaper. This is one way to get used to the kinds of language that is commonly used. The business newspaper and what is said on business TV programs like CNBC is quite similar.

Products and /or Services

In this section of your business plan, you want to describe what products and services your company will offer, and include information on specific product lines and associated research.

The products/services section of your business plan is where you want to describe what it is you are selling, benefits to the customers, the demand for your products or services, and especially sell the distinctiveness of your product.

Be sure to relate any barriers your product may face during the production, transport, or sale of the product. These may be barriers such as government regulations, competing products, rare manufacturing materials, or high development costs.

New Products/Services

If the products are original, explain the need for them, and include all legal aspects such as patents or copyrights and include photos or other visual aids.

If you are still in the process of developing your product, provide your strategy for production, and a projected timeline.

Include any patents, copyrights, or trademarks currently owned or applied for. Also include any confidential and non-disclosure protection the business has secured.

Products/Services Already Available

If it is an established market, focus on the advantages your business has over competitors. This is the portion of your business plan where you want to highlight your competitive advantage. What makes your product or service unique? Be specific when illustrating your advantages.

Be sure to show that you will be able to price your products/services competitively, and still maintain profit.

The Market

In order to have a successful business, you need to have a thorough knowledge of the business’s target market. It is therefore a good idea to include a section in your business plan specifically focused on the market you will be serving. Included in this section should be all aspects of your market research data, including customer purchasing habits and buying cycles.

Be sure to include a detailed description of your target market, and why you chose it.

Provide a thorough explanation of the demand for your product or service in the market, and include supporting documentation to demonstrate those needs.

Illustrate your projected market share, as well as how you plan to attract, hold, and increase market share.

Remember that your markets may grow with time. Provide information on the growth potential of these markets, and how you will satisfy that growth. Are the markets large enough to allow for possible expansion in the future? How will you price your products/services to remain competitive in a growing market?

A competitive analysis strives to categorize your competitors and assess their relevant strengths and weaknesses. By understanding the events of your competitors, your company will have a improved perspective of what products and/or services you ought to provide to your customer, how to market successfully, and lastly how to strategically position your business.

4 CRITICAL STEPS TO A COMPETITIVE ANALYSIS

Step 1 | Categorize your competition
Step 2 | Investigate your strengths & weaknesses
Step 3 | Explore and examine your opportunities and threats
Step 4 | Assess your position amongst competitors

The outcome of your company’s comp. analysis institutes the competence required to do well in your business, while defining your viable advantage. To gain from your comp. analysis and market research, capture scores of weaknesses about your competitors and transform them into impending strengths for your company. Slim your inventory of competitors to just the matter that will offer your company the aggressive edge. Items to consider when populating your Competitor catalog:

* Fits a unambiguous market
* Intended to resolve a hitch in your company or take care of a explicit need
* More importantly, ROI-effective, rational and practical

Upon doing a comprehensive job in carrying out your competitive analysis, your company will produce a lot of data, which while vital to investors can become rather cumbersome for you. A competitive matrix presents hordes of information in an actionable and rich format.

AXIS 1 | list the significant assessment criterion characteristically used by potential clients to weigh against the rival offerings.

AXIS 2 | list main competitors. Rank the competitors aligned with the criterion.

*Be sure to make the matrix the essential section to your competitive analysis, while providing relevant content in paragraph form.

Lastly, subsequent to completion of the competitive analysis describe how your company speaks to a specific market.

Look for more articles from me regarding business plans, market research or funding your venture, current company or start-up. Also be sure to first talk to your small business development center in your community, if you are new to the business plan process – This is funded101 signing out.

If you want to start a business, but don’t know where to start, then the place to start is with Start Your Own Business: The Only Start-Up Book You’ll Ever Need by Rieva Lesonsky. The book is put out by Entrepreneur Press and is essentially a compilation of Entrepreneur Magazine’s large knowledge database regarding starting a business.

The book literally takes you through the entire business process – from determining if you really have what it takes to run a business to how to deal with failure if your business doesn’t work out, and everything in between. The best part about the book is that it covers nearly EVERYTHING in some capacity. If you need more information, it does a great job of suggesting further reading and pertinent web sites.

The book is broken down into seven sections, each with several chapters. The first section, ‘You Gotta Start Somewhere’ covers determining if you can be an entrepreneur, how to come up with an idea for your business, and whether you should launch your business part time or full time. Most people who buy the book will already have answers to these questions, but going through the exercises in the book can still be helpful.

The second section of the book is entitled ‘Building Blocks’. It covers how to name your business, choosing a business structure, creating a business plan, and how to hire a lawyer and accountant. I think that this is the most valuable section of the book. These are the things that most entrepreneurs either struggle with or ignore. The Naming Your Business chapter in particular helped me a great deal. Naming your business is not nearly as easy as you think – you need to consider all registered trademark names, registered domain names, and names that are being used but not trademarked. One of the worst things that you can do is to pick a name that is already being used by someone and face a legal battle down the road.

The third section covers financing including where and how to get money to run your business. The fourth section, ‘Setting the Stage’ is absolutely massive and covers numerous important things such as choosing a location for your business, creating a professional image, offering customers credit, hiring your first employee, and business insurance. Needless to say, all of these things are extremely important to every business owner.

The fifth section covers buying company computers, cell phones, and cars. These things probably won’t be very difficult for most business owners. The sixth section, however, covers one of the hardest thing every business owner faces – marketing. The section is nearly 100 pages about advertising, marketing, and public relations. It also briefly touches on web-marketing but those looking to seriously profit online will need to look elsewhere because the book is a little thin when it comes to e-commerce.

The final section, entitled ‘By the Books’ goes over every entrepreneurs favorite things – accounting and taxes. It gives solid advice regarding basic bookkeeping, financial statements, budgeting, and taxes. For most business owners this section and the web resources listed should be more than enough to get them started on keeping their business legal.

I can’t overemphasize how important I think it is for every business owner to have this book. It is a mini-encyclopedia (ok, so 800 pages isn’t THAT mini) for everything business related. Having this book on your shelf will save you countless hours. I read it from cover to cover when I got it and I constantly refer back to it. I have recommended it to every person I know that has talked with me about starting a business. Each and every one of them bought it, and each and every one of them came back to me raving about it.

For the amount of depth that is covered in the book, Start Your Own Business: The Only Start-Up Book You’ll Ever Need by Rieva Lesonsky is an amazingly easy read. Anyone over the age of 16 will be able to comprehend the simple nature of the book. Reading this book won’t guarantee your success as an entrepreneur, but it will help reduce the risk of starting a business by providing you with a sound foundation to build upon.