By Marguerite Moore
With the passing of President Trump’s “Tax Cut and Jobs Act,” many businesses are asking whether to change from a pass-thru form of organization to a C-corporation to take advantage of the tax savings provided in the law. Under the Act the tax rate for a C-corp is reduced from 35% to 21% while the pass-thrus, S-corps, partnerships and LLCs, will still be taxed at the same rate as before.
Even within the general category of pass-thru organizations, there may be advantages to switching to a different type of pass-thru. While the pass-thrus of similar businesses may have the same economics, they may have different tax results. Business owners may want to consider looking at whether they are in the right kind of pass thru. But before considering a switch to another pass-thru or to a C-corp, you are well advised to speak to your tax accountant.
While there are still some gray areas in the new legislation, there may be technical corrections as the year progresses. The IRS is expected to issue answers to frequently asked questions with guidance that will likely influence how nuances in the law are interpreted.
For a further discussion of the effects of the “Tax Cut and Jobs Act,” read the article published by EisnerAmper.
By Marguerite Moore
As small business owners we probably have a few clients who give us enough business to make us complacent. However, what happens if we lose one or two of them?
Many small businesses have only a handful of customers or clients at a time. If they work by themselves, they cannot take on additional work. But some may say that It is less complicated to have a few clients, but it makes a business more vulnerable.
What are small business owners to do when a client leaves and revenues dip? Don’t wait for this to occur. Keep your name out there by networking, creating a blog, using social media and attending conferences all with the thought of not only learning something new, but also meeting new people and exchanging business cards. So, if a downturn occurs you have met people who may hire you if you connect with them again. If the client is a large corporation with several divisions, there may be an opportunity to do some prospecting in other parts of the company.
Keeping up to date regarding both negative and positive developments with your clients is key. For example, when Toys R Us and Sears announced that they were closing some of their stores, it didn’t come as a surprise to vendors. They had time to act to make new connections.
Here are a few good practices to keep in mind:
- If a client is happy with your work, ask him for referrals to grow your business.
- Never have a client who provides more than 10% of your sales. That would mean having more than 10 clients in your roster. Those clients should be diverse, that is, being from different industries, so that not all of them would be affected by a downturn at the same time. Try to make efforts to solicit more business from the contacts you have made.
- Get out there and network at least once a week. Meet people who could be potential clients. See what the trends are that potential clients are looking for and address them with your skills. There are many meetings taking place on a weekly basis. To find them look at a local/regional or industry newspaper.
- Keep your name out there by writing a blog on your industry containing information which could be helpful to potential clients.
- Make a presentation to an industry group.