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How to Get Your Finances in Order Post-Covid
I talked about How to Get Your Finances in Order Post-Covid with Dawn Brolin. She is a Certified Public Accountant and Managing Member of Powerful Accounting, Inc. – a nationally recognized accounting, tax, and consulting firm. As a speaker, Dawn brings her entertaining style and rock star energy to audiences. For more information: http://powerfulaccounting.com
SmallBizlady: For the businesses who are freelancers & gigpreneurs, what paperwork do they need now to be prepared to apply for any further assistance? EiN, business bank account? Is it ok to be paid via Cashapp, Venmo, and Paypal?
Dawn Brolin: I would say now more than ever, every business owner should declare themselves as an LLC, S-Corp, Partnership, or C-Corp and not continue as a sole proprietor. A legitimate business takes the necessary steps to ensure that they are in substance, and in form, a qualifying business. A qualifying business will have advantages over sole props, in my opinion. A business bank account is also important, keeping your personal financial health separate from your business financial help. This solves so many issues such as obtaining loans, protection under the corporate veil, etc. I believe that anyway you can get paid is a good way to be paid.
What is of primary importance is that the income is tracked correctly, reported under an EIN, not a social security number. In addition, just as a sidebar, those who file taxes as “self-prepared”, beware. More businesses make errors on their business tax returns when self-preparing rather than paying a professional to handle their taxes. A self-prepared return also has a higher likelihood of being audited since it is highly unlikely the preparer (taxpayer) has had tax schooling or other education to be filing accurately.
SmallBizlady: Do all business owners need to pay themselves with a payroll check?
Dawn Brolin: The structure of a business depends on whether or not an owner can collect an actual paycheck. As a sole proprietor or a single-member LLC, that owner takes a “draw” from the business which is NOT in the form of a payroll check. Challenges for these business owners are obtaining loans, funding, etc. as well as refinancing a mortgage, etc. For a partnership (typically a multi-member LLC) the owners/partners, take distributions in the form of a guaranteed payment. Sole props, single-member LLCs, and partnerships are not “allowed” to collect a traditional paycheck due to the structure of their business. S-Corporations and C-Corporations will collect a paycheck. That paycheck must be made as a reasonable salary.
SmallBizlady: I’ve heard there are businesses who were approved for Emergency Industry Disaster Loans or EIDL Loans from the SBA but they are scared to accept them because they must be repaid, what advice would you give any small business that qualified for one of these loans?
Dawn Brolin: The EIDL isn’t scary to take as a loan, unless, you don’t really need the funding. If a business is struggling due to the pandemic, they have every right to take up the SBA on this offer. In addition, the significantly reduced interest rate may help some struggling businesses refinance existing debt at a much lower rate and allow them to minimize the monthly payments in order to help sustain their business.
SmallBizLady: For those business owners that applied for unemployment due to COVID-19, taxes must be paid on that money too, Right? 10%, if I’m not mistaken?
Dawn Brolin: Income tax on unemployment is taxes at the taxpayers’ ordinary income tax rates. There isn’t a special tax rate for this particular income category at this point. But, there isn’t any FICA withheld from these payments so that is a plus. From a state income tax perspective, the states who do not have an income tax (Alaska, Florida, Nevada, South Dakota, Texas, Washington, Wyoming, and Tennessee) won’t be dealing with this. There are a few states who also have opted not to tax unemployment income including California, Montana, New Jersey, Pennsylvania, and Virginia. Wisconsin as well but they have a complicated calculation.
How to Be a Better Leader
All of us with children are worried about school starting up right now. I spoke with Steve Bollar, a former school superintendent on how we as parents can be better leaders right now.
Steve Bollar, a.k.a. Stand Tall Steve, is a leadership expert, educational thought leader, former Superintendent of Schools, principal, and author of the leadership book Stand Tall Leadership. He is known for his quick wit, creative thought, and humor to engage audiences. Steve is working with educational leaders on school culture book Ideas, Ideas, Ideas! and is a contributing author in the book School Climate 2.0: Preventing Cyberbullying One Classroom at a Time. Steve openly shares his knowledge, experiences, and creativity with others. He currently speaks to students, staff, and communities throughout the country about how to think differently about schools, education, and life. For more information: www.standtallsteve.com
SmallBizLady: Steve, what is going through the minds of school leadership, and how is that translating to decisions being made for our children heading back to school?
Steve Bollar: The number one thought is safety. Prior to the pandemic safety was always a concern. Remember when schools ran drills, had lockdowns, and over the top safety protocols? Well, it’s at a totally different level. On top of that, there is the need to educate the students so they will excel, not just maintain their knowledge. With that said, the decisions they are making are going to focus on the management of students’ needs so that they are safe and able to learn beyond what they may have lost over the past school year and summer.
SmallBizLady: What is your definition of leadership and has it changed over the past several months?
Steve Bollar: My definition of leadership comes down to one word, “Influence”. As a leader, you can’t make anyone do anything. You can only use your influence to move people in a direction that is productive, positive, and connected to the vision of the organization. Many leaders have had to move from leader to manager over the past several months in order to ensure that systems and processes work well. But it is most important to strengthen their level of influence in order to help the school, company or organization navigate through the changes.
SmallBizLady: What is the Results Formula?
Steve Bollar: The Results Formula is a guide that can be implemented in order to move those within an organization in a direction so that you empower them to ultimately get the results that you are looking for from them. This is true with students, teachers, human resources, or sales teams. It revolves around 5 Rs. What you Respect, Recognize, Reward, and Reinforce will give you Results.
Pivoting Through the Pandemic
Dawn Fitch is an author, speaker, health advocate, and the founder and CEO of Pooka Pure and Simple, a handmade bath and body company. After battling illness and feeling the need to adopt a healthier lifestyle, she began making and selling her own products. Her products are currently sold in various Whole Food markets, online and through various distributors. This year she has been featured in Essence Magazine as one of their top 20 Black Beauty Brands. For more information: www.pookapureandsimple.com
SmallBizLady: Tell me about how you started your business?
Dawn Fitch: Pooka is a line of natural bath & body products. I started the business 20 years ago in my kitchen. After becoming ill, I wanted to live a healthier lifestyle, food, nutrition but also my body products. Not finding what I needed, I started to create my own products from healthy ingredients in my kitchen. I’m a graphic artist by trade so I knew to put a nice label on every bottle. I had started to develop so many products that friends pushed me to try selling at a festival and we sold out! That’s when the business was born. We sell online, at our showroom and through various Whole Foods Markets
SmallBizLady: How have you maintained your health and sanity through Covid-19?
Dawn Fitch: I’ve always tried to get some sort of exercise but once the gyms closed it was hard. I was also quarantined alone (that’s a whole other single girl quarantine topic, lol) In an effort to still see friends, we started walking together because we could socially distance and still get some exercise. During one of our walks, we noticed signs for trails by the local park and we went into the forest. This opened up an entirely new world. We’ve now begun hiking every day at different trails in NJ. It’s amazing, being outside in nature, in the woods has definitely had a meditative experience. We started posting pictures to social media and got flooded with calls from other women. Now we do “Sister Hikes” on the weekends and have enjoyed introducing women to an amazing adventure in the woods where they can clear their head, be socially distant but still social, exercise and we even stop along the way for a 10-minute meditation!
SmallBizLady: You developed a Self-care planner since COVID started? Tell me about that.
Dawn Fitch: After I began my business, I was later diagnosed with Multiple Sclerosis. I decided to approach it holistically with food and diet and prayer. I had some ups and downs but still on that route. One day I was having a bad MS day and needed some support, so I tagged a few friends and started a new FB community called The Best Life Tribe. We talk about food, diet, mind work, adventure, exercise, you name it we talk about it! The tribe grew from a few friends to now almost 5000 women! During COVID everyone was looking for a place to get health information and find a community of people like themselves. We did “New Normal” challenges and “Immune Booster” challenges in the Tribe during COVID. I also realized the biggest challenge people were having was getting a way to relax and release anxiety, they were struggling to find ways to get some self-care. I decided to put together a planner that would help them and that’s how the Best Life Tribe, 90 Day New Normal Planner was born!
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The post August 2020 #SmallBizChat: How to Get Your Finances in Order Post-Covid appeared first on Succeed As Your Own Boss.