A McKinsey & Co. study found that raising prices 1% with no change in demand could mean an increase in profits of 11%. Inflation for 2018 is running at about 2.3%, so this generally means you can expect to pay more for the goods and services your business uses. With a tight labor market, you’re likely to increase wages for the coming year at an even greater rate. These conditions mean one thing: it’s probably time to raise your prices. Concerns about raising prices Naturally, you fear that raising prices will reduce demand. You need to determine the impact of […]

The Tax Cuts and Jobs Act created a new personal deduction, called the qualified business income (QBI) deduction, for owners of pass-through entities that is effective starting on 2018 returns. The deduction cuts the effective tax rate on your business income.  Sole proprietors, S corporation shareholders, partners, LLC members, and self-employed independent contractors should familiarize themselves with the rules for the QBI deduction.  Here are 10 things to know about it. 1. The new deduction is based on only certain pass-through income The QBI deduction, also referred to as the Section 199A deduction (based on the Tax Code provision covering it) is […]

This is the health care season, with open enrollment for individuals seeking coverage for 2019 through a government Marketplace running from November 1, 2018, through December 15, 2018. (Medicare open enrollment runs from October 15, 2018, through December 7, 2018). But obtaining health coverage through an employer is a highly desired employee benefit, and having it may mean the difference for an employee accepting a position and/or staying on the job. Only 47% of firms with 3 to 9 employees offer health coverage as an employee benefit, according to the Kaiser Family Foundation (KFF) 2018 Health Benefits Survey  In this […]

H.G. Wells said: “Adapt or perish, now as ever; is nature’s inexorable imperative.”  … As in nature, so too in business. On October 14, 2018, Sears filed for Chapter 11 bankruptcy protection after being unable to pay a debt. Sears started business in 1886 (132 years ago). By using Chapter 11, Sears hopes to reorganize and emerge from bankruptcy, but who knows? This event tells me that Sears just didn’t adapt well to the era of online sales and new ways of marketing. It’s a cautionary tale; don’t become the next Sears. Here are some areas to check to make […]

Will Rogers said: “Even if you’re on the right track, you’ll get run over if you just sit there.” When it comes to technology, you can’t afford to stay in the same place; you must continually upgrade your PCs and laptops. One source says you should expect to replace your desktops every four years and laptops even sooner. If your equipment is becoming dated, here’s why now is a great time to do it. Your old PCs are costing you money By doing nothing and just sitting on the track (keeping your computers beyond their natural life expectancy), you have […]

Halloween has become a national obsession, with all things spooky, creepy, and ominous. Perhaps it would be a good exercise at this time of the year to consider what scares you the most so you can prepare accordingly to the greatest extent possible. Here’s a list of 10 terrible things that can so easily happen to just about any business: 1. A natural disaster It can temporarily, or even permanently, put you out of business. (I was shuttered for nearly a week last year because of Hurricane Irma.) And even if such event doesn’t happen to you, it can befall […]

The Tax Cuts and Jobs Act dramatically increased the dollar limit on first-year expensing (the Section 179 deduction) for the purchase of equipment and other qualified property. For 2018, you can elect to deduct immediately the cost of these purchases up to $1 million (compared with the $510,000 limit in 2017). This generous write-off can be used whether you pay cash or finance your purchase in whole or in part. However, you may not want to elect this generous write off in some situations: You face excess business losses as a noncorporate taxpayer. If your business deductions from your pass-through […]

Now that we’re in the fourth quarter of 2018, it’s time to nail down your budget for the coming year. Be sure to consider the following projections: Payroll Are you planning to give raises? The average pay increase for 2019 is projected to be 3.1% for non-management employees. As the owner, are you giving yourself a pay increase? Be sure to consider the impact on a greater payroll in 2019 on the amount of the qualified business income (QBI) deduction you can take on your 2019 personal tax return. The percentage for Social Security and Medicare taxes (FICA) remains unchanged for […]