Stimulus Loan vs. Tax Relief: Which is Better for Your Small Business?

stimulus loan

The recent stimulus legislation has provided support for small businesses facing economic hardship during the coronavirus crisis. There are two choices: 1) a combination of tax credits and the deferral of payroll deposits and 2) a loan known as the Paycheck Protection Program (PPP). These two options are mutually exclusive, meaning if you take the PPP loan you cannot take the tax credit or defer payroll tax deposits and vice versa. It can be difficult to determine which would be best for your business, but there are some key differences that can make a big difference. Let’s take a closer look.

PPP Loans

Administered through the Small Business Administration (SBA) and applied for through banks or other financial institutions, the Paycheck Protection Program loan can be converted into a grant and is available to businesses with 500 employees or less. For restaurants and hotels, the 500-employee limit applies to each individual location, not the business as a whole.

While the business cannot fold, it does not have to be open and operational during the crisis in order to qualify for the loan. Employees don’t have to work in order to receive their payroll. The ultimate goal of the PPP is for businesses to be able to continue paying employees throughout the crisis.

A PPP loan will be forgiven and turned into a grant if the small business can sustain its payroll for a minimum of eight weeks and use the loan proceeds only for salaries and essential operating expenses like utilities and rent. No more than 25% of the loan can be used for non-payroll costs in order to be forgiven. If the loan is eligible to become a grant, the interest (initially set at 1%) still has to be paid by the business. The maximum loan amount is either $10 million or 2.5 times the monthly payroll, whichever amount is less. The payroll for each employee is capped at $100,000 per employee. Terms of the loans are set by the Small Business Association.

ERTC

The second option is called the employee retention tax credit (ERTC). This credit is taken against payroll taxes. To be eligible for the ERTC, a business’s operations must be suspended by a government authority OR experience a 50% or greater decline in tax receipts for any quarter in 2020 compared against the same quarter in 2019. Eligibility ends when the business’s gross receipts are greater over one quarter of 2020 than 80% of if its receipts for the same quarter in 2019.

The credit includes up to 50% of wages paid from March 12th through the end of the year. The maximum a business can receive is $5,000 per employee against 2020 payroll taxes (both Social Security and Medicare). Since the credit is refundable, a business will receive a payment from the government if the credit exceeds the payroll taxes due. In addition to the ERTC, a business can defer deposits of payroll taxes due in 2020. One half of the deferred taxes must be paid by the end of 2021 and the other half by the end of 2022.

In order to determine which of the above options is right for your business, it’s important that you have a thorough understanding of both. Generally, businesses with higher-salaried employees will benefit more from the PPP loans/grant option while businesses with lower-salaried employees will get more out of the ERTC, but this is not always the case.

IMPORTANT: How fast do you need the money? The PPP requires an application and approval process. You can take advantage of the ERTC option immediately, but you will have to wait for any refunds from the tax credits.

Reach out to us if you need help deciding which option is best for your small business. We are excited by how many small NJ business owners we have been able to help stay afloat thus far!

 

 

 

 

 

 

 

 

 

Tax Deductions Every Business Owner Needs to Know About

If you are a small business owner, you know the big costs of running a business. Thankfully, most of these expenses can be considered for a tax write-off. The IRS generally considers expenses as deductible if they are “ordinary and necessary” to running the business. This is open to interpretation and will vary from business to business, but there are some common deductions that might apply to your small business. Keep reading to see which tax deductions can apply to your 2019 tax year and which deductions you can implement into your business plan in 2020.

1. Rent and Utilities

If you rent an office, a store, a factory, or any other kind of business property, you can fully deduct the cost of renting the space. Likewise, every dime you spend on utilities, including electricity, phone, internet, water, heat, and sewage, is fully deductible. You can also include any repairs to property or regular maintenance like fresh paint.

2. Car and Truck Expenses

If you use a vehicle to conduct your business, you can deduct the cost of operating the vehicle for business purposes. If you don’t know exactly how much you spent on car-related expenses, you can use the IRS standard deduction at 58 cents per mile for 2019. In order to get this tax write off you will need a record of your business mileage.

3. Salaries and Employee Benefits

Any payments to employees—including bonuses, commissions, contributions to retirement plans, education assistance, or other employee benefit costs—are all tax deductible. This also applies to any freelancers or contract workers you may hire to meet your business needs.

4. Advertising and Marketing

Anything you use to promote your business can count as a write-off. Business cards, t-shirts, billboards, radio spots, boosted social media posts—all 100% tax deductible.

5. Supplies and Expenses

Supplies you need to run your business, from every day office supplies (like printer ink and post-it notes) to items more specific to your business (like tools if you are a mechanic or hair products if you are a stylist) are tax deductible. If you’ve bought new electronics or software that you use for your business, those costs are write-offs as well.

6. Travel

If you or an employee have to travel for the business, you can write off the cost of transportation and lodging for the trip. You must meet the substantiation requirements set out by the IRS to prove the trip was for business purposes so it is a good idea to keep track of any costs you accumulate on your travels. This does not include local and regular commuting.

7. Home Office

If you use a home office to work from home while running your business, you can most likely deduct the expenses for the business use of your home. Keep in mind that this only applies to a home office that is used on a regular basis exclusively for business purposes. This can include mortgage interest, insurance, utilities, repairs, and depreciation. The IRS standard is $5 for every square foot of office space, up to 300 square feet.

8. Insurance

The cost of insurance premiums used to protect your business are deductible. This includes malpractice and liability insurance, fire and flood insurance, and business continuation insurance, among other things. Under specific circumstances, medical insurance for your employees can also be tax deductible.

These are just a few of the write offs and deductions available to small business owners. If you are a small business owner, make sure you are getting the most out of your tax returns this year!

How Divorce can Affect Your NJ Small Business

Divorce can be messy and difficult for everyone involved: the couple, their family and friends, and, for small-business owners, even their business partners and employees. When a business becomes part of a divorce, owners can end up losing all or part of their business. It can be hard to understand what property is subject to division and how to go about protecting your business assets. The good news is there are legal measures business owners can implement to protect their small business in a divorce. Here is everything you need to know.

If a business is included in a property dispute between two divorcing couples, a few things can happen. If one person owns the business outright or with their partner, they stand to lose part or all of the business through divorce proceedings. If the business owner is in a partnership with non-family members, the financial and business damages can extend to business partners. To prevent a former spouse from interfering with a business, the owner(s) can face debt to keep their full ownership. Even if ownership is not in question, all the ill-will and uncertainty that can come with divorce can distract owners and their employees from the well-being of the business.

As with most legal matters, the best way to protect your business is to be proactive from the start. No one plans to get divorced, but if it does happen it is important to know your business will be protected. Forming your business as an LLC or a C-corporation will allow you to title real estate and other property to the business. Establishing this formal structure will prevent assets owned by the business to be split up during divorce proceedings. A prenuptial agreement can also protect your business during a divorce by contractually binding your spouse from seeking ownership over your business, property, or other assets.

If you are already married, you could create a postnup. A postnuptial agreement is similar to a prenup but it happens after a couple has already said “I do.” This is an agreement that would designate assets as separate property or outline how the assets would be divided in the event of divorce. If this isn’t an option for you, you should at least get a good idea of what property is considered individually held and what property is shared. Property acquired or grown during the marriage—including your small business—is normally considered marital property, which is subject to division in divorce proceedings. This way, you have a good understanding of what you could lose in a divorce from your spouse.

Even if you are already in the process of divorcing your spouse, you can still protect your business. While most marital property is subject to division in a divorce, you can negotiate in court for an uneven division of property. Obtaining a valuation for the business can help you determine how much the business is worth and how that worth has increased during the marriage. Working with an experienced attorney can help mitigate the time, risk, and some of the stress throughout this process.

Even the most prepared business owner can face challenges when going through a divorce. Having the support and expert legal advice of an experienced attorney can be essential to getting through the divorce process. Veitengruber Law is experienced in asset protection. We can help you protect your small business and avoid this challenging situation.

The Pros and Cons of Starting a Family Business in NJ

Our families are who we spend our lives with. We celebrate holidays, birthdays, and important milestones together. So much of our everyday lives are spent surrounded by family—but what about our work lives? Starting a business with a family member or joining the family business is a big decision. There are some major incentives and equally compelling challenges to running a family business. Before you take the big plunge, here are some pros and cons to help you make a confident business decision.

Pro: Invested Stakeholders

Having a personal investment in the business is a great motivator for job performance. Your family will have the same level of investment in the success of the business as you do. They will be much more likely to make the sacrifices necessary to ensure a successful future for the business. Finding willing workers for holidays, extended hours, or weekends shouldn’t be too difficult when the people you are counting on are all in the family.

Con: Family Leaders Face Unique Challenges

Leaders may be reluctant to make necessary business decisions if they could negatively impact fellow family members. Firing or demoting an underperforming employee can be  much harder if it is your brother or cousin. Likewise, leadership succession can cause serious conflict amongst family members if clear guidelines have not been established.

Pro: The Ultimate Coworkers

You know your family better than anyone else. You’ve likely perfected the best way to communicate with individual family members, allowing for an easy and honest exchange of ideas. This can make for a super efficient team of skilled communicators, maximizing on collaboration. You’ll also have the added bonus of coworkers you can count on to genuinely care about you and the business.

Con: Workplace Conflicts Become Family Drama

When you work with your family, small workplace issues can boil over to full on family feuds. A disagreement at work can turn into a serious rift between family members. It is not uncommon for these disagreements to extend to court litigation, which can permanently damage relationships between parents and children, siblings, and other relatives.

Pro: A Relaxed Work Environment

There’s no need to put on airs when you are working with your family members. Small talk, intimidating meetings with superiors, and one-upmanship take the backseat to a relaxed environment of mutual support and shared goals. Your family members are also much more likely to be empathetic during setbacks, allowing for increased flexibility in expectations of business performance.

Con: Things Can Get Too Relaxed

When you work with your family it’s easy for things to get too comfortable. This relaxed environment can reduce the drive for excellence and compromise workplace professionalism. Business growth can slow down over time if you and your family lose focus on doing what is best for the business on a daily basis.

Pro: Strong Market Appeal

Family owned businesses tend to brand themselves with hard work, tradition, and wholesome mom n’ pop shop appeal. Consumers often view family businesses as stable and trustworthy, leading to strong market appeal. Likewise, potential investors may see family-owned businesses as a safe investment.

Con: Clinging to Tradition Can Stifle Progress

Holding on to family traditions can promote closed-mindedness, resistance to change, and a lack of creative thinking. Family-owned businesses can be closed off to innovation and miss out on expanding their business as a result. Without outside help to shake things up, the stagnancy of ideas can kill a family business.

Pro: Less Fuss With Hiring

If you are in a hurry to get your business on its feet, going through the process of vetting and hiring potential employees can be a cumbersome barrier. With family members investing in and working for your business, you won’t have to conduct interviews, background checks, or follow-up on qualifications if you are working with your family. You know what your family members bring to the table and how to best utilize those skills.

Con: Non-Family Workers Feel Out of the Loop

With a strong group of family decision makers in the business, it might be harder for outsiders and non-family member employees to feel comfortable voicing their ideas. Family businesses can also have little or no system of meritocracy in place, only promoting family members regardless of job performance. This can lead to unqualified family members landing leadership positions in the business over otherwise well-equipped employees. Without a healthy system of promotion based on merit, potentially talented employees will have little motivation to excel.

Ultimately, the decision to go into business with your family is a very personal one. Family businesses are highly variable in their potential for success and depend mostly on the interpersonal relationships of individual family members. You know yourself and your family best. Sitting down for an open and honest conversation with your family about your potential business is a great first step to success.

Starting a Small Business in NJ: Do I Need an Attorney or CPA?

small business in nj

 

It’s the quintessential American dream to own a successful business. No matter what product or service(s) you’re eager to provide, every empire starts somewhere. While the popularity of Shark Tank has captured the spirit of the American entrepreneur, the statistics for success are quite grim. Over 627,000 new small businesses are started each year; however, 535,000 businesses close each year. To help your small business in NJ beat the odds and become a fixture of growth, it is important to start off on the right foot. Knowing where to begin is not always easy. You’ll need to hire the right professionals to help you navigate New Jersey’s complicated tax and business laws.

As a business owner, you’re the salesman, head of marketing, technical support provider, customer service representative, bookkeeper, debt collector, human resources department, and CEO. You need to either be an expert in each area or hire people with the expertise you need.

 


How to Jump-start Your Business


 

STEP 1: Decide on a business structure.

Some common business structures are sole-proprietorships, partnerships, limited liability companies (LLC), corporations, non-profits, and cooperatives. You can review the specifics here. This is a crucial decision, and making the right one without being informed would be a grave mistake. For this first step, you should consult with both an attorney and a CPA. Veitengruber Law can help advise you on what type of structure would best suit your business model. A CPA will advise you on how to minimize your tax burden when choosing a business structure.

 

STEP 2: Become an operating business entity.

To do this, you must file formation documents with the state, register your business name (for tax purposes), and obtain an employer identification number (EIN). Without all three, you cannot become an operating business entity in the state of New Jersey.

During (and beyond) these first steps, you’ll find the advice of both an attorney and a CPA invaluable in getting your business off the ground. Each provides important expertise and the right professionals will work together on your behalf.

 


The CPA and Your New Business


 

Not many people spend their leisure time brushing up on the ins and outs of business tax law. Even as a business owner, you’re probably unfamiliar with your tax exposure. A CPA is your translator and is ethically bound to give you sound business advice. Don’t try to navigate the tax code on your own.

Sales Tax

States, especially New Jersey, are notorious for changing sales tax on a whim. Is your product subject to sales tax? The NJ sales tax rate has changed twice in the last two years. Certain products are sales tax-exempt as are non-profits. A CPA can help make sure your sales tax charges are correct.

Payroll

If you have employees, you’ll need to accurately reflect payroll taxes, social security, and disability on pay stubs. For a first-time business owner this can all be very overwhelming. A CPA knows how to get your pay system up and running.

Income Tax

Sound financial planning is a necessity for a new business. A CPA will help determine your tax liability and set you up with a payment plan for quarterly tax payments to help you avoid an audit. They will also help maximize your deductions. A lot has changed in the allowable deductions since the changes in the 2018 tax code, so review with your CPA what you plan to deduct.

Growth

Many small businesses require an investment from outside parties in order to grow. A CPA can help create a financial plan to make the numbers look most attractive to investors. Your goal may even be to sell your business outright, and the process of reviewing your accounting books will determine your profits.

 


The Real Estate Attorney and Your New Business


 

Location, location, location

One of the first decisions you’ll make about your business once you’ve given it a name and registered it is where you will be located. Sometimes you start out in a home office. Hopefully the business will grow to the point where you’ll need to determine an outside location. Finding the optimal space that will boost your chances of success can be a daunting task as a business owner. You’ll work with a real estate agent to help you find the right space, but your attorney will be reviewing all contracts, leases, inspections, and will look for liens on potential locations.

Room to grow

There are many factors you’ll need to consider like whether to rent or buy. What size space is best suited for your current needs but can also accommodate future growth? Locales with heavy foot traffic, access to major roadways, proximity to your client base, and low crime rates may be more expensive but will be give your business the best chance for growth. Should you decide to rent a space, your real estate attorney will assist with any issues that arise with your landlord.

Veitengruber Law can also help your business in areas outside of real estate law, such as:

Liability

A common misunderstanding among many small business owners is that by incorporating into a formal business structure (as mentioned above), you’ll be free from all personal liability. While there are instances where you can be held personally liable, they are specific, and Veitengruber Law will spell out your personal liability as a business owner so that you don’t end up getting sued. Knowing the rules is very important!

Asset protection

In addition to lawsuit risks, you can also run into contract disputes and torts (actions that result in damages) when you own a business. Protecting your business assets is key, and this is one area in which Veitengruber Law is proud to be extremely well-versed.

Debt Negotiation

As your business attorney, we will form an important relationship with you throughout the life of your company. When your business hits a bump in the road, such as taking on too much debt, Veitengruber Law will be just a phone call away to assist with difficult creditors. We can help you formulate a plan to avoid getting into too much debt in the first place, but we do recognize that debt happens.

 


Attorney and CPA: Working Together


 

It is important that your CPA and attorney work well together. Veitengruber Law can recommend several experienced and trustworthy local CPAs from our extensive professional network. Together we can create a top-to-bottom budget that will fit your business needs.

Drafting the right Attorney/CPA combination is one of the most important steps you can take as you start your small business. Although it can be tempting to “do it yourself” in order to save money, the investment of hiring experienced professionals like Veitengruber Law will give your business a much higher chance for long-term success.

 

 

An Entrepreneur’s Guide to Start-Up Funding

Here at Veitengruber Law, we are big fans of entrepreneurship. After all, that’s how our firm came into being! Taking the leap from a traditional job with a regular paycheck (not to mention health insurance benefits and potentially more perks) is an intimidating move, for sure. However, if you have a true entrepreneurial spirit and know you would be happier working for yourself, getting start-up capital is one of the biggest hurdles you’ll have to clear. Today, we present you with a guide to finding the right funding for your new business.


Where to start:

Be sure that you have a service or product that will be profitable, as well as funding sources.

 

How to avoid failure:

Be able to finance your product or service, in order to bridge the gap between concept and product/service.

 

Three ways in which most entrepreneurs are negatively impacted:

1) Bad concept/idea: This leads to a lack of funding from outside sources. Marketing is key.

2) Lack of plan/strategy: In this case, the idea can be superb, but the entrepreneur has not completely researched the concept and has not created a proper rationale for profitability for potential investors.

3) Not understanding the financial aspects: In this case, the entrepreneur may have created an excellent idea and strategy for the product/service; however, he or she doe not have a full grasp on locating funding.

 

There are six major strategies for locating funding options:

1) Venture capitalists: This person is an individual who invests directly with a company, while earning a stake in the shares of the company in return. This is the most typically misunderstood, yet best options of these six funding avenues.

2) Angel investors: This type of investor is similar to a venture capitalist, but he or she has a more hands-on approach. Angel investors can be located through one’s community; particularly through local investing and entrepreneur groups, as well as the Small Business Association (SBA).

3) Bank loans: This is a popular avenue for investment with local banks providing small loans to local businesses. This should be one of the primary options to either accept or exhaust, depending upon the outcome. However, keep in mind that in the past decade many of the policies for lending have become increasingly strict.

4) Private funding: This source of funding typically comes from family and friends of the entrepreneur, which makes this option one of the most feasible. Typically, family and friends will invest directly with the person they know before an angel investor or a venture capitalist would readily invest in the company/service. However, always be aware of the fact that borrowing money from close relatives and/or friends could have a major impact on your relationship.

5) Self-funding: This option involves using personal property to fund one’s company or service; for instance, liquidating assets to utilize the money directly, taking out an extra mortgage on one’s home, or utilizing credit cards. This is the highest risk option, due to the potential ramifications of investing poorly.

6) Crowd funding: This method of funding is one of the newest and most popular ways to invest in one’s company/service. The websites Kickstarter and Indiegogo, for instance, provide a platform by which entrepreneurs can showcase their product/service without having to provide the investor with equity of the company.

 

 

What to do When Your Client Files for Bankruptcy

NJ collections attorney

From the perspective of a company owner doing business with a client (or company) who files for bankruptcy: how can you go about getting (even some of) the money you’re owed?

The second someone files for bankruptcy of any type, the Automatic Stay slams down like a sledgehammer – coming between the bankruptcy filer and anyone they owe money to. The Automatic Stay protects debtors during the bankruptcy process by making it illegal for any creditor to make contact asking for money.

Why can’t I contact my client?

After all, you and your client likely signed a working contract wherein you agreed to provide services and they agreed to pay you X amount of dollars for said services. Even though you continued to provide your end of the deal, your client filed for bankruptcy and now you aren’t even allowed to contact them. This can be very frustrating for a business owner who is owed payment(s) – money that may very well be making or breaking the creditor’s own business.

The reason you can’t contact a bankruptcy client is because the Automatic Stay is a protective measure put into place by the bankruptcy court to protect struggling debtors. It gives them enough time and breathing room to gather their financial information and meet with their bankruptcy attorney and/or a potential NJ credit counselor to come up with a plan that makes sense for getting them back on their feet again.

Chapter 11 and 13 bankruptcies are filed with the intention of reorganizing monies owed into a more feasible and achievable payment plan. As soon as these bankruptcy cases are complete – you will once again begin receiving payment from your client. According to their debt reorganization plan, you may not receive the full amount due, but you will get paid.

That’s the good news.

The bad news is that the vast majority of bankruptcies filed today are chapter 7, which entails debtors liquidating assets and discharging many of their debts altogether. If your client files for chapter 7 bankruptcy, you may have to write off their past due amount as a loss. In any case, remember NOT to contact them at all until you receive notice that their bankruptcy case is no longer active in the NJ Courts system.


To contact a debtor while they are actively going through the bankruptcy process (if an Automatic Stay is in place) means that you risk being sued. You will have broken the bankruptcy code if you even attempt to contact a bankruptcy client.


 

What You Can Do:

  • File a Proof of Claim – Downloadable from the USCourts online and easy to fill out.
  • Attend the Meeting of the Creditors; also known as the 341 Hearing – At this meeting, you will be able to question your client. You’ll also be permitted to object to the repayment or reorganization plan if you deem it unfair.
  • Thoroughly review any plan that is formulated by the debtor and their trustee. If less than half of their creditors do not consent with the plan, it won’t be approved by the bankruptcy court.
  • Make sure you are listed on the Creditor Matrix.
  • Wait and see. Truthfully, most of your time will be spent waiting to find out the outcome of your client’s case. If the case is dismissed, or “thrown out,” you will once again be allowed to attempt collection. If an agreement or repayment plan was formulated, you will receive a notice about how much you can collect. Be sure that all of your contact information is correct with the bankruptcy court and your client’s bankruptcy attorney to ensure you will receive any and all payments.

 

Filing for Bankruptcy as a New Jersey Business Owner

Starting and running a small business is a very challenging endeavor, even for the most business-savvy entrepreneur. In fact, most entrepreneurs start a number of businesses before they find one that takes off. Sometimes, a business venture simply doesn’t pan out, no matter how much effort you’ve put into it.

If you’ve started struggling to pay your business lease every month – now’s the time to really start considering your options before problems begin to surface in your personal finances as well.

When your business debts have become more difficult to manage but not out of control, you may be able to salvage things with some refinancing and debt negotiation. On the other hand, if your debts are virtually unmanageable and you see no light at the end of the tunnel, filing for bankruptcy may truly be your best choice.

As a business owner, should I file for chapter 7 or chapter 13 bankruptcy?

Whether you’re filing for bankruptcy on your own or as a business, you can file for either chapter 7 or chapter 13. In both cases, you’ll have to meet certain qualifications in order to file. For example, the only instance in which you’re permitted to file chapter 13 in New Jersey as a business is if you are a sole proprietor. Corporations, partnerships and LLCs (Limited Liability Company) are not eligible for chapter 13 bankruptcy.

You can, however, file for a personal chapter 13 bankruptcy at this time, even if your business doesn’t qualify for chapter 13. In doing so, you’ll be able to keep the business assets while you repay debts through what is called a reorganization plan. This is the best bet if you want to continue running the business after you file for bankruptcy. This option may be appropriate if you made some mistakes along the way that you have now remedied, making it more likely that the business will succeed. If you don’t meet the requirements to file for chapter 13, your business may qualify for chapter 11.

Any business entity has the right to file for chapter 7 bankruptcy. If you the sole owner of the business, you will also be required to file for a personal chapter 7 bankruptcy simultaneously. This is due to the fact that sole proprietors are legally the same entity as their business. Additionally, a business that files for chapter 7 will not receive a discharge of their debts.

Again, if you wish to continue operating the business after the bankruptcy, you’ll want to file for a personal chapter 7. This will wipe out your liability for said business’s debts, which may allow you to get a better hold on things and start over with less debt overall.

If your ultimate goal is to close up shop and move on to greener pastures and your company is a partnership, LLC, or corporation, you can file for chapter 7 as a company. In doing so, you will essentially turn over all of your business assets to the bankruptcy trustee to be liquidated. This means all of your business property will be sold in order to pay back the debts you accrued that you couldn’t repay.

For more information on filing for bankruptcy as a business, request your free case evaluation at the bottom of our website’s home page. Veitengruber Law can help you determine which NJ bankruptcy is right for your unique situation.

 

Image: “Store Closed” by Chris Chan – licensed under CC 2.0

Better Networking Strategies for the Modern Small Business Owner

Every small business owner recognizes the importance of networking. You can’t be an entrepreneur today and not hear or read the buzzword “networking” at least several times a day.

However, this doesn’t mean that every small business owner is equally adept at reaching out and working the circuit. If you need help or ideas when it comes to your personal networking plan, you’re not alone. Networking can be one of the more challenging aspects of owning a business because it involves stepping out of your comfort zone.

Difficulty level aside, reaching out to other entrepreneurs is a crucial part of how successful your small business can be. It’s a great way to generate leads which can increase your customer base, and it can also help you to learn and grow as a person and business owner.

Give the following networking tips a try – you might be better at networking than you thought!

Focus on forming relationships

Instead of going into the networking process with the mindset of striking a deal at every turn, commit to the concept of forming friendships with other like-minded entrepreneurs.

The traditional approach to networking through formal meetings and conferences can still be effective ways to hook up with other business owners, but you should also constantly be thinking about making authentic contacts as you move through your workday. You never know who may end up being your next great connection.

Knock the pitch out of the park

No matter where you do most of your networking, you have to make an incredible first impression. With only seconds to impress upon someone why they should want to continue connecting with you in the future, have an elevator pitch prepared and ready to go at a moment’s notice. Naturally, work on honing your go to introduction so that it sounds less like a pitch and more like a good reason to get to know you better.

Be honest about your intentions

Even as you work to change your mindset towards building relationships that last, leading with honesty is always the best policy. If you’re looking to expand your company‘s reach into a new geographic area, a good tactic can be reaching out to friends of a friend. Reveal your motives as you give your elevator pitch and then quickly transition into committing to the “slow burn” of long-term relationship-building.

Use social media

Small Business Trends Magazine reports that, as of November 2016, 97% of adults who use the Internet either utilize or visit a social networking site regularly. The most popular social networking sites include: Twitter, Instagram, Pinterest, LinkedIn and Facebook.

Cyber-networking has actually proven to be quite successful and prosperous for many modern small business owners. Connect online with local entrepreneurs in your industry as well as those who may complement your business. Often, online connections can prove to be as fortuitous in business as they are in romantic comedies.

Leave an impression (and your contact info)

As you work to grow your networking circle, remember to always have plenty of business cards on hand. Even if you make a lasting impression, it will mean little if your new connections don’t know how to contact you. Many business owners today still favor traditional business cards, while others have transitioned to the digital business card. It’s a good idea to be familiar with how to create, share and exchange the more modern e-business card while still carrying paper business cards, so that you are prepared for the preferences of anybody you meet.

 

Image: “Cheers” by Jakob Montrasio – licensed under CC by 2.0

How to Start a NJ Business When You Have a Poor Credit Rating

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If getting out of corporate America by becoming your own boss is your main goal as we roll into 2017, there are a lot of steps you’ll need to take to make it a reality. Starting your own business is without a doubt a challenging undertaking, but it has been done by many before you, so take heed that it can be done! However, if you’re starting the process with a low credit score, you’re already a bit behind the eight ball. Rest assured, though, that this does not mean entrepreneurship can’t happen for you.

Facing the fact that your credit score is less than ideal can be difficult, especially if you’ve managed to “get by” for years without giving it too much thought. By taking no action at all and simply burying your head in the proverbial sand, your score will never improve. Since starting a business is important to you, you’ll have to make smart borrowing choices that will enable you to launch while increasing your credit score simultaneously. In turn, you’ll have access to more financial resources later when your business expands, because your score will have gone up. It is more important to have a good credit score as your business grows, so you have that on your side. You’ve got nowhere to go but up!

In order to get your business off the ground, try these approaches to getting the start-up cash you’ll need:

  • Phone a friend. If you’ve ever watched an episode of Shark Tank, you’ve probably noticed that many of the entrepreneurs on the show report getting a large percentage of their start up costs by asking friends and family for loans (or investment in the company). While it may be difficult to ask loved ones for financial help before you have established your new company, this is one way you can avoid your low credit score prevent you from borrowing money.
  • Apply for grants. Although it can be very challenging to find a grant program that is willing to donate money to your new start-up, it is possible. This is especially true if your company is in the healthcare field or is a retail business in a struggling geographical location. Downtrodden areas with lower-income residents are frequently looking for new businesses to give a boost to their current economic status.
  • Look for a microloan. It is what it sounds like – a tiny loan, but if you have exhausted all other options, something is better than nothing. Lenders that are not affiliated with a bank do exist, and for many of them, their main purpose is helping entrepreneurs with low credit scores. Not only are they more likely to lend you money than a traditional bank or lender, but borrowing from them will also cause your score to rise! Naturally, that will only occur if you’re making your required payments on time, but with microloans the payments will be much more manageable.

The most important thing to remember if you dream of starting your own business is this: don’t give up just because of a low credit score. Today’s society revolves around the buying and selling of goods and services – now more than ever before!

Additionally, for those who are contemplating starting a business in New Jersey – our state welcomes you and wants to help you find the resources you need to succeed. More business in the Garden State means a better NJ economy! To learn more about special financing and incentives available to you, visit The Cornerstone of Financial Justice, where you’ll receive full service solutions to your credit score and business loan challenges.

 

Image credit: CCPixs