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Yoga for your PPP Loan – Achieve Flexibility with PPPFA

Posted on June 5th, 2020

Congress Finally Takes Steps to Fix PPP Flexibility – Did it Work?

By Warren Fisher, CPA

Who knew that giving business owners 10 weeks of 2019 payroll to cover 8 weeks of 2020 Covid employment when many businesses were closed or at reduced capacity would not work?  Business owners did!  Thanks to feedback from plenty of entrepreneurs across the country, Congress finally got the message and they have taken action – and most of it’s good.

The House and Senate have passed the Paycheck Protection Program Flexibility Act of 2020 PPPFA (President Trump should sign the bill today).  Here are the main points:

1) The covered period has changed from 8 weeks to the earlier of 24 weeks from the date of funding or December 31, 2020. This is huge because businesses with less than full employment rosters can use the additional time to ramp their businesses back up to prior levels to reduce or eliminate losing loan forgiveness.  But, anyone using the 24 week period will be required to maintain employee headcount (Full Time Equivalent (FTE)) and wages for an additional 16 weeks.

  • Planning Point:  A borrower with a loan date prior to the enactment date of the PPPFA can elect to retain their original 8 week period.  Why would anyone do that?  Because the CARES Act requires employers to maintain employment levels (headcount and wages) to obtain full forgiveness.  If an employer spent enough PPP funds to receive full forgiveness and has not had a decrease in headcount or wages by June 30, 2020, lock in forgiveness.  Or what if an employer would have difficulties maintaining headcount and wages after June 30th – i.e. riots?  Maybe a  bird in the hand?

2)   Watch out for the headcount / wage reduction. Remember that you can spend 100% of your PPP loan on qualifying payroll within the allowed 8 or 24 week period and still not receive 100% forgiveness.  What?  That’s the FTE and wages reduction.  If FTEs or wages are reduced relative to benchmark periods, then a percentage of the loan is not eligible for forgiveness.  The PPPFA extends the amount of time to restore FTE and wages to December 31, 2020 (unless the 8 week period is elected).

3)  The 75/25 Rule is now the 60/40 Rule. Non-payroll items such as rent, mortgage interest and utilities were previously capped out 25% of the PPP loan but that has been expanded to 40% of the PPP loan.  But there is a catch, the PPPFA states “to receive loan forgiveness under this section, an eligible recipient shall use at least 60 percent of the covered loan amount for payroll costs”.  Anyone else thinks that sounds ominous?

  • Planning Point:  A strict reading of that sounds like if a borrower spends 58% of their PPP loan on qualifying payroll, then 0% of the loan is forgivable.  It will make all the sense in the world to pay at least 2% in bonuses or run a special partial-period payroll to achieve at least 60% payroll and forgive the majority of your loan.  Note: We will probably receive new SBA Interim Final Rules (quite the oxymoron) that will hopefully provide some clarification on this point.

4)  What if your loan is not forgiven? The PPPFA extends the 2 year repayment period to 5 years

5)  Employer payroll taxes can be deferred. Under PPP, 2020 employer social security tax could not be deferred until the end of 2021 and 2022 (50% each year) after the date the employer received PPP forgiveness.  Under the PPPFA, employers with PPP can defer those taxes to 2021 and 2022, but remember it is only a deferral.

Generally speaking, this Act is a welcome addition to the PPP but like most things, some employers will benefit more than others.  Document your expenditures and plan now for achieving forgiveness success.  The calculations for actual payroll and other expenses are straight forward but the FTE headcount and wage base calculations on an employee by employee basis against elective periods are extensive.  Get on our calendar.  In the words of an SBA banker, “You only get one shot at forgiveness.  Don’t blow it.”


Seeking Forgiveness – Action List now that your PPP loan is Accepted or Funded

Posted on April 15th, 2020

First, I would like to thank the local banks who have stepped forward to assist our small businesses all across the country.  Through the conduit of the SBA, these banks have given our firm’s clients millions of dollars of forgivable loans that will give these businesses a fighting chance over the next two critical months.

Second, Congress and the Treasury were obviously interested in keeping businesses afloat in the short-term when the PPP rules were drafted and that is why the eight-week rule was set in place.  The eight- week rule starts the clock when the PPP funds are deposited into your account and gives you eight weeks to spend those funds in order to qualify for 100% forgiveness.  Their position clearly did not anticipate the number of businesses that are closed by government order that do not have an opportunity to invest those funds in payroll.  A simple solution would be for them to extend the eight-week period for the amount of time that the business is required to be closed beyond the funding date.  Even though this would extend former employees on unemployment, it would not require additional PPP funding.  If you have any pull in Washington DC, please lobby for this modification!

The funds have hit your account.  The SBA has not issued its rules for granting forgiveness so these are our best practices (at this point).

1) If possible, deposit the funds into a dedicated bank account. If the funds were deposited into your normal operating account, open a new account and transfer the PPP amount to the new account.  Another option is to use a current dormant or infrequently used account such as a business savings account.

2) Plan your atonement. The CARES act states that forgiveness is based on qualifying costs incurred and payments made during the eight-week period.  Even though the rules are not issued yet, this would imply that some guidance suggesting prepayments to payroll companies or paying the rest of the owners annual salary during the eight-week period is not valid because it was not incurred.

The first step is to calculate your non-payroll costs such as rent, utilities and mortgage interest. The limit on non-payroll cost forgiveness is 25% of the total PPP advance.  Let’s assume your advance is $100,000 and during the eight-week period.  Here are two scenarios:

  • You pay $27,000 in qualifying non-payroll costs. $25,000 of those costs are forgivable if all requirements are met (more on that in a minute).
  • You pay $22,000 in qualifying non-payroll costs. $22,000 of those costs are forgivable if all requirements are met plus you have $3,000 of additional funds that may be forgiven through payroll.

Opportunity:  If you have not paid April rent yet and your business is funded today, you could pay April rent on April 15th, May rent on May 12th and June rent by June 10th (end of the eight-week period) and all three months should be forgivable because they are incurred and paid.  Of course, this is subject to the constantly shifting sands of the SBA process.

The next step: Payroll. If you do not spend the remaining 75% of the loan proceeds on qualifying payroll during the eight-week period, any deficit will reduce the amount of forgiveness.  For example, you spend $68,000 on payroll and employer benefits such as health insurance and retirement expense during the eight-week period.  Your forgiveness will be reduced by $7,000.

The previous requirements are the outline for maximum forgiveness, but there are other hurdles to clear: headcount and salary reduction.

Headcount: One intent of the CARES act was to encourage employers to maintain the same employee head count as they had pre-COVID 19.  Head count will be determined by full-time employees (FTEs) (kind of remind you about Obamacare?).  The formula will be the average number of FTEs per month during the eight-week period divided by the average number of FTEs per month during either 2/15/19-6/30/19 or 1/1/20-2/29/20.

Planning note:  You can choose which period you want to use and you will want to chose the period with the lowest number of FTEs.  If your FTEs fall by 20%, then your forgiveness will be reduced by 20%.

Example:  We think the rules will state that anyone working more than 30 hours per week is an FTE and part-time workers will be combined to determine FTEs.  Assume for 2/15/19-6/30/19 you had 15 FTEs and but since your business was growing, for the 1/1/20-2/29/20 period you had 18 FTEs.  You chose the 2019 period because it provides the lower hurdle of 15 FTEs.  Then, for your eight-week period, you have 12 FTEs.  You have a 20% reduction in FTEs and your loan forgiveness will fall by 20% (or another way of saying it, you owe back 20% of your loan – so far).

Salary Reduction: After the headcount forgiveness reduction, next comes wage reduction.  The formula compares amounts from unequal time periods and is probably a drafting error (that we pray will be corrected).  The assumption is that if an employee’s average weekly payroll during the eight-week period is at least 75% of that employee’s average weekly payroll during the first quarter of 2020, then no reduction is required.  However, if the wages were reduced more than 25%, those reduced wages will be deducted from the forgivable portion of the loan.  Clear as mud, right?

Example:  Assume an employee worked full-time for the first quarter of 2020 and earned an average of $720/week ($18 per hour).  This would set that employee’s threshold at $540/week ($720 x 75%).  But, during the eight-week period the average hours dropped to 20 hour per week for an average of $360/week.  Since the reduction is more than 25%, the forgivable portion of the loan will be reduced by $180/week for the eight-week period or $1,440.

A workaround for re-hires? The statute did offer some relief to these provisions but, like everything, this is subject to change.  Any reduction in headcount and wages that occurred between February 15, 2020 and April 26, 2020 will be ignored if the number of FTE’s or wage per employees is restored by June 30, 2020.  This implies limited relief for just that time period but the statute says the employer “has eliminated” the issue.  Once again, we have vague and opposing guidance.

3) Document your forgiveness.  It is probably not reasonable to change your payroll withdrawal account or any other qualifying ACH items for an eight-week period so it will be permissible for you to reimburse  funds from your designated PPP account to your operating and/or payroll accounts.  Documentation is and will be the key.  I recommend that you reimburse for each payroll run for the exact amount of qualifying payroll expense.  If possible, pay non-payroll items directly from the PPP account but if not possible (i.e. savings account), reimburse for specific items even if grouped together.

For example, if you pay rent, electric, gas and water on your April 20th accounts payable batch, it is permissible to reimburse your operating account for the total of those items but keep copies of the accounts payable checks, bills and a summary showing reconciliation back to the transfer.

If there are complications to your forgiveness process and you end up with 20% of the loan not forgiven, the worst case scenario is either immediate repayment of the 20% with very little interest or a very favorable loan for 2 years at 1% interest and government subsidies for 80% of these costs for eight-weeks.

Plan for loan forgiveness but keep your eye on the prize, the survival and recovery of your business and continued employment for your employees.

by Warren Fisher, CPA


Confused About SBA Loans – So is the Rest of the Country – And the SBA

Posted on April 5th, 2020

There is still so much confusion between small businesses, lenders and the SBA itself regarding the Payroll Protection Program (PPP).  In an attempt to provide guidance, the SBA issued its new interim final rule on April 2, 2020.  This rule has some mundane and some quite dramatic items (and possibly frightening changes – see Coordination with EIDL Loans below):

Interest rate:  Doubled from .5% to 1% to provide coverage for community banks

Payments terms:  Reduced from 10 years to 2 years

Affiliation rules:  The SBA will publish further guidance.

Payroll costs definition:  Payments to independent contractors do not qualify (this appears to be in direct contradiction to the law).

Cover for the SBA lenders:  The SBA application states that the only agent your business can have in the PPP application process is your SBA lender.  Then, the rule states that the lender will be held harmless for borrower’s failure to comply with program criteria.  Who will be held responsible?  The borrower.

Borrower responsible for use of funds:  Knowingly unauthorized use of funds is subject to charges of fraud.  Examples of unauthorized funds:  refinancing prior debt and dividends.

Coordination with EIDL loans:  I have read the 31-page rule and at least a dozen articles or blogs from law firms and there is a considerable range of how to interpret the rule regarding coordinating EIDL and PPP loans.   Most, it appears, are waiting for further guidance.  Here is what we know right now:  If a business received an EIDL between January 31, 2020 and April 3, 2020, it could still apply for a PPP loan.  If the EIDL was not used for payroll costs, it does not impact eligibility for a PPP loan.  If the EIDL was used for payroll costs, the PPP loan must refinance the EIDL loan.  So, what about the elephant in the room?

What about businesses applying between January 31 and April 3, 2020 that haven’t heard anything?  What exactly is the date of receiving an EIDL loan?  I applied for an EIDL loan and I have not heard a thing from the SBA (including the $10,000 grant that was to be deposited within 3 days – it wasn’t).  So, Friday 4/3 I called the SBA and asked about the status.  I was told an unnamed loan officer will contact me in 2-3 weeks.  I asked if I would receive the grant.  I was told to wait until Monday and check with my bank and if it’s not there, contact my loan officer (who will not be named for 2-3 weeks!).  The loop of bureaucracy.  Is my receiving date the application date, the date the funds are received or what if the loan is never signed but a grant appears in the bank account?

The way this rule is written, it appears that if my receiving date is anything other than the application date, I am disallowed from applying for a PPP loan!  And the same thing certainly applies for anyone applying for an EIDL loan after April 3, 2020.  I do not believe this is Congressional intent.  The EIDL is a non-forgivable cashflow loan with very long terms – up to 30 years.  The PPP loan is designed for payroll and occupancy costs, it can be forgivable and is now shortened to a 2-year term.  Two distinct programs.  Two distinct purposes.  Why create this line in the sand to further hinder businesses already crippled by Covid-19?

What can you do?  I discussed this issue today with a lead SBA banker.  He recommended two steps:

1)  The interim rule is still temporary and can change.  Reach out to your members of Congress.  Tell them these two programs fit different needs and both should be available to small businesses at this critical time.  https://www.govtrack.us/congress/members

2) If you have not applied for a PPP loan and you qualify with a significant benefit in excess of the $10,000 EIDL grant, complete and submit your application to your SBA banker.  The PPP is first come, first served.  If the rule is reversed or positively clarified, perfect, your application is already submitted.  If the rule is upheld and is negatively interpreted, then the worst case is the rejection of your application.

by Warren Fisher, CPA


Covid-19 Ate My Cash. Employee Strategies For Right Now!

Posted on March 27th, 2020

That steady crunching sound you hear is Covid-19 coronavirus eating your cash and as a small business employer, you are worried.  You want to keep your most valuable assets – your employees – but you are running out of time.  We heard this at least 20 times yesterday from our business clients.  Since you not only read but follow every word of our blogs, we can assume that your SBA EIDL and CARES Act loans are in the works and relief is coming.

One of the hardest things for all of us right now is our hazy crystal ball.  It is cloudy if not foggy when I try to determine not only when do we all get back to business but when will we emerge from a certain (if not already firmly entrenched) Covid-19 recession.  If this all ends next week, much of this conversation is not relevant.  Unfortunately, if this ends in 18 months, much of this conversation is not relevant.  So we will focus on a 4 – 10 week window.

Rule 1:  If you are either not applying for loans or you were somehow rejected and your cash outflows are exceeding your inflows and your ship is taking on water – you need to layoff employees.  Employees need to be laid off in order to qualify for unemployment – if they voluntarily quit – they receive no unemployment.  With the current CARES Act package, which has not yet passed, there is a good chance that these employees will make more on unemployment than they will on your payroll.  This is not indefinite.  The CARES Act will provide $600 of additional unemployment per employee per week but only up to 4 months.  After that, they will only receive regular state unemployment which is usually 56.5% of current earnings up to a maximum of $520 per week but the CARES Act added an additional 13 weeks of state unemployment insurance.  So, once the 4 month period is over, everyone will want to work and unemployment rates will still be high.  Will your Oklahoma state unemployment rate go up?  NO.  On Wednesday, OESC Executive Director Robin Roberson signed an order waiving employer benefit wage charges as a result of Covid-19.

Rule 2:  If you have or are applying for loans, you will probably be waiting for funding.  The CARES Act gives the SBA 30 days from date of enactment to provide guidance to lenders.  However, an SBA bank president told me this morning that clients should gather the relevant documents and that they hope to start within 7-10 days after enactment.  So, the reality is it will probably take at least 30 days to receive funds.  If you are out of cash and waiting on government assistance, using Rule 1 above, talk to your employees and explain that you will lay them off allowing them to claim the expanded unemployment benefits but that your intention is to hire them back as soon as possible (and before the unemployment runs out).

Rule 3:  If you have liquidity, qualify under the CARES Act loan and the government is going to reimburse you for your payroll costs, why wouldn’t you keep your employees working?  If your business is shut-down by the order of the governor, you should use Rule 1 for some employees but then retain your management team to use this time for remote employee training, working on your business flow, employee reviews, analyzing your product mix (80/20 rule), calculating your KPIs, developing your loan outflow strategy to maximize loan forgiveness and strategic planning that few businesses ever pause long enough to complete.  Remember, most (if not all) of your competitors are going to emerge from Covid-19 weaker than when it started.  Position your business now to take full advantage of a new economy post Covid-19.  If your business is not shut down but is slow, re-read this paragraph!  And if your business is not shut down and is rocking, congrats.  Get your expenses reimbursed and make this crazy year your best ever!

Warren Fisher, CPA


My Business Needs Cash (or it will real soon). What To Do!

Posted on March 26th, 2020

Step 1: Apply for an SBA loan directly with the SBA under the Economic Injury Disaster Loan (EIDL) program (scroll down to see blog posted 3/25/20).  This is a cashflow loan!  For most small businesses, this program has the largest potential loan amount since it is based on 50% of gross profit.  Hint: SBA EIDL Form P-019 requests gross revenue and cost of goods sold to arrive at gross profit.  Per the IRS, cost of goods sold is for resale or production of tangible products.  Thus, service businesses don’t have cost of goods sold but rather cost of revenue which is not a deduction on Form P-019.  As a recap, this program is 3.75% fixed interest, 30-year repayment schedule and first payment deferral for 1 year.  The original parameters were funding within 30 days but due to excessive demand, that timeframe will surely be longer.

Step 2:  Assuming the CARES Act passed by the Senate passes the House and is signed by the president, pursue this loan as a means to fund payroll and occupancy costs such as rent, mortgage interest and utilities – and it may qualify as forgivable.  Now we are in no-brainer territory!

The loan formula is the lower of 2.5 times average monthly payroll incurred in the one-year period before the loan was made or $10 million.  And, if desired, the SBA EIDL you have already applied for can be rolled into this loan.  Other features of this program are applying either directly with SBA or a qualified lender, no requirement for collateral and no personal guarantees.

This loan can be used to pay for payroll including state payroll taxes and independent contractors, group health insurance, interest on existing mortgage obligations, rent, utilities and interest on any other debt obligations incurred before the covered period.  Indebtedness is forgiven (and excluded from gross income) in an amount (not to exceed the principal amount of the loan) equal to the following costs incurred and paid during the covered period of February 15 to June 30, 2020 for payroll costs, interest, rent and utilities.  But forgiveness amounts will be reduced for any employee cuts or reductions in wages.

Step 3: Document everything!  You are already in business for yourself and you know to keep receipts and records but now you need to keep even more records.  For instance, make sure you can prove you paid an employee leave because they are being diagnosed for coronavirus or they are staying home with a school-aged child.

Warren Fisher, CPA


SBA Coronavirus Economic Injury Disaster Loans

Posted on March 25th, 2020

The latest indication from Congressional negotiations regarding an economic stimulus bill is that $367 billion will be allocated for small businesses.  With 30,200,000 small businesses in the US, that is only $12,152 per small business but those funds will most likely be added to the already available funds in the SBA program.

The US Small Business Administration declared a coronavirus disaster in all counties within the State of Oklahoma.  This declaration allows small businesses in Oklahoma to obtain working capital loans at fixed 3.75% interest, 30-year terms, one-year deferment with no payments due for 12 months and borrowing amounts up to $500,000 based on 50% of the prior year’s gross profit.  If a borrower requires more than $500,000 and their gross profit calculation will support it, a more involved calculation can result in loans up to $2,000,000.  The historic average processing time has been 3 days with disbursement within 30 days but the loan application volume will skyrocket.

The loan process is handled virtually through www.sba.gov/disaster (which is currently under maintenance as of 12:01am 3/25/2020).  The first step is to identify the disaster.  Use Oklahoma Declaration #16373 Disaster OK-00135.  This covers incidents “occurring January 31, 2020 and continuing”.  The application filing deadline is December 21, 2020 but time is of the essence when cashflow is concerned so do not delay.

Other items that you will need are business financial statements, personal financial statements and release of IRS transcripts to the SBA on Form 4506-T.

There is a customer service number specifically set up for this program that is available to answer questions 1-800-659-2955 or email at disastercustomerservice@sba.gov.

Warren Fisher, CPA


Coronavirus Small Business Payroll Credits

Posted on March 24th, 2020

The Problem for Your Small Business

by Warren Fisher, CPA

We applaud the efforts of the Federal government to make tax credits available almost immediately through payroll credits rather than income tax credits that may take a year to appear.  However, when they try to create a package that is good for businesses with anywhere from 1-500 employees, there are going to be problems.

The bill requires these employers to provide paid time off for employees with coronavirus, caring for a family member with the virus or to take care of school age children whose school is closed.  The government wants to reimburse the employer but look at this example:

Assume all employees make $14/hour.  If one employee is out on paid leave for 2 weeks, that is $1,120 paid by the employer.  The IRS will allow the employer to keep the employer paid FICA of 6.2% to reimburse the employer.  Problem: The employer would need to pay over $18,000 to more than 16 employees with only 1 employee out sick for the credit to equal the cash outlay.  Any fewer employees than 16 or more than 1 employee out on leave, the employer loses cashflow and right now, almost no employer can afford losing cashflow.

What to do:  This bill allows for businesses with less than 50 employees to petition the secretary of labor for an exemption if providing paid leave “would jeopardize the viability of the business”.  The guidelines for petitioning the secretary of labor have not been released.  To be included with our list of businesses awaiting petition directions, please email cheryl@wcfishercpa.com with subject “Petition”.


Families First Coronavirus Response Act

Posted on March 20th, 2020

On March 18, 2020, President Trump signed into law H.R. 6201 – Families First Coronavirus Response Act. This bill is primarily concerned with mandating emergency employer-paid sick leave (for employers with less than 500 employees), and providing a payroll tax credit to fund the sick leave payments.

The new law expands emergency family and medical leave. Two weeks of paid sick leave at full pay is to be paid to employees to quarantine or seek a diagnosis for COVID-19.  Two weeks of paid sick leave at two-thirds pay is to be paid to employees to care for a quarantined family member or to care for a child whose school has closed or child care provider is unavailable due to the coronavirus. An additional 10 weeks at no less than two-thirds pay is available to employees covered by the above circumstances as a result of the coronavirus.

Tax credits for employers paying sick and family medical leave are available and equal to 100% of qualified sick leave wages paid. The credit is a payroll tax credit applied against the employer portion of social security taxes. It is imperative that our clients keep diligent payroll records for any employees on sick or family leave due to the coronavirus.

Qualified wages are capped at $511/day for employees self-isolating and $200/day for those caring for a family member or child.  There is a $10,000 overall maximum per employee.

Tax credits are available for the period beginning within 15 days from the date of enactment and ending on December 31, 2020.

Email us to be added to our coronavirus payroll tax credit project list.


COVID-19 Update

Posted on March 20th, 2020

Changes to office procedures as of Monday, 3-23-2020

As we continue to monitor reports of the impact of the Coronavirus (COVID-19), we want to assure you that Warren C Fisher, CPA & Associates remains committed to delivering outstanding service.

During this evolving health situation, the safety and well-being of our team members, clients, and families is our main priority. We greatly care about our communities and want to do our part to keep you healthy, keep our employees healthy and help minimize the spread of the virus. In that spirit, we are implementing a more aggressive plan to assist in the containment of the coronavirus and help protect us all.

Our office will be closed to outside visitors through April 17. We encourage clients to use other means available to communicate and send information at this time.

  • We are available via email, phone and video conferencing to continue to serve you.
  • We highly encourage you to use our client-friendly portal for the safe and secure transfer of information. There is a short setup process for new users, click here to get started.
  • You may mail documents to our offices but, again, consider using our portals.
  • If the above methods are not an option for you, drop-off of documents is allowable currently as a last resort. Please use the secure dropbox located by the front door.
  • There will be no signing of documents on-site. We will electronically send documents for signature or mail required documents.

Treasury Secretary Steven Mnuchin announced March 20, 2020 that the deadline for filing and paying federal taxes without interest or penalties will move from April 15 to July 15.

The Oklahoma Tax Commission met on March 19, 2020 and all three commissioners unanimously voted to extend the payment deadline to July 15, 2020 mirroring the Internal Revenue Service.  Charles Prater, Chairman of the Oklahoma Tax Commission said “We are following IRS guidelines and want to remind Oklahomans that due dates for other tax types, including sales and withholding taxes, remain the same.”

While we will continue to be as timely as possible, please understand the circumstances we are all faced with may slightly delay the turnaround on tax returns.


5 Common Mistakes Made When Starting a Small Business

Posted on August 23rd, 2019

Starting a small business isn’t always simple. There are so many moving parts and decisions to make that you may feel overwhelmed. This pressure can cause you to make poor decisions that can hurt your success in the future.

While there is no fool-proof plan for launching a profitable new business, here are 5 common mistakes made by new business owners that might derail your success.

1) Failure to plan

Constructing a well thought out business plan should be the first step when starting your business as it will be the bedrock that your long-term success is built on. Most lenders will ask to see your business plan before considering your loan application, so take the time to make sure it is meticulously prepared. Your business plan should include details about your startup expenses, operating expenses, income statement, balance sheet and cash flow projection.  It will also include a description of your business, the outlook for the industry, your experience and qualifications, your target market and other key elements.

2) Not setting SMART goals

Entrepreneurs are often dreamers at heart. When it comes to starting your new business you probably have lofty goals for the future, but you may find it difficult to know where to start. You may find yourself setting fuzzy goals like “building more business” without a well-defined plan of how to make it happen. If this has left you feeling a bit daunted, you can start by setting SMART goals for yourself.  SMART is an acronym that stands for Specific, Measurable, Achievable, Relevant and Time-based. This means you need to set goals for your business that are focused and well defined, quantifiable with a precise number, and realistic. You also need to give yourself a deadline for when these goals should be achieved. By setting one SMART goal for yourself, and then another and so on you can put together an actionable plan to make strides toward your overall goal of a healthy thriving business. You can find an insightful article on SMART goals here.

3) Undervaluing products or services

Start by getting an accurate picture of how much it costs you to make your product or offer your service. Be sure to include commonly overlooked expenditures such as marketing and operating costs. Include an amount for your time, your efforts have value.

Next, start digging. Research what similar products or services are bringing in your area and then use that information, combined with your estimated costs to formulate the price that works best for you.

4) Marketing too little (or not at all)

Customers can’t support your business if they never find out about it in the first place. That is why aggressive marketing in the early stage of your business is so important.  Word-of-mouth can be included in you marketing plan, but it should not be your only strategy.  Social media marketing and advertising, pay-per-click (PPC) ads, and internet advertising all offer cost effective options that will drive new clients to your business without breaking the bank.

5) Not asking for help

When starting a small business, it is easy to get overwhelmed by everything that needs to be done in the beginning.  And, because money is usually tight, it can be quite tempting to try to take on the seemingly insurmountable mountain of tasks alone. In actuality, investing in the help of a good support team can end up saving you money in the long run.  Outside experts, such as accountants, can help you avoid costly mistakes often made when setting up a new business, and assist you in realizing your vision for your company, helping you get where you want to be. It has the added benefit of freeing up more time for you to concentrate on growing and marketing your business.