Business Information for Entrepreneurs by an Entrepreneur

Businesses across all industries are being forced to tighten their belts as a result of the ongoing economic recession. Cost cutting is a primary way that businesses are combating the effects of the recession; however, all cuts are not created equal. There are certain cost cutting measures that can actually have a detrimental effect on business operations in the long run.

1. Slashing the marketing budget. Marketing is a costly endeavor, regardless of the mediums are used. Many business owners see making cuts to the marketing budget as the best way to save money. However, the only way to generate a solid revenue stream is if customers know who you are, where you are and what you have to offer. This is accomplished through marketing, and therefore marketing is something that your business should not cut. Some businesses have actually increased their marketing budget to try and counter the effects of the recession. One good way to refine your marketing techniques is to use feedback mechanisms to see what works and what doesn’t. This can be as simple as a quick online survey of customers or asking walk-in buyers where they learned about your business. This will allow you to focus your marketing monies on strategies that actually translate into results.

2. Refusing to accept credit cards. There was a time when cold hard cash or personal checks were the standard in business. Those days are long gone, and people are now using credit and debit cards as staples in their lives. Some business owners believe that refusing to accept credit cards is a quick way to save on costs. Processing fees for credit cards may take a percentage out of your operating budget; however, your sales will most certainly drop if you stop accepting them. You may lose sales all together or find that each sale’s value has been reduced. The loss is not worth the savings in processing fees in the long run.

3. Cutting prices. The prices you charge for products or services are essentially the life blood of your business. When times are tough, business owners may be attempted to slash prices in order to attract more customers. This is a move that can have a negative impact in the long run. Instead of cutting prices across the boards, look for ways to give customers additional value, such as package deals, weekly specials, coupons and incentive programs.

In these tough economic times, it’s important to exercise caution when trying to tighten the belt. Avoid these three cost cutting mistakes and look for other creative ways to save on overhead.

Time is running out for small businesses to save on incredible tax perks. The year 2009 is more than half over, and some impressive tax incentives expire on December 31st. Before 2010 arrives, small business owners can take a proactive approach to capitalize on these special tax perks. Here are some of the most lucrative tax benefits that are available to small business owners, as well as supporting details about what needs to be done to take advantage of them in 2009.

Bonus Depreciation Break

The government has made provisions for something called a bonus depreciation break this year. A bonus depreciation break applies to just about all types of new business equipment, as well as some types of software. It is possible for small businesses to claim tax deduction that is equal to 50% of the remaining balance due for the equipment. In certain cases, businesses will be able to create some net operating losses or increase the existing net operating loss numbers. The net operating loss is, of course, another source of tax break for small businesses. This bonus depreciation break must be taken advantage of before December 31st, 2009.

Section 179 Deduction

Section 179 is a special deduction that relates to the depreciation of certain equipment that a business has procured. For example, any new equipment or software that has been purchased is eligible for a deduction as soon as it is put into use at the business. This deduction applies for equipment and/or software purchases up to $250,000. These terms are not applicable to equipment that has been leased. In 2010, the Section 179 deduction will be reduced to cover purchases up to $135,000. This is a significant reduction, and therefore taking advantage of Section 179 in the year 2009 is important.

There is a possibility that the government will to extend the deadline for bonus depreciation breaks and Section 179 deduction beyond December 31st, 2009. However, there is no concrete guarantee for small business owners beyond this target deadline. It is more prudent to strike now while the iron is hot, rather than waiting it out and becoming ineligible for perks beyond 2009.

If there is one complicated aspect of entrepreneurship that small business owners struggle to understand, it’s intellectual property. As if time and money don’t present enough troubles and constraints for small business owners, intellectual property simply serves to muddy the waters even further.

The facets of intellectual property are largely misunderstood in the small business world. There are in fact some key points that can help small business owners protect their rights, assets and interests using the power of intellectual property law. Here are some commonly held myths regarding intellectual property and practical applications of truths for small business owners.

Myth #1 – Intellectual Property Rights Are a Waste of Time and Money for Small Business Owners. Intellectual property isn’t just about patents; it’s about protecting the unique brand and image that your small business has developed. Many small business owners often forget that intellectual property also pertains to trademarks, the look and feel of a certain product, and even the website addresses that the company uses. These are relatively simple assets to protect without the hefty price tag like a patent carries. Small business owners can easily secure intellectual property rights for items like trademarks and web addresses.

Myth #2 – I Already Have a Trademark, Therefore, My Brand is Totally Safe. A trademark is an excellent way to protect your small business and your brilliant ideas. However, a trademark doesn’t automatically grant you rights to everything under the sun. For example, if you have a trademark registered with the U.S. Patent and Trademark Office, it doesn’t stop someone else from registering a URL with the same name as your trademark product. You might not be able to get the exact URL you desire, even if you have a solid trademark in hand.

Myth #3 – My U.S. Patent or Trademark is Good All Over the World. International business has transformed the world of intellectual property. When doing business in other countries, you might discover that it is not possible or very costly to secure intellectual property rights, such as a trademark or URL.

Small business owners need to exercise awareness and prudence when it comes to intellectual property rights. For more specific information regarding intellectual property, especially patents and trademarks, consult the Small Business Association or the US Patent and Trademark Office.