NASE Monthly E-Newsletter for Small Business Owners

SelfInformed - November 2016

Chris Lashua is the Founder and Director of Wheelwork Arts, LLC, a performance company based in Las Vegas, Nevada doing business as Cirque Mechanics. The company was founded in 2004 as a way to provide a unique brand of entertainment that encompassed theater, the circus, history and all things mechanical. Chris received a Growth Grant in 2010 to build a device to be incorporated in his shows. Cirque Mechanics has toured the U.S. theater arts markets, Canada, Mexico, Europe, Dubai and Hong Kong.

Accomplishing The Impossible

5 Ways Small Business Owners Can Also Enjoy a Winter Vacation

“Nobody works harder than a small business owner. We work while sick, injured and overwhelmed by life.” My dad told me that when I was in high school and way too young to fully appreciate the depth of truth contained in that sentiment.

Small business owners face struggles the 9-to-5er never dreams of, but you also reap rewards most jobs just can’t offer. It seems that holiday plans are the great annual equalizer when comparing your career advantages with your friends in the corporate world. With the Holiday Season in full swing, the savvy business owner wonders how to balance the clients’ and customers’ needs with personal time and family obligations.

Below are a few thoughts and ideas that will help you achieve actual peace of mind during your time away by making a plan to manage the work pipeline, customer needs and employee actions during this already-hectic time of year.

1. YOU VERSUS THE PIPELINE
If you work in a knowledge industry and can get a lot done from almost anywhere, consider a decision to forgo all but the biggest, most valuable opportunities from November– December. Politely turn down smaller jobs that you may normally take. Be (mostly) honest with those clients, saying that your schedule is full through December. The fact is that your schedule is full…because you decided to fill some of it with family activities and travel so the kids can see grandma, grandpa, aunts, uncles and cousins. There is also an unexpected benefit to telling some clients you can’t accept new work: they see that your service is a sought-after commodity by others and they actually place a higher value on booking you.

2. MANAGE YOUR BUSINESS REMOTELY
Planning and communication are the keys to your success here. Being in a position to effectively manage your operations with a laptop and cell phone can be a real advantage. Should you decide that remote management is the best for your business demands and family’s needs right now, then make a schedule, stick to it and communicate those limited work hour availabilities to clients, your staff and, most importantly, the family. Make every effort to communicate to your clients, customers and workers how long you will be gone, what they should do in the event of an actual work emergency and what you’ve done to ensure each open project moves along smoothly during your absence. Addressing major concerns in advance goes a long way to mitigate the potential downfall of being geographically separated from your business.

3. TRUST...SO HARD SOMETIMES
Trust your staff or employees to carry out your intent, but clearly communicate your very high expectations for production and conduct while you’re unavailable. Continuing the trend of having a plan and communicating with everyone involved, review open or expected projects in advance with your team. Give them every opportunity to succeed and surprise you, but don’t leave the overall result of the project to chance or their interpretation of your vision. If you have a daily routine of things that need to be done around the business, make sure they’re written or even consider a checklist for easy reference. Take this opportunity to review your schedule with your team and they will come away with a greater appreciation of what you put into the shop every single day.

4. CAPITALIZE ON CULTURAL DIVERSITY AND HOLIDAY HOURS
Don’t fret, friends in the retail and service industries. There are ways to get your valuable me-time, also. Developing a holiday schedule that allows the owners and employees to spend time with their loved ones while also providing opportunities for customers to get what they need can be quite a balancing act. Can you bring in temporary help during the holidays? Not only is school out but the diversity of cultures in our society means that some families don’t place as much value as others on being away from work during this time of year. You can also reduce your hours of operation during the weeks of Thanksgiving, Christmas and even the New Year if possible. As long as you make every effort to ensure your customers know the holiday hours in advance (more on this below), these methods can be a great compromise and almost all of your customers really do understand shortened holiday hours.

5. NONE OF THIS APPLIES TO YOU, WHOLESALE MISTLETOE PROVIDERS
Let me guess, none of the above applies to you at all, right? Your business volume from here until March is dependent upon snowfall levels, hipster holiday sweaters and all things winter wonderland. Seasonal businesses have less options during this time of year but they can more than make up for working over the traditional holiday season during slower times on the calendar. You may well have the best vacation deals of us all during your business’s off-season. Early Spring and early Autumn are the best time for travel deals to many destination locales that are usually packed during peak seasons. Travel around the U.S., Canada, Europe and even Australia and New Zealand is frequently offered at a discount during these traditionally slow travel seasons. So make those vacation reservations for April or September with a smile on your face knowing the rest of us are paying full fare to travel while you are running your business!

Get with your work team to plan open projects and discuss expectations. Put up those holiday hours in a friendly sign on your door and definitely don’t forget to update your website and social media platforms with the seasonal schedule. Then take a little time to explain to the family there may be occasions when you absolutely must address work items but reassure them that those will be during scheduled times whenever that is possible…and hold up your end of the deal, by sticking to it. These tips will help ease the anxiety of your clients and workers while you’re enjoying some earned time off to enjoy the season.

What are your favorite tips and tricks for managing business ownership requirements while enjoying holiday time? Tweet us @NASEtweets and let us know!

Commonly Missed Deductions

Q: What Deductions are most commonly missed?

A: As you probably know, most business deductions come right out of your business checkbook. Any expense that is incurred in the course of your business activity that is ordinary and necessary will be deductible in some form. Therefore, the first step is to make sure you have captured all the data from your business checkbook and any other expenses that were incurred even if you paid some of those from another account. Try to avoid paying business expenses with cash simply to make sure documentation is adequate. However, if valid business expenses were indeed paid with cash, the amounts are still deductible; just make sure you maintain adequate support for the expenditures.

There are certainly deductible expenses that don’t show up as a specific cash disbursement and therefore are easy to miss. Perhaps the most common is the deductible expense related to the business use of your vehicle. Whether you use the standard mileage rate method or the actual expense rate method to calculate the deduction, the tax savings can be substantial. The IRS has a very good publication to help with the detail called Publication 463, Travel, Entertainment, Gift, and Car Expenses. You can download the publication for free at IRS.gov.

Another powerful deduction that does not appear in your business checkbook that is often overlooked is the Home Office Deduction. If you operate your business from your home and use a space in that home regularly and exclusively for business then a portion of the costs incurred to maintain your home are deductible. Those expenses would include your mortgage interest, real estate taxes, rent expense, utilities, repairs, etc. A portion of all of those amounts consistent with the amount of space you have dedicated to business use will reduce your taxable income and save some tax dollars. The best news is that this is money that you are already spending anyway but without the home office deduction, the amounts do not help your tax liability. The IRS has another good publication for assistance called Publication 587, Business Use of Your Home.

Perhaps the most commonly missed deduction is that which is available for investing in your own future. Congress allows us to deduct amounts that we invest in qualified retirement accounts via traditional IRAs, Simplified Employee Pension Plans (SEPs), 401(k) plans, and others. Best of all, the contributions that you make today can still be deducted on last year’s tax return. Contributions made up until April 15th, and in the case of SEPs, as late as October 15th can still reduce the amount of tax that you owe and help you keep more of your hard earned money. Most taxpayers can contribute up to $5,500 to a traditional IRA while small business owners can contribute up to 20% of the net earnings from their business to an SEP plan. Regardless of which fits your specific situation, make sure you consider options for a qualified retirement plan contribution before your file your tax return. The deductible contribution will help secure your future and will reduce the taxes you have to pay today.

As always, don’t forget that you are not alone. Bookmark our website at NASE.org as well as the IRS website at IRS.gov and you will always be able to find the help you need.

Riding Self-Employment

Chris Lashua is the Founder and Director of Wheelwork Arts, LLC, a performance company based in Las Vegas, Nevada doing business as Cirque Mechanics. The company was founded in 2004 as a way to provide a unique brand of entertainment that encompassed theater, the circus, history and all things mechanical. Chris received a Growth Grant in 2010 to build a device to be incorporated in his shows. Cirque Mechanics has toured the U.S. theater arts markets, Canada, Mexico, Europe, Dubai and Hong Kong.

What inspired you to enter the field you are in?
The experience that led me to enter this field was during an appearance in 1992 performing my freestyle BMX act at the Wu Ciao circus festival in China. I was representing Ringling Brothers Circus and this led me to a meeting with one of the creators of Cirque du Soleil and he invited me to join their tour in Japan. Once I had a taste of theatrical circus and the international travel, I was hooked.

When and why did you start your business?
We launched Wheelwork Arts in 2004. We wanted to be our own boss and be able to express ourselves creatively without the limits imposed by large companies.

When and why did you join the NASE?
We joined NASE when we launched our company Wheelwork Arts in 2004 as a way to learn from other small businesses and professionals as well as access to resources available in the NASE publications and website.

Can you tell us a bit more about the new device the 2010 Growth Grant helped you create?
The device we created is the Gantry Bike. We put all of the money from the grant towards the purchase of trusses (which are the heart of the device) used to assemble the Gantry Bike. As a result of the construction of the Gantry Bike we have been able to focus on the special event market. As a signature offering of our company the Gantry Bike lead to the creation of several other mechanical apparatus that widen the appeal of Cirque Mechanics and allow us to provide elements that continue to integrate entertainment with hospitality.

What challenges have you faced in your business?
Several years ago, as our business grew, we faced the challenge of not having our own warehouse space for storage and rehearsals. Thanks to increased business in the corporate events market we were able to secure a space. Finding new clients/business is an ongoing challenge. We have increased our sales effort by holding one on one presentations and meetings with potential clients.

How do you market your business?
We primarily rely on our website and social media presence to market our company. We are about to launch a monthly gathering of performers at our studio. We work with a New York based agency to sell and schedule tours, plus work with theaters to promote our shows.

Do you have any employees and if so, how are they categorized?
My wife Aida and I are two equal partners in the company. We hire about 75 individuals every year on a contract basis typically tied to the show they will be working on. In the future we would like to be in a position as our business grows to add a full time staff.

What's your schedule like, what's a typical day for you?
One of the great parts of being self-employed is that every day has the potential to be different. A typical day may start in our warehouse space or machine shop building a new apparatus or repairing current performance machines. We may have long brainstorming conference calls with our creative team to discuss new project ideas or might have to load a truck with our equipment to head out to an event. Time is spent every day on the computers designing sets, developing budgets, negotiating contracts and casting performers for upcoming events.

What’s the best thing about being self-employed?
The best part of being self-employed is the flexibility in workspace and schedule, plus the freedom to make decisions without the typical bureaucracy of large companies.

What’s the best compliment you’ve ever received from a client?
The best compliments come as audiences laugh and applaud. Meeting younger performers who are inspired by our shows and audience members that are grateful for our appearance in their city are always extremely gratifying.

What’s the most important piece of advice you would give to someone starting their own business?
Make sure you love what you do every day and surround yourself with talented, creative people you like.

Republicans Control the White House, Senate, and House

WHAT THIS MEANS FOR YOU!
The 115th Congress will not look so different from the 114th, the Republicans still hold the majority in the Senate and House, however, in what many perceived as a shocking election, the Republicans now also hold the White House, President-elect Donald Trump, will have a path and the support to enact many of his campaign promises.

As stated in a communication to members and lawmakers, NASE is positioned and ready to advocate for the self-employed in three key areas: health care, regulatory reform, and tax reform.

HEALTH CARE
The Affordable Care Act provided vital health care coverage for millions of Americans, but it must be fixed to ensure it works for everyone. With increasing premiums and fewer choices, the Trump Administration and leaders in Congress must implement a system that incentives Americans choosing to enroll in health care by first eliminating the penalty, offering a tax deduction, while reducing costs and implementing additional options for the American public and self-employed who fall into the individual market.

ELIMINATING BURDENSOME REGULATIONS
Millions of American small businesses are overwhelmed with a burdensome malaise of regulations that unnecessarily impact their budgetary bottom-lines. Before implementing any new regulations, our government and policymakers must undertake a rigorous and realistic evaluation of how current regulations are already negatively affecting the American small business community. For instance, the recent Department of Labor Overtime Rule negatively affected many small businesses and hit them right in their pocketbooks.

TAX REFORM
To strengthen our economy and build a strong and healthy workforce — including small and large businesses alike — we must move forward with an approach to tax reform that makes our code fairer and simpler, including individual tax reforms, which is where most self-employed and micro-businesses file. These individual changes include small tweaks and are fertile ground for bipartisan cooperation on any reform package, such as amending the definition of “employee” to include an owner of a sole proprietorship to take advantage of additional benefits; simplifying the definition of a independent contractor to clarify a workers’ status; streamlining the deduction process, such as creating a standard schedule C-Z by expanding as many deductions as possible for business expenses; and offering a standardized business deduction.

The NASE’s advocacy efforts continue and we look forward to working with all members of Congress, in both chambers, and within the Administration to ensure the opportunities for ensuring self-employed prosperity will be championed in the coming year.

Katie Vlietstra is NASE’s Vice President for Government Relations and Public Affairs