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Start Hiring Sooner—the IRS (and Your State) Will Literally Pay You To Do It

Posted by Celene Robert to Taxes, Accounting, Business Advice, Payroll, Business, Startup Tips

Hiring? If you run a startup, you probably should be. Job growth is up, unemployment is down, and our country’s already competitive labor market is on track to tighten even further in the coming months.


Long story short: now is the time to focus on employee recruitment and retention. Fortunately— for once—you can count on the Internal Revenue Service for help. Numerous tax credits cover costs associated with hiring. In fact, the United States tax code is full of benefits and incentives aimed at helping emerging companies like yours create jobs. Check out a few ways the government will literally pay you to hire people:

What Could Your Startup Accomplish With an Extra $250K in 2019?

Posted by Celene Robert to Taxes, Accounting, Business Advice, Business, Startup Tips

A quarter of a million dollars could transform your startup. Or it could buy you a vintage Taco Bell hot sauce packet. No joke—as of this writing, that is a genuine listing on eBay: one unopened pouch of Taco Bell hot sauce, circa 1984–1992, priced at exactly $250,000.


If you can think of better ways to spend $250,000 (or if collecting expired condiment packets is truly your definition of Living Más—I won’t judge), you should consider claiming the United States Research Experimentation Tax Credit, commonly referred to as the R&D Tax Credit.


Why Location Matters When Filing Business Taxes

Posted by Melissa Hollis to Taxes, Business Advice

Where you do business says a lot about your company. If you’re a clothing shop in Waikiki, you probably have to keep your bikinis and boardshorts stocked all year round. If you’re a therapist in New England you might find your busy season ramps up in November due to seasonal depression. But no matter what you do where you do it affects how you file your taxes.

The Role Outsourced Accounting Plays in Growing Your Startup

Posted by Melissa Hollis to Taxes, Accounting, Business Advice

Here’s a phrase you never thought you’d hear from a CEO who just raised seed funding: “Nobody told me how difficult success can be for a startup.”

 

This may not sound like much of a problem. But the more I thought about it, I realized that many early-stage businesses start out with blazing potential and burn out before they reach it.

8 Budgeting Tips for Surviving Seasonal Business Ups & Downs

Posted by Melissa Hollis to Accounting, Business Advice, Business, Budgeting

 

Seasonality is a common experience many businesses face when they’re building out their budget. There are obvious examples in the form of tanning salons and ice cream shops to tax firms and event space venues, but even a digital agency or SaaS startup can experience high and low points in cash flow throughout the year.


Here’s a few tips on how your business can plan for seasonal slumps and take advantage when business is booming.

Examples of Qualified Research Expenses That Prove the R&D Tax Credit Isn’t Just for Big Businesses

Posted by Melissa Hollis to Taxes, Business Advice, Startup Tips

 

One of the most momentous parts of business is nailing down what makes your product or service different. For some companies, like law firms, this can be the talent, experience, and expertise of your team, or even just your location. However, outside of professional services, many companies define their competitive advantage by identifying new problems to solve or coming up with new ways to solve them. So, it’s those innovative entrepreneurs whom I’d like to introduce to the R&D Tax Credit.

 

What is the R&D Tax Credit?

Since 1981, the United States federal government has offered the research and development (R&D) tax credit as an incentive for companies who research and develop new products. What started as a temporary, trial-based credit has recently become a permanent part of the federal tax code due to its success in stimulating job creation and helping to solidify the U.S. as an economic leader on a global scale.


But, its effects could be even greater.

Seed Investment: Comparing SAFE and Convertible Notes

Posted by Melissa Hollis to Investment, Business Advice

When it comes to seed investment, founders have options. Typically they prefer low interest which is where SAFE comes in as a favorable alternative to convertible notes, but there's much more to the picture. Every entrepreneur should understand his or her options and make sure that they align with their long-term strategic fundraising plans.

 

Definition of Convertible Note

A convertible note is a type of debt that has the right to convert into equity when you hit an agreed upon milestone. FundersClub explains convertible notes as an investment vehicle that is structured similarly to a loan. However, as TechCrunch points out, this type of debt automatically converts into shares of preferred stock upon the closing of a Series A round of financing. The overall consensus about convertible notes is that they are known to be complex and therefore, finicky or glitchy.

 

Definition of SAFE as Seed Investment

SAFE is an acronym that stands for “simple agreement for future equity” and was created by the Silicon Valley accelerator Y Combinator as a new financial instrument to simplify seed investment. At its core, a SAFE is a warrant to purchase stock in a future priced round.

 

There are some similarities between SAFE and convertible notes investments. Both act as a viable way to help startups overcome their current big hurdle in growing or scaling to reach the milestones that warrant a Series A round. Also, both options carry a discount on the next round (or current round for convertible notes), so neither presents a clear advantage. With those in mind, looking at the differences will help an entrepreneur consider their pros and cons when determining their preferred seed investment terms.

Navigating the Financial Waters of a Friends and Family Funding Round

Posted by Melissa Hollis to Investment, Business Advice, Business, Funding

Early in his company’s history, entrepreneur Greg Vetter achieved a seemingly impossible feat: he convinced Whole Foods to distribute his family’s line of salad dressings on a national level.

Although the green light from Whole Foods provided an incredible opportunity, Greg knew it meant he needed capital—fast. So, he liquidated his and his wife’s 401(k)s, maxed out his credit cards, and even used his parents’ home as collateral to secure a bank loan. Then, he raised an additional $1 million from about 30 friends and family members.

What Investors Really Want to See for a Series A Funding Round

Posted by Elise Fajen to inDinero Academy, Business Advice

As someone who spends all day, every day, listening to entrepreneurs share the challenges they face, I’ve learned a few things: Every business may be unique, but business owners have a lot in common.

Lately, I’ve been hearing a lot of anxiety from founders of SaaS companies and other rapidly growing startups as they approach their series A fundraising round.

The Internet is full of great advice for approaching a series A funding round. Most of them emphasize a few basic points:

[Checklist] Making the Switch from Cash or Accrual to GAAP Accounting

Posted by Daniel Reji to Accounting, Business Advice

One of the most thoughtful and hardworking CPAs I’ve ever met once told me that businesses are like fingerprints—each one is unique and has different ways of tracking and sharing financial information internally.

 

I was brand new to inDinero, and she was helping me understand why GAAP is so essential for so many of our clients. GAAP, or generally accepted accounting principles, has become the guiding light for financial professionals preparing public-facing reports for companies in the United States. Accountants use these principles to create statements that give outsiders an easy-to-understand window into your business’s financial performance in order to compare it alongside other businesses, while still maintaining the individuality of each company’s financial profile.

Success starts when you take charge of your finances.

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