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2 Ways Your Business May Be Guilty

Franklin was right. Photo by Paul Hudson

In 1789, Benjamin Franklin said in a letter that there are only two things you can be certain of death and taxes.

He was certainly right about the taxes. Especially sales tax. We are hearing from clients and accountant colleagues about the increase in sales tax audits. These are turning out not to be friendly, let’s talk audits but somewhat nasty, prove you’re innocent audits where the assumption is that your business is not paying what it should.

The real issue is not whether you’re paying but whether you’re collecting, then paying. Since that’s what you are really doing. You’re the Sheriff of Nottingham and Prince John wants his due.

We are recommending to our clients that they actually pick up the phone and talk to someone at the Texas Comptroller’s Office. Their mission, should they accept it, is to validate what products and services they offer that are taxable. And, collect and pay the taxes of course.

This is not something you do once and forget. State legislatures in tough times move the goal posts to find “lost” revenue and a smart business owner is right there, ready to go. It’s very likely that what you thought was not taxable is now or at least part of it is. Their position, quoting the Texas Comptroller is “State Sales and Use Tax is imposed on all retail sales, leases and rentals of most goods, as well as taxable services”.

The second guilt for a business is payroll taxes. You are guilty of having employees and needing to pay taxes on them unless you can prove otherwise.

Even though people and bookkeeping software refer to “Contract Labor”, there’s no such thing. There are only employees and contractors.

As I heard every time attorney Tommy Simmons from Texas Workforce Commission spoke at my Street MBA and Owners MBA programs, no one can “sign away” their rights to be classified as an employee. So, don’t think you can ask someone to sign a paper that says they’re not an employee.

Everyone is an employee unless you can prove otherwise and that’s tough. There are 20+ ways to recognize you’ve got employees that are spelled out in a grey way by the IRS and Workforce. They look to see how many of those apply. If enough do, that person is an employee.  In general terms, the IRS says what matters is if the employer has the legal right to control the details of how the work/services are performed.

There is some information on employee vs contractor at the IRS site. We refer owners to Especially for Texas Employers that has a great section on the issue by Simmons who has been a business owner himself. Pay special attention to Appendix D & E which have a test that the IRS and Workforce apply.

So, be wary and prepared.

Have a happy Sales Tax Holiday, August 19-21 when you get a break as a consumer or business from state and local sales taxes on purchases of clothing, footwear, backpacks and school supplies priced at less than $100.

Want a Mentor? Look around you.

Business Success Center prospects tell us in their initial meeting they want a “Mentor”  to advise and guide them to solve a specific problem or achieve a specific goal.

I completely understand. I’ve had several wonderful mentors. My godmother, Northwestern University professor Alvina Krause, had “teas”. At these salons, I learned the fine art of  conversation. My grandmother taught me the importance of family. My mother  helped me find my voice and be comfortable being myself. She always said “we grew up together”.  Maybe so, but she was my guide.

There were important male mentors, too. My brother Bill (aka WC Triplett, II) has worked for Presidents and Senators, Tibet and Tiananmen, written best sellers and significant treaties. He showed me how important it is to get involved. Ed Van De Vort  gave me confidence because he believed everyone was capable.

But when it comes to a business mentor, there’s been no one better for thirty years than my husband and partner Daniel Diener. That’s what I told Patricia Rogers when she interviewed me for the Austin Business Journal‘s “Journal Profile” published last December.

As a matter of fact, I met Dan because I needed a mentor for a photography project. He has always been willing to share his time, knowledge and expertise.

A good mentor is a guide, encourager, teacher, strategist, supporter — an exemplary person you want to emulate. That’s Dan.

What have I learned from him?

1. To be entrepreneurial.

Dan was selling papers on a street corner in downtown Chicago at age 10. When he lost his job, he moved south to start again. He landed at PETEX (Petroleum Extension Service at UT) made movies, wrote manuals that were translated into 15 or so languages, and became Special Projects Director. When the bug bit again, he started his own company, Dan Diener Photography. I was not a risk taker. He showed me you can succeed on your own. Dan was and is an innovator. He truly understands what it means to create assets that make financial and marketing sense.

2. To be systems driven

Dan was a teacher in Wisconsin and you never forget that you have to stay ahead of your students. That means being organized and systematic to the Nth degree. With his creativity that meant that he is always looking to improve things without being rigid. I learned from him how business systems can be very creative and rewarding.

3. To know how to fight fairly

In a business, partners don’t always agree. Just ask Marsha Vanhorn, our Client Services Manager, who’s worked with us 12 years. Early on, Dan helped us set rules of engagement. He prepared us for tough times. And, we’ve stuck by them through thick and thin. I think that’s why our business and our relationship has survived and thrived. The funny thing is though, somehow when we disagree, even strongly, he always makes me smile. He has a great sense of humor and it just bubbles out in what he says and how he says it. I also thank him for introducing me to the O’Henry Pun Off, a great Austin, Texas tradition. (Maybe I’ll see you there on May 21.)

There are so many other things I have learned from him: versatility, resourcefulness, staying curious, balance, strength, and comradery. I couldn’t have a better mentor and partner. He means the world to me.

Dan’s birthday is this week. I wish him many happy returns and a big thank you for helping make my personal and business life exciting, rewarding, and very special.

Here’s to you, Daniel.

If you want a mentor, look around you. That person may be closer than you think. Who has helped you learn or progress?

Being Able to Visualize is a Mixed Blessing

Posts can be very personal. This one is.

Visualizing the needs & concerns Egyptian small business owners, their families and their employees like this man. Photo by Julie Gomoll.

I have a friend, Rasha, who is from Egypt and who has family there. My thoughts are with her and the wonderful people I met through the eyes, words, and pictures of another friend, Julie Gomoll.

Sometimes we say, “I can’t imagine” what it’s like. But I think business owners and other creatives can imagine in huge detail.

And, that’s what makes being able to visualize a mixed blessing. I saw this during 911 and hurricanes Katrina and Rita. I see it again here. And, media aside, it’s not due just to what we see and hear on TV, radio, and the Internet.

Friday, I went to my favorite bakery, Upper Crust on 45th & Burnet in Austin. I love the food and I enjoy talking to the managers and staff. Over the years I have found that many of them have other creative outlets — usually music or art.

The goodies were as good usual things but staff just seemed a little off kilter. I asked a staff person who is an artist and musician about what I observed because I was concerned. He didn’t talk about Egypt or other problems in the world but he was sensing or visualizing something that took him off his usual game. I had never seen him this way. He asked me my advice. I was stumped. That’s partially what prompted this post.

I bring this up because if you are an owner you have to visualize how to build your business so that it is sustainable and profitable. That means you can visualize and have nightmares about what can happen to it. So, you can imagine what’s happening to those business owners who are living through this uproar. You can imagine their concern for the welfare of their families and their employees and their families.

That’s not to say that people should not speak up and try to get rid of dictatorial regimes. It’s a recognition that there is more than just simple empathy at work here. It can be almost a physical reaction because you can realistically imagine what’s happening.

I am also not saying that non-creatives don’t empathize or feel in these big events. They do. I have just observed that the more you can visualize, the more you get caught up in this. I may be wrong.

If you have creatives on your staff, they may be visualizing things, too. They may not verbalize it but they can be off balance, feel overwhelmed.

My advice, talk about it. You and they need an outlet. Don’t just dismiss it. Be prepared. If I am right, it will happen again the next time the world seems to be going up in flames.

Are you seeing this in your business? What are you doing to deal with this mixed blessing in yourself and your staff?

In the meantime, my heart and mind are with all the people of the Middle East.

Business Owners Should Celebrate April 1st

Fool having fun at the Scarborough Faire Renaissance Festival in Waxahachie, Texas.

It’s April 1, April Fool’s Day, a day to be silly and cut loose. A must for those of us carrying the weight of being the nation’s economic engine because we have a small business. I could get into talking about “running out of gas”, “not running on all cylinders”, “breaking down”…but I will resist the temptation.

This is also a special day for me. It’s the day my business partner and husband proposed 28 years ago. He may have been hedging his bets, but I fooled him. I said “yes”.

So this post is dedicated to Daniel’s wonderful sense of humor and the recognition that all work and no play makes every business owner pretty dull and likely to end up at 45th St & Lamar in Austin, Texas, aka Austin State Hospital, formerly the insane asylum.

In his honor, I would like to recommend that on this day, every business owner do something fun. Here are some suggestions:

1. Go fly a kite – literally. You can. You’re the owner. Just leave. Wouldn’t that surprise everyone? Or climb a mountain inside a building at Austin Rock Gym. No wonder people think Austin is weird. (You missed the Austin Kite Festival but you can get ready for next March.)

2. CDB, a great book to read and giggle over. Also recommended  Eats, Shoots & Leaves: The Zero Tolerance Approach to Punctuation and Squad Helps Dog Bite Victim, and Other Flubs from the Nation’s Press
(think about it a minute). My mother also had a wicked sense of humor and came up with a prize winning article on the cockroach. I think I will save that to share with you on a really down day.

3. Plan your pun. Coming soon the the O Henry House is the Austin Pun-Off on May 22. Yesterday’s pun: The end of March, Halt.

4. I wish I could tell you to work on your spam recipe for the Spamarama, another Austin treat? But, we don’t hold it anymore. Maybe we could if you found something truly useful to do with the stuff. As a vegetarian, I am out of the hunt but there have been some really noxious concoctions — including the Spamarita  — never touch the stuff myself.

5. Make birthday preparations for Eeyore’s big 47th birthday, April 24th. Dress appropriately — as silly as possible and recycle it for Scarborough Faire Renaissance Festival April 10-May 31, north of Austin in Waxahachie.

6. Play golf — miniature golf. Everyone knows that deals are made on the golf course. Nothing’s more relevant for small business than to play small golf. I make no apologies to those of you who think this is silly -— of course it is but for 15 years this was our clients favorite event. We still have a few mini golf places here. Peter Pan on Barton Springs Road is still my favorite, dinosaur and all.

We take our owner selves entirely too seriously sometimes — at least I do. The next time someone from the media or the Mayor’s Office asks me why Austin is such a great place to start, run, or grow a small business I’m going to say that is because we are such fools. I mean it!

Have a great day and please add your own foolish thoughts, action items and what have you. And, thanks Daniel for 28 wild years.

If you have something silly to add or a favorite foolish folly, please add. Today, really LOL.