Finding funding in retail sector
Dear Karen: I’m seeking investments to open a dive shop. I’m attempting to raise funds via traditional loans, but in the worst market possible I’m not confident. The investment groups I find locally are focused on technology or a mass-manufactured product. Can I find an investor open to multiple industries, including retail?
Answer: As you’ve found, private investor groups aren’t typically interested in retail unless it’s a proven concept with a national chain.
Draw from several financing options, said Dileep Rao, a professor of entrepreneurship at the University of Minnesota and author of “Finance Any Business Intelligently.” Start with equity from friends and family along with any debt financing you can secure. Next, “approach angel investors who are interested in the swim, surf and dive industry and potential vendors and suppliers who stand to gain if your store opens,” Rao said.
You might also seek funding from the business development agency in your city.
Keeping records for tax deductions
Dear Karen: I’m closing out my first business year and adding up expenses. How do I avoid trouble with the IRS?
Answer: Your record-keeping skills will be paramount in avoiding problems with business taxes. “IRS studies show that poor record-keeping is the primary factor when a small business fails an audit,” said Brett Anderson, principal of the Allsure Insurance Agency in Houston.
Keep all your receipts and canceled checks in an organized fashion, separating them into expense categories such as auto, rent, utilities, advertising, travel and entertainment. “If you are ever audited, the IRS is likely to focus on business deductions for travel, entertainment and car expenses. The burden of proof will be on you to prove your deductions” are justifiable, Anderson said.
The IRS says any “ordinary, necessary and reasonable” expense that helps you earn business income is tax-deductible. “The general rule is if you think it is necessary for your business, it is probably deductible. Just be prepared to explain your reasoning to an auditor,” Anderson said.
Publish yourself, market yourself
Dear Karen: I’ve just self-published a how-to book. Now, how do I get some book sales?
Answer: Often, beginning authors believe they can write a book and expect the masses to flock to it. But that’s not usually the way it works, said Eric D. Goodman, a children’s author based in Baltimore.
“If you hope to sell copies of your books, rather than just giving them to friends and relatives, you’ll also have to take on a job that many introvert writers are uncomfortable with -- that of marketing director,” Goodman said.
Connecting your work with an audience often is the most time-consuming part of writing. “If you want your book to be successful, you’ll want to reach out to the media, bookstores, literary festivals, author events and local book clubs and literary organizations,” Goodman said. A large publisher might arrange these things for you, but in your case you’ll have to set them up yourself. You should set up a website for book sales and be prepared to do public readings and book signings.
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