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The Need for Progressive Assets and Revenue Streams
Current mood:  creative
If you take risks, you may fail. But if you don't take risks, you will surely fail. The greatest risk of all is to do nothing.
~Robert Goizueta
Be brave enough to live life creatively. The creative is the place where no one else has ever been. You have to leave the city of your comfort and go into the wilderness of your intuition. You can't get there by bus, only by hard work and risk and by not quite knowing what you're doing. What you'll discover will be wonderful. What you'll discover will be yourself.
~Alan Alda
There has been a calculated risk in every stage of American development--pioneers who were not afraid of the wilderness, businessmen who were not afraid of failure, and dreamers who were not afraid of action.
~unknown
"Democracy is based upon the conviction that there are extraordinary possibilities in ordinary people."
~Harry Fosdick
The rules of engagement around building a brand have changed significantly over the past 10 to 15 years. Where companies at one time could spread their message through traditional marketing, consumers now seek an enduring emotional connection with the companies they patronize. The foundation of that connection is the most important characteristic of building a world-class brand: trust. Trust with your people and trust with your customers.
~Howard Schultz
Source: Business 2.0: How To Succeed: Dare to Be a Social Entrepreneur: http://money.cnn.com/popups/2006/biz2/howtosucceed/5.html
www.zaadz.com
"A social entrepreneur is someone who recognizes a social problem and uses traditional entrepreneurial principles to organize, create, and manage a venture to make social change. Whereas business entrepreneurs typically measure performance in profit and return, social entrepreneurs often start nonprofits and citizen groups."
http://groups.myspace.com/SocialEntrepreneurship
"Why, then, do we accept the excuses? Why do we hand business a blank check and exempt enterprise from the responsibility for maintaining social values? One reason might be that . . . we have only a piecemeal view of events. We have no [way to] accumulate the overall image of cumulative destruction. Furthermore, their actions are defended--I daresay have to be defended--because most of us are dependent upon them for our livelihood. Even a declining General Motors still employs nearly 600,000 people.
A supermarket chain such as American Stores employs 200,000 or more. The 400 companies profiled in Everybody's Business Almanac employ or support one-fourth of the U.S. population. . . . The average large business is 16,500 times larger than the average small business. And since much of the population is now employed by these large corporations, they naturally see their interest as being linked to the success and growth of their employers. Such fealty resembles the allegiance that sustained feudal baronies; the vassal serfs believed that the lord who exploited them was better than the uncertainty of no lord at all. But in the competitive world of modern commerce, loyalty to the system prevents an objective examination of how market capitalism can also work against those who serve it."
"We should not be surprised then, that there is deep-seated unwillingness to face the necessary reconstruction of our commercial institutions so that they function on behalf of our lives. Business believes that if it does not continue to grow and instead cuts back and retreats, it will destroy itself. Ecologists believe that if business continues its unabated expansion it will destroy the world around it. This book will discuss a third way, a path that restores the natural communities on earth but uses many of the historically effective organizational and market techniques of free enterprise."
~Paul Hawken
http://www.ecobooks.com/books/ecommerc.htm
"The difference between what we are doing and what we are capable of doing would solve most of the world's problems."
~Mahatma Gandhi
Message #2
Calling all artists, musicians, writers, crafters, accountants, nerds, talkers and listeners, programmers, carpenters, real estate brokers, lawyers, non-gunmen and moneymen and moneywomen, etc. let's brainstorm. *** Anyone have any ideas or interest in working together to build ventures to further peace & social justice and create jobs and income for the participants? ***
The Need for Progressive Assets and Revenue Streams
No society, group or people can long survive if they can not provide sustenance or income to their members. Those who struggle on behalf of peace & justice can be more effective if they have independent sources of income. Groups and organizations that work on these goals are in dire need of revenue sources as well. With that in mind I sent out an email to my friend's list several days ago. Please forgive the delayed arrival of this reply to the initial group of friends answering the first email. I would list all of my excuses for not replying sooner but that would only add further delay.
I will start out by showing the replies that I have received so far and then offer my observations about the replies. I think that it would be useful if we brainstorm and generate some ideas that we can organize and winnow down based upon agreed upon criteria. Perhaps we can come up with ideas in a short, middle and long range format.
Included is info about some tax benefits of having a home-based business. Also, I have collected some info about Social Entrepreneurship, Non-Profits, and social transformation FYI. Lots of stuff here so take your time. As you may know Uncle Bill will endeavor to send only very useful stuff, so enjoy and pass it on.
Suggestion; Please join this group, http://groups.myspace.com/SocialEntrepreneurship so that we may continue this discussion online. Also, please help get the word out if you feel this endeavor has value.
If you recall, the question was;
*** Anyone have any ideas or interest in working together to build ventures to further peace & social justice and create jobs and income for the participants? ***
My friend Molotov said;
"I'm interested. No ideas where you want to go with this though..."
Molotov
Read on Brother Molotov, I'm not so sure myself but wherever I go, I want to go with an inclusive group of kindred spirits.
My friend Doug said;
"Sounds good to me. Let me know what you have in mind, and I'll help out any way I can! Example: I'm in Spain, and they are pretty good at alternative energy over here. It would be cool to set up a company that sends that technology to the states, since it fights against the energy and oil wars at the same time. I know a couple of people, one stateside and one here in Spain, who would also be interested. If you have any other ideas, I'd be glad to hear them!"
doug
Good stuff Doug. My wife and her sister are starting a business to broker Green goods and services. We need to discuss this further, ok?
My friend Jim said;
I'm interested. But got no ideas.....
There are places like the Catholic Worker Houses where you don't really make any money, but its room and board, anyway.
Jim
Jim, I bet you got more ideas than someone can shake a stick at.
My friend Alma said;
"I believe they can ... at least I'm hoping so. As for peace and justice ... I haven't come up with anything that would provide an income for that just yet ... our small newspaper is still barely breaking even by exploiting us volunteers.
Progressive environmentalism may have a chance down here where I am ... I've got to finish writing my business plan for a recycling project I hope to pursue ..."
Alma Abedul
Good stuff Alma. Is your newspaper online? Perhaps we can work as a group to assist you in promoting it. Also, I have a friend that does an online magazine, perhaps you can swap contact info and you publicize what they are doing and they do the same for you.
http://www.myspace.com/bansheemagazine
My friend Dude said;
It'd have to be a non-profit enterprise. At least for now.
Dude
I don't see why we can't do both.
My friend Charles said;
One of the biggest agendas in my life is to build businesses. I created a Corporation called Siafu Industries. Basically, Siafu Ind. builds businesses. Now, of course I have only been in the foundation of building my own business, though the goals are to build business, make them self-sufficient, and then build another. I am working on a couple of projects currently. My first project is a family entertainment guide for my area, one that expands to include many areas that is free yet offers advertisement. The guide is unique in the information it contains. And second I am working on organizing a Non-Profit called SAORC or Sexual Abuse Outreach Center, Basically a national call center that assists victims in getting help, council and help with reporting the crime to the authorities, (over 70% of sexual abuse goes unreported.) So, all those are venture programs and I am very open to other ideas as well.
Your Servant
Charles
Charles,
What you are doing sounds very exciting. Would you consider having a look at my business with the possibility that I would offer my B2B service of an employee benefit nature to your employees and use some of the commissions to fund a charity of your choice and a venture that we can develop collectively with this group?
My friend Writeress said;
Hi Bill
I think first we must come together as like minds and then pursue goals of worthy change. I started the NEW TITHERS Group for that purpose, I hope. The new tithe is a method outlined in my book, of A Mustard Seed. So, the way to be compensated for your time, as every human being deserves and should insist upon, is to devise the simplest strategy one can to implement positive change to any issue. Mine is homeless kids. That is so "unnatural" to our species, or certainly should be. So, I wrote about it. I chose fiction so that hopefully, you can see the point I am making in an entertaining mystery. I love mysteries when I do actually get time to read. I prefer chewy thought every time. And, the compensation I receive will give me the resources to build houses for homeless kids. Everything comes full circle and a wonderful balance to my life and my soul is achieved. I am immensely thankful!
Writeress
Writeress;
What you are doing sounds sooo inspiring and needed. I really like what you said, "Mine is homeless kids. That is so "unnatural" to our species, or certainly should be."
My friend Carrie On said;
I've wondered about this, and i can't think of a way to make money unless you end up selling something.... darn consumer culture! I wish I could think of a way! Unless it was run by donations or membership or something. Do you have any ideas?
Carrie On
Well Carrie, I share your misgivings about consumer culture as I'm sure many of our friends do. Perhaps some aspect of the non-profit world is more to your liking. For others though, marketing or "selling" is an unfortunate part of life; Alma has a newspaper, Writeress has a book, Charles desires to start a Sexual Abuse Outreach Center and fund it using his business, all of these projects involve some aspect of consumer culture. What we should do is to build a consumer culture that is good for workers, consumers, communities and the environment.
My friend Christopher said;
(Let's create a real commune!! Plenty of fun, but serious too. This is a new concept, totally, not like the old communes at all)
A call to establish a large, rural, cooperative community (commune) based on socio-economically just principles and ecologically sustainable practices.
Please check out the proposal and instructions for joining at:
http://www.abundancethroughsharing.org/
Thank you,
Christopher
Gainesville, Florida
rootcause@bellsouth.net
Telephone 352-275-5659
P.S. Just a personal thought, but as important as the male-female relationship is, it is only in a humanitarian communitarian socialist commune that I believe men and women will ever truly find deep and lasting peace in relationship with each other. I say this because only here would the pressures or issues of economics and companionship be removed from that relationship.
Well said Christopher. This especially caught my eye; "the pressures or issues of economics", this is a destroyer of families and communities. This is where we can have an impact.
Ok, so there you have a round-up of replies to my initial message.
As you can see, others are doing some exciting things. I have several purposes with this project all of which depend upon group effort. We are fortunate to have the internet as a resource for it offers opportunities to Social Entrepreneurs and Change Agents unheard of a generation ago.
This is one idea; Brainstorm to create a marketing concept --a brand-- that encompasses our values, ideals and aspirations. Use that brand to create small easily outsourced items initially then more sophisticated stuff later. The idea is to use words and ideas as part of branded goods and services to further goals of peace and social justice. We know that there are millions of people that desire to do something about various problems or challenges in the world. We also know that there is a great deal of cynicism about the world of business and work. I believe that we can tap into that desire for a better world and create businesses and organizations that actually do more and more good as they grow rather than seeming increasingly threatening as many of today's large businesses are.
Structurally, I see ourselves organizing as a cooperative with each member holding equal membership. We will need to devise transparent and independent accounting procedures if we are to have long term confidence in our endeavor. The easiest thing to do would be a purely internet biz. Perhaps we can do art/slogans on www.cafepress.com or a similar service.
Our mission as I see it is to build a replicable model of a vehicle to help create meaningful social change and provide income for the participants. I am not wedded to any idea. I do not work well alone. I need people. I believe that our strength is in our numbers and our ability to build structures that facilitate our cooperation with one another and personal and community growth.
I have some ideas re. raising capital and earning income as we raise capital, but my ideas place me in a conflict of interest and I will not introduce them unless someone explicitly requests info. Beyond that, I'd love to hear from others any ideas they may have for legally, ethically and in a fun and simple way make money.
Below I have included info re. the tax benefits of having a business. Irrespective of whatever else one is doing –minimum wage job, two jobs, "retired", homemaker, college student, etc. and especially if you are in a high income tax bracket and are one of the "good guys" lol—one should have a business of some kind because of the way our system has been set up to assist business ownership with tax breaks and other privileges. Also, find info re. social entrepreneurship.
Zaragoza Bill
Tons of stuff here. My apologies.
Hire your children, write off your golf game and other legal tax deductions that you might not know about
Tax-Planning Expert Sandy Botkin
By Laura Tiffany
February 25, 2003
URL: http://www.entrepreneur.com/entrepreneurextra/fiveminuteswith/article59870.html
Tax-Planning Expert Sandy Botkin
So you think the government is out to rob you of all your hard-earned money? Every time you hear the word "tax," you recoil in fear? Cheer up! It's not that bad--especially if you're a business owner.
Tax expert Sandy Botkin, author of Lower Your Taxes Big Time! and a former IRS attorney, says there is hope for all us saps who just hand over our paychecks to Uncle Sam. Read on for Botkin's tips on taking advantage of tons of business tax deductions--all within the letter of the law.
You say that home-based business is one of the few legal tax shelters left. What does that mean?
Sandy Botkin: First of all, understand something: We have two tax systems in this country. [Many] times people think there's one for rich and one for poor. That is a huge myth. What the systems are is one for employees--people who don't know the rules, which are designed to take your wealth--and one for self-employed people, [the rules of] which are designed to create economic growth. The reason for that is, small business generates over 70 percent of the jobs in this country. So Congress passes good tax laws. And there are good tax laws--let me emphasize this--for small business.
Let's say your business generates a loss. If that loss exceeds the income from that business, you can use that loss against any form of income you have: interest, dividends, rents, wages, pensions, anything. Say you make $50,000 in salary and you have a small business that creates a $10,000 loss. You only pay tax on $40,000. Let's say the loss exceeds your whole income. You can carry back all business losses in 2002 five years and actually get a refund from the last five years' federal and state income tax you paid. In 2003, by the way, that number is going down to two years. Or you can carry forward all business losses 20 years and offset the next 20 years of earning. So you never lose a properly documented business deduction.
What if your home-based business is profitable? How can you still save on your taxes?
Botkin: By having a profitable home-based business, you can set up a host of fringe benefits, many of which I include in my book. You can set up a self-insured medical reimbursement plan and write off all your deductibles, eyeglasses, co-insurance, pre-existing conditions. Usually that stuff has to exceed a certain threshold [7.5 percent of your adjusted gross income] to deduct anything. With a self-insured medical reimbursement plan, you get a deduction regardless. It's dollar for dollar.
What other deductions do people not typically know about?
Botkin: As an employee, you have to pay [taxes on everything]. As a self-employed person, you don't pay tax until all your deductions are over. So [if you're an employee making] $60,000 a year, you've got to pay Social Security on 15.3 percent of $60,000. You've got to pay income tax on $60,000, regardless of your employee business expenses. [But] if you're self-employed--let's say you have $40,000 of expenses on that $60,000, you only pay tax on $20,000. You pay tax on your net. See the difference?
So what are some things you can do? If you have a child and you want to send them to college, that isn't deductible. And if you pay for their wedding, is that deductible? The answer is no. But if you were to hire your children in your business and pay them [the same] wage you'd pay an assistant, that's deductible. And if they use that money to pay for their own college or their own wedding or their own car, aren't you in essence getting a deduction for those things?
And by the way, children under 18--if you hire them in a sole proprietorship business--are exempt from Social Security and federal unemployment taxes, and the first $4,700 they made in 2002 is exempt from income tax. Result? You get a deduction, and they get that money tax-free.
So to protect yourself, you need to do the same paperwork as you would a normal employee?
Botkin: Good point. You want to have things like time sheets or a tax diary showing what your kid did. So for example, you might say Matthew, my son, sorted files and made 3-by-5 cards for four hours on February 3. That shows what he did, when he did it and how long he worked.
You also want to pay by check--none of this under-the-table nonsense, because [checks] establish a payment from you to your child to your child's bank account. You want to have the appropriate paperwork done. There are W-2s you have to file once a year and 940s and 941s for unemployment and Social Security. But I recommend using a payroll service, because people don't want to do all this paperwork. They will do all the payroll, all the forms, all the filings. You also want to have a contract for services showing you hired your kids and what you're paying them, a normal contract like any other employee.
Does all this apply when you hire your spouse as well?
Botkin: Yes, it's all the same. Now for hiring your spouse, you can set up a self-insured medical reimbursement plan. I can deduct all my medical expenses, dollar for dollar--not because I'm paying medical, but because I'm providing a medical reimbursement plan for my employee, who I happen to be married to. And the IRS has approved this, by the way. It's not some loophole I thought up.
What are some other techniques for taking deductions?
Botkin: A lot of people don't know that when you're in business, you can deduct your fun. IRS says in their regulations that you can deduct 50 percent of your fun and 50 percent of your [business associate's] fun if you talk business within the same 24-hour day as the fun. Say you invite a prospect over to go to a football game. You talk business over the phone and then pick them up two hours later. Is that talking business within the same 24-hour day? The answer is yes. Say we go to a restaurant and I talk to you in the car about our business or try to get referrals and then we go to a nice theater. Is that talking business within the same 24-hour day? The answer is yes.
You also don't need receipts for entertainment if it's under $75 per expense. Now when you do entertain, the IRS requires certain documentation. So with entertainment, you have to write down what I call the four Ws and an H:
• Who: name and occupation
• Where: We went to Greasy Lloyd's restaurant.
• Why: Why did you take that person out?
And here's one of the biggest mistakes self-employed people make. You must be specific in the documentation. The word "prospect" isn't specific enough. "Good will" isn't specific enough. Specific would be "try to get a referral" or "talked with a reporter about my book." Don't be general.
• What: What was the date, and was it for breakfast, lunch or dinner?
• And finally, how much.
If you write down all five things, you'll never have to worry about an IRS audit again. If you leave out any one of the five, your deductions will be disallowed and the IRS will hit you with a 75 percent penalty, plus interest.
Why is it so important to make yourself aware of these things?
Botkin: What amazes me is, say you look at your credit card statement and there's a $200 charge you never saw before. Aren't you going to call the credit card company and find out what's going on? And you might spend an hour on the phone doing that. Yet taxes are the number-one expense in this country. They exceed what most people pay for food, clothing, lodging and transportation combined. [But] 99 [percent of people] give it a 10-minute thought. And the reason is, there's a huge myth in this country. "My accountant takes care of my taxes."
What are some audit red flags that people need to avoid?
Botkin: The number-one red flag is failing to report all your income. The IRS matches all those 1099s you get from your bank accounts, your stock brokerage companies, whatever. If there's a mismatch--suppose you made $30,000, but you only report $28,000--then you're calling attention to your tax return.
The second thing you want to do is do not use cents in figuring out your tax return. Always round. Mathematical errors cause some of the biggest scrutiny of your tax return because things don't match up. If you use cents, you're just increasing your chance of making an error.
If you do your own tax return, for the most part, you increase your chance of being selected for an audit. The IRS figures if you do your own return, you don't know what you're doing, unlike accountants who might do hundreds of returns. People tend to make more mathematical mistakes when they do their own returns than accountants make.
Third major tip to reducing your chance of audit: Always, always send in your tax return with a return receipt. And if there's a check, send it registered mail or FedEx. There [have even been] cases where if you do send it FedEx [and it is lost], the IRS will waive penalties.
I'll give you another nice tip. Many times people call the IRS for information, especially during this time of year. The problem is, the IRS isn't bound to anything they tell you. However, there is one situation where you can call IRS and if you get a bad answer, they'll waive penalties. But you've got to get six things when you call them: The person's name, their badge number, the date of the call, the time of the call, the nature of the question and the answer. If you write down all six things and you get a bad answer that IRS relied on, they'll waive penalties...
If You Dont Have a Home-Based Business Start One Today! - 4/17/2001
Sandy Botkin CPA. Esq.
Copyright 2001, all rights reserved
The last decade may have been a decade of tremendous corporate profits and economic growth, but for the vast majority of North Americans, the 90's were a dismal, uphill climb. And many economists believe that this new millennium won't be getting better any time soon.
Why?
Changing business and government attitudes are the reason. There has seemingly been more anti-business legislation in the last decade than in any other this century. Stronger employment and labor laws, the Age Discrimination in Employment Act, the Comprehensive Omnibus Budget Reconciliation Act (COBRA, which includes mandating health insurance for workers for a period of time after they leave employment), safety laws, much tougher laws for discharging workers, more liabilities for lawsuits, Family Leave Act, Americans with Disabilities Act (which is creating immense numbers of lawsuits), along with higher minimum wages and fringe benefits.
Just reading this list is exhausting.
While these acts have beneficial and protective aspects, they have also encouraged businesses to move their facilities. That "sucking sound" popularized by Ross Perot is not just down to Mexico, but elsewhere as well. The result has been a dramatic loss of heavy industry in the U.S.
The young and the middle-aged alike are realizing that their dream of "having a job with a company forever" is an illusion. Companies have been downsizing, rightsizing, and capsizing for some time now, and they continue to do so-more now than ever before. Even the federal and state governments are getting into the act with layoffs and attrition of jobs.
In addition to all this uncertainty and mutual lack of loyalty between companies and employees, even the workers who do keep their jobs have no guarantee of promotions due to the shrinking number of management positions. These circumstances aggravate the already tryingly long commutes in rush hour traffic and increasingly typical frustrated boss-spelled backwards, that double S-O-B.
Finally, if all this isn't bad enough, under recent tax laws employees are shafted more than ever with limits and thresholds for their employee deductions and higher social security tax limits. This results in more couples working than ever before and, on many occasions, working more than one job. It is now almost impossible to have only one job in the family and make ends meet! Today, many households need three incomes just to survive.
Sadly, even having more than one job does not produce any major positive effect on most people's bank accounts. Why? Because of tax laws. This was well illustrated in 1994 by Jane Bryant Quinn in her Woman's Day article on "How to Live on One Salary."
Where The Money Goes
Ms. Quinn's example assumed that a man was earning $40,000 per year. His wife (we will call her Lori) wasn't working. They had more month than money. (Sound familiar?) Lori subsequently got an administrative job for $15,000 per year. You would think this would improve the family's financial situation, but when Ms. Quinn examined the economics of getting this extra income, the results were startling!
Lori had to pay federal and state taxes on her new income. Since they filed jointly, the family's combined income was what established their tax bracket. She paid $4,500 in new taxes, most of which was non-deductible, for federal and state income tax.
Lori had social security withheld from her paycheck at the rate of 7.65 percent, which amounted to an additional nondeductible amount of $1,148 being extracted from her salary. She also had to commute to work 10 miles a day round trip, which is probably conservative for most people. This resulted (in 1995) in nondeductible commuting costs of $696.
Lori also had some child care expenses, which give a partial tax credit. Ms. Quinn figured that the amount spent over and beyond the tax credit was $4,250 per year.
Lori also ate out each day with colleagues, spending an average of $5 per day, five days a week. This results in a nondeductible expense of $1,250 per year. ( I would love to know where she ate for only $5!)
Now that Lori has a job, she has to have professional clothing, this means a hefty dry cleaning bill. Ms. Quinn assumed that Lori's increased expenses here amounted to an extra $1,000 per year, nondeductible, of course.
Finally, with both spouses working, Lori wasn't in the mood to cook dinner every night. They bought more convenience foods and ate out more frequently. This resulted in increased food costs of a nondeductible $1,000 per year in minimum.
Add it all up and Lori's take home pay was a paltry $1,156 a year, for which she had to put up with a daily commute, an unpleasant boss, and corporate hassles.
No wonder more and more people are starting home-based businesses. In fact, there are currently an estimated 30 million people working from their homes. This number is expected to more than triple, to 97 million, by the year 2000, and to keep on growing. This has become and will continue to be one of the greatest mass movements in the U.S.
Why a Home-Based Business Makes So Much "Cents"
There are many reasons why so many people are favoring home-based over traditional business.
There is no commute (unless you have a really big home), no boss, little if any chance of lawsuits, much lower overhead, no employees, (or few), and far fewer government restrictions. In fact, many of the laws previously cited don't apply to small firms with few or no employees. It is for these reasons, according to Entrepreneur magazine, that 95 percent of home-based businesses succeed in their first year and achieve an average income of $50,250 per year with many earning much more.
There are really two sets of tax laws in this country. One is for employees, and it allows deductions for individual retirement accounts, 401(k)s (if you have one set up by your company), interest and property taxes on your home (which some in Congress want to do away with ), and charity. Then there are the laws for home-based business people who conduct their business either full-time or part-time. They can deduct, with proper documentation ,their house, their spouse, and even children (by hiring them), their business vacations, their cars, and their food with colleagues. They can also set up a pension plan that makes any government plan seem paltry by comparison.
For Lori-and for you - the meaning of all this is simple:
Lori earned $15,000 in salary as an employee, but took home only $1,156. She could have netted the entire $15,000 had she earned it in a home-based business!
This is an increase of almost 13 times her take-home pay as an employee.
Notice that Lori is not spending dramatically more money than she is currently spending. She would eat out anyway, go on trips and drive her car the same as before. By having a home-based business, however, many of their expenses become deductible. This concept is known as "redirecting expenses." With a legitimate home-based business, she can now deduct some of the expenses that she is incurring anyway.
Renegade Strategy: If you don't have a home-based business, start one!
In addition to all the benefits mentioned above, Congress will subsidize you while you are growing your home-based business. If your home-based business produces a tax loss in the first year or so, you can use that tax loss against any other income you have. It can be used against wages earned as an employee, dividends, pensions, or interest income-or you can use the loss against your spouse's earnings if you file a joint return.
If the tax loss exceeds all your income for this year, no problem. You can carry back the loss two years and get a refund from the IRS for up to the last two years of income taxes paid, or you can carry over the loss twenty years. You read it right: You can offset up to 20 years of income!
Here's an example:
Mike earns $50,000 in a job with the government. If he starts a home-based business that generates a tax loss of 10,000, he only pays tax on $40,000.
Renegade Tip: You can never lose a properly documented business deduction as long as you run your legitimate business like a business with a bona fide business purpose and have an honest expectation of profit. Make also sure that all your expenses are ordinary and necessary and reasonable as noted in our Tax Advantage and Tax Strategy Program
Renegade Strategy: Get LUCK-Labor Under Correct Knowledge.
Can You Succeed In a Home-Based Business?
Research has constantly shown that it is rarely the business that determines success or failure. It is usually the business owner. Why does one person succeed and another fail at the same business?
Two words-Knowledge and Action.
Some people want the benefits of having their own business, but they don't take action. The result is business failure.
Then there are the people who are always working. They take action but still fail. The reason is that they are not taking the correct actions, the knowledgeable actions, that will bring the desired results. Again, business failure.
It's like drilling for oil. If you set up a drilling rig in your back yard, it is going to fail at producing oil unless your back yard is in Texas or Alaska. The same rig in a good field will produce a gusher, because it was placed where oil was known to exist.
The point is that most people who get excited about starting their own home-based business do so without all the necessary knowledge. Consequently, many people quit before they acquire, through experience, the knowledge they need, without realizing that they are getting substantial tax breaks. This leads to another strategy....
Renegade Strategy: Learn to duplicate the success of others.
Duplicating the strategy of others is much quicker and more effective than going to the school of hard knocks.
It is also known as modeling, which is well-illustrated by the way The McDonalds Corporation blazed a trail to success that many have since followed.
In the early 1950's McDonald's and other start-up companies discovered that they could grow many times faster than the conventional firms through franchising. Instead of the company investing millions of dollars to build new stores, they let independent franchises do it for them.
It seemed like a great idea, but at first no one figured out how to make it succeed on a consistent basis; therefore, the media attacked relentlessly and continually. News articles featured destitute families who had lost their life savings through franchising schemes. Virtually every state attorney general in the U.S. condemned the new marketing method. Some congressmen even tried to outlaw franchising entirely.
Over the years, however, Ray Kroc and his management team at McDonald's developed a turnkey franchise business team at McDonald's franchise. The newfound success-from the system-turned public perception of franchising around. Today, virtually every franchise business models-to some extent-the franchise business system created by McDonald's, making franchising one of the most respected ways of doing business in the world.
Modeling is simply learning what other successful people have done to achieve success in a specific area, and then doing the same thing. Someone said that "education is the shortcut to experience." With modeling, you literally leverage your own learning with the collective years of learning through experience of many others. Modeling the success of others saves both time and money and reduces frustration and stress.
The light at the end of the tunnel, for you and millions of others today, is the financial opportunity that starting your own business offers. If you have one going already, then make sure you are enjoying the many financial advantages to which your smart choice entitles you. The tax advantage alone can make a home-based business the single best financial move you could ever make.
Sandy Botkin is a CPA, attorney and former trainer of IRS attorneys nationwide. He lectures all over the nation on tax planning for self-employed and corporate taxpayers and can be seen in the big events with Donald Trump, Anthony Robbins and many others. He has been written up in Newsweek and in many other magazines. He is also a syndicated writer and noted author of this famed tape series "Tax Strategies for Business Professionals" and "Tax and Financial Strategies for Residential Real Estate." To find out more about Sandy and his products, check out his terrific small business web site at: www.taxreductioninstitute.com or by calling his office at 301-972-3600 in Maryland. http://www.taxreductioninstitute.com/article.asp?specific=10
What is a Social Entrepreneur(SE)?
Social entrepreneurs are individuals with innovative solutions to society's most pressing social problems. They are ambitious and persistent, tackling major social issues and offering new ideas for wide-scale change.
Rather than leaving societal needs to the government or business sectors, social entrepreneurs find what is not working and solve the problem by changing the system, spreading the solution, and persuading entire societies to take new leaps.
http://www.ashoka.org/fellows/social_entrepreneur.cfm
Social entrepreneurship
Social entrepreneurship is the work of a social entrepreneur. A social entrepreneur is someone who recognizes a social problem and uses entrepreneurial principles to organize, create, and manage a venture to make social change. Whereas business entrepreneurs typically measure performance in profit and return, social entrepreneurs assess their success in terms of the impact they have on society and often work through nonprofits and citizen groups.
http://en.wikipedia.org/wiki/Social_entrepreneurship
What is a Social Entrepreneur?
A social entrepreneur is a different kind of social leader who:
Identifies and applies practical solutions to social problems by combining innovation, resourcefulness and opportunity.
Innovates by finding a new product, a new service, or a new approach to a social problem
Focuses first and foremost on social value creation and in that spirit, is willing to share openly the innovations and insights of the initiative with a view to its wider replication
Doesn't wait to secure the resources before undertaking the catalytic innovation
Is fully accountable to the constituencies s/he serves
Resists being trapped by the constraints of ideology or discipline
Continuously refines and adapts approach in response to feedback
Has a vision, but also a well-thought out roadmap as to how to attain the goal
What is Social Entrepreneurship?
Describes an approach to a social issue. It is not a field of discipline that can be learned in academia.
An approach that cuts across disciplines (medicine, engineering, law, education, investment banking, agronomy, environment, etc.) and is not confined to sectors (health, transportation, finance, labor, trade, and the like).
More related to leadership than to management
http://www.schwabfound.org/definition.htm
Social Enterprise (Social Entrepreneurship)
http://www.managementhelp.org/soc_entr/soc_entr.htm
Nonprofits Doing Business:
Earned-Income Generation
The National Economic Development and Law Center offers a free document [PDF] regarding many of the legal ramifications of creating a business venture out of a nonprofit.
Even though an organization is tax exempt, it still may be liable for tax on its unrelated business income. Unrelated business income is income from a trade or business, regularly carried on, that is not substantially related to the performance by the organization of its exempt purpose or function except that the organization needs the profits derived from this activity. An exempt organization that has $1,000 or more gross income from an unrelated business must file Form 990-T, Exempt Organization Business Income Tax Return. For additional information, see the Form 990-T instructions. http://www.nonprofitexpert.com/income.htm
Where to Start:
http://www.socialenterprise.net/pdfs/earned_income_strategies.pdf
Why Grantmakers Fund SE's
http://www.se-alliance.org/making_the_case_final.pdf
Important definitions
After years of hovering around the edges of the nonprofit sector, social entrepreneurship today has moved into the mainstream. Venture philanthropists, traditional grant-makers, Boards of Directors, nonprofit entrepreneurs, consultants, academics and others are all rushing to the table. But there is still confusion about terminology.
Please click here for definitions of 22 terms that might prove useful. http://www.socialent.org/beta/definitions.htm
And here are three of the most important:
"Dependency"
The traditional business model for nonprofits, in which they depend solely or almost entirely on charitable contributions and public sector subsidies, with earned income either non-existent or minimal
"Sustainability"
The ability to fund the future of a nonprofit through a combination of earned income, charitable contributions and public sector subsidies
"Self-sufficiency"
The ability to fund the future of a nonprofit through earned income alone
http://www.socialent.org/
Eight Basic Principles for Non-Profit SE's
"Eight basic principles for nonprofit entrepreneurs," Jerr Boschee, Nonprofit World, July-August 2001, pp. 15-18.
http://www.socialent.org/pdfs/8BasicPrinciples.pdf
The Social Enterprise Sourcebook
Jerr Boschee's Sourcebook contains journalistic profiles of 14 nonprofits that have successfully started social sector businesses. If you would like to download free copies of specific chapters, click below on the name of the nonprofit featured in the chapter you desire.
http://www.socialent.org/sourcebook.htm
Welcome to the Social Edge Resource Index.
Social Edge's online events cover topics crucial to the success and growth of nonprofit organizations across the globe. Social Edge also hosts a library of articles written by experts in the field. These archived events and articles contain a trove of practical advice and recommendations for practitioners in the field of social entrepreneurship.
To find the information you need, simply search the category and topic you're looking for. Events are grouped by topic and listed alphabetically.
http://www.socialedge.org/resources.html
Vision
The vision of Social Edge is to become a spiritual home for social entrepreneurs, supporting the growth of social entrepreneurship as a field.
Mission
The mission of Social Edge to inform social entrepreneurs about news and opportunities, educate them with a set of information resources in the field and connect them to each other and the broader community with tools and services that support their work.
Engaging Youth To Be Social Entrepreneurs
A Network Of Purpose
Should Your Organization Go Hybrid
Networking For The Social Benefit Sector
Creating A Hybrid For-Profit / Nonprofit Social Enterprise Structure
How To Get Online Donations
Profit For A Purpose
What's Your Story? What's Your Need?
Help Us Find An Alternative To 'Nonprofit.'
Second Life and the Social Sector
http://www.socialedge.org/
Entrepreneuring Peace
On-the-ground innovations for managing conflict
Entry deadline is January 10, 2007 at 12 pm Eastern US time
http://www.changemakers.net/journal/peace/
A social entrepreneur is someone who recognizes a social problem and uses traditional entrepreneurial principles to organize, create, and manage a venture to make social change. Whereas business entrepreneurs typically measure performance in profit and return, social entrepreneurs often start nonprofits and citizen groups.
http://groups.myspace.com/SocialEntrepreneurship
If you do not design the future, someone or something else will design it for you.
~Edward de Bono
http://www.zaadz.com/
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