What is a Certificate of Existence and Do I Need One?

You may be asked for a Certificate of Existence by a lender or if you do business in another state. What exactly is a Certificate of Existence? A Certificate of Existence is simply a document that indicates that your business is properly registered with the state and have followed all state requirements. It serves as evidence that the entity exists and is authorized to transact business in the state.

 

Why would a business need to provide a Certificate of Existence?

Carl Dietz, Business Services Attorney, with the Iowa Secretary of State’s office explains, “The primary reason an entity may want to have a Certificate of Existence issued is to include it with an application for authority to operate in another state.  For example, if a corporation incorporated under the laws of Iowa that operates a restaurant chain wants to open its first restaurant location in Nebraska, it will need to apply for authority from the state of Nebraska to do business in that state.  Part of Nebraska’s application requirements will almost certainly be a Certificate of Existence issued by the Secretary of State of Iowa.”

You may also be asked to provide it by a bank when applying for a loan or line of credit in the name of the business.

 

Which businesses can obtain a Certificate of Existence from the Secretary of State?

Requirements in order to be in “good standing” vary by state but typically they include:

–            Registering with a state agency to conduct business

–            Being up-to-date on all your taxes and fees

–            Filing annual or biennial reports

All states require registration of corporations and limited liability companies (LLCs).

 

How do I obtain a Certificate of Existence?

You can apply for the certificate by simply contacting the Iowa Secretary of State’s Business Services Division in person, by mail, or online through their website, www.sos.iowa.gov. The cost is five dollars. Be careful not to fall for scams and pay more than needed for this certificate. If you are in doubt, contact the Secretary of State’s Business Services Division for clarification.

 

Have further questions about this or other business concerns? Schedule an appointment for confidential, no-cost business advising at one of our 15 regional centers across the state of Iowa. You can request an appointment online at iowasbdc.org.

America’s SBDC Iowa is an outreach program of Iowa State University’s Ivy College of Business and the Office of Economic Development and Industry Relations. Funded in part through a cooperative agreement with the U.S. Small Business Administration, America’s SBDC Iowa has 15 regional assistance centers located strategically across the state. Since program inception in 1981, the SBDC has helped Iowa businesses and entrepreneurs through no fee, confidential, customized, professional business counseling and practical, affordable training workshops.

For more information on America’s SBDC Iowa programs or services, visit www.iowasbdc.org, https://www.facebook.com/AmericasSBDCIowa, or @IowaSBDC on Instagram and Twitter.

Iowa Tax Issues when Hiring Employees

When it has come time for your business to hire its first employee, there are Iowa tax issues to keep in mind.  Every employer who maintains an office or transacts business in Iowa and who is required to withhold federal income tax on any compensation paid to employees for services performed in Iowa is required to withhold Iowa individual income tax from that compensation.

Prior to Starting the Hiring Process:

If you have not received your FEIN prior to applying for the Iowa withholding tax permit, enter “Applied For” in the FEIN field.

Once You Have Hired the Employee:

 

Failure to Withhold

A withholding agent who fails to withhold and pay to the Iowa Department of Revenue any money required to be withheld and paid is personally, individually and corporately liable to the State of Iowa.  If this occurs, the amount of withholding may be assessed against the withholding agent in the same manner as is used to assess personal or corporate income tax.

 

Iowa Income Tax Benefits Available When Hiring Certain Individuals

Iowa offers employers who meet specific criteria an additional deduction on their Iowa income tax returns for hiring ex-offenders or persons with disabilities.

What are the benefits?

  • Iowa income tax deduction for 65% of the wages paid in the first 12 months of employment
  • Maximum deduction of $20,000 per employee
  • This benefit is in addition to the Targeted Jobs Tax Credit.

 

Ex-Offenders:

Who is an ex-offender?

  • Has been convicted of a felony in Iowa or any other state or the District of Columbia or
  • Is on parole or
  • Is on probation for an offense other than a simple misdemeanor or
  • Is in a work release program or
  • Is still incarcerated or
  • Qualifies under the interstate probation and parole compact or
  • Is certified as an economically disadvantaged ex-offender for the Targeted Jobs Tax Credit

Who is a qualifying ex-offender?

  • Can be any age; no restrictions
  • Must be a new hire; a current employee who becomes an ex-offender does not qualify
  • May hold more than one job; each employer may take the deduction
  • Can be a full or part time employee
  • Must pass the business’ probationary period, which is six months if an employer does not have a written policy
  • Cannot be hired to replace another employee who was terminated within the previous 12 months, unless the termination was for misconduct in connection with employment. If the employee left voluntarily, the ex-offender qualifies.

How do I claim the income tax deduction?

The employer claims the deduction on the Iowa 1040 individual income tax return under “other adjustments” or on the Iowa corporation income tax return under “other reductions”.  The following information must be provided with the return:

  1. Employee’s name
  2. Employee’s social security number
  3. Employee’s hire date
  4. Employee’s total wages

If I don’t claim the maximum amount during the year, can I claim the balance next year?

If 65% of the employee’s wages does not meet the $20,000 maximum in a single tax year, the balance may be claimed the following year as long as the employee worked fewer than 12 months the first year.

What if I have had an employee who is an ex-offender and was not aware of this benefit?

The employer may amend income tax returns to include the deduction as long as the amended returns are filed within 3 years from the due date of the return.

 

Persons with Disabilities

Who is a person with disability?

  • Has a physical or mental impairment* which substantially limits one of more major life activities or
  • Has a history of impairment* or
  • Is regarded as having an impairment* or
  • Qualifies for the targeted jobs tax credit as a person with a disability undergoing vocational rehabilitation or
  • Has been certified by the State Division of Vocational Rehabilitation as having a disability

*impairment includes, but is not limited to, physiological disorders and conditions, cosmetic disfigurement, anatomical loss, and any mental or psychological disorder.

Who is a qualifying person with disability?

  • Can be any age; no restrictions
  • Must be a new hire; a current employee who becomes disabled does not qualify
  • May hold more than one job; each employer may take the deduction
  • Can be a full or part time employee
  • Must pass the business’ probationary period, which is six months if an employer does not have a written policy
  • Cannot be hired to replace another employee who was terminated within the previous 12 months, unless the termination was for misconduct in connection with employment. If the employee left voluntarily, the person with a disability qualifies.

Is there a limitation on the size of my business in order to qualify?

Yes.  Only employers who meet the “small business” definition can claim the deduction for employing persons with disabilities.  To be considered a small business, the employer must have both of the following:

  1. 20 or fewer full-time equivalent employees. Full-time means any of the following:
    • A position requiring an average work week of 40 hours
    • One in which compensation is paid on a salaried full-time basis without regard to hours worked
    • An aggregation of any number of part-time positions which equal one full-time position. See table below.

 

Full-time equivalent table

Hours:  more than 0, but less than 15: ¼ time
Hours: 15 or more, but less than 25:  ½ time
Hours 25 or more, but less than 35: ¾ time
Hours:  35 or more: Full time

  1. Annual gross revenue of not more than $3 million. Annual gross revenue means total sales, before deducting returns and allowances but after deducting corrections and trade discounts, sales taxes, and excise taxes based on sales.

What is considered a qualifying business?

  • Corporation
  • Sole proprietorship
  • Partnership
  • Joint venture
  • Association
  • Cooperative
  • Farm operations
    • Cultivation of land for production of agricultural crops
    • Raising poultry
    • Production of eggs, milk, fruit, other horticultural crops
    • Grazing or production of livestock
  • Franchise owned by a local employer if the other criteria are met

What are considered non-qualifying businesses?

  • Production of timber, forest products, nursery products, or sod
  • Processor or distributor of farm products or supplies that provides spraying, harvesting, or other farm services
  • Corporate-owned business managed by a local employer
  • The practice of profession requiring specialized knowledge and preparation such as:
    • Accounting
    • Architecture
    • Audiology
    • Chiropractic
    • Dental hygiene
    • Dentistry
    • Engineering
    • Law
    • Medicine
    • Mortuary science
    • Nursing
    • Occupational therapy
    • Optometry
    • Osteopathic medicine
    • Osteopathy
    • Pharmacy
    • Physical therapy
    • Podiatry
    • Psychology and psychiatry
    • Speech pathology
    • Surgery
    • Surveying

How do I claim the income tax deduction?

The employer claims the deduction on the Iowa 1040 individual income tax return under “other adjustments” or on the Iowa corporation income tax return under “other reductions”.  The following information must be provided with the return:

  1. Employee’s name
  2. Employee’s social security number
  3. Employee’s hire date
  4. Employee’s total wages

If I don’t claim the maximum amount during the year, can I claim the balance next year?

If 65% of the employee’s wages does not meet the $20,000 maximum in a single tax year, the balance may be claimed the following year as long as the employee worked fewer than 12 months the first year.

What if I have had an employee who is a person with a disability and I was not aware of this benefit?

The employer may amend income tax returns to include the deduction as long as the amended returns are filed within 3 years from the due date of the return.

 

About America’s SBDC Iowa and the Author
Lisa Casper, Business Tax Counselor for America’s SBDC Iowa, assists small businesses with questions relating to the
Iowa tax code. She provides advice on sales and use tax filings, Iowa tax law that affects small businesses, and general
services provided by the Iowa Department of Revenue. She also provides business consulting to help small businesses grow and succeed.

America’s SBDC Iowa is an outreach program of Iowa State University’s Ivy College of Business and the Office of
Economic Development and Industry Relations. Funded in part through a cooperative agreement with the U.S. Small
Business Administration, America’s SBDC Iowa has 15 regional assistance centers located strategically across the
state. Since program inception in 1981, the SBDC has helped Iowa businesses and entrepreneurs through no fee,
confidential, customized, professional business counseling and practical, affordable training workshops.
For more information on America’s SBDC Iowa programs or services, visit www.iowasbdc.org,
https://www.facebook.com/AmericasSBDCIowa, or @IowaSBDC on Instagram and Twitter.

Do I need an Iowa Sales Tax Permit?

When opening a new business, an important step is determining whether the product or service you are selling requires obtaining an Iowa sales tax permit. If you are selling any tangible item, specified digital products, or service that is taxable, you must obtain a sales tax permit.

Tangible Products:

Iowa law states that tangible items are taxable unless specifically exempted by law. Common reasons for exemption are listed below with links to the Iowa Department of Revenue guidebooks relating to that topic. This is not an exclusive list.

» Items primarily and directly used in agriculturally production
https://tax.iowa.gov/farmers-guide-iowa-taxes

» Certain food items
https://tax.iowa.gov/iowa-sales-tax-food

» Medical products for human use and consumption
https://tax.iowa.gov/medical-clinics-and-related-businesses-iowa-sales-and-use-tax-information

» Certain nonprofits
https://tax.iowa.gov/iowa-tax-issues-nonprofit-entities

Specified Digital Products:

Prior to January 1, 2019, whether a digital good or service was subject to sales tax depended on various factors. To be subject to sales tax, a digital product had to constitute either tangible personal property or an enumerated service. Beginning January 1, 2019, taxation of specified digital products, software, and related services changed. Additional information can be found at: https://tax.iowa.gov/taxation-digital-products

Services:

Services, unlike tangible property, are exempt unless specifically listed in the code as taxable.
Approximately 80 services are considered taxable in Iowa and they are as follows:

» Aircraft lease or rental, 60 days or less
» Aircraft repair, remodeling, or maintenance, except when used in a scheduled or nonscheduled interstate FAA certified air carrier operation
» Alteration and garment repair
» Armored car services
» Bank and financial institution service charges
» Barber and beauty services
» Battery, tire and allied services
» Boat repair
» Cable/pay television fees
» Camera repair
» Campgrounds
» Carpentry
» Carpet and upholstery cleaning and repair
» Communication services; excluding internet access fees
» Dance school and dance studio
» Dating services
» Demolition
» Drain cleaning; unplugging toilets, sinks, and sewers
» Dry cleaning, pressing, dyeing, and laundering. Beginning 7-1-2015, the use of self-pay washers and dryers is exempt from tax.
» Electrical and electronic repair and installation
» Employment and executive search agencies
» Excavating and grading
» Exterminators
» Farm implement repair of all kinds
» Flying service and instruction
» Furniture repair and cleaning
» Fur storage and repair
» Garbage collection and disposal, nonresidential commercial only
» Golf and country clubs and all commercial recreation fees, dues, and charges
» Gun repair
» House/building moving
» Household appliance, television, and radio repair
» Investment counseling
» Janitorial and building maintenance or cleaning; non-residential only
» Jewelry and watch repair
» Landscaping, lawn care, and tree trimming and removal
» Limousine, including driver
» Machine operator fees
» Machine repair of all kinds
» Massage; unless performed by a licensed massage therapist
» Mini-storage
» Motor repair
» Motor vehicle, recreational vehicle, and recreational boat rental; when rented without a driver or operator
» Motorcycle, scooter, and bicycle repair
» Oilers and lubricators on vehicles and machines
» Office and business machine repair
» Painting, papering, and interior decorating
» Parking facilities
» Pet grooming
» Photography
» Pipe fitting
» Plumbing, including drain cleaning and unplugging toilets, sinks, and sewers
» Reflexology
» Retouching photographs
» Roof, shingle, and glass repair
» Security and detective services
» Sewage services, nonresidential commercial only
» Sewing and stitching
» Shoe repair and shoeshine
» Sign construction and installation
» Storage warehouse or lockers of raw agricultural products
» Storage of household goods
» Swimming pool cleaning and maintenance
» Tanning beds or tanning salons
» Taxidermy
» Telecommunication services; excluding Internet access fees
» Telephone answering service and telephone services
» Test laboratories, except tests on humans and animals. Beginning 7-1-2015, environmental testing is not taxable
» Tin and sheet metal repair
» Tree trimming and removal
» Turkish baths and reducing salon
» Vehicle repair
» Vehicle wash and wax
» Water conditioning and softening
» Weighing
» Welding
» Well drilling; repair only
» Wood preparation (for example, stripping, cleaning, sealing)
» Wrapping, packing, and packaging of merchandise other than processed meat, fish, fowl, and vegetables
» Wrecker and towing

The following are considered sales of tangible personal property and are taxable:

» Engraving
» Equipment and tangible personal property rental
» Optional warranty contracts
» Printing and Binding
» Recapping and retreading tires
» Vulcanizing

Services that would normally be considered taxable are exempt when performed in connection with new construction, reconstruction, alteration, expansion, or remodeling of a building or structure.

Applying for the permit

If you have determined that the nature of your business requires procuring a sales tax permit, you may apply for the permit at the Iowa Department of Revenue’s website: https://tax.iowa.gov/businesses/business-permit-registration

Your permit number and instructions on how to file returns via the Department’s eFile & Pay system will be mailed to you. You do not need to wait to receive the sales tax permit number to begin operating your business. Once you have applied for the permit, you are allowed to begin conducting taxable sales.

Personal Liability for Paying Taxes

An important thing to keep in mind is that if a business fails to pay sales and use taxes, the officers or partners are personally liable for the tax, interest, and penalty. The dissolution of a corporation or partnership does not discharge a responsible person’s liability for failure to pay tax.

Final note

Taxability of specific items is fact and circumstance dependent. Additional information may found at www.tax.iowa.gov. If you would like assistance in determining taxability, you may reach out to the Iowa Department of Revenue at idr@iowa.gov or 515-281-3114.

 

 

About America’s SBDC Iowa and the Author
Lisa Casper, Business Tax Counselor for America’s SBDC Iowa, assists small businesses with questions relating to the Iowa tax code. She provides advice on sales and use tax filings, Iowa tax law that affects small businesses, and general services provided by the Iowa Department of Revenue. She also provides business consulting to help small businesses grow and succeed.

America’s SBDC Iowa is an outreach program of Iowa State University’s Ivy College of Business and the Office of Economic Development and Industry Relations. Funded in part through a cooperative agreement with the U.S. Small Business Administration, America’s SBDC Iowa has 15 regional assistance centers located strategically across the state. Since program inception in 1981, the SBDC has helped Iowa businesses and entrepreneurs through no fee, confidential, customized, professional business counseling and practical, affordable training workshops.

For more information on America’s SBDC Iowa programs or services, visit www.iowasbdc.org, https://www.facebook.com/AmericasSBDCIowa, or @IowaSBDC on Instagram and Twitter.

Is an SBA 7(a) Loan the Right Business Financing Option for Right Now? – Blog post from Ryan Collins, a commercial lender with Lincoln Savings Bank

Is an SBA 7(a) Loan the Right Business Financing Option for Right Now?

With the National Federation of Independent Businesses (NFIB) reporting that 92% of small businesses have been negatively impacted by coronavirus pandemic, the Small Business Administration has become an even more critical financial resource.

The SBA’s business relief Payroll Protection Program has captured a great deal of attention recently, but its narrow focus on maintaining payrolls during the pandemic means the funds can only be used for very specific purposes: payroll, rent, mortgage interest, and utilities. For businesses that need longer-term financing for more flexible purposes, the SBA’s flagship 7(a) program offers many benefits.

Though it’s been around for decades, many business owners aren’t familiar with the SBA 7(a) program – which gets its name from section 7(a) of the Small Business Act of 1953 – and may have never considered a 7(a) loan.

Particularly when the economy is uncertain and business cycles are unpredictable, an SBA 7(a) loan can be critically valuable. There are many reasons a business may be a good candidate, including factors such as:

  • Being a start-up business without an established history
  • Experiencing a temporary slowdown in revenue
  • Having seasonal income
  • Not having enough collateral to secure your desired loan amount

Does anything on that list apply to you?

An SBA loan may not have been on your radar screen before, but today’s business climate is like nothing we’ve seen in the past. Now may the right time to give the 7(a) program a fresh (or first) look. Here’s an overview of the key features.

  • Access up to $5 million in capital. If needed, a business can access high amounts of capital with an SBA 7(a) loan. This can be particularly helpful for companies that need to invest in expensive equipment, materials, or technology. Business that don’t have as sizable financial needs will be happy to learn that for loans under $350,000, there is a more streamlined process and faster turnaround time.
  • Obtain a loan with little or no physical collateral. Most conventional commercial loans are fully secured with physical collateral, which mitigates risk for the lender. An SBA loan offsets the lender’s risk when collateral is missing because it is backed by the U.S. government.
  • Longer terms for lower monthly payments. A key benefit of 7(a) loans is the option to extend the terms beyond what conventional business loans offer. This can mean up to 10 years for equipment loans, and 25 years for real estate loans. Business that take advantage of the maximum terms can lower monthly payments and significantly improve cash flow – a particularly attractive benefit while the economy is uncertain.
  • Competitive interest rates. The growth of financial technology in recent years has created a new arena of non bank lenders that companies can turn to for fast capital – but, this often comes at a cost. An SBA 7(a) loan almost always offers better interest rates for long-term financing, saving companies thousands of dollars over the long run.
  • Six months of payment relief. For new 7(a) loans authorized prior to Sept. 27, 2020, the SBA is offering six months of payment relief as part of its coronavirus business aid. This means the SBA will make six months of payments, interest, and associated fees, beginning with your first loan payment. This is not a payment deferral, and you won’t be required to apply for loan forgiveness. You are automatically eligible when your loan is approved by the SBA.

SBA 7(a) loans are here to help small businesses succeed whether the economy is up, down, or somewhere in-between. In any business climate, an experienced SBA lender can be an important partner in supporting the long-term health of your business.

Ryan Collins is a commercial lender with Lincoln Savings Bank, a community bank proudly serving Iowans since 1902. For more information about an SBA loan through LSB or other commercial lending services, please contact  bln@mylsb.com or visit www.mylsb.com.

Ryan Collins’ passion for assisting small business owners began with his time at Lincoln Savings Bank, but his passion for teaming up with individuals can be traced back to pre-professional days as a football player and strength coach at Central College. It is at that time when he started to truly learn the importance of a strong team. That passion/understanding has carried over to his professional career as he implements that teamwork with small business owners. He and Lincoln Savings bank aim to fulfill dreams by providing access to the necessary capital.

The information in this blog post is intended for general educational purposes only. This is not an official endorsement of any bank service or product. 

Online Transactions and Iowa Sales Tax

In today’s business world, more customers are moving to online purchasing as an alternative to in person transactions. Covid-19 has only increased the amount of online shopping consumers are doing. In Iowa, there are laws that both businesses and individuals must be aware of and in compliance with when selling or purchasing online.

Retailers:

» Businesses located in Iowa or out-of state-retailers with nexus in Iowa and selling to Iowa customers online have an obligation to collect and remit Iowa sales tax depending on where the product is being shipped to. If the merchandise is delivered to an Iowa address, both the sales tax rate of 6% and the additional 1% local option sales tax (LOST), if applicable, must be collected from the customer. LOST has been adopted by voters in most cities and unincorporated areas in Iowa and applies if delivery of the tangible personal property occurs within a local option sales tax jurisdiction.

Sales tax and LOST rates searchable by address can be found at:
https://tax-mapper.iowa.gov/.

A spreadsheet listing all jurisdictions may be found at:
https://tax.iowa.gov/documents/status-all-ia-jurisdictions

» Businesses located in Iowa and selling online to customers with a delivery address outside of Iowa will not collect Iowa sales or LOST. The retailer will want to check the laws in the state where the delivery is being made to determine if that state’s sales tax applies to the transaction.

» For out of state businesses with no physical presence in Iowa, beginning July 1, 2019, Iowa requires sales tax plus applicable LOST to be collected and remitted if the company has $100,000 or more of gross revenue from Iowa.

» Marketplace facilitators must collect and remit Iowa sales tax and LOST if they made or facilitated Iowa sales of tangible personal property, services, or specified digital products into Iowa equal to or exceeding $100,000. A marketplace facilitator generally includes businesses that facilitate retail sales by providing infrastructure (listing the product on the marketplace, communicating offer or acceptance of a retail sale, providing the physical or electronic marketplace) or support (customer service, fulfillment or storage services) for retail sales to occur and collecting the sales price, processing payments, or receiving compensation from the retail sales. Marketplace facilitators include consignment stores, auctions, and online marketplaces.

For further information on marketplace facilitators, visit:
https://tax.iowa.gov/marketplace-facilitators.

Consumers:

» If a customer makes a purchase from an out-of-state supplier not collecting Iowa tax and the product is for use in Iowa, the purchaser must pay Iowa use tax. Consumer’s Use tax applies to both individuals and businesses. If out of state purchases are being regularly made from an out of state source not collecting Iowa tax, the purchaser must obtain a consumer’s use tax permit. See https://tax.iowa.gov/consumers-use for more information.

The information in this blog post is intended for general educational purposes only. Nothing should be construed as legal advice. Any oral or written opinion by Iowa Department of Revenue personnel not pursuant to a Petition for Declaratory Order under 701 IAC 7.24 is not binding upon the Department.

 

About America’s SBDC Iowa and the Author
Lisa Casper, Business Tax Counselor for America’s SBDC Iowa, assists small businesses with questions relating to the Iowa tax code. She provides advice on sales and use tax filings, Iowa tax law that affects small businesses, and general services provided by the Iowa Department of Revenue. She also provides business consulting to help small businesses grow and succeed.

America’s SBDC Iowa is an outreach program of Iowa State University’s Ivy College of Business and the Office of Economic Development and Industry Relations. Funded in part through a cooperative agreement with the U.S. Small Business Administration, America’s SBDC Iowa has 15 regional assistance centers located strategically across the state. Since program inception in 1981, the SBDC has helped Iowa businesses and entrepreneurs through no fee, confidential, customized, professional business counseling and practical, affordable training workshops.

For more information on America’s SBDC Iowa programs or services, visit www.iowasbdc.orghttps://www.facebook.com/AmericasSBDCIowa, or @IowaSBDC on Instagram and Twitter.

 

Top Tips to Improve the Financial Wellness of Your Business by Paul Heath

January is Financial Wellness Month. Have you thought about the financial wellness of your business? I have counseled businesses for more than 30 years, and advise that financial wellness begins with a handle on your business’ accounting so you know where you stand.

Not sure where to start? Here are some helpful tips to help you stay on top of your business finances:

  • Keep personal and business finances separate – maintain a bank account specifically for your business. Don’t be tempted to use your business account for personal expenses. And be sure to reconcile your bank account every month. This will help you detect any fraud, as well as keep close track of the funds you have to use for your business.
  • Keep records of all deposits and track every expense – distinguish between the different types of deposits such as income, owner investments and loan proceeds. Categorize your expenses to take advantage of tax deductions.
  • Retain all source documents – this include invoices, receipts and deposit slips. An electronic system may be a good idea to help you keep organized.
  • Analyze your financial statements – gain an understanding of your businesses financial situation. This will help you identify trends, as well as help you plan for the future of your business.
  • Maintain accurate info on employees – keep your payroll info up-to-date and have all the information necessary to prepare W-2s.
  • Contact your local SBDC to schedule a free and confidential appointment to discuss your finances, cash flow, financial projections, and plan for the future of your business at iowasbdc.org

 

About The SBDC and the Author
The Iowa SBDC provides no-cost technical services and advice for Iowa small businesses and individuals looking to start and grow a business. The 15 centers throughout Iowa are run by small business experts and counselors who have the experience and expertise to confidently help on a number of topics.

Paul Heath, Regional Director for the University of Iowa SBDC has been in the position since 1984. His expertise is in financial analysis for small businesses. He holds an MBA from the University of Iowa, as well as a Certified Management Account (CMA®) designation. He is also a Certified Business Advisor (CBA®).

 

10 Great Ideas for Getting Your Local Business Ready for the Holidays by Sue Pitts

The good news is that holiday spending is forecasted to increase by 4% for the 2019 holiday season (National Retail Federation). The bad news is that online shopping is becoming more and more popular and is a threat to small local businesses.

Small Business Saturday and shop local campaigns are great and a big help. But in the end, the customer is looking for the perfect gift or a special experience. Here are some tips to help you stand out from the crowd and offer a local experience that customers will not be able to resist:

1.  Decorate, Decorate, Decorate! – whether you are a restaurant, retailer or service business, turn up the volume and offer a festive experience for your customers that reflects your brand.

2.  Categorize your merchandise displays – Display items according to type of gifts your customers are looking for. Have sections for “The Perfect Gift For Dad” , “What Teen’s Want in 2019”, “Gifts for under $20.00”, etc.

3.  Be aware of holiday gifts and decorating trends – Offer these services and products to your customers. In 2019, gnomes are the new red truck. And have you noticed that Advent Calendars are everywhere? How about a 12-days of Christmas hair care package?

4.  Work with other local business to host a shopping event, contest, etc.

5.  Invite local makers into your service business – Imagine getting the perfect holiday hair cut and being able to find unique gifts made locally at the same time.

6.  Offer convenience – Online stores, major retailers, and restaurants are equipped to offer undeniable convenience. There is no reason a local business cannot compete with this. Offer online purchases from your website or an app with local store pick up, or as a restaurant, join food delivery services to offer home delivery.

7.  Up your content and social media game – Online “window shopping” is a thing. Post your gift guides and gift categories along with tips for the holidays on your blog, Facebook, and Instagram. When your customers search for these things online they will be able to find you.

8.  Consider special hours for the holidays – Big box stores always extend hours and Amazon is open 24/7. What can you reasonably do to add a bit more convenience for your customers? Maybe one evening opened later will suffice?

9.  Take advantage of community holiday festivities – Consider participating in some way. Maybe extending hours to be open during the event or participating with a pop up shop at the actual event.

10.  Collect customer information – This is valuable information to have for future promotions and next year’s holiday season. If you already have this information, check in with them and email them your latest blog posts, gift guides, and tips.

 

 

About The SBDC and the Author
The Iowa SBDC provides no cost technical service and advice for Iowa Small Businesses and individuals looking to start a business. The 15 centers through out Iowa are run by small business experts and counselors who have the experience and expertise to confidently help on a number of topics

Sue Pitts, Regional Director for the Iowa Western SBDC in Council Bluffs has been in the position since 2004. Sue has become the state expert in Digital Marketing and Website Content. She teaches small businesses on these topics on the local level as well as at regional, state, and national conferences.

Summer for Small Business

This summer has been hot.  With many days climbing into the upper 80’s and 90’s, it’s hard to find motivation to accomplish any amount of work.  All you want to do is hop in the pool, or sit on your couch with a fan.  It can even be hard to run a business in this heat.  Customers may not want to walk or drive to your store to avoid the heat.  Your employees may lose productivity as they take vacations or simply daydream about being outside in the fresh air.

However, you can still improve your business in the summer months.  Here are four ideas to help you keep your business running smoothly when even the air conditioning is struggling.

  1. Take advantage of “rainy days”.

I know many people still use the adage “I’ll save it for a rainy day.”  Generally this means they’re saving some money for when it’s tight, but it also means sometime when a job can be accomplished.  Luckily for us, this summer has brought many rainy days to accomplish tasks.  However, you don’t need to watch the sky to know if it’s a rainy day.  A rainy day can be any time that you can accomplish a task.  Is your business often quiet before 10 am?  Then schedule some time in the morning to work on that bookwork that’s been piling up.  Do five people call on Tuesdays compared to 20 the rest of the week?  If so, start using that day to update your client profiles.  “Rainy days” can happen at any time.

  1. Make sure all your systems are running smoothly.

This one is especially true if your business involves a lot of outside work or has many pieces of equipment.  The summer months are the best time to fix anything that may be broken on your office building or within your machinery.  Take this one from me as I have had to set fence posts into the cold ground on Christmas Day and also demolish a building in mid-May.  I would much rather demolish buildings all summer then set one fence post in December.  Your employees will thank you if you accomplish outside tasks during the warm summer months.

  1. Plan an employee or customer appreciation night.

This one can help you express your gratitude to loyal employees and customers.  Rent a park, picnic shelter, or even just offer up your house one night (assuming it can hold all your employees).  Your customers will appreciate the gesture, and it can help build comradery between your employees.  It can also be cheap, especially if it’s an outdoor employee potluck or barbeque.

  1. Take a class

This is a page right out of your college handbook.  If you get behind on your degree, take summer courses.  Running a business is no different.  If you’ve been running your business for a long time, taking a class that is focused on your business can give you new perspective on how to attract customers, create marketing schemes, or simply get you up to date with new rules and regulations.  There are many classes for business owners offered in the summer months.  If you are interested in this, check out www.iowasbdc.org/workshop-calendar/ for different classes, workshops, and seminars offered around the state of Iowa.

Studying vs. Learning in Entrepreneurship

Students.  The children, teens, and young adults out there in the world trying to learn as much as they can in order to succeed in life.  As I am currently one of these, I can say that studying and learning is my job.  As I write this post, I am well aware of the fact that I have three to four hours of homework waiting for me at home, and I can’t say I’m excited about that fact.  Some business owners may understand my pain as you have piles of bookwork stashed away to be tackled when you have time.

But this blog isn’t for the people who already have a business started.  It’s for all of the people who are reading this, hoping to gain more information on how to be a business owner so they can become one too.  You’re doing your homework, so to speak.  Reading entrepreneurship articles for hours, trying to understand as many concepts as you can to ensure that your vision can come to fruition.

I realize that I’m still a student with very little “real world experience”, but I can say that I understand homework and studying.  It’s tedious, your hand cramps as you write yet another research essay, and you can’t cram any more accounting information into your head.  Studying is legal torture, and you cannot convince me otherwise.

I’ve also heard that you never stop learning.  But I’m beginning to realize that we have confused studying and learning.  Many students study for hours to simply regurgitate what they memorized onto a test, and then forget it immediately after.  They haven’t really learned anything, just passed the test.  Most of you are probably wondering what this has to do with business, but I’m not just talking about formal education here.  Many people have goals and visions for a future company.  They spend hours researching on sites like Forbes, Entrepreneur, and The Wall Street Journal hoping to eventually figure out exactly how they should put this idea into action.  They study, and while this isn’t bad, it’s not learning.

Growing up on a farm, I never studied how to check cattle.  There was never a website that I logged onto to figure out how to unlatch a gate, or read a magazine article on how to carry a hay bale.  But I learned a lot.  It was informal, and often painful as I would get kicked or stepped on, but I learned a lot about how to properly handle an animal and farm work that I couldn’t have learned through a book.

One Entrepreneur article says that many people have the knowledge to become business owners, they have studied so much that they have “information overload” and don’t know where to go.  They haven’t turned their hours of studying into learning.  The article goes on to encourage aspiring business owners to take action, and start the business.  You can’t fail if you never start, but you can’t succeed either.

I doubt that most of you will have to worry about stampeding cows if you open your business, but there are other things that will be difficult.  You may struggle finding loans, creating a customer base, or marketing your product.  However, I would have never learned how to jump over a fence if I never had the cattle in the first place.  Maybe it’s time for you stop studying entrepreneurship, and start learning about entrepreneurship.

If you’re ready to take the next step but are still uncertain on exactly where to go, the Iowa SBDC is here to help.  Visit / to schedule your free and confidential advising appointment.

 

Springtime for Small Business

The time around the changing of the year is commonly used for reflection and revitalization. We make promises of things that we will change about ourselves, or we set goals for the year, tough goals, that we may or may not reach. Today, I want to focus on something much more practical. With the longer days and warmer weather, you will probably be preparing to rid your house of the clutter that has accumulated over the past year. This is a great opportunity to do the same for your small business. Small business owners should take some time to perform some spring cleaning on their businesses.

What do I mean by that? Spring cleaning is all about getting rid of clutter. “Clutter” is anything that is inhibiting you from creating value for your customers.  For your business, “clutter” may be the Britannica-sized stack of papers on your desk. It may be the product line that isn’t selling. It may even be the employee who shows up late, drags their feet, is rude with customers, and adds about as much value to your business as the pen you’re fiddling with while you read this. Whatever it may be, it is disrupting processes and decreasing revenue. Spring cleaning is all about eliminating these things.

Why do I believe this is a good activity for your business? Because I’ve seen your desk. Not your desk specifically, but the desk of a small business owner. It is a desk that bears less resemblance to a desk than it does the Amazon rainforest. As a small business owner, you have a plethora of responsibilities, and when these overwhelm you it can lead to disorganization and waste. Spring cleaning gives you a great opportunity to ask yourself questions like “how much time am I wasting on everyday tasks?” and “what can I do to change that?” You don’t need to find drastic pivots to make to your business model or philosophy. Save that nonsense for New Years. The goal is to look for simple improvements to make to your business and your daily routine.

Why spring? No particular reason, just tradition. Also, with this being around tax time, you may already be getting ideas for things that need to be cut or changed. More than anything, the end of another long winter often makes for an influx of productivity from Midwesterners, who are weary of hiding in their caves to escape the cold. Now, you can obviously choose a different time to do your spring cleaning, although then it will just be “cleaning,” and no one likes boring ol’ cleaning. Whenever you do your “spring” cleaning, the important thing is that you are setting aside time to identify and eliminate the clutter in your business.

The Amazon…or your desk?

Remember, spring cleaning is not another opportunity to make sweeping resolutions about the direction of your business. You should be looking for small, tangible changes to make that immediately increase productivity or improve business processes. Most importantly, your focus should be on eliminating, not adding. This is a time to get whatever is worthless or inhibiting out of your business. So for Pete’s sake, clean your desk.