Act Quickly on Section 179

October is the perfect time of year to look into the Section 179 Deduction, also known as the 179 Expense Election. Small businesses or those who spend less than $800,000 on capital equipment this past year may expense a capital equipment acquisition up to $250,000. If more than $800,000 is spent on capital equipment, the amount of the deduction declines as the amount spent increases.

To qualify, the property must be business equipment used in the business at least 50% of the time. Permanent structures do not qualify, although some single use farm buildings do. The equipment may be new or used and must be acquired during the 2008 tax year, from an entity not controlled by the purchaser.

If you lease or finance the equipment, the deduction may be greater than the investment required to initiate financing. For example, suppose you leased a piece of equipment in December of this year that costs $300,000. You have the ability to write off $250,000 but you have only invested the first and last payment to start the lease. The write off exceeds the investment you made to get that piece of equipment, resulting in a lower tax bill.

As always, talk to a tax professional first because every company's situation is different and there may be tax savings that are more suitable for your particular company.

Brad Harmon is the President at a leading financing company, First Star Capital (www.firststarcapital.com). Brad is a frequent contributor to online publications and newsletters, and is the author of this blog on commercial financing topics.

8 Customer Service Blunders

Every customer values good customer service. Customer service can be a company's greatest asset or its greatest impairment. To keep you company image strong and your customer service top-notch, avoid some of these mistakes:

1. Having an untrained staff. No matter how many employees you have in your company, make sure that every one of them are trained. Customers will not tolerate incorrect information or lies, which can sometimes happen when the employee does not know how to help.
   
2. Trying to win the argument. Keep in mind that the "customer is always right." It is far more difficult to gain one new customer than to keep a current one.
   
3. Standing by your policy. Taking care of the customer is far more important than standing by a policy.
   
4. Not fulfilling your promises. If you make a promise to a customer, make sure that you will fulfill it. If you promise something will be there by Wednesday, you make sure it is there by Wednesday.
   
5. Being inaccessible. Be sure to always be able to be contacted by the customer. Nothing is more frustrating than not being able to reach the person, or even just a person, to talk to. Also be sure to be diligent in calling customers back. Calling a customer back quickly will always win points in their book.
   
6. Having poor record keeping. Make sure your notes on the customers are correct and that you are addressing the right person. Nothing is more frustrating for a customer than having been promised their phone bill would be canceled, then being charged fees for not paying the bill.
   
7. Not listening to the customer. Sometimes customer service representatives do not listen to the customers and answer with non-relevant responses. Make sure to pay close attention to the customer and to their problem.
   
8. Not being polite. "Please" and "thank you" will go a long way. They are so simple but always win points with the customer.

Making sure that your customers are taken care of should be your top priority. They are the reason you were, are, and will be in business.

Brad Harmon is the President at a leading financing company, First Star Capital (www.firststarcapital.com). Brad is a frequent contributor to online publications and newsletters, and is the author of this blog on commercial financing topics.

Your Target Audience

When starting a new ad campaigns, product line, or even a different approach, it is vital to know your audience. Each target audience is different. Each group has different likes, dislikes, hobbies, etc. BMW's audience is far different than Walmart's, and both are targeted differently. To best appeal to your customers you must take the time to assess your target audience. Ask yourself these questions:

• What is the target audience's gender?
• What is their age range? Are you trying to appeal to teenagers who like bright, edgy products or middle-aged adults who lean towards neutral colors and solid products?
• What is their level of education?
• What is their yearly income? (Take time to compare how high-end products differ from consumer products. For instance, compare Nordstroms to JC Penny's.)
• What are the target audience's hobbies? Do they prefer golfing or bowling? Do they prefer television or reading novels?
• Are they single or married? Are they parents? Grandparents?
• What qualities are important to them? Do they prefer prestige, quality, or an inexpensive price?
• Why will they like your product? What does your company have to offer?
• If you want to go even farther, compile a bio of individual people that make up the targeted audience. You can even include their photo.

When you complete your assessment, you will have a stronger foundation for your project.

Brad Harmon is the President at a leading financing company, First Star Capital (http://www.firststarcapital.com). Brad is a frequent contributor to online publications and newsletters, and is the author of this blog on commercial financing topics.

Protect Your Computer

Online threats are becoming more and more sophisticated. Spammers use pop culture and recent events, like the election or the Olympics, to lure the viewer to click on links infested with malware and viruses. You must be very careful with links you click and sites you go to.

Here are some tips about how to protect your computer from such threats:

• Don't click on pop-up messages. Sometimes they say you need anti-virus software to protect your computer, but instead give you a virus.
• To counteract the scenario above, be sure you have a trusted anti-virus software already installed in your computer. You will have no need to click on the link.
• Be very careful when opening any email attachment. Try to find an email provider that scans the attachments before you open them.
• Be very careful with clicking on links in an email. A email from "PayPal" requiring you to sign in may indeed be a scammer trying to steal your PayPal account information. Be sure to login in on any website's official home page.
• Avoid emails from people you don't know or that have odd email addresses/messages.
• Regularly run spyware scans.
• Regularly up-date your software and patches.
• Routinely back-up your files onto an external hard drive or USB drive.
  

Brad Harmon is the President at a leading financing company, First Star Capital (http://www.firststarcapital.com). Brad is a frequent contributor to online publications and newsletters, and is the author of this blog on commercial financing topics.

Your Elevator Pitch

Do you have an elevator pitcher? An elevator pitch is a means of convincing the person you speak to, mainly your investors, networks, and prospects, of your business potential in 60 seconds or less. Basically, can you tell the overview and goals of your business in 150 words or less, in one elevator ride?

Why do you need an elevator pitch, you ask? It helps you, firstly, figure out the true goal or your business. It answers questions such as “Who are you?” “What is your product/service?” “Why does your product/service do for the buyer and what are the benefits?”

Many times investors and venture capitalists are too busy to look through an 80-page business plan. They want to know who you are and what you do in literally one minute.

Firstly, figure out what is your goal for your business? What is unique about what you do? Why are you a cut above the rest?

Be sure to make it exciting and keep it simple. Show your passion for what you do. But keep it clear, concise, and memorable.

If you formulate a strong elevator pitch, you will be prepared to “wow” any investor.

Brad Harmon is the President at a leading financing company, First Star Capital (http://www.firststarcapital.com/ ). Brad is a frequent contributor to online publications and newsletters, and is the author of this blog on commercial financing topics.

Your Business Plan

Your business is born through your business plan. Make sure that it is as thorough as it can be. The more detailed you can get, the more grounded you will be.

We did a search to find great business plan websites and tools. Here are our results:

• US Small Business Administration – This site is full with articles, resources, and tools. SBA offers many services in addition to help businesses with all types of needs. www.sba.gov
• SCORE – SCORE offers many tools for the business owner. They offer templates for business plans as well as free business mentoring. www.score.org/template_gallery.html
• My Own Business – Non-profit site that offers a business course with 14 lessons on basics to starting your own business. www.myownbusiness.org
• BPlans.com – This is a simple website that offers many business plan examples, articles, tools, and software. www.bplans.com
• Entrepreneur – Offers many articles on how to write a solid business plan. www.entrepreneur.com/businessplan/

Brad Harmon is the President at a leading financing company, First Star Capital (http://www.firststarcapital.com/ ). Brad is a frequent contributor to online publications and newsletters, and is the author of this blog on commercial financing topics.

Do You Have A Borrowing Checklist? - Part 2

Last month we shared 5 items that will make the borrowing approval process quicker and easier. This month we have some more items to add to that list. You may be already on top of these items, in which case- outstanding! If not, hopefully this will be a useful business guide

Most leases under $75K only require a one-page credit application but often times other issues come up or the equipment you’d like to lease is a higher amount. Knowing pertinent company information or having it easily accessible will save you precious time and let you get back to focusing on what you do best!

Sam Thacker from Allbusiness.com has put together a borrowing checklist. Here are a few more important items that we often trip across at First Star:

1. "Know several important statistical characteristics of your business. Here is a partial list of information that management should always know about their company through the last interim financial statement:
   a) Year to date gross sales
   b) Year to date gross and net profit
   c) Current accounts receivable balance
   d) Current accounts payable balance
   f) Projected annual sales for the current year.

2. Know what lenders / trade vendors have filed financing statements. (UCC’s) against the business. Have copies of them and understand what collateral is secured. Knowing in advance who has a blanket lien on the company is very useful, particularly if you’ve already paid for some or all of the equipment.

3. Keep a one page, smartly worded, easy to understand description of your business. This is particularly important if your business is complex and unique.

4. Write a quick and easy to understand description of the equipment you are looking to acquire and how it fits into your operations. Just like your business may be complex and unique- so too with the equipment. Briefly explaining what the equipment is and how it fits into your operations can help speed up the approval process.

5. If your leasing request is higher than $75K (or in some instances $100K), you’ll need to provide the last 2-3 years of completed business tax returns and financial statements. "

Don’t be overwhelmed. You won’t be asked for all of these items- you may not be asked for any of them. But staying on top of such items will not only help you when it comes time to acquire some new equipment, it just makes good business sense. Our goal at First Star is to help your company grow and succeed. Being a well-informed borrower is key to your success.

Brad Harmon is the President at a leading financing company, First Star Capital (http://www.firststarcapital.com/ ). Brad is a frequent contributor to online publications and newsletters, and is the author of this blog on commercial financing topics.