From NFTs, to the booming economy driving inflation concerns, to tax season, there is a lot going on this spring!
And let’s be honest: If you’re like most entrepreneurs out there, you’re probably just trying to keep your head above water running your business.
In today’s publication I provide some context for the latest business data, share tax tips in an interview with my CPA, and put a practical spin on the NFT/crypto craze that hopefully keeps you focused on what matters most right now.
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Our insights this month come from my friend Stephen Rifici, a private wealth advisor and Certified Financial Planner with Ameriprise Financial Services.Activity on the services side of the economy is accelerating at a record pace, according to a recent report from the Institute of Supply Management (ISM). The ISM Services Index for March far exceeded all estimates, coming in at 63.7—the highest the index has ever been since its inception 23 years ago.
So what does this mean exactly?
The economy, absolutely flooded with capital, is roaring back across multiple sectors in the U.S. So quickly and so strongly that worries of inflation are beginning to sound more serious. But if you’re running a real estate business or another small service enterprise, what do you do? I’ve got two quick suggestions:
Re-examine your expense budget for opportunities to cut and increase your profit margin. If you’ve been in a position to take advantage of the booming market, then you’ve probably gotten lazy with your expenses. I know I have. The danger is growing that increasing prices will erode your profit margin. Act now to trim the fat.
Double-check your number for revenue per unit sold and make sure it’s tilted upward. If it’s not, it’s best to evaluate that now before inflation does kick in and you find your expenses per unit up and your revenue per unit down.
It’s tax season, of course, and for many business owners, that means dealing with lots of documentation around worker classification (among plenty of other things!). Sometimes that’s not so straightforward. As a small business owner, you may employ several W-2 employees, but you also likely work with at least a few (and sometimes a lot of) independent contractors.
So, what are the best practices for business owners to follow on worker classification?
I recently interviewed my very own CPA,Larry Rubin of Aronson LLC, about a handful of small business finance questions, including worker classification. From determining what’s “easier,” to figuring out whether or not you need to issue 1099s (and how), hear what Larry had to say about all things worker classification in the interview below.
In a CPA’s busiest season of the year, I can tell you: Larry is one making things happen.
I have been fascinated lately by what appears to be the decentralization and remaking of our culture of value around digital goods and services. Whether it’s looking into crypto, blockchain, or NFTs, I’ve made my way down a few of these rabbit holes this month.
I do think all of this has massive implications for real estate and entrepreneurism for the next 10 years and beyond.
We are already seeing digital tokens created, used, and traded for all sorts of things, including real estate. We are also seeing tokenization for original social media posts, thought leadership content, digital courses, and who knows what else.
Honestly, it all makes my head spin, and I know I’m not alone in that.
I suggest two things:
Keep reading and educating yourself about the space, and be patient. I really thought Scott Galloway’s recent podcastwith Raoul Pal, Co-Founder and CEO of Real Vision Group, was well done. That podcast led me to Real Vision TV—a great resource to dive into all things digital currency. I also think you’ll appreciate Seth Godin’s take in his recent blog post as well as my favorite explainer so far, “All About NFTs” on The a16z Podcast.
Stay focused on executing your business now as you know it. The newness and hype around this stuff can be distracting. Meanwhile, you have customers you need to call back and people you need to hire. Have the confidence to know that whatever macro changes happen, you’ll be able to pivot successfully. In the meantime, keep your eye on the ball by working on your vision, your love for the journey while you execute, your financial capacity, and the quantifiable impact you can have. All is well. And all will be well going forward.