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Investing Those Tax Reform Savings

One of the most significant changes in the Tax Cuts and Jobs Act will be a 20% deduction for all pass-through businesses. (Businesses that pass income to the owner to pay the income taxes.) This means, as an example, if your revenue in 2018 was $500,000, you will pay taxes on only $400,000 of that revenue. In a 15% tax bracket, the savings will be about $4,500 on a gross basis and even on a net basis the savings will get your attention. It is anticipated that this will impact roughly 95% of the small businesses in the United States.

That sounds like good news, and, to be sure, it is! The more important question, however, may be what to do with those tax savings. One possibility is to pour it back into the business in some form of new business development or promotion – i.e. marketing.

Investing in the business when “surprise” funds become available should help to grow the business and increase future revenues for many years to come, thus magnifying the impact of the tax code changes.

That investment could come in various forms that could lead to increased production and sales. Here are some general ideas to consider:

  1. Hire additional staff who will potentially add operational productivity and increased sales. If the tax savings aren’t large enough to cover the increased salary, don’t forget to measure the value of the increased sales revenue. That increase may make up the difference. Adding staff to a well-run business, meaning one with operational efficiencies that will incrementally benefit from increased productivity and sales, will lead to increased profits.
  2. Spending a little more on an effective advertising campaign will likewise increase profits, as a result of increased sales.
  3. Maybe its time to expand the product line. Have customers been asking for something that you just couldn’t afford in the past? Now, with tax savings, perhaps its time to follow through on meeting those customer requests for slight enhancements in the product line.
  4. Not to be outdone, a service provider can also consider customer requests for additional services. Expanding service offerings that respond to customer needs will certainly increase sales.
  5. Perhaps a discount or coupon offering will get a lagging product or service into an upward tilting sales line. With some extra funds (tax savings) to cover the costs, perhaps a well-placed promotion will help that lagging product get the notoriety it needs.
  6. Another direction where tax savings could be spent is in expansion of a sales territory. If a lack of resources has limited your geographic reach in the past, perhaps now is a good time to expand to new territory.

The tax savings for the tax legislation may be the funding source needed to address some growth tactics that have been set aside in the past. Business owners that can take these steps will reap long-term benefits that will far outweigh the short-term increase in personal income.

While considering some of the marketing and promotional steps mentioned here, don’t forget to check out the SCORE/NaperLaunch Marketing Series workshops and meetups available each month at NaperLaunch.

Monday, January 14, 2019 - 11:00am

End-of-Year To-Do List for Small Business Owners

Don’t let the hustle and bustle of the holiday season cause you to forget about your business. Crossing these items off your to-do list before the end of the year will help you not only close out 2018 but also get off to a good start in 2019.


  • Generate a complete financial report that includes a profit and loss report, balance sheet, and cash flow statement. If your profits are higher than expected, consider making some large purchases for which you can record depreciation. (Check with your accountant and review depreciation rules first.)
  • Reconcile accounts receivable. Review your list of unpaid invoices and payment owed for work already completed and try to collect on them by the end of the year.
  • Schedule a meeting with your accountant and/or tax preparer.


  • Evaluate last year’s goals and set new ones. Use the information to plan for the upcoming year, including financial goals, budgeting, and staffing, as well as updating your business plan.
  • Make a list of the year’s accomplishments (and don’t forget to share them with your employees!).
  • Conduct an inventory count and update your records if needed.


  • Back up your data and contacts (and make sure your employees do the same).
  • Audit your website. Go through your site and click every link. It’s also a good idea to send yourself a message from the “contact us” form and call the 800 number to make sure it works.

Human Resources/Payroll

  • Decide if you’ll offer year-end or other bonuses to employees. Distributing them in December versus January has tax implications because it affects the profits you report.
  • Check payroll and verify benefits and 1099 information. Identify any issues or corrections that need to be made before the year’s end and look for fringe benefits you’ll need to report on your W-2s.

If 2019 is the year you want to start or grow your business, why not add “join NaperLaunch” to your to-do list? In addition to coworking space, mentoring, and access to the library’s business resources and technology, we also offer the NaperLaunch Academy. The January 2019 cohort is forming now!

Thursday, November 29, 2018 - 10:00am

Financial Wellness Series

Managing financial wellness can be a challenging do-it-yourself endeavor for many Americans. However, no one must do it all alone! Naperville Public Library’s upcoming financial wellness events provide the opportunity to learn from a financial expert about Social Security and Tax Planning. Dates, times and locations are listed below. No registration or library card is required to attend these programs.

  • Financial Wellness: Tax Strategies
    Date and Time: Wednesday, November 7th, 6:30 – 8:30 pm
    Location: Nichols Library Community Room
    Presenter: Ray Kozicki from The Foundation for Financial Education
  • Financial Wellness: Advanced Social Security Planning
    Date and Time: Wednesday, November 14th, 6:30 – 8:30 pm
    Location: Nichols Library Community Room
    Presenter: Ray Kozicki from The Foundation for Financial Education

The Tax Strategies presentation will review activities that make it easier to maximize the benefits of recent tax law changes. Financial planner, Ray Kozicki, will also address creating tax-advantaged streams of income.

Attend the second session to learn about Social Security planning. Learn how to calculate potential benefits and what the impact of Cost-of-Living adjustments could be to those benefits.

Ray Kozicki volunteers his time with The Foundation for Financial Education to help increase communal and organizational financial literacy. Read more about Ray on the Foundation’s website. The Foundation for Financial Education is a national non-profit organization that provides free financial education to the public.

Monday, October 29, 2018 - 2:30pm

Update Your Skills with

Naperville Public Library provides access to many digital resources, but a key one to update and learn new skills is is an online learning platform that contains thousands of streaming videos that can help anyone learn business software, technology and creative skills.

Access is free for Naperville Public Library cardholders and easy to use. Just log in with a library card number/username and PIN.

After signing in users can search for specific applications such as MS Excel, MS Word or browse through a broad collection of videos using the menu. Access the Business collections by going to Library > Business > and choose a topic.

lynda example 1

The available business skills courses include learning how to sell into specific industries, how to use a business coach and how to consult other businesses. There are over 500 courses in the Business Skills category alone!

lynda example 2 offers transcripts of all videos, downloading for offline access, and access via downloadable apps on all of the major platforms – check it out today!

Thursday, October 25, 2018 - 12:15pm

Take Advantage of the Small Business Resource Center

Whether starting a new venture or growing a current business, entrepreneurs need access to information and planning tools to help them achieve their goals. Small Business Resource Center covers the major areas of starting and operating a business, including planning, financing, accounting, taxes, management, human resources and marketing.

This online resource brings together hundreds of sample business plans and the content of 300 small business journals. The content now also includes a wide range of other media and sources:

  • Audio—Listen to or download podcasts and radio shows.
  • Video—Watch videos from CriticalMention, Inc., Press, Inc. and other providers.
  • News—Find content from over 120 local newspapers.
  • Directories—Locate listings for thousands of trade associations, consulting organizations, trade shows, etc.
  • Glossary—Define key business-specific terms for quick reference.
  • EBooks—Browse thousands of topical overviews from over 80 small business reference eBooks from Gale, Wiley, and other publishers.
  • Websites—Access vetted, authoritative and topically relevant links from outside sources.
  • Legal forms—Link directly to small business forms available through Gale LegalForms.

Small Business Resource Center is a comprehensive and useful source for entrepreneurs. You can access it here.

Wednesday, October 24, 2018 - 9:45am