In our fast-moving world, using concise yet descriptive words and phrases can be very powerful when communicating important thoughts and ideas.
While the term can incite eye-rolls if overused, certain words and associated phrases can be helpful as a communication tool when you don’t have the time for an in-depth conversation. Here are some of the latest business buzzwords to help you expand your professional vocabulary or better understand them when thrown at you.
Headwinds & Tailwinds. Headwinds are outside factors that get in the way of where you want to go. They can be macroeconomic factors like interest rates, or can be closer to home such as new regulations in your industry. Tailwinds are positive factors that help move something in a better direction for you, like a competitor getting out of the market or demand increasing for your product. It’s like riding your bike on a windy day – it’s out of your control, but riding is so much easier with the wind at your back than in your face.
Forcing Function. Ever get stuck in the middle of a project or have delays caused by someone not doing their part? A forcing function is a secondary action or factor related to the activity you are trying to accomplish that forces resolution or a decision. An example is an expiration date on a sales proposal. The date is the forcing function to ensure a decision is made on the proposal. This prevents the proposal from lingering indefinitely.
Ecosystem. In business, an ecosystem is the collective group of people and organizations that comprise a given industry. To be in the ecosystem, an organization needs to have an impact on everything else within that ecosystem. For example, the tax preparation ecosystem is made up of clients, tax preparers, the IRS, state & local tax authorities, suppliers, and competitors. If something changes with anyone in this ecosystem, everyone involved is impacted in some way. To be successful in any industry, you need to understand the specifics that drive behavior in your industry’s ecosystem.
Table Stakes. Like many business buzzwords, table stakes is a term first popularized at the poker table before finding a similar application elsewhere. It refers to the minimum functionality or service delivery that is expected for an offering in a given industry. Take streaming services like Netflix, for example. Table stakes include 24/7 access, original content, and subscription tiers. Without these features, a streamer’s market share would quickly diminish.
Value Proposition. Often referred to as a value prop for short, a value proposition is a concise statement that explains the value a business provides its customers, often in comparison with their competitors. It’s essentially an elevator pitch designed to get a prospective customer interested in the business. Without a solid understanding and communication of the business’s value proposition, all other benefits the company can offer may go by the wayside. So it’s very important to get this right.
While the business buzzwords presented here are general in nature, the ones you use may be industry- or tool-specific. So be aware of the buzzwords you use on a regular basis and make sure your audience also fully understands their meaning.
If someone asks what your most valuable asset is, your answer might be your house, vehicle, or investment portfolio. But there’s another answer to this question that’s worth considering – yourself.
As you seek out opportunities to increase the value you bring to the table both in your personal and professional life, here are some ideas.
Meet one new person each week. Research shows that up to 85% of workers land a new job through networking. In other words, who you know may be more important than what you know. Consider expanding your network and potential job prospects by meeting someone new in your industry, or a related industry, each week.
Learn a complimentary skill. This will help you create meaningful points of difference that you bring to the table every day. For instance, if you’re an engineer, learn how to be a better writer. If you’re a marketing executive, consider taking finance and accounting courses. Or consider becoming an expert in an area of interest to help you land a complimentary job or meet people with similar interests.
Increase awareness about yourself. You may be the best in the world at what you do, but if companies don’t know you exist, you’ll never get better opportunities! Joining an online forum related to your industry and finding opportunities to volunteer and help other people is one way to increase awareness about yourself to prospective employers.
Aim for a personal best in your favorite activity. Get in shape (and stay in shape!) by picking your favorite activity and aiming to achieve a personal best. If you’re a runner or a walker, for example, pick a time that would be a personal best for completing a set distance, then work toward achieving that goal. Taking care of your physical and mental health will help you accomplish more in every other area of your life.
Improve your interpersonal communication. Think about the most important relationships in your life – whether it’s with your parents, spouse, children, best friends, or someone else – and find three ways you can improve your communication skills with those people. With the time, money, and education that many spend to improve their professional skills, consider a small investment to improve your interpersonal skills.
Social media is an easy way for scammers and others to try encouraging people to pursue some really bad ideas, and that includes ways to magically increase your tax refund.
– IRS Commissioner Danny Werfel
Tax scammers continue to become more sophisticated, which means it’s more important than ever to pay attention to any person or message asking you to provide confidential information. Here are several of the more prevalent scams to be on the lookout for, according to the IRS.
Phishing and smishing. Taxpayers continue to be bombarded with email and text scams from fraudsters attempting to lure you into providing valuable personal and financial information that can lead to identify theft. Phishing involves fraudsters sending emails claiming to come from the IRS, while smishing uses text messaging and alarming language such as Your account has now been put on hold!
What you can do: Never respond to phishing and smishing messages, and never click on a link! Report all unsolicited emails, including the full email headers, claiming to be from the IRS to [email protected].
Online help to create an IRS account. A scammer may offer to help you set up an online account on www.irs.gov. While the IRS’s online account tool can provide convenient access to your tax information, it’s also a valuable source of information for identity thieves who use information from your account to submit fraudulent tax returns using your name in order to get a big refund.
What you can do: Schedule an appointment with someone you trust if you need help creating an online IRS account.
Fake charities asking for donations. Scammers masquerading as charitable organizations try to lure you into making a contribution after natural disasters and other publicized tragedies. Scammers also use fake charities to swipe personal and financial information from you, in addition to targeting certain groups such as senior citizens.
What you can do: Visit www.irs.gov, then search for Tax-Exempt Organization Search Tool. Use this tool to confirm that a charity to whom you want to donate is a legitimate organization registered with the IRS.
Fake tax advice and AI tools. Social media routinely circulates inaccurate and misleading tax information. These articles and videos share wildly inaccurate tax advice, including some that involve urging people to misuse common tax documents such as Form W-2 or Form1099. They will make is especially convincing by using AI as a buzz word.
What you can do: Don’t turn to the internet for tax advice. Remember, AI-generated ideas can also pull in inaccurate information as well!
It’s easy to fall victim to tax scams. So stay vigilant and if you see a scam, let everyone know. It’s with increased awareness that we can decrease the number of scam victims.
Financing a new or used car could spell big financial trouble if your vehicle is ever declared a total loss – even if the accident is 100% the other driver’s fault. Here’s what you need to know about staying safe financially if you take out a car, truck, or SUV loan in the future.
Background – The 80% Rule
Many Americans believe if their vehicle is declared a total loss following an accident, insurance companies will provide enough money to cover the cost to replace the vehicle with a similar vehicle. The truth, though, is that insurance companies never provide you with enough money to buy a true replacement vehicle.
The rule of thumb to use when planning is 80%…if the true cost to get the exact same vehicle you were driving before an accident is $30,000, your insurance will only give you 80% of this dollar amount, or $24,000. You’ll have to come up with the other 20%, or $6,000 in this example.
Why not 100%?
Unbeknownst to most of America, the valuation of vehicles deemed a total loss is determined by one company, CCC Intelligent Solutions. Per CCC, their services are used by most of the top 20 insurance companies. Instead of using a fair market valuation method to calculate the replacement cost of your vehicle, CCC uses a model that calculates a value that, when compared to valuation models found at Kelly Blue Book, Edmunds, and NADA, is systemically low.
How to Protect Yourself Financially
Here are some ideas to help you stay financially healthy when purchasing your next vehicle:
Put down at least 20%. An unavoidable accident, even with no medical bills, could place your financial life in chaos. So try to have at least 20% equity in the vehicles you own from the moment you make the purchase or your loan will be underwater leaving you with no room to replace your vehicle with a similar make and model.
Get a vehicle history report. Don’t buy a vehicle that’s been in an accident or has had other major issues such as flood damage. Buying a vehicle history report can help you identify cars, trucks, & SUVs that may create an even greater financial risk if you need to find a replacement.
Build a fund for vehicle repairs and maintenance. Save up for inevitable maintenance and vehicle repairs. You could even use these funds to cover your 20% portion of a vehicle’s replacement cost. Having enough money in this fund is critical. If you need to repair a car after a fender bender AND you do not have enough to cover your share of the cost, you will need to deal with the lender who has a lien on your vehicle. You can quickly find yourself in a financial trap.
Choose shorter repayment terms. While the average car loan length is now well over five years for both new and used vehicles, choosing a shorter repayment term can help you build equity faster. You’ll have a higher monthly payment, but you’ll be in a better financial situation sooner in the event of an accident.
Many start-up businesses move from hobby status to a business when they start to make a profit. The tax entity typically used is a sole proprietorship. Taxes on this business activity type flow through your personal tax return on a Schedule C. Here are some benefits to consider if you’re trying to decide if being a sole proprietor is right for you:
You can hire your kids and decrease your tax bill. As a sole proprietor, you can hire your kids and avoid paying Social Security and Medicare taxes for their work. While there are exceptions, this can generally save your small business over 7.65% on their wages.
Your kids can benefit, too. Any income your kids earn that’s less than $12,950 isn’t taxed at the federal level. So this is a great way to build a tax-free savings account for your children. Remember, though, that their work must reflect actual activity and reasonable pay. So consider hiring your kids to do copying, act as a receptionist, provide office clean up, advertising or other reasonable activities for your business.
Fewer tax forms and filings. As a sole proprietor, your business activity is reported on a Schedule C within your personal Form 1040 tax return. Other business types like an S corporation, C corporation or a partnership must file separate tax returns, which makes tax compliance a lot more complicated.
More control over revenue and expenses. You often have more control over the taxable income of your small business as a sole proprietor. This can provide more flexibility in determining the timing of some of your revenue and business expenses, which can be used as a great tax planning tool.
Hire your spouse. If handled correctly, a spouse hired as an employee can work to your advantage as a sole proprietor. As long as the spouse is truly an employee of the business, the sole proprietor can benefit as a member of their employee’s (spouse’s) family benefits. This can include potential medical expense reimbursements.
Funding a retirement account. You can also reduce your business’s taxable income by placing some of the profits into a retirement account like an IRA. As a sole proprietor, you can readily manage your marginal tax rate by controlling the amount you wish to set aside in this pre-tax retirement account.
It’s not all roses. While there are many benefits of running your business as a sole proprietor, don’t forget the drawbacks. One of the most significant drawbacks is the lack of personal legal protection, which is a feature in other business forms like corporations and Limited Liability Companies. Most sole proprietors address this with proper business insurance, so do not overlook the need to find coverage for yourself.
Please call if you have questions about your sole proprietor business.
