5 Top Tips for Those Thinking of Opening an Online Shop

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These days more and more people are deciding to open up their own online shops- and none more so than those over 50s. Setting up an online store is not only a great mean of making some extra cash; it can also be a really rewarding pastime for those that find themselves with a little extra time on their hands. Here are five tips for those looking to set up their first store. 

It’s cheaper than you think

It is quite remarkable that these days it is possible for anyone to set up an online shop within a couple hours for next to no cost. There are a huge range of different e-commerce platforms out there and it is well worth having a look around and working out which one is for you. Many people waste thousands of pounds having a bespoke website created for them by a web design company when a much cheaper option could have worked just as well. 

Think about marketing 

It’s all well and good having a great looking site but how will anyone find it? Underestimating how difficult it can be to get people to a site is probably the most common mistake that new online business owners make. Think carefully about how you plan to acquire customers and have a good sense of how much this is likely to cost. There is nothing more frustrating than having a beautiful looking website that nobody ever visits.

 

Think about stock 

If you are just setting up your business you do not want to be holding a lot of stock. One way around this is to work with a drop shipper. You market their products but they keep them all at their warehouse and fulfil the orders as you notify them. Although the margins are not as good, it removes any risk you might have of being stuck with products you cannot sell- and it also takes the headache of fulfilment! And believe me it can be a headache. There are many companies offering drop shipping services, covering a huge range of different products, from pet supplies to electronic equipment. If you do decide to work with one then make sure you do plenty of research to ensure they are reliable.

 

Do your homework 

The more you understand about e-commerce then the more likely your shop is to succeed. You may not want to become an expert in user experience, organic search, pay-per-click, analytics or any other mysterious online phenomenon, but having a working understanding will be incredibly useful. There is a huge community of first time internet entrepreneurs and they are incredibly eager to help out newcomers. Sites such as Warrior Forums and SEOMoz are full of great information and support for newbies. Do not waste money on e-books or expensive courses which claim to explain how to set up a successful online shop- all the information you could ever need is available on the web for free. 

Market research 

It is amazing how attached you can become to your online shop and it is always good to try and get other people’s opinion. Market research does not have to be expensive- in fact it doesn’t have to cost anything at all. Simply construct a list of questions and email them to everyone in your address book and ask them to respond- before you know it you will have a useful sample size. Feedback is really important and the beauty of having an online shop is that it is relatively quick and easy to act upon it. It is important that you have a shop which you are happy with- but ultimately it’s more important that you have a shop which your customers will love.

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What Is a Good Credit Card Deal?

You must have heard people say – ‘I got a good credit card deal’. So if you happen to be looking for a credit card at that moment, do you just go with what your friend has told you as a good credit card deal? 

Let’s check what one can term as a good credit card deal. A credit card deal is good if it works for you. So, if the credit card fits into your lifestyle in a way that rakes in maximum benefits for you, that is a good credit card deal.

Credit Card Deal

The most important thing to realize here is the word ‘your’ as in ‘your lifestyle’. So logically speaking there is nothing like a good credit card deal. What it is - is good credit card deal for ‘you’ i.e. the individual who is going to use that credit card. 

This is because the lifestyle and the needs differ from person to person (and that is precisely the reason why every credit card supplier offers so many different kinds of credit cards). 

It might be true in some cases (where the lifestyle of two individuals/friends is similar) that the credit card deal which is good for one be good for the other too, however, this is just in a few cases. 

You can always check with your friend who has recently got a credit card deal, since that might cut down the time needed for researching/hunting-for a good credit card deal. 

Travel Credit Cards

However, it’s really a matter of evaluating your own needs. If you travel a lot and to far off places by air, a card that offers you good rewards/rebates/benefits on travel would comprise a good credit card deal. 

Sometimes the airlines themselves have their own airline credit cards where you can get a good credit card deal. For people shopping at a particular retail store or a shop, a good credit card deal would be a card that offers discounts, rebates and rewards on shopping. 

Again, the retail stores themselves might have credit cards on offer that could be beneficial to you. Then there are credit card deals that are linked to gasoline stores or big grocery chains. If you don’t have any specific needs, you might use a general purpose credit card that gives reward points on every purchase you make on your credit card. These points can then be redeemed for cash/rewards. 

Hence, this card could become a good credit card deal for you. 

Good, for credit card deals, is really a relative term and there is no credit card deal which is equally good for all.

Reverse Mortgage vs. Payday Loan, the Hard Facts

Loans (Photo credit: zingbot)

Reverse mortgage vs. payday loan Reverse mortgages and payday loans have significant similarities and differences. If you're looking for the hard facts, you will find them here. Both reverse mortgages and payday loans can be used when you are in need of immediate money, although reverse mortgages can be drawn monthly too, which would provide long-term financial stability. 

Reverse mortgages are primarily for those of retirement age.

A reverse mortgage allows you to draw money in a lump sum or you can receive monthly payments. Reverse mortgages are common for those of retirement age because it provides an opportunity to starting preparing for retirement living. Often times, retirees will invest in property, RV's, or park model homes so that they can retire without financial struggle. If you are not ready to sell your house but you'd like to purchase something for retirement, a reverse mortgage provides that opportunity.

Reverse mortgages are based on the equity of your home.

In order to receive a reverse mortgage, your home has to be appraised at a significantly higher price than you currently owe on your home. This may not be possible with the current condition of real estate. During the economic recession, homes lost a large majority of their value and their equity quickly plummeted. Before you consider a reverse mortgage, it's a good idea to have the equity of your home appraised so that you can see where you stand financially.

Reverse mortgages have interest that will be added to your mortgage.
Like all loans, a reverse mortgage has an interest rate. This interest will be accrued to your mortgage, so it's important that you keep a close eye on the interest that you are accumulating. Essentially, your reverse mortgage will draw equity away from your home, since your mortgage will continuously increase because of this interest. This makes reverse mortgages unfavorable to some, but if you're not in a position where you feel comfortable selling your home, they may be the perfect option.

Payday loans often earn their money from repeat loans.

Payday loans have a poor reputation among many financial advisers because payday loan companies earn about ¾ of their income from repeat loans. This is often because payday loan companies encourage borrowers to continue drawing loans when they cannot afford to repay their initial loan's fees. 

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This leaves the borrower helpless to the high interest rates of the payday loan and they often struggle to break free from the amount of debt they have accumulated.

Payday loans have high interest rates; the lowest APR cap is 156%. (Texas)
Payday loans have very high interest rates but they are intended to be short-term loans. The lowest annual percentage rate cap is found in Texas and is 156% of the loan. While you would never take an entire year to repay a payday loan, this helps increase the extent of the interest. Payday loans typically have a two week payback period. This means you must recover the funds to pay back the loan and all fees associated with the loan within a two week period.

Payday loans provide short-term financial relief and are typically easy to obtain.
Payday loan companies are not very picky when it comes to accepting borrowers. Unlike banks and financial institutions, credit is not a huge factor when it comes to approval. If you have a bank account, proof of income and a driver's license to identify yourself, it's very likely that you will be approved. As far as we know, there are no payday loan companies that perform a complete and comprehensive credit check. In fact, it's usually harder to obtain a credit card than it is to obtain a payday loan.

Does Your Tax Preparer Have the Proper Credentials?

Taxes (Photo credit: Tax Credits)

As we approach the end of the year, many people are starting to prepare for income tax season. Whether you prepare your own taxes or have a professional do it you need to gather the necessary documents. 

I use an accountant to do my taxes. I used to do my taxes myself but they became so complicated I hired an accountant. It's not cheap but I can feel sure they are done right. The last thing I want to have is any encounters with the I.R.S.

All individuals who prepare tax returns for compensation must have a preparer tax identification number (PTIN). This requirement generally applies to all attorneys, accountants, and enrolled agents who prepare returns, as well as to registered tax return preparers who are authorized by the IRS to prepare returns.

In order to become a registered tax return preparer, an individual must pass an IRS competency examination. The PTIN requirement also applies to “supervised preparers” who do not and are not required to sign returns, but who are employed by an attorney or CPA firm and who prepare returns under supervision.

Enrolled agents and registered tax return preparers are subject to continuing education requirements set by the IRS, while attorneys and CPAs are subject only to continuing education requirements (if any) required to maintain their professional credentials.

What is an Enrolled Agent?

Enrolled agents (EAs) are the only federally-licensed tax practitioners who both spe­cialize in taxation and have unlimited rights to represent taxpayers before the Internal Revenue Service. These tax specialists have earned the privilege of representing taxpay­ers before the IRS by either passing a stringent and com­prehensive three-part examination covering individual tax returns, business tax returns and representation, practice and procedure, or through experience as a former IRS em­ployee. All candidates are subjected to a suitability check conducted by the IRS.

What are the differences between enrolled agents and other tax professionals?

The enrolled agent is the most expansive license IRS grants a tax professional. Enrolled agents are generally un­restricted as to which taxpayers they can represent, what types of tax matters they can handle, and the IRS offices before which they practice.

Unlike attorneys and CPAs, who may or may not choose to specialize in taxes, all enrolled agents specialize in taxa­tion. While CPAs and attorneys are licensed by the states, enrolled agents and registered tax return preparers are fed­erally licensed. Registered tax return preparers must pass a basic, one-part exam and complete a minimum 15 hours of continuing education per year. They do not have the unlimited representation rights held by enrolled agents, CPAs and attorneys. The enrolled agent license is the highest credential the IRS issues.

The advantage of working with an enrolled agent lies not only in the depth of experience and understanding of how to prepare a tax return, but the knowledge of tax law that may be used to represent taxpayers before the IRS. If you get a letter from the IRS, or worse, are audited or are the target of a collection action, your EA can speak directly to the IRS on your behalf.

How can an enrolled agent help me?

Enrolled agents advise, represent and prepare the tax re­turns of individuals, partnerships, corporations, estates, trusts and any other entity with tax reporting require­ments. EAs prepare millions of tax returns each year and their expertise in the continually changing field of taxation enables them to effectively represent taxpayers audited by the IRS. In addition to tax preparation and tax representa­tion, many enrolled agents offer other business-related ser­vices which may include:

• Bookkeeping
• Financial planning or budgeting
• Payroll services
• Financial statement preparation
• Mortgage assistance

Are enrolled agents required to take continuing professional education?

In addition to the stringent testing and application pro­cess, the IRS requires enrolled agents to complete 72 hours of enrolled agent continuing education every three years to main­tain their licenses. The National Association of Enrolled Agents (NAEA) raises the bar even further in that its members are required to complete at least 90 hours in a three year period.

What are the key points to remember when hiring a tax professional?

Your tax needs are best served by an enrolled agent. How­ever, no matter who you hire there are certain things to keep in mind.

• Always use a qualified professional to prepare your return.
• The preparer should always sign the return and include their Professional Tax Identification Number (PTIN).
• Beware of preparers who encourage you to lie or otherwise modify your information in order to get a bigger refund.
• The taxpayer is responsible for what’s on a tax return.
• Enrolled agent continuing education requirements are met.

Reputable preparers will ask to see receipts and will ask multiple questions to determine whether ex­penses, deductions and other items qualify. By doing so, they are trying to help their clients avoid penalties, interest or additional taxes that could result from an IRS examination.

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