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Insurance can cover costs associated with rioting

Posted on August 7, 2020July 6, 2020 by Victor Varma

It’s a scenario that has happened all over the country.
The owner of a small restaurant or boutique just gets the store ready after the long coronavirus quarantine and then, a riot. Windows smashed. Building vandalized. The entire inventory ransacked and stolen.
Were they finished for good?
For the insured, there was good news in May and June and for those whose enterprises were not hit, there were lessons learned.

Business Insurance
A standard Business Owners Policy typically covers fire, riots, civil commotion or vandalism. Plate glass insurance can be purchased separately. The key is whether the insurance was sufficient to cover all losses, including inventory and equipment. According to the Insurance Information Institute, some small business owners, cutting costs after the virus quarantine left them without income, may have discontinued insurance policies.

Income Interruption Insurance
Business Interruption Insurance pays for loss of income when businesses are forced to close because of rioting or some physical damage to the premises. However, according to the Institute, only about 40 percent of small businesses have this coverage.
Businesses have to document their income and expected loss from the looting. If a business was closed due to the virus outbreak, and then was looted, most insurers will assess the loss based on a 12-month income picture, according to the Claims Journal.

Outlook for Business Insurance
Property losses were still ongoing, but with rioting taking its toll on cities across the country, insurers were estimating losses to be the biggest in U.S. history, the Claims Journal reported in June.
For the insurance industry, the timing of the riots is especially difficult since the Atlantic hurricane season began in June. Hurricane and flood claims are extremely high.
Most observers expected insurance premiums to rise overall while the industry limits coverage. Insurers are likely to stop writing policies that cover looting and rioting.

Tips for giving a speech

Posted on July 2, 2020June 9, 2020 by Victor Varma

When you’re going to talk at a meeting, see the boss, or give a speech, it’s normal to be nervous. Dorothy Leeds, author of Power Speak gives this advice that helps:

Prepare. Make an outline of what you will say. Do a dress rehearsal to see how you look even if it’s just a raise request to a supervisor.
Check the meeting plan. Know when you will be able to speak.
Visualize yourself doing well, having a successful talk with the boss or making good points at the meeting.
Memorize a few opening sentences. After that you can look at your notes.
Walk calmly, take a few deep breaths as you wait to speak. Arrange your notes and materials.
Don’t forget to breathe when you are speaking. If it helps, put a symbol in your notes indicating breaths.
Watch your gestures. Don’t hold a paper if you are shaky.
Learn to pause. It lets the audience catch up with you.
Never tell the audience you are nervous.

Buying and selling in the temporary normal

Posted on May 29, 2020April 7, 2020 by Victor Varma

With all of this extended time spent homebound recently, many of us have discovered a new truism: if you have to be quarantined, you might as well do it in your dream home.

No matter what — the season, the economy, even a virus — people will continue to buy and sell houses. It’s only the process that changes. And buyers and sellers who can adapt and pivot are the ones who come out ahead.

Fortunately, real estate professionals are already adept at strategies that could prove especially helpful this year, as COVID-19 dominates the news.

Think: technology. Virtual tours will likely increase in popularity. Buyers were already screening houses online before seeing them in person, and a thorough virtual tour could dramatically increase the number of eyes on your property.

A 2018 report by the National Association of Realtors (NAR) said that 46 percent of buyers found a virtual tour very useful, while 74 percent used the internet to search for homes. Among millennials, that figure leaped to 92 percent.

Some other accommodations this year could include:

Sellers may request more hand-washing. Another NAR survey, this one in March, found that more sellers were requesting that visitors wash their hands or use sanitizer. (Some may also request the use of booties, a commonplace request already.)
Open houses may limit the number of people inside a home at one time – which probably makes for a more pleasant walk-through anyway.
Technology can also aid in brokering a deal. Already, contracts are regularly sent via email and signatures can be gathered online. Expect more of this.
Those who attend open houses in the coming months are more serious buyers, as the tire-kickers have opted to stay at home.

How do we move on from coronavirus and get back to work?

Posted on May 1, 2020April 7, 2020 by Victor Varma

Today we know every member of the workforce is extremely valuable because when we went home in March, everything fell apart.

The stock market (and our retirement savings), our incomes, companies, and a good slice of our dreams, at least in the short term. Not to mention our friends and family who suffered with the virus that has been the top of our minds.

But now that we see the end of the virus in sight, what do we do?

People have different ideas

Harvard Business Review recommends the following:

Test every worker — Open the parking lots and make sure every person is well.
Certify patients as ready to work (and not shedding virus.)
Employers, retailers, restaurants, even friends and neighbors insist on verification that each person is virus free. Everyone maintains social distancing.
States would optimize the plan.

Meanwhile, the Imperial College of London says stringent controls will be required to keep people safe.

They suggest: Impose social distancing every time admissions to intensive care units spike. Relax when they fall.

Their advice is to do this until a vaccine is discovered, possibly 18 months. So schools would close and social distancing practiced in two month blocks, with one month off.

Meanwhile, until a vaccine is available, everyone mostly stays in quarantine, minimizing social contact.

Under this model, we just accept that restaurants, cafes, sports, gyms, theaters, malls cruises, and airlines basically shut down.

A dour existence in which we live the pandemic daily?

Not everyone is so downbeat.

Most observers think that mass testing is really the main requirement for getting back to work and a social life.

In China, traffic jams and smog are back and sales of housing and cars are ticking upward, according to Foreign Policy.

One problem in China that is slowing a return to growth: People are not spending money, especially on big ticket items. Maybe everyone, everywhere is saving an emergency fund.

Coronavirus and investments: Don’t worry, be happy

Posted on April 3, 2020March 10, 2020 by Victor Varma

So the stock market tanked in historic drops in February on news of the coronavirus Covid-19. It also recovered in an historic one-day recovery.
Dizzy yet?
Investment experts at Market Watch say ignore the headlines.
The market will go up and down during the virus crisis, but no experts think it will stay down.

Long-term investors need not worry
Those with a 401(K) or IRA are probably still doing well compared to the same time last year or even the year before. If you have some time before retirement, take a deep breath. You made a lot of money in the last three years, and you are probably still ahead.

Don’t let bad news make you sell good stocks
Headline risk. That’s what stock advisers call short-term bad news that panics some investors into selling.
Don’t panic.
Apple, for example, was selling for around $146 in 2018 but soared to more than $330 before the virus crisis. During the crisis, it dipped to around $220. But, even though in the short run, sales will be slower and the supply chains crazy, it’s still Apple. Still a great company to own.

Opportunities arise
Plus, in the meantime, as stock prices sink, buying opportunities rise. Buy the bargain. A short-term crisis offers lots of buying opportunities.
One caution from Market Watch: Don’t try to guess when the market will be lowest. No one can. Buy when the bargain seems good.
It might be time to look at your portfolio and consider rebalancing your ratio of stocks to bonds, according to Market Watch.

New investment rule: Take your money later

Posted on February 28, 2020January 15, 2020 by Victor Varma

As of Jan. 1, those with a 401(k) or IRA can start withdrawing the required minimum at age 72.
Previously, account holders were required to take the minimum distribution at age 70.5.
The new rules, arising from President Trump’s Secure Act, update the old rules, which were based on life expectancies in the early 1960s.
There may be some tax implications for some account holders, depending on their tax brackets in the year they withdraw. Check with a financial advisor to be sure.
The Secure Act also eliminates the maximum age for traditional IRA contributions, which was previously capped at 70.5 years old. The bill summary by the House Ways and Means Committee explains, “As Americans live longer, an increasing number continue employment beyond traditional retirement age.”
Americans who turned 70.5 years old during 2019 will still need to withdraw their required minimum distributions. Failure to do so results in a 50 percent penalty.
People who are expected to turn 70.5 years old in 2020 will not be required to withdraw RMDs until they are 72.

PPP loans and taxed expenses

Posted on January 15, 2020December 5, 2020 by Victor Varma

The IRS issued guidance in November clarifying the tax treatment of PPP loans that have not been forgiven by the end of the year the loan was received:

Businesses are not taxed on the proceeds of a forgiven PPP loan, so the expenses are not deductible.
This means that the taxpayer sees neither harm nor benefit, since the taxpayer has paid nothing out of pocket.
Here is how this looks on your tax return, according to bench.com:
A C-corporation receives $100,000 in a PPP loan, uses the money entirely on payroll and qualifies for loan forgiveness.
The $100,000 won’t be listed as taxable income on the tax return.
BUT, the tax deduction the business would normally get (about $21,000) won’t be allowable. So, surprise — you have an extra $21,000 tax liability (assuming 21 percent corporate tax). You did receive a net $79,000 from the program, which you have already spent, but which you might not have had otherwise.
Businesses are encouraged to file for forgiveness as soon as possible. If a business believes a PPP loan will be forgiven in the future, expenses related to the loan are not deductible, whether the business has filed for forgiveness or not.
If a PPP loan is expected to be forgiven but it is not, the business WILL be able to deduct expenses.
According to the CARES Act, a forgiven loan amount won’t be included in taxable income.

The impact of target marketing in small business

Posted on November 15, 2019October 30, 2019 by Victor Varma

Target marketing, according to Inc., is collecting information to determine your ideal customers among those who also need and will pay for your product or service.
For these purposes, you need their age, gender, family size, education level, and occupation. To find out where they are, you need their zip codes, size of the area, its population, and climate.
How does your ideal customer decide to make a purchase? The answer helps you determine why they buy what you’re selling, how much of it they need, and how often they must buy it.
Most social media profiles for your business provide a free demographic breakdown of customers like yours. Zip Codes can furnish vast amounts of info from the U.S. Census Bureau.
If you’re currently in business, your sales data clearly show what your customers are buying, when, and their purchase prices, among other data. For the essential feedback, talk to them in person or on the phone, conduct a few customer surveys. You don’t need a ton of responses to acquire a pretty good sense of your customer base.
In addition to the basic demographics, these should be among the takeaways from your target customers:
Is the distance to your location a problem? Parking? Public Transportation? Do, or can you, deliver?
How do they make a living? Knowing what your primary customers do can help you adjust your hours to fit their needs or devise special offers. Having an idea of the money they can or are willing to spend can help with your pricing. With this kind of information, you can confirm some of your assumptions regarding your customers and dismiss others.
Practical target marketing is almost always beneficial. And genuine interaction with your patrons — plus giving them what they want — is almost always a pathway to loyalty and future growth.

Why Facebook ads are often not profitable for small business

Posted on November 8, 2019October 7, 2019 by Victor Varma

The revenue of Facebook ads is ever-increasing, and small businesses are the reasons why.
But not all small businesses profit.
With 2.2 billion users every day, Facebook will easily surpass $4 billion in advertising this year. It has a global reach that promises highly targeted audiences.
All this can be managed with a small dollar amount to begin if the audience is local.
Why, then, do 62 percent of small businesses not make any money with their Facebook ads?
The reason has four parts:

Nature of Facebook
Facebook has become a friends-and-family favorite, and enabling conversation is Facebook’s first mission, according to Facebook itself. It is an after-work pleasure for most. The key idea is that people are taking a break from work or are at home when they are on Facebook. Something to remember.
The service or product
Consumer items like clothes, decorations, games, and toys do sell on Facebook. Maybe this is because Facebook ads come to people when they are relaxed.
Facebook targeting
Facebook’s targeting abilities are widely acclaimed. Yet, it is sometimes impossible to see whether your targeted ad hit the target. You might get likes, comments, or shares, but many times you won’t get them from your actual audience. Why is this? Facebook claims that ads are shared. Yet, the person who shares is often not the target market. If your results are bad, change targeting, but you will probably never be able to confirm whether any portion of your ad hit your target.
Consumer products that appeal to nearly everyone work best. Service niches, product niches, just won’t work as well. Business products won’t work as well either, though some do.
User skill
Still, if you want to buy Facebook, you must put in the time to become an expert in its targeting and ad styles.
An eye-catching meme-like ad with an offer usually will attract likes and shares, which expand your audience organically.

Book Review: The dark shadows of “The Four”

Posted on November 1, 2019October 7, 2019 by Victor Varma

According to serial entrepreneur and NYU business professor Scott Galloway, they’re The Four Horsemen of technology and digital media.
In his best-selling “The Four: The Hidden DNA of Amazon, Apple, Facebook, and Google,” Galloway casts a harsh light on the dark features of their business models and impact on society.
He calls out Apple for its eagerness to become a luxury brand that maintains high prices for its devices.
Google, he writes, seeks the image of a public utility.
Amazon continues to devour the retail marketplace while leaving local shopping mails deserted if not already closed.
Facebook? According to Galloway’s book, it’s now “the world’s biggest seller of display advertising – an extraordinary achievement, given Google’s brilliant takeover of advertising revenues from traditional media just a few years ago.”
Indeed, Galloway foresees Google and Facebook ultimately in command of more advertising media spending than any two firms in history.

Less taxes
According to the book, from 2007 to 2015–when the average tax rate for the S&P 500 was 27 percent, The Four Horsemen paid much less.
Apple paid 17 percent of its profits in taxes, Google 16 percent, Amazon 13 percent, and Facebook 4 percent.
Meanwhile, the overall impact of The Big Four continues to alter the economy, impede the growth of innovation, and stifle competition. They don’t have many employees, but they do have millions to spend on D.C. lobbyists.
Nevertheless, Galloway believes the breakup of Big Tech will occur because “We’re capitalists.”
This book is a worthy read, especially for those in or starting a new business competing with even a segment of The Four.