A few Tips on Navigating Complicated Business Partnerships

Navigating Complicated Business Affiliations

 

Complicated Business

Complicated Business

Many companies encounter problems in their early stages of their business that the business owners could never anticipate when starting the company. This is especially true as the company grows. Outside vendors will have formed business relationships with the company before they were able to actually visualize the success that the company would experience. These integral business vendors may then attempt to capitalize on this success by attempting to renegotiate solid deals.

The pressure from these interests will often be aggressive because these vendors will feel entitled because of an ill-conceived and outsized perception of their company’s influence on this success. Their demands may also be exaggerated and unreasonable because of these same reasons, but there may be some validity in some cases.

The conflict will play out with a constant barrage of often confusing but always frustrating text and email messages. Often this ends with threats from the offended vendor of personal and business character assassination. This is a significant threat because the vendors that utilize these tactics are often well connected with very large networks, and they can potentially inflict real harm on the business.

 

Over-reaction

Over-reaction

Swift Emotional Reaction Issues

Knee-jerk reactions are very damaging now that most business communications are done by electronic or digital means like e-mail and text messages. These methods of communication are technologically advanced, but they also can be confusing because of the inability of the technology to accurately translate this type of digital communication into real life, nuanced conversation. This causes these conflicts to quickly become litigious. The acumen required to properly diffuse and resolve these conflicts is not easily learned.

A better resolution to these problems could have been thoughtful conflict resolution. Often the drive and pride of accomplishment that initiates a person to start a business precludes these same people from being aggressive at a perceived threat. A better path forward would have been to negotiate with the vendor and continued the relationship unabated. Taking the proper path forward with forethought instead of pride would have avoided these issues. It would have also fostered goodwill throughout the same network in which the company was maligned in as a result of the irreparable, improper conflict resolution.

 

A Better Solution

A Better Solution

The quick reaction is understandable when the desire that is required to become a business owner is considered. The stakes of the endeavor will affect the future of the owner, their family and those of their employees and partners in a very significant way. The pride of the owner that is bolstered by success and the pressure to continue this success makes the business owner sensitive to outside advice even from people that are vested in the company’s success that may seem implausible or outright counter-intuitive.

In these cases, it is important for the business owner to attempt to see the situation from the point-of view of the disgruntled vendor. Instead of becoming insulted by the implications of the demands, an owner can temper these demands by conveying to the vendor all of the processes and payouts that are required to build this success. A meeting of the minds can produce a continued relationship based on realistic views of both businesses while also gaining deeper insight and empathy for the vendor’s plight.

 

Managing Clients

Managing Clients

Utilizing the Delayed Response Method

The most appropriate initial step would have been for owners to give themselves a complete day before responding to the seemingly unreasonable and insulting request. The next step would be to invite the disgruntled networking vendor to a formal meeting to discuss a new mutually beneficial contract if necessary. Instead of costing the developing business the damage that is caused by the impulsive swift reaction to the request, the now defunct relationship could have not only been salvaged, but reversed into a significant positive. This full day of contemplation before responding is a rule from which no business owner should stray.

The alternate point of view that is derived from this forced 24-hour hiatus allows the business owner to gain a perspective that is most conducive to the success of the business and that of the vendor. The rationality will not only calm the situation down, but it will also allow the business owner to explain the reasons for being hesitant about the demands in a respectful tone that will almost guarantee a mutually beneficial compromise.

 

Calm decision making

Calm decision making

Cool heads are reticent in properly planning and attaining the future trajectory of the company, and the people involved in the effort deserve contemplative, thoughtful responses to every problem that the company will face in its rise to greatness. The 24 hour response rule will be effective in attaining this forethought, and in planning a trajectory that is free of self-inflicted issues that often end in litigation like quick, knee-jerk reactions to solvable problems.

 

From the Author:

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Obama Push for Tax Changes at The State of the Union

Obama Uses State of the Union to Push for Tax Changes

In his first address before the newly elected Republican Congress, Democratic President Barack Obama advocated for lower taxes on the middle-class and higher taxes on the rich in his annual State of the Union address presented on national television on January 20th.

Tax Reform

Tax Reform

Calls for Tax Reform

Although many of the President’s proposals were previewed in broad terms by the White House last weekend, the address revealed new details, calling for raising taxes on upper-income Americans and those who have trust funds, income from capital gains and advocated new taxes on a variety of forms of financial transactions. Obama said these taxes should be used in order to fund new programs that Obama claimed would be helpful to middle-class families. Full details of the proposals will be made available in the President’s new budget that will be unveiled in the coming weeks.

Making Childcare a Greater Priority

Obama stressed the need for “helping working families feel more secure in a world of constant change.” He called for measures to make childcare, healthcare, college, housing and retirement more affordable. The President complained that historically Congress has treated childcare as “a side issue, or a women’s issue” and urged Congress to make affordable childcare a “national economic priority.” A $3,000 yearly tax break was suggested as one of the ways to lower the cost of childcare.

Economic Recovery

Economic Recovery

Economic Recovery

Obama attempted to counter those who might criticize his proposals as unaffordable by pointing out recent economic data indicating that the economy has improved notably during the past year. He stressed the contrast between the economic conditions he inherited upon being elected in 2008 and the improved economic conditions of today, improvements which he claims would make his initiatives more affordable than in the past. However, the White House also conceded that the proposals are in conflict with the priorities of most Republicans, who for the first time in Obama’s presidency now control both houses of Congress.

Urges Bipartisanship

Despite profound political differences between the President and the congressional Republicans, Obama insisted that there are broad areas of bipartisan agreement on certain issues, such as infrastructure improvements and basic scientific research. He also based his arguments upon questions of fairness, saying that every American must pay their fair share of taxes, including the rich. Obama denounced the current tax code as filled with loopholes and special exceptions, including “giveaways the super-rich don’t need, while denying a break to middle-class families who do.”

Tax Havens

Tax Havens

Attacks Tax Havens

As in last year’s State of the Union speech, Obama urged Congress to discontinue tax breaks that allow companies to escape taxes by shifting their profits to tax havens overseas. He also called for the simplification of the tax code, plus the use of any savings “to help more families pay for childcare and send their kids to college.” The President called for “a tax code that truly helps working Americans trying to get a leg up in the new economy.” As expected, President Obama repeated a proposal first made several weeks ago to provide free tuition to anyone who wants to attend a Community College for two years. He also called for at least one week of guaranteed paid sick leave for all workers.

Foreign Policy

Foreign Policy

 

Foreign Policy

The President’s speech was not only devoted to domestic affairs, but also addressed the international challenges the nation faces. Obama wants the Congress to give him official authorization to continue to use force against the so-called “Islamic State of Iraq and the Levant” or ISIL, a terrorist nation that has taken over parts of Iraq and Syria. Another international issue discussed by the President was the need to address problems related to climate change, citing the recent agreement between China and the United States to limit emissions of greenhouse gases as an example of success.

Political Response

Political Response

Republican Response

As is traditionally done, the President’s State of the Union address was followed by a nationally televised response from a representative of the opposing party. This year the Republican spokesperson was Iowa’s newly elected freshman Senator Joni Ernst. She agreed with the President on the importance of tax reform, but rejected the President’s suggestion that the reforms should include new taxes. While denouncing what she called “America’s outdated and loophole-ridden tax code,” Sen. Ernst called for simplifying the tax code as a means of lowering rates for all income groups. Ernst dismissed the possibility of using any of the resulting savings to “pay for more government spending.”

This being said, every tax preparer needs to find ways to maximize their clients ROI without breaching legal guidelines. You should be thinking about how to advise your business clients on possible ways the new and proposed tax rules could impact their bottom lines.

Also, think about improving your internal processes this tax season. If you’re not efiling your tax forms, try it. Choosing to efile 1099 and other forms may save you countless hours, and the expenses of mailing copies to recipients.

Like many tax accountants, your clients use sub-contractors and have employees in dispersed areas. If you’re wasting hours daily sending out tax forms, reduce it by 70% by doing the following. Use eFile4Biz.com to file 1099 online, and use the remaining time to find more clients.

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Watch the video below to see what I mean.