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Photographer invoice example for small businesses

everyone my name is Sal Sin Cara and I am a wedding and portrait photographer based in O'Fallon Illinois and like many of you I am a small business owner and today I want to talk to you about the cares act that has just been passed and really what it means for small businesses I think it's very confusing what just came out as you can imagine the government put this relief package very quickly put it together very quickly and it's important for all of us as small business owners to understand now I am a photographer but I am talking to every small business owner and I'm gonna give you a breakdown of the cares Act on what it means for your business so right out of the gate the cares Act stands for the coronavirus aid relief and Economic Security Act which allocated three hundred and fifty billion dollars for small businesses and it sounds like it's a lot of money and something to get excited about but this is unprecedented as a business right normally businesses we you know we're in a society and an economy of capitalism and it's up to us to go out there and earn our way and I usually believe in that wholeheartedly but right now what is happening to businesses around the world is just unprecedented and small business owners are panicking they're laying off employees they're furloughing employees and it is going to have a devastating ripple effect through the US economy because let's be honest when this is over who's buying your product or service it's those very people that are getting laid off right now and without jobs and income their first priority is not going to be spending their way to recovery their first priority is gonna be putting food on the table you know paying their rents their mortgages and you know taking care of their hierarchy of needs so what I want to do today is just kind of break down and what it means for you and your business and also keep in mind it is still fluid so while this has just passed it's going to be a couple more weeks before businesses like yours and mine have all the details we need to start implementing this but if you finish watching this video hopefully I will kind of breadcrumb you through what to expect and most importantly what documents you're going to need to be ready for when these loans and programs open up so let's talk about it right but before we get started I just want to talk to everybody out there panic is contagious okay and it's really easy right now myself included I have 40 employees it is very easy for us to panic and just have a knee-jerk reaction with what's going on right because that that hierarchy of needs we're trying to protect our business our families but we have to understand that there is a ripple effect and so while panic is contagious I'm telling you so too is optimism and so right now I'm choosing to be more optimistic that some day this will be over we have no choice right if it's not over that means the zombie apocalypse has come and then it none of this matters anyway so let's together as small business owners be more optimistic as optimistic as you can I understand of course and start looking for positive ways to alter the course of what's about to happen here and keep our businesses healthy keep it out in the forefront of our customers start investing back into our business and focus on some of the things well we're all guilty of putting on that back burner because we wish we had more time well guess what you've got plenty of time right now probably more time than you'd like to admit and so you know as a business owner here are some things that I'm working on with in my business and hopefully that it can inspire you and motivate you to start focusing on some of those more positive things update your websites we are all guilty of not having our websites updated myself included and so now is the perfect time to step back go through your websites get rid of some of those ugly pictures those bad pictures update your portfolio with maybe new edits things that are more representative of your current style update your blog's update any of your forward communication to your customers work on social media this is so important right now that our customers know we're still in business remember this isn't just if you are a photographer this is any kind of business owner it is so important to stay in contact and stay relevant as a business we cannot give up and just say screw it I'm gonna sit home and watch the news and all the negativity that's going on every day that is the worst thing you can do for your mental health and the worst thing you can do for your business okay focus on SEO search engine optimization again all of us know how important this is but all of us many of us will freely admit we're too busy we don't have enough time etc etc well spend that time and get your business your website your search engine optimization ready for when this thing ticks back up we are ready to go as a business right we have to prepare for the the eventual upswing verse focusing on all the negativity get motivated you have to get motivated refused to quit I refuse to give up on my people I refuse to give up on my business I'm not ready to give up yet yeah it sucks the last couple of weeks all the economic news watching us lose customers watching us lose revenue it is it is exhausting it makes you want to curl up and cry in a corner we can't do that we are the leaders of this economy together small business owners we are the future we cannot give up on this we cannot give up on our people maybe you don't have a lot of employees maybe you just have one or two part-time people every person matters maybe you're a sole proprietor you matter right so we've got to keep pushing forward and be positive here you know again work on all those projects that you wish you had more time for and now it's the time you have more time focus on those things of course again I'm reinforcing this communicate with your customers let them know you're still here you're still looking to succeed engage with them find all sorts of unique ways to engage with them online via social media remember your customers are trapped at home too they're going nuts right now looking for something to do you can only watch netflix for so long we need things to keep our mind off it and so to do your customers okay so let's circle back around to the cares act what is this all about it's about small businesses so these are a hundred percent federally guaranteed loans to small businesses who maintain their payroll during the emergency this is so poor to understand how this is going to apply to you what the federal government is trying to do is stop small businesses like yours like mine from laying people off it will have a ripple of act of devastating proportions across the entire economy there will be no recovery there will be riots there will be people homeless unemployed right no way to pay their bills we can't let that happen and so the government is trying to trickle this down by encouraging small businesses owners like yourself like myself to maintain our employee base and this is what this is all about so this is more than just alone by the way it's not just alone that you're gonna have to pay back and we're gonna talk about that in a second these loans will be forgiven if the employer maintains the payroll during the crisis or restores payroll after and we'll talk about that in a second as well so again the goal is to ensure we don't have massive layoffs which will have that ripple effect that is the ultimate goal I like some of the things they're doing some of the details are not completely vetted out yet more will be coming in the upcoming weeks now warning right I'm already telling you not all the details have been released yet meaning the implementation part of this we don't all know how am I going to be able to go to a local bank am I going to have to go to the SBA will the guidelines be loosened what does the loan application look like what what tax returns or tax documents do I need all of that will come up in the next you know a few days and weeks and I will update you as that is released so first up are you even eligible that's the first question you should be asking yourself and so you are eligible if you're a small business with fewer than 500 employees now that 500 employee number includes part-time full-time etc right so it's not just your full-time employees now if you're a small business like myself I have 40 employees I'm clearly in there if you have one or two you're gonna qualify for that as well even if you're a sole proprietor you're gonna qualify for this it's a small business that meets the SBA size standards you could be a 501 C 3 with fewer than 500 employees an individual who operates as a sole proprietor many photographers out there or operating as sole proprietor so this is where we fall into this an individual who operates as an independent contractor one who's self-employed carries on any trade or business any trade to be defined I'm sure a tribal business concern that again meets the SBA size or 501 C 19 which is a veteran organization that again meets the SBA size requirements okay so if you're a small small business of photographer photography studio you more than likely qualify for what is about to happen here or the funding that will be released now the question is how much can you borrow and there were all sorts of rumors going around on how much you could borrow and it wasn't until the other day that the details were finally released you're gonna be able to borrow two and a half times your average monthly payroll not to exceed 10 million my payroll is not ten million so I think most of us are covered under that but two and a half times your payroll average monthly payroll so this is huge right they're allowing us to borrow enough money to carry a two and a half month window with our employees now that doesn't mean that the economy's gonna be back up and running in two and a half months we all know at this moment there's a lot of uncertainty what it doesn't mean though is they are helping us get enough information or enough money to carry us a certain amount of time I would guess that if in two-and-a-half months we're still under quarantine there's gonna be some bigger issues and there's probably gonna be another round of economic stimulus so as of right now this is what we can go after and this is a very good number I'm happy with that number right now if you are not operational this is very important in 2019 they'll look at payroll from January and February of 2020 so for those of you who are new businesses there's still opportunity for you to protect your business now something interesting seasonal employers that's gonna be a little bit different right we all know that you're gonna have this a band flow to your business and so what they're gonna allow you to do is grab two and a half times the average monthly payments for payroll costs for a 12-week period beginning either February 15th or March 1st and which you'll be able to decide on that and ending June 30th so again you can see where the US government's head is on when this is gonna last right they're going through June right now and who knows they may have to extend that so again this is important information if you start reading between the lines now right we're talking about average monthly payroll what does that include and so there's two types of payroll calculations that we're gonna have to make and again not all the information is fully available yet but there's that of an employer and that of an independent an employer self-explanatory I've got employees I'm employing people I'm a small business and independent those a little bit differently that's different that's a sole proprietor a contractor those who are otherwise just self-employed with no employees so they're not excluding those people which is very good news because if you are self-employed or sole proprietor you're still part of the economic engine in this country and they're including you in this as well and so for employers let's dive into that this is the sum of payments of any compensation with respect to an employee that is salary wage commission or similar compensation payment of cash tip or equivalent this is also important for restaurants things like that payment for vacation parental family medical or sick leave allowance for dismissal or separation payments required for provisions of group health care benefits including insurance premiums payment of any retirement benefit payment of state and local tax assessed on the compensation of the employee and so this is what's gonna qualify when you start adding things up now if we if we look at this practically speaking if you're an employer you're using some sort of payroll software right so for us we use Intuit this data is gonna be they're very easy for you to have access to so my recommendation to you is rather than getting caught up in all the mechanics and confusion of these bullets is work with your payroll software and get an export of that because this is what you're gonna be using to go to the bank to acquire this loan this is what's going to be important for you right so it's an easy export out of your payroll system to have all this information in an easy-to-use format for an independent this is what's going to qualify for sole proprietors independent contractors and self-employed individuals it's the sum of payments of any compensation - or income of a sole proprietor or independent contractor that is a wage Commission income net earnings from self-employment or similar compensation that is an amount that is not more than $100,000 in one year as prorated for the covered period and so this statement is a little confusing to me I think they're gonna have to add more clarity because in one sense it's reading that your compensation is not more than a hundred thousand dollars in one year then it's saying it's prorating it for the covered period and so I think we're gonna have to get a little more clarity on what that means for sole proprietor meaning if your sole proprietor and you're not paying yourself a salary there might be some problems here for you right because you're not paying yourself anything it's just going back into the business so that might be a point of contention you may want to talk to your accountant and get a little bit more clarity on this once this is released or more details are released but as it reads today as I'm reading it this is saying similar compensation wage Commission income net earnings from self-employment so it's not just it's reading a little tricky so either it's going to include your your self-employment or there's gonna be caveats to it and so as I'm reading it it's a little confusing but I'm being a little bit more optimistic I'm reading this to mean your net earnings from self-employment so even if you're not paying a salary you're still gonna qualify on those earnings but like I said we'll update this as we go now what is excluded okay so you're gonna take what is included - what's excluded and that's gonna be the amount compensation of individual employees in excess of an annual salary of $100,000 as prorated for the period Feb 15 through June 30th 2020 so if you're getting an annual salary of over $100,000 this is not going to be included as it reads today payroll taxes railroad retirement taxes income taxes any compensation of an employee whose principal place of residence is outside the United States qualified sick leave wages for which credit is allowed under the families first corona virus response okay so this is what's going to be subtracted from it and that's what your gonna go to so remember the easiest way to deal with this is get a copy of your payroll and your tax returns these are gonna be the things you need so as I'm talking to you here today I'm telling you don't waste time because once the floodgates open on this we're all gonna be waiting in the same line to get access to this information so it is this money so it is imperative that you start preparing now make sure your tax returns whether they're 2019 or 2018 are ready and available you've got copies of them and start printing out reports from your payroll company so that you have these readily available now here's the beautiful part this is where the forgiveness program comes into play the loan will be forgiven assuming you meet certain criteria meaning you do certain things with the money the goal of this loan was not to make people like me or you as a small business owner rich it's to mitigate rich I should say it's to mitigate the risk that is associated with carrying all these employees right they don't want to see small businesses just start laying people off that would be devastating and so this is meant to help mitigate that and again I think they're doing a good job right now so a bar you're eligible for loan forgiveness if you spend it on the following items during the eight week period beginning on the date of the origination of the loan first and foremost as I've explained your payroll costs so as long as you're paying the qualified payroll cost that we just covered that is going to be absolved in that loan you're not gonna oh that money back that is great news guys interest on the mortgage obligation incurred in the ordinary course of business so if you're a business like myself I own this building I've got I still have rent and mortgage payments we have to make we're gonna be absolved of that interest payment on that if you're renting or part of a leasing agreement that part of it will be absolved so again that's great for small studio owners don't stop paying your rent this will help you cover that and help you during that down time okay so this again is great great news payments on your utilities electric gas water telephone internet if you've got tipped employees additional wages paid to those employees to cover them during this this time so now here's common sense the loan forgiveness cannot exceed the principle right so they're not going to forgive you for more than you borrowed so you've got to make sure you're borrowing based on the formula they have in front of you now can the loan forgiveness be reduced meaning you borrow you go into the bank you borrow ten twenty thirty thousand dollars whatever the number is based on your projections if you don't do the right thing with that money it is going to reduce how much can be how much will be forgiven so yes remember the goal is to keep business is moving forward and prevent them from laying off employees so you can't go to the bank get this loan and then layoff your entire staff that is not gonna work you're gonna get hammered on that but the amount of loan forgiveness is reduced if there's a reduction in the number of employees so if you borrow this money and reduce your employees you're gonna owe that money back or the reduction of wages so for example let's just say you're paying your employees an annual salary of $30,000 a year and you reduce that salary during slow time right now more than 25% you're gonna get hammered and all that money back so again the spirit of what the federal government is doing right now is to help businesses stay in business and not layoff their employees to cut costs it's helping us mitigate it we've got to take care of our employees they if we don't take care of our employees they're not going to be around when that when the when the economy starts recovering they're not gonna have money to spend so we've got to keep our employees whole when they come back right there should be no resentment this is the way to do it guys and so but what if we did furlough some employees right because we just had no choice right in the interim well reduction in the employment of wages occur during the period beginning February 15th and ending 30 days after the enactment of the Care Act shall not reduce the amount of loan forgiveness if by June 30th you bring those employees back okay so maybe in the beginning you panicked you laid some people off but if you go in and get these loans and bring those employees back right all is going to be forgiving there so that's also very important and lens back to the spirit of this loan and so what's gonna be needed to get this loan this is important right this is an important part make sure you've got your 2018-2019 taxes ready if you're like me my 2019 taxes are not done right we're a business and we've got sources of revenue coming from multiple places accountants are still working on it but you don't want to be excluded they're gonna accept your 2018 taxes so what else is needed you have to show or in good faith that you need this loan to maintain operations and maintain your employees and that you're gonna use this loan to maintain payroll and retaining workers make mortgage lease and utility payments that's again the goal the bar does not have an application pending for another loan that's similar right so you can't double dip here so if you're already going through a different loan process through the SBA you're not gonna be able to get this loan so you've got to at least acknowledge that in good faith and you have not received that loan so maybe you already applied and received it you can't again double dip it's a real simple process here now here's two points that I thought were very important no collateral is going to be required for these loans this is huge if you're a small business you understand that typically you go for a loan you need some level of collateral to maintain that to get that loan in addition no personal guarantees this is an awesome thing if you are a small business owner those two bullets right there made me very happy to see that they the government is trying to simplify this process as much as possible to allow small businesses to quickly get money into our employees hands and and maintain right the economic structure here everybody I hope this was very helpful a lot of information in a short period of time if you know a small business owner please share this video with them knowledge is power right now and the more we can educate small businesses the more we can get people moving in the right direction being a little bit more optimistic again my name is Sal Sankara I'm a wedding and portrait photographer and I am a small business owner just like you so I hope you found this video useful again share it like the video comment below look forward to hearing from you but most importantly we look forward to helping you be successful during this uncertain time