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Top 5 To-Dos for Small Businesses to Complete by January 31st

Written by Natasha Goncharova on . Posted in Accounting, Blog, Finance, HR

The important date of January 31st is almost upon us, the day when the IRS requires all businesses in the US to mail W-2s and 1099s to their employees. To make sure you’re on time each year, follow these few simple rules:

1. Collect SSNs or EINs (Employer Identification Number) and current addresses from your employees and contractors.

2. Reconcile books and payments via cash, checks, and direct deposits.

3. W-2: In most cases, your payroll service provider should automatically create W-2s so you will just need to check them, print, and mail. Otherwise, you will need to use Intuit Forms and print them.

4. 1099: Instead of using pre-printed 1099 forms and wasting time on positioning them correctly in your printer, consider using one of these services:
Intuit — $39 for an unlimited number of 1099 forms — $3.49/form
• If you search for 1099 on the IRS page of the recommended e-filers, you will find other options, most of which will be more expensive if you want to e-file in addition to printing the 1099s.

5. Be aware of Form 1099-K

Beginning with tax year 2011, the IRS requires businesses to exclude from Form 1099-MISC any payments made by credit card, debit card, gift card, or PayPal. For information about the IRS requirements, review the IRS Final Regulations on Payment Card Reporting.

This means the amount you record on Form 1099-MISC must equal the total amount you paid the contractor minus any portion you paid by credit card, debit card, gift card or PayPal.

Any amounts you paid using these other methods of payment must be reported to the IRS, not by you, but by the credit card company, the debit card company, gift card company or PayPal using Form 1099-K. You do not need to report these amounts on Form 1099-MISC.

The deadline for this year is only one day away so if you haven’t started yet, get going!

Free Education For Real: General and Computer Science Open Courses and Videos

Written by Natasha Goncharova on . Posted in Blog, Resources and Links

The demand for programmers is growing. More and more companies/industries are turning into software-based businesses yet formal education is ever more expensive. Open source courses are becoming increasingly available and are allowing to learn programming without paying thousands of dollars while studying at your own pace. We have put together a list of courses available for FREE. Let us know in the comments if you have found others that were helpful to you.

All Subjects
Khan Academy – a free library of over 2,700 videos covering everything from arithmetic to physics, finance, and history and 253 practice exercises

Computer Science Courses
The /r/programming FAQ is a great place to start with FAQ for programming; has links to many resources for beginners.

Higher Computing for Everyone – Free Online Classes by Carl Herold

Taken from a comment by robot_zombie in the learnprogramming subreddit
Interactive Tutorials

Interactive Database Tutorials
Interactive Editor Tutorial
Online Editors — good place to try simple html, css, javascript
Programming Practice

Tech Community and Resources in Western Massachusetts, USA

Written by Natasha Goncharova on . Posted in Blog, Resources and Links

Finance Alpha works from Western Mass and serves companies in New England. We have a great tech community in Western Mass and have decided to share with our hidden treasure with you. Here is the Link to the Google Doc listing Links to the Tech Communities and Resources in Western Mass (about 2 hours from Boston).  If you have additions or changes, please let us know at

The same Doc is also embedded below, but opening it from the link above will give you a better view. Enjoy!

Can You Make Money On The Internet? Slicing The Internet Money Pie Part 2

Written by Natasha Goncharova on . Posted in Blog, Sales & Marketing

Earlier we discussed the eCommerce, Advertising, and SaaS industries and the potential for small businesses to generate revenue therein. Now we will turn to the other side of selling on the internet which is to say that there are a number a niche markets in which large companies don’t compete. Using examples of successful online entrepreneurs, we will outline both how they established themselves among the multitude of online resources and what they do to “snowball” their popularity once they have gained a foothold in their industries.

Some of the most successful online industries on a smaller scale are:

  • Professional/Career Coaching,
  • Online Certification Programs, and
  • Video Courses (the material taught has to add to the viewers’ earning potential)

However, the road to success in these industries is not as easy as simply writing a book or producing a series of video lectures and making them available for purchase.  Mostly, this is due to the fact that there is  A LOT OF free content out there.  Writing a book by itself, these days, isn’t going to garner much attention.  Making it in these industries requires building a large audience of followers (often referred to as “building a large email list”) with a (statistically proven) hope that 1-5% of your followers will pay for a product (a book or a video) of yours.   Repeat sales in this case are much more probable than the first sale.

What is important is providing something unique beyond the information itself.  In the world of freely available information, for viewers to pay for digital material, it has to come with the promise of adding to the viewers’ earning power or career growth.  What this means to the online entrepreneur is that there must be a certain qualities of the material published or services offered that are unavailable anywhere else.

This may be humor as in Roger CPA Review (which saw its sales jump from $4.5 million in 2008 to $6 million in 2010), free book chapters and a promise of access to other “free” digital resources in Michael Port’s Book Yourself Solid series, longevity and super confidence of Problogger, or by presenting your learning course as a smart and affordable alternative to traditional methods as in Mat Hulquist’s Quickbooks University.

Furthermore, a well established consistent reputation in these industries only leads to more business and thus the self-perpetuating cycle begins. This works because web-based content generated by professionals acts as tangible evidence of their expertise resulting in increased consulting business which in turn can increase the popularity and value of the content itself. Thus as an online entrepreneur, your goal may have be not to generate revenue from books, lectures, and other published materials but rather to establish yourself as an expert in your field and generate revenue by providing consulting services.

N.B.: Chris Guillebeau from The Art of Non-Conformity wrote a great piece about the fundamentals of selling online and how to focus on the right things.

Can You Make Money On The Internet? Slicing The Internet Money Pie Part 1

Written by Natasha Goncharova on . Posted in Advertising, Blog, Google, Sales & Marketing

This is the first in a series of posts about making money online in which we will discuss the major online industries and their leaders. In our next post, we will provide examples of niche sites that have had success selling online and outline their business models. 

I received a question from a professional acquaintance of mine about the best way to help a professional service client add the internet as a channel for delivering service.

My first instinct was to answer that there is A LOT OF FREE information online. Unless you are offering something that can not be found for free your chances of selling your product are bleak. As a small business or individual, potentially developing and offering some digital products, it can be difficult to both compete with the wealth of information and learning material freely available online and distinguish yourself and your product from the competition.

So the real question is: what market are you competing in? E-commerce, advertising, Software as Service, digital goods?

In 2010, Americans spent $165.4 billion online.  Perhaps the first monolithic online industry that comes to mind is eCommerce — selling both physical and digital goods online. While giants like (with its online properties at and and many, many affiliates) and  eBay certainly dominate the lion’s share of the market, smaller sites have been able to benefit from the industry’s long tail. Sites like Etsy offer handmade and unique items while specialty sites like Cabela’s cater to interest-specific shoppers.

The second major industry of the digital world is advertising ~ $26 billion in 2010.  Making money by selling advertising online requires significant traffic and, often, a niche site for advertiser to be willing to spend their advertising budgets on your site or blog. Google is the dominant advertising force, offering targeted ads based on search results and collecting the advertising budgets of so many small businesses through AdSense. Facebook is a prime example with > 750 million users and a high number of page views such that their low click-through rate  doesn’t adversely affect ad sales. Per Mashable, in 2010, Facebook  had 0.051%, or about one click-through (CTR) for every 2,000 ad impressions with the industry standard CTR is 0.1 percent, or one click-through for every 1,000 impressions. As with eCommerce, niche interest-oriented sites can also generate significant advertising revenue fron banner advertising by offering information and a point of view not available elsewhere. Examples of sites of this type are (a tech blog), (a popular gaming community site), and (a music blog).

There is the increasingly successful SaaS (Software as a Service) industry ~ $12 billion in 2010. SaaS is attractive because it makes itself available “on-demand” and exists completely within the confines of the internet which means customers are not required to have hard disk space, CD-ROMs, or a personal computer, just a credit card or a few :). Furthermore, as a relatively new industry North American SaaS revenue is predicted to experience an 18.7% increase between 2010 and 2011 alone.

Finally, the digital goods market (the goods that do not exist in real life) has been growing.  In the US, it is expected to reach $2.1 billion, up from $1.6 billion in 2010.  This includes offerings from the social gaming companies like

Jumping into ponds with such big fish (Amazon, Google, Facebook) shouldn’t necessarily be a deterrent to your internet sales venture, but in our next post we will outline how individuals and small businesses have had success selling online by targeting smaller niche markets.

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Creating and Managing Your Cap Table

Written by Natasha Goncharova on . Posted in Blog, Startups

This is the second post in a series about cap tables. To learn more about what cap tables are, see our first post.

Now that you’re ready to create and manage your cap table, there are a number of tools to help you through the process rather than drawing it up in Excel by hand:

1) A SaaS (Software as a Service) optionTruEquity ($20/m, 10 equity holders* included $1.99 per month for each additional equity holder). TruEquity is a relatively new service launched in February 2011.

2) A pre-built cap table template: ($69).

3) Our list of freely available cap table templates (also try Googling “cap table.xls”):




Cap Table Generator.xls


Update: Since publishing this post we’ve had a lot more interaction with cap tables and have discovered a nice SaaS solution for cap table management called CapMX offered by Silicon Valley Bank

Thinking of Creating a Startup Accelerator? A Comprehensive List of Resources to Learn From

Written by Natasha Goncharova on . Posted in Blog, Startup Accelerators, Startups

Recently I’ve been involved in a discussion about creating a startup accelerator and while I can’t share the details of the discussion I’m involved in, these are some of the resources that you might be interested in if you are thinking about creating an accelerator in your area or at your educational institution.

The current wave of startup accelerators or ‘startup factories’ as they’ve been referred to is not a new concept. Prior to the startup bubble in 2000 there was a wave of startup accelerators, most of which ceased to exist due to unsustainable economics. You can read more about the first wave of incubators in the report by Morton T. Hansen, Henry W. Chesbrough, Nitin Nohria, and Donald N. Sull of the Harvard Business School.

The second wave of startup accelerators, arguably originated by Y-Combinator in 2005, have more sustainable business plans and a better chance of remaining in the industry unless a Euro or Dollar crisis happens or unless some other “Black Swan” flies in.


As you conceptualize the idea of your startup, these are some great resources to learn from:

A comprehensive post by Ben Yoskovitz of Year One Labs, a Lean Startup accelerator: So You Want to Run a Startup Accelerator…10 Things to Think About When Starting a Startup Accelerator.

A comprehensive overview of existing startup factories: who, where, how much

A list of 102 startup accelerators: 

Lessons learned:

Are you thinking about a startup accelerator? Some Accelerator Resources:

“How to Build a Venture-Finance Ecosystem”, practical principles that the Babson Entrepreneurship Ecosystem Project have been identifying and developing for public leaders:

The Facts About Startup Accelerators

Written by Natasha Goncharova on . Posted in Blog, Startup Accelerators, Startups

In the last 5+ years, startup accelerators (also dubbed ‘startup hubs’ and ‘startup factories’) have proven themselves to be effective in bringing startups from ideas to viable businesses. With the number of accelerators now rapidly increasing in North America and Europe, comparing and contrasting the methods and numbers of the most prominent firms is valuable in providing a picture of what the model for a successful accelerator might look like.

In his recent post entitled ‘Why Startup Hubs Work’, Paul Graham of Y-Combinator gave a list of the qualitative reasons why startup hubs are useful, “I think there are two components to the antidote: being in a place where startups are the cool thing to do, and chance meetings with people who can help you. And what drives them both is the number of startup people around you.”

Notable US seed accelerator programmes by location showing total number of startups funded to 2010
  p.8, The Startup Factories The rise of accelerator programmes to support new technology ventures


In May, Tech Cocktail released their ranking of the top 15 startup accelerators and incubators based on their participant companies’ rate of investment post-program, the overall success of the companies, and on the program characteristics of the accelerators themselves. The #1 spot was a close finish between Boulder, CO’s TechStars and San Francisco’s Y Combinator.

To provide a clear side-by-side comparison, we will take a look at both TechStars and Y Combinator as well as Massachusetts’ own MassChallenge in the categories of up-front investment, location, duration, equity, and application/acceptance rate.

For profit
Investment: Up to $18,000
Optional Convertible Debt: $100,000
Location: Boston (MA), Boulder (CO), New York City (NY), and Seattle (WA)
Duration: 3 months
Equity: 6%
Acceptance: 10 companies at each location (total of 50)

Y Combinator
For profit
Investment: $11,000 + $3,000 per founder (e.g. $17,000 for two founders)
Optional Convertible Debt: $150,000
Location: San Francisco (CA)
Duration: 3 months
Equity: 2-10%, usually 6 or 7%
Acceptance:  60 companies in two sessions

Investment: Given in the form of prizes which fluctuate depending on the judges (~15-20 prizes of $50-100k)
Location: Boston, MA
Duration: 4 months
Equity: None
Acceptance: 125 companies accepted resulting in 26 finalists (in 2011)

500 Startups
For profit
Investment: $25,000-$100,000
Location: Mountain View, CA
Duration: 3-6 months
Equity: ~5%
Acceptance: 12 in February, 2011; 21 in June, 2011; 140 total investments

A comprehensive overview of existing startup factories: who, where, how much

What is Wrong With Many Presentations Uploaded to SlideShare or How Seth Godin Changed Our Frame of Reference

Written by Natasha Goncharova on . Posted in Blog, Presentations

For quite some time, I have been perplexed why the PowerPoint presentations uploaded to SlideShare are so not informative. A sentence, a flashy image, next slide — repeat. Tonight, I think I’ve figured out why it is the case and what the problem with these presentations is…

It appears that by now most people (who create power point presentations) have read Seth Godin’s Really Bad PowerPoint and have started following his advice. The problem is that his advice was for the presentations you PRESENT, not upload. When you present, people see the image (form an emotion), listen to you talk, and, if you present well, later they will remember/associate your words with the image. This is not true for uploaded presentations! Your (spoken) words are not communicated there, so when I spend a minute on a presentation and see 20-30 (great) stock images, I often have no idea what you were trying to say, or I feel the whole thing could have been communicated with 2-3 images/slides. I believe those presentations that are uploaded to SlideShare should have more than one sentence per slide and should actually educate readers about the subject matter (and possibly form an emotion).

Uploaders missed this point: “Don’t hand out print-outs of your slides. They don’t work without you there.” They essentially print (read: upload) presentations, but the presentations suffer without their authors.

Yes, I get it — no one will be creating two versions of ppt for presenting AND for SlideShare. Too bad. As a result, many of the uploaded ones are useless, imho. :)

Paul G. Silva – thanks for the hint, even if you did not mean it. :)

3 Options for HR Management for Startups, Small Businesses, and Distributed Teams

Written by Natasha Goncharova on . Posted in Blog, Document Management, HR

You’ve got a team together, you’ve got an idea, and maybe you’ve even got funding or paying customers and you’re at a point where you really need to manage your team members’ HR matters. You find yourself facing the fact that, regardless of if your staff are employees or contractors, there are forms to be filled out and regularly updated, taxes to be paid, and benefits to be provided and managed.

These are the options currently available for HR management for startups, small businesses, and distributed teams:

PEO (Professional Employer Organizations): In this case, HR is completely outsourced such that there are no part- or full-time employees working directly for the company.

PEOs are third-party providers, often certified by ESAC (Employee Service Assurance Corporation), that serve your business HR needs from soup to nuts for approximately $120-150/employee/mo (~$1800/employee/year).  The assumption is that for up to 30 people, you get savings from hiring a PEO vs an HR Manager.  This fee covers managing all HR functions inclusive of benefit plans, FSA, and healthcare. PEOs provide a branded HR portal to employees to update their info as well as taking care of compliance requirements, issuing FSA (flexible spending account) cards for pre-tax medical expenses, and choosing the best health insurance plans for employees. You, as an employer do not have to.

SaaS (Software as a Service) HR Offerings: SaaS in the HR field are online software services that allow you to manage HR from a central portal. This includes a combination of some or all of the following: employee records, document/resource sharing among employees, job postings, benefit tracking, time management (can include clocking and leave tracking), and company/employee reports. In this case, you would hire a part-time HR administrator or include this in the duties of another person at the company to adminsiter the HR records via the SaaS option and ensure that all necessary forms are completed and updated regularly.

Offline HR: In this case, there is a part- or full-time employee of the company that is responsible for managing all HR functions.  Offline HR management is viable mostly for a team that works in the same office. For distributed teams it becomes increasingly difficult to manage especially for various employment forms and information updates that employees need to provide.

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This is the first in a series of posts about HR management. Subsequent posts will discuss specifics of the options listed. To be informed about new posts, subscribe to our RSS feed or sign up by email on the right.


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