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Good Business Practices
January '08
Click on a link below for the entire article.
Success Tip – Your Annual Business Practice Checkup
Best Practices – How to Manage the Risks of Using Your Home or Car for Business
Real eStat™ – Working From Home
Success Tip
Your Annual Business Practice Checkup
 A visionary real estate broker, Ben Bermel, once said: “I don’t know if real estate is a profession, but it’s a darn good business.”
And as a business person, you need to organize and protect your business. Take time to answer these questions before you get too busy this year:
Am I maximizing my tax deductions?
Make sure you keep records of all your business expenses, and ask your tax advisor about these practices:
- Should I deduct my vehicle’s mileage or deduct depreciation, and how should I document deductible expenses?
- Am I better off leasing or buying a business vehicle?
- Can I deduct costs for personal business equipment such as cell phone, computers, fax machine, file cabinets, office supplies, and home office furniture?
- How can I deduct a home office?
- When can I deduct travel costs to conventions and meetings?
- How do I document and deduct meals when business is discussed?
- Can I deduct business-related educational courses?
Am I adequately protecting myself from legal risks?
Ask your legal and insurance advisors about these basic business decisions:
- Should I protect myself by forming an LLC or a corporation?
- How can I establish a trademark for my personal branding?
- Should I add a business endorsement to my Homeowner’s insurance to cover a home office?
- How do I cover the risks of letting clients ride in my personal vehicle?
- Should I have the extra coverage of an umbrella policy?
- (Please read the next article in this newsletter for more insurance tips.)
How well am I protected from errors and omissions?
If you are an owner, make sure your policy is still in effect and enter the renewal date in your scheduling system. If you work for an agency, ask your broker or manager:
- Is the company covered by E&O insurance, or is it self-insured?
- Are individual agents covered by the company or the company’s policy?
- What is the deductible portion of the policy, and who pays it?
- What is the maximum coverage per incident?
- In addition to judgments, are arbitration and mediation rulings covered?
Take time now to make sure your risks covered so you can focus on opportunities during the rest of the year.
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Best Practices
How to Manage the Risks of Using Your Home or Car for Business
 Most real estate agents are independent contractors, and, therefore, self-employed business people with business risks and liabilities. This month we are introducing a new course designed for real estate agents, managers, and brokers to help them manage their risks if they use their home and/or auto for business purposes. The course was written by Jack Hungelmann, author of the book “Insurance for Dummies.”
As a real estate agent, your car represents your greatest catastrophic exposure, especially since you use your car for all clients to show them properties and you are responsible for their safety. In one split second, you can experience lawsuits, death, long term disability, major medical expenses, and major property damage! Pretty scary stuff!
Real estate agents are also increasingly using their homes for business purposes. Computers, and inexpensive fax machines and copiers, have made it possible to conduct many real estate tasks without driving to an office.
Some agents have incorporated, and this course will also address some of the special risks of incorporated business.
So many home businesses are inadequately insured for two reasons:
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The Homeowners policy, even with the optional business endorsements, falls far short of meeting the coverage needs of most home-business owners.
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Many home-business owners are unaware of all the risks arising from their business and that their Homeowners policy doesn’t cover many of the risks that they do know about.
Most real estate practitioners have one thing in common: little or no business insurance. And yet these businesses have uninsured risks that are often serious enough to cause financial ruin if they occur. How sad that the dream of succeeding in one's business, if not properly protected, could lead to a tragic result.
Our course is also intended to help real estate professionals better serve their clients. After completing this course, you will know when to recommend that your home-business clients seek appropriate advice from an insurance agent, thus providing a superior level of service to them.
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Real eStat™
Working From home
According to a recent REALTOR® Magazine survey (MRI, Custom Division) nearly 78 percent of REALTORS® maintain a home office.
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