Is Writing A Business Or A Hobby?

Most writers start young, secretly writing journals or poetry, and reveling in the pure joy of stringing words together. As they age, many of them will shelve their talents to make a living in a less-creative field, the majority will spend a lifetime writing occasionally, just for the joy of it, and a small percentage will come out into the world as professional writers.

So how does a writer know whether they are engaged in a hobby or working as a professional writer? The answer is found within a couple of lines of IRS tax law; it’s not creative writing, but for any writer who hopes to make money with their creative talent it should be required reading.

To the IRS there is only one reason to be in business – profit. If your primary motive is to become a famous writer, to put your words on paper because you need to get them out of your head, or to push a particular viewpoint, you could be a hobby writer. Or, you could be in business… it all depends on you.

Any freelance writer who treats their writing as a business can file their taxes as a business, once they understand what the IRS expects of self-employed writers. And, the benefits are big – a hobby writer must report all writing income but can only take expenses up to the amount of that income. Those in the business of writing are allowed to write off all expenses, even if they exceed the writing income. For part-time writers this can mean big tax refunds from W-2 earnings.

To the IRS, the distinction between hobby income and business income is clear; a business is always profit motivated. And, a business that has profit as its main motive is always looking for ways to increase their income, even if they are engaged in a part-time activity.

Even though the freelance writer may need a paycheck today, in order to be successful in the business of writing a writer needs a long-term business plan. Spending money on advertising, promotion, business classes, networking expenses, and the equipment necessary to do your job are all part of growing a business. Trip expenses that outweigh any potential for profit, the lack of record keeping on article submissions, running your writing finances out of your personal bank account, and not having a set working schedule are all signs that your goal may not be profit minded.

Being a hobby writer is not a bad thing; you just need to understand the rules about hobby income and expenses, and make sure they are reported in the proper place on your personal tax return.

For the serious freelance writer, because writing is considered to be a hobby by the IRS, the tax return of a professional writer with repeated losses could be pulled for an audit. If that happens, the IRS will ask you to prove that you are operating as a business. For the writer with a written business plan, a dedicated writing schedule, and good financial records, that’s generally an easy audit to win.

So, if you want to be a professional writer, let those creative energies flow when you write, but when it comes to taxes and the bottom line, remember what the IRS says… only those acting in a profit-minded manner get to file their taxes as a business, for everyone else, it’s a hobby.

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The Advantages Of Leasing Programs For Business Equipment Needs

Many businesses find that they need to set aside funds for purchasing equipment as they grow. However, it can be difficult to make such allowances, especially in these economic times. Why put the operating budget in the red by taking on extra financing, when it is much more advantageous to secure one of the many leasing programs offered by equipment brokers to get the equipment you need today?

Financing vs. Leasing

For established businesses, those that have been operating successfully for at least two years, getting financing to make equipment purchases can be a difficult prospect to face. With rising interest rates, banks and loan companies can require additional collateral to be signed over in order to secure the loan, or even enforce such loans on a short-term note that will have to be paid off with fees in less time than the business may be able to afford.

Leasing programs, on the other hand, are much more flexible and can be customized to the business’ exact needs. Not all equipment purchases are meant to be for the long term, and may only be needed for a limited amount of time. Financing through loan agencies under these circumstances would be less than efficient, because once the loan is paid, you are still the owner of the equipment, and reselling it once it is no longer needed will not pay back the initial investment. With equipment leasing, you can easily add in clauses that cover the return of unneeded equipment, sometimes at a financial bonus to your business.

Types of Equipment Leasing Available

For those seeking to only gain the use of needed equipment in the short term, there are two programs that can be used to their advantage. The first, known as an operating lease, allows a business to lease needed equipment for the exact length of time that they need it, at an affordable rate. Once it is no longer needed, it can be easily returned back to the leasing agent for a small fee. The second, known as a master lease, allows the business to try out equipment they were thinking of purchasing for a specified period of time, without any transference of ownership. At the end of the initial lease, they have the option to extend that lease, without having to renegotiate.

For those interested in actually purchasing the equipment but do not want to tie up operating capital in commercial financing, the capital lease is probably the best leasing option available. The equipment is purchased through a leasing agreement with affordable monthly payments and at the end of the agreement, one final payment secures the property and transfers ownership rights. However, for the purposes of taxes, the equipment is considered to have already been purchased during that fiscal year and any tax breaks for making such a purchase can be applied, even though the final payment on the equipment may be a year or more away.

A Lease That Actually Pays You Money

For business owners looking to the future, they may have already earmarked equipment that they would like to sell but cannot do so until operations surrounding them have been concluded. This would normally mean taking out a loan in order to finance the startup of the future operation, including purchasing new equipment. With a sale and lease back type of leasing programs, business owners can sell future unwanted equipment to a broker, for a negotiated full purchase price, and then temporarily lease it back at an affordable rate. This gives them the use of the equipment while they need it, plus the cash flow they need to start the new operation. At the end of the term, the broker takes possession of the sold equipment.

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Best Small Business Insurance Info: How to Find and Choose the Best Insurance Solution for You

Are you a small business owner? No matter what kind of company you run, you’ll need general liability insurance and maybe some additional coverage depending on the industry you’re involved in. How do you know how and where to apply for the best small business insurance policy?

Read reviews on various insurance companies by other businesses in your industry to learn which ones offer quality solutions. Consider whether or not you want an insurance representative or broker to help you find the right coverages. If you decide to work with a specialist, ask what kind of information he or she will need in order to determine your specific needs. Have all of the documents and information prepared. Small business owners typically need to provide details such as physical location, number of employees (if any), total payroll size, business assets, gross annual sales (if there are any to report), and so forth.

Even if you decide to apply for insurance on your own without the help of a broker, you’ll still need to have this information ready.

Best Small Business Insurance as an Investment

Think of commercial insurance as an investment. It will cost money, but it will protect your business from unexpected expenses such as lawsuits and worker’s compensation. The best small business insurance will also protect you from industry-specific problems. For instance, if you are involved in web design, you don’t want to risk financial losses associated with technological glitches, miscommunication, etc. If you are a small beauty salon owner or barber, you don’t want to risk equipment malfunctioning, allergic reactions to certain chemicals, or someone tripping and falling on your property.

No business, no matter how small, is 100% immune to possible lawsuits. People will sue over literally everything these days, and only the best small business insurance will protect your assets. If you want to stay in business for a long time, and hope for the ability to expand it someday, then you should be prepared to handle any kind of accident. It will be very difficult to survive if you suddenly owe a lot of money in compensation, or find yourself dealing with damage caused to your place of business due to extreme weather. The only real solution is to have good insurance from a reliable company that has a lot of positive reviews.

So, where can you get the best small business insurance online? Check with Hiscox Inc. to see what they have to offer for business owners in your industry. You can either get a quote through the website or call and speak to a licensed agent.

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Starting an Aircraft Washing Business

So you love airplanes and you want to start an aircraft washing service? I cannot blame you, as I did the same thing. After cleaning Thousands of aircraft over the years, I have paid for my flight school, first aircraft and then started an aircraft washing franchise as a module of another franchising company I had founded. Named the Aircraft Wash Guys we learned early on what it takes to satisfy aircraft owners, FBOs Fixed Based Operators and Chief Pilots. We always specialized in washing and polishing aircraft. We’ve cleaned thousands of private planes, corporate jets, flying clubs, flight schools and helicopters. My Car Wash Guys company was originally founded over twenty years ago and started as an aircraft washing service.

As you know, aviation people are serious about flying and a clean plane makes flying more fun and enjoyable. Corporate Aviators need you to maintain their positive image. When in the aircraft washing business you will not only wash exteriors of planes, you must also have carpet-cleaning capabilities. Many of our crewmembers are also private pilots and it pays to have pilots as part of your employee team. To learn more about aircraft washing, I have put some additional ideas online to assist you.

http://www.Aircraftwashguys.com/aircraftbbs

We have always kept our prices low and gone for volume, you may wish to do this or charge the going rate. Our rates are at the lower end of the spectrum and this will give you a good starting point on pricing.

Single Engines $20.00-45.00 wash, waxing $60.00-140.00, weekly wash $20.00;

Twin Engines $45.00-90.00 wash, waxing $90.00-240.00, weekly wash $40.00; Corporate Jets $90.00-140.00 wash, waxing $180.00-400.00, weekly wash $80.00;

Helicopters $30.00-100.00 wash, waxing $45.00-180.00, weekly wash $30.00. Carpet Shampooing, Bright Work and Aluminum Polishing, etc. generally we will give the customers free estimates.

You will need to perform these services the customer’s schedule and usually accommodate, immediate services, day or night, evenings and weekends. Customizing your services with the customer’s requirements must become your specialty. You will also need the following things:

Two Million in Liability Insurance

Quiet Machines and Professional Crews in Uniform

Monthly Invoice by “N”-Number

Water Reclamation Device Onboard, EPA Compliant

Truck or Trailer Mounted Unit, Fully Self Contained, Painted Safety Yellow

Owning an Aircraft Washing Service small business can be quite rewarding and although hard work, it can be an extension of your flying hobby. Just think getting paid to wash some of the latest and greatest aircraft and hanging out at the airport all day? And yes, they will even pay you very well for doing just that. Think on this.

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How Divorce Will Have an Impact on Your Business

When you decide to divorce your partner, you not only divide yourself emotionally, but you also divide financially. Financial separation can mean dividing all your assets or by paying money as a settlement. The biggest impact that a divorce has is on the business of a person, because if the divorce is not mutual, you might mess up the business due to your emotional troubles and even if it is mutual, the business might be divided as alimony.

Going through the divorce and the separation is tedious enough, but for business owners it gets worse as they need to protect their business and the assets attached to the business. Unless a divorce is filed, your business is safe and is considered as a job, but once a divorce is filed, it becomes an asset, an asset that is looked upon for division among the two. People start questioning about it more than normal, they start finding out to see if there are any hidden income, they start turning rocks to see and hidden facts about the business.

Points kept in mind

There are various facts that are considered about your business when taking a divorce. Your business will be divided amongst your life partner and you only if your wife had played any role is setting up or developing of your business. Besides helping in developing your business, if your business has your life partner’s name as a business partner even though they haven’t done anything for it, the business will be divided.

Supposedly there is a co owner who is nowhere related to your divorce who is a business partner, things get complicated as he/she would not want to be on a loss because of misunderstanding between you and your life partner. Another point that is considered is if your will includes any mention of your business, this means if you are planning to pass on the business to your children after your death, then the court might consider this business as a partial asset and not as a whole.

When making a financial record of your business, you should ensure that you’re not showing any private expenses in the records as it might be used against you to prove that you mix your professional and personal life. Suppose the business was set up before your marriage, it will be considered as a non matrimonial asset unless and until your spouse has contributed to it, in such a case you should clearly have a record of their contribution so as to prove that their demands are not over exaggerated. Supposedly, if your husband/wife has contributed in your business, then the assets of the business will be divided in a ratio which will be proportionate to the contribution towards the business.

Emotional impact

If the divorce is happening mutually then both the parties will be fine with it, but if you are not willing for the divorce, but are still being made to go through it, it will have a toll on your mind and your feelings. This messed up state of mind might also result in losing your focus towards your business making your profits vanish away soon and incurring losses. The frustration of the divorce might lead to emotional outbursts in the business, making your staff uncomfortable working.

Social impact

A divorce is not something to be discussed socially, but people do get to know about it and even they do some of them don’t leave a chance to bury your reputation. A divorce might bring down the well established business you have in the market by defaming it.

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5 Business Growth Strategies to Survive a Growth Spurt

They say that slow and steady wins the race, but in business the race never ends and the slow and steady will soon be left behind. The trouble is that the faster the growth rate, the more risk involved. Many businesses which experience their first growth spurt don’t make it out the other side. If you’re a small business owner, make sure to familiarize yourself with these business growth strategies before you come to that first, and all-important, growth spurt.

1. Grow your profits, not your revenue – It’s easy to get blinded when you see your revenue growing rapidly. Don’t forget that your expenses are surely growing as well, perhaps even faster than your revenue is. Growth creates more growth and many businesses fall into the trap of embracing the growth before laying the proper foundation. The mismanagement of growth can cause efficiency to drop and overhead costs to rise radically. Don’t sacrifice profit margins to increase revenue – it is not sustainable business growth strategies.

2. Develop your infrastructure – That brings us to what are sustainable business growth strategies: the businesses that surprise their growth spurt are those that have a well-developed infrastructure. Make sure you have systems in place to allow your business to absorb and respond to new challenges effectively and efficiently, such as clearly-defined work procedures, communications channels, short and long-term goals, etc.

3. Have a bold vision – Speaking of goals, what are yours? Every business owner has a vision, their business wouldn’t get very far without one, but there are a lot of them out there. What separates you from the pack is the boldness of your vision. In this age of instant gratification, if you’re not trying to find a new or ground-breaking way of meeting people’s needs, then you shouldn’t get to comfortable with the idea of long-term growth.

4. Maintain loyalty – Just because your business is growing doesn’t mean your head should be growing. Nobody gets successful without the help of their partners, employees and customers. As your business grows, don’t neglect the people and the community that helped you to get this far. “Think global, act local” is one of the business growth strategies that apply no matter the shape or size.

There are many ways to grow your business but you have to be careful not to like that growth run away from you. A negative cash flow is the reality for many young, growing businesses – but it doesn’t have to be. Follow these to ensure your growth is sustainable.

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Small Business Venture Capital Strategies

When launching a new small business, often the entrepreneur will consider venture capital as a source of funding. Here are 3 tips to ensure that venture capital funding can be secured when sending out your business plan:

  1. Send your business plan to the right people
  2. Venture capitalists tend to specialize in certain kinds of businesses. Some will specialize by industry, only investing in new energy companies, for instance, while others look for a certain size of company to invest in. It is worth doing the research to determine who the venture capital backers are for your industry, before you start sending out your business plan. Venture capitalists who are not specific to your industry can provide recommendations to make your plan more appealing to other venture capitalists. However, it would naturally be a mistake to send your plan to potential investors who will not even consider it.

  3. Make sure your business has the potential to be profitable enough
  4. Most venture capitalists look for a return of about 5-10 times their initial investment. For example, an investment in a company of $2 million should yield a return of $14-20 million after about five years. To satisfy these requirements, it is generally necessary to have a business which has the potential for a high rate of return on the amount invested. If the rate of return can reasonably be expected to be lower, such as for a clothing retailer, then it is probably better to look for an alternate source of funding, such as an investment or commercial bank.

  5. Remember to include an exit strategy for your investor
  6. Venture capitalists generally do not want to be involved with a new venture for an indefinite period of time. Most will plan to leave the new venture after about five years, so you should offer a clear explanation of how this may be achieved. There can be a variety of reasons for this; some venture capital managers require that the holdings periodically be sold off to acquire other offerings. Nonetheless, by demonstrating that you understand the limited time frame for many venture capitalists, you automatically make your plan more appealing than those which do not.

In summary, by sending your business plan to the right people, by recognizing what rate of return is necessary for venture capitalist involvement, and by including an exit strategy, you can improve your odds of securing venture capital funding for a new and growing business.

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How to Get Your Business Funded in 2018

Contrary to popular belief, business plans do not generate business financing. True, there are many kinds of financing options that require a business plan, but nobody invests in a business plan.

Investors need a business plan as a document that communicates ideas and information, but they invest in a company, in a product, and in people.

Small business financing myths:

Venture capital is a growing opportunity for funding businesses. Actually, venture capital financing is very rare. I’ll explain more later, but assume that only a very few high-growth plans with high-power management teams are venture opportunities.

Bank loans are the most likely option for funding a new business. Actually, banks don’t finance business start-ups. I’ll have more on that later, too. Banks aren’t supposed to invest depositors’ money in new businesses.

Business plans sell investors. Actually, they don’t well-written and convincing business plan (and pitch) can sell investors on your business idea, but you’re also going to have convince those investors that you are worth investing in. When it comes to investment, it’s as much about whether you’re the right person to run your business as it is about the viability of your business idea.

I’m not saying you shouldn’t have a business plan. You should. Your business plan is an essential piece of the funding puzzle, explaining exactly how much money you need, and where it’s going to go, and how long it will take you to earn it back. Everyone you talk to is going to expect to see your business plan.

But, depending on what kind of business you have and what your market opportunities are, you should tailor your funding search and your approach. Don’t waste your time looking for the wrong kind of financing.

Where to look for money

The process of looking for money must match the needs of the company. Where you look for money, and how you look for money, depends on your company and the kind of money you need. There is an enormous difference, for example, between a high-growth internet-related company looking for second-round venture funding and a local retail store looking to finance a second location.

In the following sections of this article, I’ll talk more specifically about different types of investment and lending available, to help you get your business funded.

1. Venture capital

The business of venture capital is frequently misunderstood. Many start-up companies resent venture capital companies for failing to invest in new ventures or risky ventures. People talk about venture capitalists as sharks-because of their supposedly predatory business practices, or sheep-because they supposedly think like a flock, all wanting the same kinds of deals.

This is not the case. The venture capital business is just that-a business. The people we call venture capitalists are business people who are charged with investing other people’s money. They have a professional responsibility to reduce risk as much as possible. They should not take more risk than is absolutely necessary to produce the risk/return ratios that the sources of their capital ask of them.

Venture capital shouldn’t be thought of as a source of funding for any but a very few exceptional startup businesses. Venture capital can’t afford to invest in startups unless there is a rare combination of product opportunity, market opportunity, and proven management. A venture capital investment has to have a reasonable chance of producing a tenfold increase in business value within three years. It needs to focus on newer products and markets that can reasonably project increasing sales by huge multiples over a short period of time. It needs to work with proven managers who have dealt with successful start-ups in the past.

If you are a potential venture capital investment, you probably know it already. You have management team members who have been through that already. You can convince yourself and a room full of intelligent people, that your company can grow ten times over in three years.

If you have to ask whether your new company is a possible venture capital opportunity, it probably isn’t. People in new growth industries, multimedia communications, biotechnology, or the far reaches of high-technology products, generally know about venture capital and venture capital opportunities.

If you are looking for names and addresses of venture capitalists, start with the internet.

The names and addresses of venture capitalists are also available in a couple of annual directories:

The Western Association of Venture Capitalists publishes an annual directory. This organization includes most of the California venture capitalists based in Menlo Park, CA, which is the headquarters of an amazing percentage of the nation’s venture capital companies.

Pratt’s Guide to Venture Capital Sources is an annual directory available online or in print format.

2. Sort of venture capital: Angels and others

Venture capital is not the only source of investment for start-up businesses or small businesses. Many companies are financed by smaller investors in what is called “private placement.” For example, in some areas there are groups of potential investors who meet occasionally to hear proposals. There are also wealthy individuals who occasionally invest in new companies. In the lore of business start-ups, groups of investors are often referred to as “doctors and dentists,” and individual investors are often called “angels.” Many entrepreneurs turn to friends and family for investment.

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What to Do When Your Business Is Unprepared for a Black Swan Event Like the Coronavirus

Don’t panic. There are a few very simple things you can and should do.

You have a receptionist or guard watching the front door, an alarm system at night, anti-virus software protecting your computers and a firewall protecting your servers. It’s all good except for one thing. You just sent your staff to work from home. You can’t let your business information, including some data with compliance requirements that must be protected, become exposed to the internet.Don’t expose your business, your employees, or your customers to internet pirates and scammers or worse. If you have suddenly found yourself in this position, consider providing your employees with these basic tools to allow them to work from home securely.

We live in an age where the level of risk to our confidential information grows greater every day. The need to safeguard digital communications places a tremendous burden on a business and requires constant diligence to mitigate these ever-evolving risks. During a Black-Swan event like the spread of COVID-19, where you are forced to make a critical decision like sending your staff home with only a few days’ notice, it is critical that you do not let your guard down. The use of secure encrypted email application is the front line of risk avoidance for your business.

Email Encryption is a must

You need an application your entire team can use safely, easily, and affordably. You don’t have the time for extended training sessions or to find out who has what capability at home. You need a product that is easy to install, easy to use and highly flexible, including a compatible mobile app. If you will be sending secure emails to clients, suppliers or others outside of your business you will need an application that allows you to send an encrypted email to recipients to purchase the application in order to receive a secure email.

Check out Send_It_Secure by Protected Trust https://envoy.protectedtrust.com/ Their free trial is being extended to 30 days during this crisis with no further financial commitment necessary. Group rates are available if you decide to continue use in the future.

Team Communications

Communicating with your employee team in as easy and transparent a manner as possible helps keep your team focused and motivated, even when working remotely. There are several products on the market that provide texting and group chats, video conferencing, scheduling and conducting online team meetings, and file collaboration and sharing. To keep things as simple as possible for employees just becoming accustomed to working remotely, combining these capabilities on a single, easy to use application will eliminate a lot of headaches and get your team back to work quickly. The Microsoft Teams application is a good way to accomplish this. There are some upfront minimal fees but they are small if you are able to maintain your employee productivity.

Check out https://www.protectedtrust.com/ They specialize in setting up virtual teams.

Culture Change

Employees like working from home and see the ability to do so anytime as a benefit. No traffic, no gas, and work in your PJ’s if you want. Then they finish their first day working remote and add soon their list can change. No quiet office, no escape from the kids, no business lunches, loss of contact with their fellow employees and delays getting their job done because they can’t just walk down the hall to ask the boss a question. Let’s face it, people also have lots of reasons to like working from the office. Your employees may be in culture shock. Some can handle it and will see it as a benefit, and some will not.

Working with remote employees is also a culture change for managers. Can you run a business without the ability to see your employee’s fingers running across the keyboard? Many managers are “Old School” and have a greater problem with culture change than their employees. Much of the change is in the mindset of the manager. https://paulemcmahon.wordpress.com/2020/03/15/6-tips-in-10-minutes-for-successful-working-from-home/

I recommend a book titled “Virtual Project Management” by Paul McMahon. It was written for software managers but has broad application in any virtual environment. www.pemsystems.com

There are many reasons to believe that the days of working in tall office towers are over. What 9-11 didn’t accomplish, the 2020 Pandemic may. Of course, I recognize there are jobs that can’t be done remotely… but many of them can. The overhead cost to operate most offices, rent, electricity, cleaning, insurance all go away when you lock the doors and let your employees work from home. Lowering overhead costs is often a good tradeoff for perceived lack of control over your employees. Use the current situation to try remote working with your employee team. You may be pleasantly surprised.

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5 Reasons for Writing Business Correspondence

What is an effective business organization? The answer to this is quite broad and diverse. But there is one aspect of business operations that is often neglected. This is business writing.

Effective business communication is important in the daily operation of a company. Moreover, it can dictate whether the company earns or loses money. In addition, it affects the business organization at different levels from the individual up to the corporate leaders.

1. To convey information

The essential role of business writing in an organization is to share information. Whether it is the latest sales statistics or sale projection, a business plan, a marketing proposal, proper communication of data is essential. The success of a business organization depends on the quality of information that passes through its people.

2. To justify an action

Another reason why people communicate is to justify or explain an action. One example to this is writing an incident report. The person explains what happened so that the company can understand an event better. Justifications and explanations require that the author put as much detail as possible to communicate his thought clearly.

3. To influence action

Business writing is often a way to influence other people. A good example of this is presenting a business proposal, a marketing plan or a project proposal. By detailing pertinent information, the author seeks to affect the decision. Influencing others is a hallmark of effective business communication.

4. To deliver good or bad news

The workplace is a dynamic place. It offers employees both good and bad news on a daily basis. Through proper business communication, the bad news is properly written to soften the blow. Likewise, good news is highlighted just to give emphasis. This can range from getting a pay raise to sharing the company’s achievements. On the other hand, this can offer grim realities like suspensions, or even layoffs.

5. To direct action

Lastly, effective business writing aims to direct the reader to the right actions. Many company documents like SOP manuals, employee handbooks, technical instruction manuals and the like offer explicit information. In order for a corporate correspondence to direct the action of the employee, it must be clear and concise. Unfortunately, many failures in communication result due to unclear and conflicting statements.

Having these 5 reasons of corporate correspondence in mind, an author can effectively write business communication. Furthermore, the proper writing style stems from a clear and effective business writing purpose.

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