So how do you figure out what your budget should be? Here is an easy method to help you find a number that is going to work for you and your business. Some might say that it is a good rule of thumb, but I personally judge things on whether or not they work and get results. That’s all.

Moving on... Start with amount of income that your company generated last month and multiply it by .14 (or 14%). That means that if you had $50,000 in Gross Income last month you should budget to spend $7000 on marketing in next month. Wait... I know, it sounds painful but it is just like a shot at doctor. It might hurt for a minute (or in this case a month) but down road you are going to be glad that you went through it. Putting that much toward right marketing will bump up your income next month and start you on a cycle of steady growth.

I know that some businesses run tighter than others and it is possible that you won't be comfortable with that amount in beginning. Don't misunderstand me, any marketing is better than no marketing. Don't get discouraged if your budget is lower than 14%. But use 14% as ideal to strive for because, for me as well as many other growing businesses, it has proven to give best rate of growth possible. How do I know, you ask? My company has expanded 400% in past 2 years. Now picture your business at 4 times its current size... There's that smile I was looking for!

The growth of your business is based on three factors; quality products, great customer service and proper amount of marketing. If you know you have first two taken care and you still aren't experiencing healthy growth then you need to take a serious look at your marketing budget.

So sharpen your pencils, start calculating and decide how rapidly you want your business to grow.

Please take a moment this week to sit down and decide on your goals for New Year. Even if it is past New Year and even well into year, set your goals for rest of year.

Everything is easier when you are working towards a goal. My goal is your success and I assume that is your goal as well.

You will need an EIN number prior to filing business returns with IRS, so make sure you give yourself plenty of time to obtain one. For more information on EINs and your business, consult your accountant.

And while we’re on subject …

Q: I made extra money selling things on eBay last year. These were items I picked up at yardsales mostly. My husband says I am responsible for paying income tax on money I made, but I disagree. This is just my hobby, not a business. What do you think? -- Gladys A.

A: With so many people selling on eBay these days this is a question I get quite a bit. In fact, I have plans for a future “eBay and taxes” column, but I believe your question is more, “is it a hobby or is it a business?”

Again, I went to horse’s mouth (at least I think it was mouth) for answer. According to IRS there are a number of factors that help determine if your hobby can be considered a business and thereby make you susceptible to IRS tax rules governing business.

Do you carry on activity in a business-like manner? If you conduct your eBay activities like a business, i.e. you keep business records, track your profit and loss, keep a separate checking account, etc. then whether you think so or not, your hobby is considered a business.

If you put considerable time and effort into your venture, IRS may contend that you do so for profit and not fun. It seems folks at IRS don’t believe in doing things strictly for pleasure. My guess is, neither do you. If you weren’t making money selling on eBay I doubt you’d be bothering getting up at 4am to hit all those yardsales. Then again, maybe you would…

If you depend on income from your eBay activities for your livelihood, it’s a business, not a hobby.

There are a number of other factors IRS considers to determine if a hobby is really a business, but in your case I think that covers basics.

For detailed answers to any tax question you should consult a qualified accountant or tax attorney. God forbid you rely on a guy who is afraid to mumble letters “IRS” three times in a row.

Here's to your success!

Tim Knox

Tim serves as the president and CEO of three successful technology companies and is the founder of DropshipWholesale.net, an online organization dedicated to the success of online and eBay entrepreneurs.