How New Health Care Plan Could Affect Your Business

According to an Inc.com report, “The healthcare reform…will bring drastic changes to the way small businesses buy and supply health insurance.”  Below are some key points from the report.

• By 2014, states must set up Small Business Health Options Programs, essentially purchasing pools where small businesses can club together to buy insurance.

-          Companies that outgrow the size limit will be grandfathered in.

• Companies with fewer than 50 workers won’t face penalties if they don’t offer insurance.
• Companies with 25 or fewer employees and a work force with an average pay of up to $40,000, can get tax credits to help buy insurance.
• Full credits will be available for the smallest firms with the lowest-paid workers (10 or fewer employees and average yearly wages of less than $25,000).
• Most of the provisions of the $940 billion legislation won’t kick in until 2014.

Employee Stock Ownership Plans Increase in Popularity

An Employee Stock Ownership Plan is a plan that allows employees to own stock in the company they work for.  According to BusinessWeek, this method has increased in popularity, mostly as a result of the recession. “ESOPs have become a more appealing way for owners to cash out their equity because the downturn has lowered what most companies would fetch in a merger or acquisition,” said Jude Anne Carluccio, a partner in the Minneapolis law office of Barnes & Thornburg and chairwoman of the firm’s ESOP Practice Group (BusinessWeek).

*There were 11,400 ESOPs in the U.S. in early 2009, up about 400 over 2008 and 800 over 2007 (National Center for Employee Ownership).

What’s Your News?

What’s new with your small business?  Feel free to leave a comment below.

The Latest on Unemployment

The Bureau of Labor Statistics released its Employment Situation Summary today.  Key points include:

• Unemployment rate remains at 9.7%
• Employment fell in construction and information, while temporary help services added jobs.
• Average hourly earnings increased by $0.03.

According to a Business Week report, the smallest businesses may be adding jobs.  “..data from payroll companies suggest that losses at the smallest businesses have stopped and those businesses are beginning to hire,” wrote John Tozzi.

*Have you hired new employees this year?

Tax Time

April 15 is the deadline for filing taxes and news related to taxes is abundant, from the governments’ cracking down on small business owners misclassifying workers as independent contractors, to tips on getting small business tax deductions and “loss carry back.”

What’s Your News?

What’s new with your small business?  Feel free to leave a comment below.

New Plans for Small Business Lending

President Obama has announced plans to increase the limit of the Small Business Administration’s express Loans.  The current limit for these loans is $350,000; Obama would like to increase this limit to $1 million.

The SBA Express program features “an accelerated turnaround time for SBA review.”  Through this program, responses to applications are given within 36 hours.

Unemployment Rate Falls Slightly

Today, the Bureau of Labor Statistics released its Employment Situation Summary for January, 2010.  This report features employment information, household survey data, establishment survey data, as well as changes to the employment situation text and tables, revisions to establishment survey data and adjustments to population estimates for the household survey.

Key Points

·         Unemployment rate fell from 10.0 to 9.7 percent.

·         Nonfarm payroll employment was “essentially unchanged.”

·         Employment fell in construction, transportation and warehousing.

·         Temporary help services and retail trade added jobs.

Is Social Media Affecting your Credit?

According to Miranda Marquit, a blogger for allbusiness.com, credit companies are beginning to look at your social media profiles to determine your credit worthiness.  “In their quest to identify creditworthy customers, some are tapping into the information you and your friends reveal in the virtual stratosphere,” wrote Erica Sandberg, for creditcards.com.  Read the full stories here and here.

Job Cuts

According to a report released by payroll-processing firm  Automatic Data Processing, small businesses cut 25,000 jobs in the month of December.  This is the 23^rd consecutive month of cuts for small businesses; however, it is the lowest number of jobs cut since July 2008.

Many small business owners are attempting to expand their businesses, which would require hiring more employees.  Unfortunately, bank lending has yet to rebound, leaving a significant amount of these small business owners without the funds they need to expand and preventing them from hiring additional employees.

Suggestion:

Small business owners searching for business funds to expand their businesses and hire additional employees should apply for a business cash advance. They can get up to $500,000 which can be used with no restrictions.  These funds could improve their businesses and potentially improve the economy, helping to lower unemployment.

Pay Increases

Based on the findings from individual surveys conducted by five different companies (Conference Board, Hewitt Associates, WorldatWork, Watson Wyatt Data Services and Mercer) salaries are poised to increase in 2010.

Each survey projected employee pay increases from 2.6% to 3.3%

Do you plan to increase your employees’ pay this year?

Current Small Business Bestsellers at Barnes & Noble

1.   E-Myth Revisited : Why Most Small Businesses Don’t Work and What to Do about It by Michael E. Gerber

2.       QuickBooks 2010 The Official Guide by Leslie Capachietti

3.       The Small Business Owner’s Manual: Everything You Need to Know to Start up and Run Your Business by Joe Kennedy

4.       Power of 2 : How to Make the Most of Your Partnerships at Work and in Life by Rodd Wagner

5.       Training Camp : What the Best Do Better Than Everyone Else by Jon Gordon

Business Credit Cards’ Turn for the Worse

As the Consumer Credit Protection Act aimed to protect consumer credit card holders, credit card companies aimed to make up for soon to be lost money by cutting lines of credit, raising interest rates, and closing accounts of small business credit card holders.

This couldn’t have happened at a worse time.  Bank lending had already virtually come to a standstill and many small business owners were relying on business credit to keep their businesses alive.  Many small business owners were suddenly forced to make drastic decisions regarding their businesses.

Boosting Local Business

In August 2009, CNN Money ran a story titled “The People’s Stimulus Package.”  In this article, six small businesses that created their own “grassroots stimulus” efforts were profiled.  An entrepreneur that stood out of the pack was a pharmacy owner who handed out $16,000 in bonus money to his staff and told them to give 15% to charity and spend the rest locally.  He gave out the money in $2 bills, so they could actually see the money circulating throughout the community.

Small Business Reading

Inc. recently released its list of the best books for small business owner of 2009.  Below are five of the 14 books.

1. Getting to Plan B – by John Mullins and Randy Komisar
2. Outlier – By Malcolm Gladwell
3. Exploiting Chaos: 150 Ways to Spark Innovation During Times of Change – by Jeremy Gutsche
4. How the Mighty Fall and Why Some Companies Never Give in – by Jim Collins
5. Crush it! Why Now is the Time to Cash in on Your Passion – by Gary Vaynerchuck

“The economy is in the throes of a long transition back to health; recovery will be long, extending beyond 2010,”said Ivan Seidenberg, chairman of the Business Roundtable.

The consensus among CEO’s is that they anticipate the US economy to grow approximately 1.9 percent next year. Based on the US commerce Dept., corporate profits grew a staggering 13.4 percent this quarter, making it the strongest performing quarter since 2004.

Among CEO’s, Healthcare is their number one concern, with a full third of them worried about rising cost of health insurance and how it will affect growth.

“This underscores the urgent need for the right kind of health care reform that can achieve real and permanent cost reductions,” Mr. Seidenberg said. “Without reform, these costs will continue to weigh down the economy and hinder job creation when we need it most.”

President Obama has been pushing health care reform along with plans to stimulate job growth, something that our economy is still struggling with. This past Tuesday he offered a series of initiatives that he hopes will get people into jobs and help small businesses which have been hit particularly hard. Some of these initiatives include tax cuts for small businesses and infrastructure spending.

Learn about Small Business Loan Alternatives

Celebrate the good news!

Top Five Books on Amazon in Small Business and Entrepreneurship as of December 4, 2009

1. Put More Cash in Your Pocket:  Turn What You Know into Dough – Loral Langemeier
2. Crush it!  Why NOW is the Time to Cash in on Your Passion – Gary Vaynerchuck
3. Getting Things Done:  The Art of Stress-Free Productivity – David Allen
4. Good to Great:  Why Some Companies  Make the Leap…and Others Don’t – Jim Collins
5. The 7 Habits of Highly Effective People – Stephen R. Covey

Jobless Rate Down

The Bureau of Labor Statistics reported that the unemployment rate for the month of November dropped from 10.2% to 10%.  “Employers in the U.S. cut the fewest jobs in November since the recession began and the unemployment rate unexpectedly fell…” as written in an article on Business Week’s website.

In addition to the declined unemployment rate, the average work week in November grew to 33.2 hours, compared to 32 hours in October and average weekly earnings increased to $622.17.

Business Ownership on the Rise

Business ownership is becoming a popular choice, especially amongst people who have lost their jobs due to the downturned economy.  “Self-employment rates have been growing at an average of 4.5 percent annually most of this decade, adding roughly 1 million people per year, and they are expected to keep pace or spike when the 2008 and 2009 numbers are released, as stated on msnbc.com.

Unemployment Rate Reaches 10.2%

The Bureau of Labor Statistics reported that the U.S. unemployment rate reached 10.2% in October.  According to news sources, this is the first time unemployment rates have passed 10% since the Great Depression, which began in October of 1929 and lasted at least a decade.

Business Credit Card Rate Hikes

According to Gerri Detweiler, a financial education expert and co-founder of the website BusinessCreditSuccess.com, business credit card issuers are cutting credit lines, raising interest rates and even closing accounts, as stated on All Business. 

A bill that was recently passed to amend the Consumer Credit Protection Act is most likely to blame for this phenomenon.  This law only protects consumer credit cards and according to various sources, credit card issuers are trying to make up for losses via business credit cards.

Some small business owners have been forced to close their credit cards while others have had their lines cut.  Still, other options, such as the business cash advance, exist for effected small business owners.

Top Five Books on Amazon in Small Business and Entrepreneurship as of November 6, 2009

1. Crush It!: Why NOW Is the Time to Cash In on Your Passion by Gary Vaynerchuk
2. Getting Things Done: The Art of Stress-Free Productivity by David Allen
3. The Five Dysfunctions of a Team: A Leadership Fable (J-B Lencioni Series) by Patrick Lencioni
4. Good to Great: Why Some Companies Make the Leap… and Others Don’t by Jim Collins
5. The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich by Timothy Ferris

The Obama administration has announced new initiatives to help increase lending to small businesses.  The Small Business Administration and the Treasury Department plan to increase the maximum sizes of 7(a) loans, 504 loans and microloans.

**Note:  Small business owners who do not qualify for SBA loans may apply for unsecured business cash advances.  Furthermore, merchants who already have bank loans may use business cash advances as additional funds.

America’s Top 10 Small Public Companies

Forbes recently released its list of America’s top 200 small companies.  “Our list of the 200 Best Small Companies in America begins with a search for companies that show both sales and earnings growth,” wrote Kurt Badenhausen and Christina Settimi.  The top 10 on the list are as follows:

1. Lumber Liquidators
2. Allegiant Travel
3. Quality Systems
4. LHC Group
5. Green Mountain Coffee Roasters
6. Transcend Services
7. Rackspace Hosting
8. NVE
9. American Public Education
10. American Science & Engineering

Small Business Reading

Top five books in “Small Business and Entrepreneurship” on Amazon, as of October 23, 2009:

1. The Big Book of Small Business: You Don’t Have to Run Your Business by the Seat of Your Pants - Tom Gegax and Phil Bolsta

2. Small Business For Dummies (For Dummies (Business & Personal Finance)) – Eric Tyson and Jim Schell

3. Small Business Start-Up Kit – Peri Pakroo J.D.

4. How to Succeed as a Small Business Owner … and Still Have a Life – Bill Collier

5. The Small Business Owner’s Manual: Everything You Need To Know To Start Up And Run Your Business – Joe Kennedy

Young Entrepreneurs

Inc. released its 30 under 30 list of the top entrepreneurs under the age of the 30.  Featured in the list are John Goscha, Jeff Avallon and Morgan Newman who create IdeaPaint, “…a paint that essentially turns any smooth surface into a dry-erase writing surface,” allowing users to brainstorm directly onto walls without the need for a dry-erase board, and wipe it clean when finished.

Also included in the list is a 13-year-old girl who developed Snap Caps, uniquely designed bottle caps that can be worn “…on necklaces, in hairpins, or as bracelets.”

Banks are Urged to Straighten Up

According to Fortune, federal bank “watch dogs” have sent out 29 letters calling for prompt corrective action for the year through August, when last year, they only sent out seven for the same time period.  “A prompt corrective action letter comes when regulators determine a bank has become undercapitalized, meaning it doesn’t have a big enough cushion against future losses,” wrote Collin Barr.

Small Business Reading

Top five books in small business and entrepreneurship on Amazon, as of October 13, 2009:

1. Getting Things Done: The Art of Stress-Free Productivity by David Allen
2. Seven Habits of Highly Effective People, Miniature Edition by Stephen R. Covey
3. The Five Dysfunctions of a Team: A Leadership Fable (J-B Lencioni Series)
4. Good to Great: Why Some Companies Make the Leap… and Others Don’t by Jim Collins
5. The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich by Timothy Ferris