BizOp Blogs

How Does A Small Biz Get Bigger?

2009-10-12T18:28:55Z

One of the big issues for ambitious small firms looking to grow is how to attract new customers.

You know you have a great product, or offer a good service, but how do you best make yourself known to would-be buyers?

Here Ganesh Selvarajah, an advisor at Business Link, the government-funded business support service, looks at how to best target your advertising or marketing spend.

Question
Matthew asks: “We are a small road-marking company based in East Anglia.

Our company has been running for approximately two years, purely from word of mouth and recommendations.

We are now looking to increase our revenue and would like some pointers as to the best advertising investments.

We already have a website and are listed on most directory sites, but realise it is an unusual area to market. Thanks in advance for any ideas or advice you can offer.”

Answer
“As the road-marking industry is a very niche market, all your advertising and marketing would need to be targeted at the correct audience to maximise your spend,” says Ganesh Selvarajah of Business Link.

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Ideas To Fix Unemployment

2009-10-12T18:24:21Z

Atlantic Online:

To stanch the flow of continued job losses (with 263,000 jobs lost in September, up from 201,000 in August), the White House is weighing new options. Among them are more stimulus-style projects as well as traditionally conservative approaches such as tax cuts for small businesses. As Obama’s economic team pursues new strategies for America’s catastrophic unemployment, economists of all stripes are offering suggestions. Dire times have pushed some pundits to cross party lines looking for solutions. Below, five ideas for tackling unemployment and two warnings about what not to do.

* 1. Send Money to States – The Wall Street Journal’s Gerald Seib notes that states are more vulnerable since many are required to balance their budgets and are also better at pushing out jobs than the federal government. “Getting additional help to states in coming months might well be both the most efficient and the most politically feasible action Washington could take to avoid sinking deeper into the jobs hole,” he writes. “Getting money out to states quickly may have been the single most effective impact of the February stimulus package. That money — which went for construction projects, education and health-care programs — helped financially strapped states avoid even bigger disasters as they put together budgets for the current fiscal year.”

* …But States Must Court Businesses – Jennifer Rubin examines Michigan, a state that has spent and worked extravagantly to promote jobs without success. “For starters, it is one of the more heavily unionized states around. The UAW did its number on the car industry, and any employer coming into the state will have a similar experience with Big Labor. Given the choice between a right-to-work Sun Belt state and a Big Labor–dominated Rust Belt one, most employers will (and do) choose the former,” she writes. “Think for a moment (aside from the political impossibility of it) what would happen if the state passed a right-to-work law allowing employees to refuse to join a union. I’d imagine employers might take another look at Michigan.” Read more.

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Is It So Crazy For A Patent Attorney To Think Patents Harm Innovation?

2009-10-05T00:01:27Z

Techdirt:

I know a fair number of patent lawyers and copyright lawyers who are quite skeptical of what’s become of patent and copyright law — and who readily admit that the law has gone way beyond what is reasonable or what the law was designed to do (i.e., “promote the progress…”). And yet there are some in the patent or copyright legal business who somehow seem to think that it’s traitorous for a patent or copyright lawyer to ever dare question the idea that patents and copyrights work. I had a patent lawyer argue with me the other day that of course patents encourage innovation, because the Constitution says they do. This sort of logical blunder blows my mind. How can otherwise intelligent people assign such backwards logic to things? Do these same people also believe that when Congress passes any law, it automatically achieves its goals?

I have a good friend, who has recently made it through law school. Since he spent over a decade as a computer scientist, the law firm he went to work for made sure he did a rotation in the patent group (but of course).

Read on…

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Prepare For A Possible Pandemic – RECOMMENDATIONS FOR BUSINESSES

2009-08-28T02:50:04Z

FranchiseTalk:

* Check that existing business continuity contingency plans address long-term absenteeism rates. In particular, check to see if core business activities can be sustained over several weeks with only a minimal workforce available.

* Identify your company’s essential functions, which might include accounting, payroll, and information technology, and the individuals who perform them. The absence of these individuals could seriously impair business continuity. Cross-train employees to perform essential functions to ensure resiliency.

* Plan for interruptions of essential government services like sanitation, water, power, and transportation, or disruptions to the food supply. For example, employees may need back-up plans for car pools in case mass transit is interrupted.

* Determine which outside activities are critical to maintain operations and develop alternatives in case they cannot function normally. For example, what transportation systems are needed to provide essential materials? Does the business operate on ‘just in time’ inventory or is there typically some in reserve?

* Update sick leave and family and medical leave policies and communicate with employees about the importance of staying away from the workplace if they become ill.

* Establish or expand policies and tools that enable employees to work from home with appropriate security and network access to applications.

* Collaborate with insurers, health plans, and major healthcare facilities to share your pandemic contingency plans and to learn about their capabilities and plans.

* Maintain a healthy work environment. Ensure adequate air circulation. Post tips on how to stop the spread of germs at work. Promote hand and respiratory hygiene. Ensure wide and easy availability of alcohol-based hand sanitizer products.

Tell your employees about the threat of pandemic flu and the steps the company is taking to prepare for it. Establish an emergency communications plan and revise periodically. The plan should include key contacts (with back-ups), a chain of communications (including suppliers and customers), and the processes for communicating pandemic status and actions to employees, vendors, suppliers, and customers inside and outside the worksite in a consistent and timely way.

How President Obama Can Fix Small Businesses, Not Provide Band-Aids Americans for Tax Reform: On Monday, the Obama Administration...

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Reasons To Start A Business In A Recession

2009-03-30T18:36:06Z

Entrepreneur.com:

Everything is cheaper
Let’s face it: There is great value right now in this and in world markets. This is the right time for fantastic deals in virtually every category, from land and equipment to commercial office space, personnel and labor.

As asset prices have been knocked down, there is no better time to get into the real estate or financial markets, or even heavy equipment and construction. Some people have waited years to find value in these markets–and now that time has come.

You can hire more and better-qualified people
In an era when even Microsoft is laying off, you can find great resources at affordable rates. Thinking about getting your high-tech startup off the ground? There are plenty of engineers waiting to be hired.

Thinking about forming a professional services firm? There are many accountants and attorneys looking for their next opportunity.

People are looking to change suppliers
From a cost perspective, everything is on the table for most companies. Even if your prices are higher, if you can come in with greater value, you have a good chance at winning new business. You also have the advantage of being the new kid on the block when it comes to pitching your products and services. Many companies are desperate to find new partnerships with new companies that have a different, better or more innovative way of delivering those products and services.

Ownership equals tax incentives
Business ownership offers a variety of tax benefits that aren’t available to employees. While taxes should never be the sole reason to go into business for yourself, it should be one reason to add to you “benefits of business ownership” list.

Family and friends don’t want to (or can’t) invest more money into the stock or real estate markets
That means they may be willing to finance a portion of your new venture, or the expansion of an enterprise that has proven itself over time. The main benefit is that they know you and have a relationship with you–and if you have a solid business plan that delivers real numbers, your chances of raising the capital you need increase exponentially.

More reasons here.

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How President Obama Can Fix Small Businesses, Not Provide Band-Aids

2009-03-18T21:07:12Z

Americans for Tax Reform:

On Monday, the Obama Administration announced a series of government-focused solutions for America’s small business sector. Unfortunately, none of them involve long-term ideas to incentivize small businesses to be created or hire more employees.

Below are ten ideas President Obama could get started on right away to help America’s struggling small business sector…

1. Remove the looming tax hike on most small business profits. Since small businesses pay their income taxes on their owners’ tax returns, increasing personal income tax rates is a tax hike on small business profits. In fact, at least $2 out of every $3 in small business profits is earned in households making at least $200,000 per year. So the Pelosi-Reid-Obama plan to raise the top two tax rates is a direct tax hike on the lion’s share of small business profits. It’s like a Sword of Damocles hanging over the heads of small business owners

2. Cut the top marginal tax rate. Since most small business profits are taxed in the top two brackets, these tax brackets should be cut, not raised. A good principal should be that nobody should have to pay more than 25% of their income in taxes. Any rates higher than this should be cut down to 25%. This would be an immediate cut for small businesses, and would remove the current rate structure’s bias against future small business profits. Firms with fewer than 100 employees account for over one-third of employment in America. Cutting this tax rate will put more people to work

3. Cut the self-employment tax rate. Small businesses organized as sole proprietorships or general partnerships must pay two layers of tax—the income tax, and a “self-employment tax” (which is equivalent to the employer plus the employee “shares” of the FICA tax). As a result of the interaction of these two parallel tax structures, growing small businesses often face higher marginal income tax rates than established small businesses. This is unfair, and imposes ridiculously-high marginal tax rates on modest business profits. The self-employment tax should be cut in half to a flat rate of 7.65% (1.45% after the Social Security wage base is exceeded), the same rate faced by the employee’s “share” of FICA

4. Allow full business expensing. Small businesses are already allowed to expense business purchases today, but only up to $250,000 in assets purchased (there are also other limitations). Any asset purchases not eligible for expensing must be slowly-deducted, or depreciated, over many years. For small business owners, a tax cut delayed is a tax cut denied. The cap on small business expensing should be lifted, and all other limitations removed. This will incentivize small businesses to invest more in growing their firms

5. Uncap small business contributions to retirement plans. It’s no secret that America is facing a retirement savings crisis. The looming threat of Social Security’s bankruptcy conspires with a halved stock market and a low savings rate to foil our retirement safety. One easy solution to help turn things around would be to uncap the amount that small businesses could contribute to owner and employee retirement plans. Anything contributed should be deductible against both income and self-employment tax. There should be no contribution limits at all. Now more than ever, America needs to hyper-charge retirement savings

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Free Expert Help For Tax Questions

2009-03-18T20:54:11Z

New York Daily News:

No tax question is too tough for New York’s top accountants, and Your Money is putting them to work for you — for free.

The annual Daily News Tax Hotline is returning this week to assist filers. An all-star team of certified public accountants will be on hand tomorrow, Wednesday and Thursday, from 10 a.m. to 4 p.m., to take your calls and reply to your blog posts and e-mails.

To get help, call (212) 210-2044, visit nydailynews.com/money or write to tax@nydailynews.com.

The Daily News is partnering again on the Tax Hotline with the New York State Society of Certified Public Accountants, whose members have helped thousands of Daily News readers over the years.

“This is a wonderful opportunity for consumers to obtain free tax advice from top tax professionals,” said Sharon Sabba Fierstein, president of the society. “Our members have expertise in federal and state tax issues to respond to questions on any level.”

Your Money Editor Scott Wenger added: “In a tough economy, every legitimate deduction is crucial. Many readers don’t realize they may qualify for a refund.”

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Top 10 List Of Biz Opps In The Stimulus Bill

2009-03-08T22:18:12Z

Virtual Entrepreneur:

The American Recovery and Reinvestment Act was signed into law by President Barack Obama on Feb. 16, 2009. It is massive, not only in dollar amount ($787 billion), but also in length (781 pages, single-spaced).
The legislation represents about $1 billion of tax and appropriation benefits per page.

Here are 10 of the surprising, little known opportunities for businesses buried within this massive legislation:

1. Extension of bonus depreciation. The federal stimulus package extends last year’s 50-percent write-off of the cost of depreciable property for capital expenditures. Wisconsin businesses can extend this temporary benefit for capital expenditure incurred in 2009.

2. New Market Tax Credits. Available New Markets Tax Credits are increased to $5 billion for 2009 and 2010. Wisconsin developers, who have the opportunity to receive allocations for qualified projects, will enjoy an economic boost to projects during the current challenging economy.

3. Creation of renewable energy grants. In recognition of the recent constriction in the market for production and investment tax credits, Congress is allowing for-profit taxpayers that place in service a wide variety of renewable energy facilities to receive a grant from the Treasury Department in lieu of claiming a production or investment tax credit for those facilities. The grant will be equal to a percentage of the taxpayer’s basis in depreciable tangible personal and real property (not including buildings) that is used as an integral part of the facility. This grant opportunity should serve to provide a significant financial boost to qualified renewable energy projects in Wisconsin.

4. Creation of credit for investment in advanced energy property. Congress authorized $2.3 billion in tax credits for certain advanced energy property. The credit will be equal to 30 percent of a taxpayer’s basis in certain depreciable tangible personal or real property (excluding buildings) related to any project that re-equips, expands or establishes a manufacturing facility for the production related to various identified renewable energy resources. This represents an exciting opportunity for Wisconsin suppliers of component parts for renewable energy products.

5. Increase in the amount of energy conservation bonds from $2.4 billion to $3.2 billion. This increase in a financing source should serve to mitigate the current restrictive lending practices that apply to qualified energy projects.

More here.

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Small Businesses Find A New Source For Funding

2009-03-08T22:21:11Z

MarketWatch:

Unable to get loans at banks, more small-business owners are turning to credit unions.

Most credit unions didn’t get in on the subprime-loan market, so they’re not smarting from multibillion-dollar losses like many banks. Many also have extra cash because deposits increased in 2008 as more investors abandoned the stock market and sought greater certainty in savings accounts. So credit unions are more able — and willing — than most of their banking counterparts to dole out money to small businesses.

Wisconsin Credit Union LeagueMatt Rosenthal, vice president of business services of Summit Credit Union, right, with Josh Duggan, president of Chem-Dry of Madison. Mr. Duggan received two business loans from Summit Credit Union.

About 27% of the 8,147 credit unions in the U.S. offer business loans, according to the Credit Union National Association, a trade group based in Washington, D.C. The amount of business loans was up 18% last year to almost $33 billion from nearly $28 billion in 2007. The average loan size is about $215,000.

“In this really bad environment, we’re doing more and more loans,” says Mike Schenk, senior economist at the Credit Union National Association.

Many credit unions say they would lend out even more money if they could. But a 1998 federal law caps the amount of business loans credit unions can have at 12.25% of assets. The banking industry opposes any changes to the legislation, but credit unions hope to convince Congress to introduce legislation to lift the cap. Last year, a bill was introduced to raise the lid to 20%, but it didn’t garner enough votes. Full post.

How President Obama Can Fix Small Businesses, Not Provide Band-Aids Americans for Tax Reform: On Monday, the Obama Administration...

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Turning Employees Into Biz Owners

2009-03-08T22:20:59Z

Buffalo News:

For four decades, Hal Leader owned and ran Printing Prep, steering it through one industry change after another.

Even in retirement, the founder remains ebullient about the digital printing and graphic company’s latest innovations, like images applied to a set of blinds or a tablecloth.

When he was preparing to retire, Leader wanted to ensure the Buffalo company would survive without him.

The question was, who would buy it?

The answer, it turned out, was all around him. He decided to sell Printing Prep to his company’s 30 employees, through an Employee Stock Ownership Plan, or ESOP.

“It’s the way it should be, quite honestly,” said Leader, who is 69.

Under an ESOP structure like Printing Prep adopted, employees buy shares of stock in the company from the owner. Many of the employees buy the shares with bank loans, which then must be paid back. An outside expert annually evaluates the value of the shares. Employees who leave or retire sell back their shares to the company for redistribution.

Since the company’s performance affects the shares’ value, the employees have a stake in those results. Ideally, the ownership strategy also removes the uncertainty that can occur when a business is sold to an outside interest.

Read full article.

Photo: Sharon Cantillon / Buffalo News.

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