Small Business Tax Breaks

December 23, 2015 by

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For the small business owner, a tax break can mean a little savings that go back into their pockets and not to the IRS.  Buying new computers, printers or machinery that they have postponed buying, can mean that their productivity level might increase thus giving them a better year overall.  Some of the “Tax Breaks” for the small business owner are so minimal that they do not impact their well being or the well being of their business, let us hope some of these tax breaks can affect them positively this coming year.

For more about this topic, follow the links below.

Small Businesses Get a Permanent Tax Break on Buying Equipment

Tucked inside the mammoth tax and spending bill passed by Congress this month is a much-anticipated provision that will lock in a large tax break for small-business capital investments that has been temporary until now.

The break is intended to make it more affordable for small companies to buy up to $500,000 a year worth of equipment like computers, machinery and vehicles.

Known as the Section 179 deduction, the tax provision allows qualifying capital items to be written off immediately on a business’s taxes, instead of being depreciated over a number of years. That has the effect of lowering a business’s taxable profits, sometimes significantly.

The deduction is essentially limited to small and midsize companies. It begins phasing out when a company spends more than $2 million a year on qualifying purchases, and is eliminated entirely for those that spend more than $2.5 million.

Small Businesses Need to Act Fast to Get This Huge Christmas Present

But the new “section 179” deduction limits will last into 2016 and beyond

The bigger deduction, aimed at stimulating the economy, covers computers, furniture, vehicles and machinery. Under the provision, small business owners can deduct the full purchase price in the year they bought it.

“It’s one of the most immediate, tangible things most small businesses do in some form,” said John Arnsmeyer, founder and CEO the Small Business Majority, a network of 42,000 small business owners. “It has a very immediate benefit for them.”

Small Business “Tax Holiday” Could Be In The Works

TALLAHASSEE (CBSMiami/NSF) – A Senate Republican has proposed creating a sales-tax “holiday” for small businesses on the Saturday afterThanksgiving, one of the busiest shopping times of the year.

The bill, filed by Sen. Rene Garcia of Hialeah, is similar to a measure filed last month by Rep. Jay Fant of Jacksonville, and Rep. Ed Narain of Tampa.

The bills, which will be considered during the upcoming legislative session, would create a “Small Business Saturday” tax holiday on Nov. 26 next year. If approved, small businesses would not be required to collect sales taxes on items priced at $1,000 or less.

Lawmakers considered such a proposal during the 2015 session, but it did not get approved in a final tax package.

The News Service of Florida contributed to this report.

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Interest Rates and Small Business Borrowing

December 17, 2015 by

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Many believe that the increase in the interest rate will have a minimal effect in consumers wallets, and others believe small business borrowing will have no change despite this.  Borrowing for the small business owner  they believe is not a matter of whether the interest rate is high or not, but whether the small business owner believe borrowing can benefit their business or not.

For more about this and other topics follow the links below.

Everything You Need To Know About How The Rate Hike Will Affect Your Wallet

For the first time since 2006, the Federal Reserve has announced that it will raise interest rates by 25 basis points. This means that it is increasing the target for short term interest rates to a range of 0.25% to 0.50% from a range of 0% to 0.25%.

Within minutes of the Fed’s decision Wednesday, Wells Fargo, JPMorgan Chase and US Bancorp became the first banks to announce that they would increase their prime rate, a rate used for consumer loans like mortgages. Effective December 17, the prime rate at Wells, JPM and US Bancorp will move from 3.25% to 3.5%. Later in the afternoon, Citibank announced a similar move; many other banks are likely to follow suit.

Yet despite this and despite all the hubbub surrounding the Fed’s decision – journalists and Fed watchers have literally been talking about a rate hike for years – the immediate impact to consumers’ wallets will be virtually indiscernible. Fed chair Janet Yellen even said as much in her Wednesday afternoon press conference.

Small businesses like Nick’s Roast Beef may be easy targets for the IRS, says expert

Nick’s Roast Beef, a small family-owned business in Beverly, was federally indicted Monday and charged with reporting false tax statements.

As it turns out, Nick’s may be just one of many small businesses the IRS keeps a close watch on, according to Forbes.

Small businesses that run cash-only operations make easy targets for the federal government, defense attorney Joel Androphy told Forbes. All the while, bigger, more sophisticated businesses get a pass because the work to prove evasion can be more complicated, requiring more time and work, he said.

Many of the cases the IRS works on come from the “Whistleblower” program and involve small businesses with claims under $2 million, which is small in comparison to what some large corporations may be hiding, according to Forbes.

Don’t expect Main Street to accelerate borrowing overnight

What’s more relevant to small business lending appetite is optimism.

As years of low interest rates start to wind down, don’t expect Main Street to accelerate borrowing overnight.

There can often be a disconnect between the Fed and smaller businesses, which are driven by other variables including cash flow, business opportunities and loan availability and terms. If you’re a growing business, you’ve likely already signed onto loans. For the rest of the smaller guys, however, it’s likely borrowing will ramp up gradually to stay ahead of higher lending rates. And if anything can trigger more borrowing for small companies, it’s a more upbeat mood about business prospects.

“Business credit is so different than consumer credit. It’s driven far less by rates and far more by availability in terms of both loans and market opportunities,” said Jeff Stibel, vice chairman of business researcher Dun & Bradstreet. “Rates are almost irrelevant.”

The Federal Reserve, as widely expected, approved a quarter-point increase in its target funds rate on Wednesday. It was the first rate increase in nearly a decade.

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A Way to Limit Common Management Mistakes

December 14, 2015 by

64510516You’ve probably heard this saying, “Insanity is doing the same thing over and over again and expecting different results.”  It’s commonly attributed to Albert Einstein, but that’s a mistake – the exact origins of the quote are unknown. However, as mistakes go it’s a “no harm, no foul” one.

Like this one, some mistakes are little ones, and then there are those big enough to close businesses.  The ones big enough to close businesses usually are the result of the owner’s and manager’s repetitive, unproductive behaviors (i.e. insanity).  The kind of mistakes that they repeat over and over, regardless of facts which show the behavior isn’t working.

Maturation in humans and animals is the process of being able to learn from our mistakes, which results in positive behavior changes.  That’s what we call experience – I tried this, it didn’t work, I learned from it and will try something else that’s hopefully better (and repeat). 

There are several common management mistakes which most people make.  However, there’s a simple time tested way to avoid or minimize the damage from them.  A way which has evolved over centuries and has the power of experience behind it – ask for help. 

The majority of small businesses start because the owner knows something about the product or service.  He’s worked in a specific field for someone else and then gone out on his own.  He’s good at what he does and knows his product, but what he’s not good at is the “other stuff” (i.e.  marketing, accounting, legalities and regulations, human resources, taxes). 

Nor should he be.  While those areas are important in running a successful business, no one has the level of expertise or experience to understand them all.  He shouldn’t expect to be good at or knowledgeable about everything it takes to run a profitable company.

Yet, overwhelmingly small business owners expect just that of themselves.  They won’t ask for help, because they see it as a personal failing.  They believe they can and should figure it out for themselves.  However, they get sidetracked by trying to do the things they aren’t good at and lose focus on their strengths.

One of the best ways to limit mistakes in business (and life) is being willing to learn from others.  Learning from other’s mishaps saves us from having to go through the costs and hardships of making them ourselves.  There are more than enough chances in life to mess up, why not take the opportunity to let someone else do it for you when possible.

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So You Want to Buy an Online Business?

December 4, 2015 by

business (2)There’s a cycle in the development of any new technology and how it enters the business community.  Part of the growth process for any new idea is to be a good enough model to establish a business around it, and have that business become valuable enough to resale.

In the small business community we’re beginning to see the maturing of the online business market.  Up until very recently when people talked about owning an online business they were talking about starting one.  But, that’s beginning to change – small online businesses are trickling into the business-for-sale market. 

Owning and running an online business, like any business, has its positives and negatives.  The way to increase the positives and decrease the negatives begins with the buying process, nothing takes the place of solid due diligence.  Here are 2 vital areas to consider.

Technical

An online business is in a volatile and rapidly changing industry.  How much technical knowledge do you have and how much is needed for the business?  Do the ideas of regularly tracking site traffic metrics, developing SEO tactics, rooting out plagiarized content and maintaining your legal/ethical responsibly for security excite or bore you?

If you can’t or don’t want to manage the day to day technical issues you should have answers to these questions – who will, how much will they cost and how hard are they to find?  The problem of attracting and retaining qualified people is an on-going issue that’s not going to be resolved any time soon, if ever.

Financial

Be sure to assess the company’s actual value, risk and outlook.  Traffic totals are routinely unknown, manipulated and lied about.  Traffic is money, so don’t accept guesses or vague numbers.  The financial information should line up with the site’s metrics, all of which should be hard numbers gathered over a realistic time period.

If you aren’t an expert hire someone who is, someone who knows the industry’s past and current benchmarks.  As well as, someone who understands and has the data for the future outlook specific to your product or service.  Over inflated forecasts for the financial potential of online businesses are legendary.

Don’t be swayed by the hype.  The process of buying an online business is the same as buying one in a more established area (i.e., retail or food store, machine shop, insurance agency).  Taking your time and doing the due diligence is still the key. 

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Ohio Job Growth, Outsourcing, and Health Costs

November 18, 2015 by

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Many small business paying for health insurance coverage for their employees have seen an increase in their premiums year after year, and they expect 2016 will not be any different. And although paying for health insurance coverage for their employees is an expense that keeps increasing, the alternative is not something they are considering doing.  To retain or attract top workers for their companies, the incentives they offer are as important as the salaries they promise.

For more about this and other news follow the links below.

Should your small business outsource IT?

Depends on how small a business it is.

To outsource or not to outsource, that is the question many small businesses struggle with.

For certain support tasks, like payroll, outsourcing is universally considered the small business protein shake: without it there’s no way to compete with the big guys. But for other business functions, outsourcing is more like the candy bar: it’s tasty at first, but in the end, there’s little real benefit.

IT was once considered a no-brainer for small business to outsource. After all, good IT is expensive and hard to find. Why further stress a fragile revenue stream with another salary?

But in more recent years, IT evolved from a purely supportive department to an integrated revenue driver. For companies who rely on their IT for innovation, outsourcing IT is not a no-brainer; it’s unthinkable.

So what is right for small business: outsourced IT or an internal department? Let’s examine what they need to consider.

Small business health costs: Up this year and next?

The vast majority of small businesses are paying more for health insurance for their employees under the health care law, and many expect their costs to keep going up next year, according to a survey by the advocacy group National Small Business Association.

Ninety percent of the 810 owners surveyed said their costs are up in 2015 over last year, and 84 percent expect to pay more in 2016.

The number of companies that offer health benefits to their employees fell 5 percent to 65 percent this year from 2014, the survey found. The largest decline came in companies with 10 to 20 staffers; 73 percent are offering benefits versus 86 percent last year.

But nearly half the owners provide health insurance to more than 80 percent of their workers. Almost all the owners — 94 percent — believe offering health insurance is important to recruit or retain top workers.

Local entrepreneurs report growth, job gains

COLUMBUS — The Columbus chapter of the Entrepreneurs’ Organization’s annual EO Global Entrepreneur Indicator shows overall growth and opportunity in central Ohio.

The indicator is intended to reflect top Columbus entrepreneurs’ economic experience during the past six months and their outlook for the coming six months.

Seventy-five percent of those involved in the Columbus survey say employment rose in the past six months; the numbers were 70 percent in Cleveland, 56.8 percent in Cincinnati and 58.3 percent globally.

However, only 60.7 percent of those surveyed locally expect an increase in hiring over the coming six months. That’s in contrast to 80 percent in Cleveland, 67.6 percent in Cincinnati and 62.8 percent globally.

Those surveyed in Columbus reported strong profit and revenue numbers both in the past six months and in their outlook for the coming months, besting the percentages of the other Ohio cities’ entrepreneurs in most cases.

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4 Ways to Increase the Bottom Line

November 16, 2015 by

donk1-300x266The majority of small businesses fail because they aren’t able to generate enough operating capital, they simply run out of money.  But, there are ways to prevent this.  The lack or loss of money is overwhelmingly caused by internal problems.  Contrary to most owners’ beliefs, external forces are responsible for just a fraction of small business failures.

Companies run out of money because the owners won’t or don’t know how to address their structural and operational problems.  Commonly, the actual causes of the typical business’s collapse can be traced to 4 problem areas.  Therefore, if addressed in a timely manner, profit and profit margins can be increased when the problems are identified and fixed.

Key to an efficient operation is putting the right person in the right job.  It’s vital to accurately assess employees’ skills, everyone has strengths and weaknesses.  This is especially true in small businesses where family and friends are often in jobs they aren’t suited for.  Putting people in positions they’re not trained to do or just aren’t capable of doing affects the bottom line. 

Lack of accountability – for owners (who usually don’t hold themselves accountable for their actions), managers and workers – is an enormous problem in workplaces.  This area all by itself can financially affect a business to the point of closing.  Employees, owners and managers must be accountable for their responsibilities and behaviors. 

Another area that directly affects profitability is lack of or poor internal and external communication.  Billions of dollars have been lost simply because somebody didn’t pass on important information, talk over a problem, speak up with a concern or listen enough.  Prioritizing effective communication, at all levels, is a smart fix.

The final area, improve production efficiency, is a no-brainer.  Some of the benefits include: it’s cheaper to produce the product, requires less rework, increased customer satisfaction, is easier to sell, generates referrals and decreased waste. All of which contributes to increased earnings.

These are 4 main ways a company can increase its bottom line.  If a small business owner is willing to learn some new skills, and consistently apply them, the monetary and non-monetary rewards (i.e. time off, happier employees, secure future, increased quality of life) are well worth it. 

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Entrepreneurial Stubbornness – the Good, the Bad, the Ugly

November 4, 2015 by

59948705Persistence, not listening to the nay-sayers, determination, following your dream: All things which contribute to starting and building a thriving business. All things which are fueled by good old-fashioned stubbornness.  I have yet to meet a successful small business owner who doesn’t have a very large streak of it.  Unfortunately, that’s not always a positive.

The Good

Stubbornness is a positive quality when it’s driving you to create, build and sustain a business.  The desire to “do things my way”  is a powerful motivator.  It’s what keeps you on track to work the long hours and make the hard decisions.  It has built multi-national Fortune 100 companies, as well as the local machine shop.

The Bad

As the saying goes, “There are 2 sides to every coin.”  There’s a bad side to entrepreneurial stubbornness.  It’s human nature to become attached to our own viewpoint – not only do we get stuck in ruts, we furnish them for additional comfort.  This makes it difficult to see other’s (accountants, consultants, employees, managers) points of view and listen to their ideas. 

Ideas which are good for you and your company.  When a company is growing there’s a juncture when the owner should shift from “a one-man show” style of management to a team approach.  Many don’t make that change, they stubbornly hang on to old ideas and ways of doing things, which often leads to the ugly.

The Ugly

There comes a time when an owners’ refusal to modify his inflexibility crosses the line from poor management skills to self destructive behavior-“the old way is good enough, no  one is going to tell me what to do”.  Resulting in — due to the owner’s unwillingness to recognize and adapt to changing ideas, technologies, employee’s needs and market requirements — a bankrupt company. 

Good entrepreneurial stubbornness often turns bad and ugly over time.  Owners fail to understand that we all need to evolve if we are to thrive in an ever changing world, and we have to be willing to listen to others to do so.  As Benjamin Franklin said, “We are all born ignorant, but one must work hard to remain stupid.”

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It’s Time to Get Serious About Strategic Planning

October 6, 2015 by

business (11)It’s that time of year again. The time of year when companies are — or should be — developing their strategic plans for 2016. Compared to larger companies small business owners are in an enviable position. They have more control over the development and execution of their plans. They can have a greater impact on the profitability and success of their business, with significantly less hassles and politics.
But, the downside is they have fewer resources (people, experience and knowledge) to draw from while formulating their plans. Often, in a small business, owners don’t know where to start or what’s needed to put one together and they need to figure it out for themselves. Here are 3 things they can do to fill in these gaps.
Combine data with intuition
Successful planners strike a balance between relying on just their gut or just the numbers. Usually, an owner falls into 1 of 2 camps — the “I don’t even look at the numbers, I go with my gut” guy and the “I’m a by-the-numbers, they don’t lie” guy. Neither is productive for the long term health of the company, good strategic thinkers use both to counterbalance each other.
Develop a trusted group
The most effective planners solicit information from others (i.e., peers, experts, employees, managers, vendors, customers) who’re successful. Because no one can know everything they seek out knowledge they don’t have. They cobble together their own panel of specialists. However, this isn’t group decision making — it’s about owners gathering data and opinions, and then reaching their own conclusions.
Be willing to learn
Questioning and listening aren’t the same thing. We all know people who ask questions, then don’t pay attention to the answer. The best strategic thinkers are open to what others have to say. They don’t substitute someone else’s judgment for their own, but they’re willing to learn from others.

In addition, not only do they seek knowledge, they look for insight from others. Businesses fail everyday because the person(s) in charge made mistakes based on uniformed, misguided assumptions, ideas and biases. Effective planners learn from mistakes and don’t do them again; ineffective planners make the same ones over and over expecting different results.
Successful, well thought out strategic planning relies on good critical thinking skills, which leads to good decisions. As one of our greatest generals Dwight D. Eisenhower said, “In preparing for battle I have always found that plans are useless, but planning is indispensable”.

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Ohio Business Registrations Now Easier Than Ever

October 5, 2015 by

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Paperwork is always considered when rating the best states to start a business.  With the new filing fees in Ohio-$99-it is easier now  to file and pay your fees on line and have your business registration done the same day. If you were dreading the filing and the time it took the government to complete the paperwork, dread no more.  Ohio is making the start of your small business easier than ever before.

For more about this and other news follow the links below.

More Ohio business owners to hire, boost paychecks

By Staff Staff

Staff report

More small- and medium-sized business owners in Ohio and nationwide expect to increase hiring and wages for their employees over the next six months, and they also are increasingly optimistic about the prospects for their own businesses, according to the most recent PNC Economic Outlook Survey findings released today, Oct. 1.

The fall findings of PNC’s bi-annual telephone survey, which began in 2003, show that about 36 percent of Ohio business owners said they expect to boost employees’ pay in the next six months, up from 26 percent last spring. And 59 percent of those business owners that do plan raises say the amount will be 3 percent or more. Nationally, the prospect of salary increases is even more promising: 42 percent intend to give raises, which is the highest percentage since 2007.

Ohio’s small, mid-sized firms report worker shortageOhio’s small and midsized businesses say they are having a harder time finding workers.

PNC Bank’s fall survey of business owners and executives released on Thursday found that 4 in 10 businesses say it is more difficult to find qualified employees than it was six months ago. Eleven percent of businesses that aren’t hiring say it is because they can’t find the right skilled workers.

Ohio’s jobless rate dropped to a 14-year low of 4.7 percent in August, and the number of unemployed workers has tumbled in recent months. In central Ohio, the rate is even lower: 3.6 percent.

Some industries are being hurt by a lack of skilled workers. For example, construction workers might have moved on to other industries during the recession, said PNC Bank economist Mekael Teshome.

Teshome said he also has heard of manufacturers struggling to find workers with the technical skills and experience needed for some openings.

In other instances, it is a case where employers aren’t quite ready to raise pay, he said.

Ohio cuts price of new business paperwork to $99

Last week, Ohio became the least costly state in the region to start and maintain a new business. On Thursday, joined by leaders from around our state, I was pleased to announce we’ve cut the cost of registering a new business in Ohio to just $99. We also launched a partnership with Google to help connect new entrepreneurs with resources to get their businesses online, registered with Google Maps and Search tools and other important marketing resources.

Elected officials and candidates talk every day about creating jobs and making it easier to do business, but what exactly does that mean? I suspect even some of the people who say these things don’t really know.

The Secretary of State’s office is the first stop for anyone wanting to do business in Ohio.

We’re working every day to try to make this first interaction positive by implementing more services to help you get your business idea off the ground. Now, we’re taking it to the next level: We’re cutting the cost of starting a business in Ohio.

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Ohio Small Business News

September 16, 2015 by

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The small business sector has long been considered a big job creator for the United States economy. Small businesses have a long history of creating jobs and employing over half the workforce in the United States. It is no wonder then that the federal government has disburse millions of dollars to support the small business sector in Ohio. For more about this and other topics, follow the links below.

U.S. small businesses feel mixed impact from China’s economy

NEW YORK: China’s economic problems have been a windfall for some U.S. small businesses — and pose a threat to others.

A nearly 40 percent plunge in the Shanghai stock market since mid-June, a response to the country’s weakening economy, has sent Chinese investors looking for safer investments. Some are focusing on U.S. real estate, including the condos Peggy Fucci’s real estate brokerage sells in Miami. She’s sold six condos to Chinese buyers in the past month, twice what she’s typically sold in that amount of time.

“It’s the insecurity of continuing to lose your [stock market] investment,” said Fucci, CEO of OneWorld Properties.

Chinese buyers, who pay an average $1.2 million for the condos in a downtown Miami development where she’s sold some homes, want them as an investment rather than a place to live, she said. Fucci is heading to China this weekend on a sales trip, optimistic that she’ll find more buyers.

Feds give Ohio over $18 million for small businesses

Ohio has received more than $18.7 million in State Small Business Credit Initiative funds to help small businesses access capital to grow and create jobs, the U.S. Treasury Department announced recently.

To date, more than $55 million in initiative funds have been disbursed to the Ohio Development Services Agency to support small businesses and the local economy.

“Small businesses are the nation’s leading job creators, and the State Small Business Credit Initiative connects sources of capital to the small businesses that need it,” said Jeffrey Stout, director of the initiative, in a statement.

“The funds announced … will continue to support loans and investments in Ohio’s small businesses,” Stout said.

TAX TIPS: Ohio budget bill provides considerable tax savings for local business activity

Ohio’s operating budget for 2016 and 2017 calls for reductions in tax rates that could prove important to small business owners in the Buckeye State.

This summer, Gov. John Kasich signed into law the two-year Ohio budget bill that expands deductions for small businesses and reduces tax rates on business income and individuals. Kasich originally called it his “Blueprint for Ohio.”

Perhaps most significant is an exemption on a certain portion of business income for Ohio small business owners that do business as an S corporation, limited liability company or sole proprietorship.

The provision does not apply to C corporations, but any business that is structured as a pass-through entity so that its income flows directly from the business to individual shareholders for tax purposes.

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