How Are Gas Prices Impacting Small Businesses?

From: chamberofcommerce.com

By: Tess Taylor

Gas prices have consumers hurting and small businesses alike feeling the hurt. How long will it be until gas prices begin to fall?

Around the nation, oil and gas prices are edging up and small businesses are increasingly feeling it. The cost of oil has gone up over 700% over the last ten years, due to supply and demand challenges. According to AAA, gas prices are averaging between $3.00 to $4.00 per gallon, particularly in remote areas of the US. For small businesses who rely on transportation to conduct business, and those who have employees trying to get to work, the impact is significant. For other businesses that provide consumer goods and services, the impact is also being felt as more consumers are cutting back to pay for fuel.

The price of gas has changed the way many small business owners are making decisions. In an economic environment that is already stressed due to high unemployment, stagnant wages, property value declines and rising inflation, small business owners are often the first to experience declines in revenue. This makes it tough for small businesses to stay afloat without suffering losses of sales and being forced to let go of employees – an action that has a disparaging affect on the economy as a whole. When small businesses cannot make it, larger businesses begin to fail, and things spiral out of control much like a domino effect.

From the point of view of a small business owner struggling to provide services and goods at affordable prices, when the cost of doing business increases, typically some of these costs are passed onto consumers. In today’s climate, however, this is impossible because consumers are refusing to make unnecessary trips and purchases. Small business owners have no choice but to absorb these costs and cut back wherever they can. Small businesses that heavily rely on fossil fuels to get the job done have no place to turn and many just cease operations because they can no longer be profitable.


There is light at the end of the tunnel, however. According to CNN News analysts, the cost of oil has reached it’s peak and has now dropped almost 30% in recent weeks. Experts are saying this is a sign that gas prices will begin to fall over the summer months in most regions. In some major cities like Atlanta, Georgia and Los Angeles, gas prices have already begun to drop over the past few weeks and the word is that gas will be at a national average of about $3.50 USD by the end of the summer. This is good news for small business owners who are trying their best to tread water while the economy starts to rebalance itself following the gas crisis.

If you are a small business owner struggling because of gas prices, there are some things you can do to keep your business alive and well. Start by cutting back to the absolute necessities in your business and focus on what needs to stay in place to maintain production and quality. For solo-entrepreneurs, this can mean combining business travel into one or two days a week instead of five, or cutting back on expensive client meetings and lunches. For larger companies, this can mean cancelling corporate events and focusing on increasing employee productivity through smart incentive plans. Remember, our grandparents survived the Great Depression by being frugal, smart and waiting things out.

There are also some other creative ways to cut back on gas costs as a small business owner. Consider allowing staff to work part time from home offices to complete some routine tasks. Since the beginning of the recession, there has been a dramatic shift in small businesses attitudes about working from home offices. In March of 2011, the Telework Exchange put out a report that indicated that some 39,694 federal employees who were allowed to work from their homes just two days a week, saved an astounding $2.7 million in commuting costs alone. In addition, those who work from home claim to save 148,000 hours by not spending them on the roads. Can you imagine the impact this could have on your business if you implemented telecommuting as part of your business strategy?

During this challenging time in the US economy, take heart that there has actually been an increase in the numbers of new small businesses in many regions. Small businesses account for over 65% of all business activity in the world, so you are part of a movement of strong souls who will get through this brief hiccup in gas prices. For the best chance of surviving, maintain quality and a commitment to your customers, whatever it takes. 

Governor signs law reinventing Michigan business taxes

Brought to you by the Michigan Economic Development Corporation, a public-private partnership between the state and local communities promoting smart economic growth by developing strategies and providing services to create and retain good jobs and a high quality of life. For more information on the MEDC's initiatives and programs, visit the Web site at MichiganAdvantage.org

On Wednesday, May 25, 2011, Gov. Rick Snyder  signed into law $1.7-billion in business tax cuts effective next January 1, spurring new job creation and making the state competitive once again for new business investment.

Michigan's tax ranking is vastly improved, from 48th to 22nd on the Tax Foundation's state Corporate Tax Index and to 13th overall from 17th previously.

"The Michigan Business Tax was a disaster - it was not only unfair, it was a dumb tax," Snyder said before signing the new tax bill into law. "This is going to make us competitive, this will create jobs. And that's exciting."

Currently about 136,000 businesses pay the MBT, but the Department of Treasury estimates only about 41,000 businesses will pay the 6 percent corporate income tax that will replace it.

The new business tax will be flat with minimal exemptions and exceptions. It will be the first time in decades that Michigan business owners and managers will be able to calculate their taxes on the back of an envelope.
  

Celebrating National Small Business Week

FROM: chamberofcommerce.com
by: Brent Barnhart 

It often feels that small businesses get the short end of the stick when it comes to appreciation. There’s plenty of talk amongst politicians who claim small businesses are the backbone of the country, yet their talk proves to be cheap as more and more businesses go under. Yet no politician or piece of legislation can dampen the spirits of small businesses during National Small Business Week, May 16-20^th. With official ceremonies taking place in Washington, DC, National Small Business Week looks to honor the movers and shakers representing the working heart and soul of the country.

National Small Business Week represents a tradition, with the first event taking place in 1963 under President John F. Kennedy. Recognizing the special impact made by outstanding entrepreneurs and business owners, this year’s event looks to honor an estimated 27.2 million businesses. A number of awards are presented to various businesses, with honors ranging from “Small Business Lenders of the Year” to the “Entrepreneurial Development Awards.”

“Small businesses are major contributors to the strength of the American economy,” notes the SBA. “More than half of Americans either own or work for a small business. They also create 60-80% of new jobs in the country. Small businesses drive innovation, create 21^st century jobs and increase U.S. competitiveness.”

While National Small Business Week honors small businesses, the celebration sports some huge names in terms of sponsors. Google, Sam’s Club, AT&T and Visa are just a few names co-sponsoring the event.

Undoubtedly, the celebration and spectacle raises some speculation amongst SMBs. Shouldn’t small businesses be celebrated year-round? What does the amount of massive corporate sponsorship say about the event? Does any of the spectacle and celebration actually mean anything for small businesses facing tough times?

Of course, small businesses and the spirit of entrepreneurship should always been celebrated. The perseverance of Main Street businesses, fighting to survive the economy and doing everything they can to keep business going, is something to honor and admire.

As the country struggles, its people struggle, and small businesses bear a massive burden to keep this country moving. Events such as National Small Business Week do well to remind us exactly how many small businesses are out there and why they should be rewarded and remembered. As the week continues and eventually passes, the struggle will continue. Yet as more and more small businesses gather to get the country back on its feet, we may take comfort in the fact that we’re all in this together.

Obama Repeals Hidden Healthcare Tax Law

By: Tess Taylor

 Source: chamberof commerce.com

Recently, President Barack Obama signed a repeal to the widely feared 1099 tax form requirement for small businesses, sending waves of relief to thousands of small business owners around the country This requirement, which was part of the Affordable Care Act of 2009, would have required that all business owners file an IRS form 1099 for each and every vendor that they work with for transactions over $600. The 1099 requirement may have resulted in the loss of millions in revenues and even less opportunities for job creation – something the healthcare reform bills did not intend.

For the average small business, having to deal with the nagging 1099 requirement could have been an administrative nightmare. Not only would it require careful consideration of every small business owner to set up an internal system for tracking of all purchases and sales, it would have called for more man hours focused on accounting. Instead of looking at ways to expand the business and create jobs, the 1099 requirement would have forced business owners to get mired in tax mumbo jumbo.

It is also very possible that the 1099 requirement would have caused major delays in the entire tax system with thousands of tax forms being sent out year after year. Not to mention the difficulties of filling these forms out correctly throughout the year, on top of all the other administrative red-tape that the government requires. It is difficult enough for small businesses to deal with the ridiculous amount of financial reporting that the IRS requires, so having an additional burden like this would have driven many over the top.

The majority of 1099 filings are done by the small business community, so being mandated to report transactions at the $600 level would have been a daunting task for all. It was estimated that without this repeal, the amount of 1099 forms being processed would exceed 200% over previous years! This would have cost additional time, most companies would have been forced to outsource this process, and it would have taken the focus off the daily operations of running a business for many.

In a recent statement released by the White House, the word came that the repeal was put into action by Obama in efforts to “repeal the expansion in the Affordable Care Act of requirements for businesses to report information to the IRS on payments for goods of $600 or more annually”. This was due to an effort to increase the number of premium assistance tax credits for consumers and businesses that choose to purchase health insurance as part of the healthcare reforms.

That repeal is good news for many small businesses who have limited means by which to provide health insurance to their employees. This also goes for entrepreneurs who have not been able to afford health insurance or choose not to purchase it due to economic factors. Having to worry about reporting cash sales over $600 annually to the IRS could have been detrimental to many small business owners who are struggling to stay afloat in troubled times.

Business Blogging and Building Your Audience

FROM: chamberofcommerce.com

04-18-11 - Posted By: Brent Barnhart in Social Media

You’ve probably heard the phrase “content is king” in reference to having a strong website that ranks well in search engines. While perhaps it sounds a bit cliché, there’s some truth to it. Take into consideration Google’s recent Farmer Update. This update rocked the search engine world as changes to Google’s algorithm punished a number of “content farms” and other sites with poor, spammy content. What happened? Those sites’ traffic went down significantly. On the flip side, sites producing fresh content on a regular basis via business blog marketing saw a boost in traffic.

What’s the lesson here? Content is crucial. It’s how you get found online, plain and simple. Having content, let alone good content, goes far beyond simply having a site that’s considered “well written.” Think about the sites you visit. What keeps you coming back? What compels you visit them more than once? New, fresh content. Additionally, search engines such as Google absolutely love sites that are consistently putting out new articles and information, and they’ve said it themselves. Your small business can get your own share of this love through effective business blogging or a home business blog.

You may think that your small business or your industries aren’t worth blogging about. Think again. Regardless of your niche and regardless of your business, there’s always something to say. Think about news and issues affecting your industry. Think about how new legislation could be impacting small businesses such as your own. Consider challenges you’ve faced as a small business owners and how you managed to overcome them. Whether they’re readers within your industry or simply other small business owners, your audience exists.

Because your audience exists and will relate to what you have to say, they will therefore be inclined to both react to and share your content. This creates a conversation, and this conversation results in more exposure for your business online. You can gain further exposure by sharing your content through Facebook and Twitter, which will incline even more people to do the same. This ability and tendency to share content represents the beauty of blogging, as business blogging is essentially free advertising that gets people talking and makes your business’ site look great in the eyes of search engines.

With all of this in mind, however, writing doesn’t come naturally to everybody. If writing is a challenge to you or you simply don’t feel that you have the time to blog every day, don’t fret. A few times a week, say three, is sufficient to maintain a following. Besides, you don’t want to stretch yourself for new content and write about topics that are boring or irrelevant. You shouldn’t have to write for the sake of writing, but rather write because you legitimately have something to say.

Your actual blogs don’t need to be much longer than a few-hundred words. Typically, longer is better in the eyes of search engines but make sure not to stretch too much. Lists and how-to guides are particular popular in the business blogging world, so if you’re hard-pressed for ideas of what to write about, those are great places to start. If you’re new to blogging altogether, WordPress and Blogger (by Google) are two of the most popular blogging platforms that’ll get you started.

There are plenty of resources out there to help you build your own small business blog. Read other blogs within your industry to better understand what others in your world are doing in terms of business blog marketing. With a bit of Social Media training and knowing best practices of business blogging, you’ll be well on your way to growing your small business’ online presence.