09.18.08
Posted in Uncategorized at 10:25 am by Diana Heeb Bivona
Just as the downturn in the economy is impacting the lives of the majority of private individuals in this country, so is it squeezing small businesses. Most small business owners can tell you they are no stranger to belt tightening and budget cuts. Many prefering to take that avenue before raising pricing, knowing how difficult it is to complete sometimes. Unfortunately, there are situations in which you have no other alternative than to raise your prices.
A recent survey by the Small Business Research Board (SBRB) found that of the 1,000 small business owners surveyed, over 65% had raised their prices. Another 23% were adding or increasing shipping/handling fees and 21% were working to reduce other operating costs. Renegotiating customer pricing agreements was another solution, as was negotiating long-term fixed cost supply contracts and reducing lead times.
As I stated earlier, I believe small business owners are quite creative and savvy when it comes to finding creative solutions in order to stay competitive during economic hard times. So to the readers of this blog, feel free to share with others what solutions you are implementing to stay competitive.
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09.16.08
Posted in Uncategorized at 11:02 am by Diana Heeb Bivona
Typically during an economic downturn, many small business owners begin to look for ways to cut expenses. One type of expense that is often cut is advertising. However, that may not be the right thing to do. If anything, it is the one budget you might want to keep in tact.
You may need to review and determine if the advertising mix you are using is the best one at the moment to get optimum exposure, but fight the urge to really slash your advertising budget.
One avenue to explore may be the use of promotional products. According to the Promotional Products Association International (PPAI) and Staples, “compared to print, TV and other advertising methods, promotional products lead to higher advertiser recall, increased ROI and better overall impression among consumers.” A survey by PPAI found that using promotional products in your advertising mix can increase brand interest up to 69% and creates a good impression of the brand 84% of the time.
Other benefits of promotional products:
- Leads to more frequent or repeated exposure of your marketing message
- Long-term visibility - most of those individuals surveyed kept promotional products for more than a year
There are several cost-effective options such as proprietary apparel, calendars, post-its, key chains, letter openers and magnets available. Strong competition should ensure you get the best price available. An idea definitely worth taking a closer look at.
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09.13.08
Posted in Uncategorized at 5:28 pm by Diana Heeb Bivona
If you are a small business owner and are entertaining the idea of setting up a retirement plan for your employees, then take note of two important upcoming dates: Oct. 1 and 15th.
Oct. 1st is the deadline by which a business must set up a Savings Incentive Match Plan for Employees (SIMPLE). If you received an extension on filing your 2007 tax returns, and want to set up a new Simplified Employee Pension (SEP) and take a deduction for 2007, then that deadline is Oct. 15th. Owners who received an extension and want to make 2007 contributions to existing SIMPLEs and SEPs need to also do so by Oct. 15th.
SIMPLEs and SEPs are popular retirement plans geared to small businesses. They are easy to create and maintain. Under a SEP, a company can deduct up to $45,000 for the 2007 tax year and $46,000 for 2008 for contributions to an employee’s account.
Employers setting up a SIMPLE can match employee contributions in a similiar manner to a 401(k). There are however more restrictions placed on SIMPLEs than on SEPs by Uncle Sam. For instance, a SIMPLE can only be created by a company with 100 employees or less.
More information is available on the IRS and Labor Department websites:
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IRS Publication 560, Retirement Plans for Small Business, on the IRS website,
http://www.irs.gov.
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This Labor Department link explains the types of plans available, employer responsibilities, and annual paperwork requirements, an owner can expect for each type of plan.
http://www.dol.gov/elaws/pwbaplan.htm
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06.23.08
Posted in Uncategorized at 1:39 pm by Diana Heeb Bivona
Many small businesses are set up as corporations and will often encounter the issue of stock while drafting the articles of incorporation. For some, figuring out how to structure your stock may be a little confusing. Below are a few main points you should keep in mind:
- The two primary types of stock often issued are common and preferred. Common gives no preference or priority over other classes of stock, and has rights of distribution, liquidation and voting. Preferred stock give specific benefits and rights to the holder over common shares including but not limited to priority during a liquidation or bankruptcy, special voting rights and protection against efforts to dilute the stock (i.e. stock splits, dividends, etc.).
- Decide whether to assign a par value (minimum dollar amount assigned to shares of stock) or non-par value (no value declared in articles of incorporation but set later by the Board of Directors when the value of the corporation goes up). Keep in mind that par value has nothing to do with market value and par value will not limit the cost of the shares. Check with state law regarding whether or not you are required to choose a par value amount when drafting your articles of incorporation and what amounts are recommended.
- You must issue a stock certificate and then record that issuances in a stock ledger which becomes part of your permanent records.
- Issuing stocks must comply with all federal and applicable state security laws. Be aware that you may also be required to file quarterly and annual reports with the SEC.
- Check with an attorney or tax advisor regarding specific laws that may additionally impact your individual situation.
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06.21.08
Posted in Uncategorized at 2:48 pm by Diana Heeb Bivona
On Friday, it was announced that the SEC has agreed to give small businesses a one year extension in order to company with the Sarbanes-Oxley Section 404(b) auditor attestation requirements. The extension will hopefully allow more time for businesses to find ways to deal with the higher costs of complying with the law’s requirements.
Section 404 of the law requires companies — even those with market capitalization below $75 million – to comply with auditing their financial controls over financial reporting. Furthermore, it mandates that a business hire external auditors to assess the management and its abilities to implement those financial controls.
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04.22.08
Posted in Uncategorized at 1:52 pm by Diana Heeb Bivona
No matter how small your business is — a one person show or an office of ten — there are several “green” strategies you can adopt in your business. The following suggestions are taken from the article, “Ways to use less paper”, published by the 3M Commercial Office Supply Division.
1. Plan each communication. Define your purpose and audience. Before you begin a document, consider its life cycle from creation through disposal.
2. Compose and review letters and other documents on the computer rather than on paper.
3. Be brief. Get organized, then get to the point. If necessary, use an editor. Keep letters and memos to one page.
4. Use the back side of waste paper for scratch paper.
5. Redesign letterhead to condense headers (printed top material) and allow for narrower margins. Use up the old inventory, however.
6. Use E-mail for routed information. If you must use paper, put the distribution list cover sheet on the same page as the message. Other options include putting the cover sheet on the front with the message on the back, or using a Post-it routing/request note.
7. Examine publication formats and frequency. Publish information on the Internet as the first choice of distribution. For mailed items, send a two-sided, 8-1/2 x 11 newsletter, rather than a four-page, fold-out version (cutting content accordingly).
8. Redesign and rewrite forms to reduce paperwork and form length. Eliminate unessential duplicates. Many companies are using electronic forms (via the Internet), which saves even more paper because no inventory is maintained.
9. For mailing use the smallest envelope possible. Fold pieces to fit into standard business size envelopes.
10. Use the lightest weight paper possible.
11. For large mailings, compile a prototype. Then combine pages to save paper and postage.
12. Use shredded waste paper to replace purchased packaging materials.
13. Transmit efficiently:
* Use the telephone if a verbal message will suffice
* Use voice mail or e-mail for short messages
*Install new software and hardware to expand your choices in data processing and document creation.
14. For mass mailings, to eliminate labels or long distribution lists, use the mail merge feature in word processing.
15. Make reports and data available online.
16. Before running a large number of copies, do a one-page test of copier settings.
17. Don’t throw away slightly light or dark copies for internal use.
18. Make double-sided copies, especially for large documents.
19. Avoid making extra copies. Make extras later if you need them.
20. Get training if you are unsure of copier features or how to use them.
21. Prevent jams and toner problems by cleaning and servicing copier regularly.
22. Post a list of paper-saving copy ideas at every copier.
23. Remove outdated or unessential listings (internal and outside the company) from your mailing lists. better yet, don’t distribute some information at all; just let people know it’s available”
24. Remove your name and company name from mailing lists. Write “Refused - Return to Sender” on unwanted junk mail (First Class Mail only).
25. Use a centralized bulletin board to post one copy of an announcement as opposed to sending individual copies. When individual contact is required, route a single copy. Sometimes it’s more effective to call a special meeting to make an important announcement.
26. Each time you reach for a piece of paper, THINK! You can make a difference.
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04.09.08
Posted in Uncategorized at 8:11 pm by Diana Heeb Bivona
There is nothing more chilling for a small business owner than the realization at tax time that you owe money — big money. You may be considering a variety of options such as paying Uncle Sam with your credit cards, dipping into your retirement accounts, or the big no-no of withholding payroll. All have been done before and all have major disadvantages to them that do not make them the best option.
So what can you do? You can approach the IRS and ask for an installment plan. Generally, the IRS says you cannot be turned down for an installment agreement as long as you don’t owe more than $10,000 and you’ve filed your returns on time and paid any tax due during the previous five years. You also cannot have entered into a previous installment agreement during that time. And you must pay what you owe within three years.
If you do owe over $10,000, you may still qualify for an installment plan, but you will need to seek special permission from a IRS district office and probably submit additional financial statements to qualify.
Though you may liken the idea of calling the IRS and asking for assistance to that of pulling out your own tooth, the possible benefits are too many to ignore. The sooner you act, the more options you’ll have available.
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04.07.08
Posted in Uncategorized at 2:11 pm by Diana Heeb Bivona
I ran across the following business expense tax tip in Diane Kennedy’s Loopholes newsletter. Even if you have already filed your taxes this year, it may be useful to keep in mind for next year.
“If you travel for business, the cost of your travel and the hotel is lodging, not entertainment. If you categorize the deduction as entertainment, you’re going to get a 50% reduction in the amount of the deduction. Code it instead as lodging and you’ll get a 100% deduction.”
“If you furnish food for a meeting, it’s a 100% deduction. If it’s a meal out for business, it’s a 50% deduction. So, a weekly management meeting catered by a local restaurant is a 100% deduction, but going out to lunch with your accountant is just 50%…”
“If you bring in coffee and bagels for Friday morning meetings, they are also 100% deductible. Code it to meetings, not meals.”
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04.05.08
Posted in Uncategorized at 12:30 pm by Diana Heeb Bivona
Frequently, the words advertising and publicity are used interchangeably by business owners. However, it is important to note that they are two different things which must be handled accordingly.
Think of advertising as choosing the media vehicles to get your message out to the public. You are in control as the buyer in determining how you will get your message across, which will ultimately increase your customer base. Will you buy radio time, run newspaper ads, and/or advertise on billboards? How much? These are examples of issues related to advertising.
Publicity is different. With publicity, you are not in control. Sure, you may put the information you want known in the form of a press release, but that isn’t a guarantee that it will get picked up and written about by reporters or your particular industry. With publicity, you are no longer the buyer so you need to convince the media that what you have to say is newsworthy to THEIR buyers. That isn’t always as easy to do.
Both are important elements in promoting your business and increasing your customer base. Knowing how to effectively incorporate both into your business can prove challenging, but will definitely allow you to reap the benefits if mastered.
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04.03.08
Posted in Uncategorized at 4:50 pm by Diana Heeb Bivona
Businesses across the U.S. are feeling the impact of the housing crisis, a slowing economy and the stock market’s roller coaster ride in many ways. Increasingly, more small to medium-size businesses are finding it tougher to get loans. Available credit from commercial lenders appears to be drying up as lenders hesitate to extend credit, particularly to small business owners who tend to use their homes as collateral for their businesses. With foreclosures reaching a record high, lenders apparently do not want to roll the dice and take the chance of ending up with another home should that small business owner default on their loan.
Small business — defined as those with 500 employees or less — represents 99.7% of all employer firms and generates 60 to 80% of the new jobs annually, according to the Department of Commerce. I would think given the down turn in the economy and the push to turn things around that the last thing lenders should be doing is cutting small business owners off at the knees.
True, lending guidelines and regulations have to be tightened in all quarters. The subprime meltdown was a painful lesson to learn for most lending institutions. However, now is not the time for lenders to scream the sky is falling and slam the door on entrepreneurship. Due diligence on the part of lenders and a solid business plan and financial statements should continue to rule the day, not panic and fear of what may happen.
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