In August, the Pension Protection Act of 2006 was signed.  While many of the provisions do not take effect for a couple of years, a few start this month.  The new law and its changes are expected to have a major impact on small business and their employee retirement plans.  Here are a few things you should be aware of:

Business owners and key personnel, who had been limited in their own 401(k) savings, can now put away more if the company enrolls employees automatically in its plan and contributes a required amount to each account. Automatic enrollment now lets an employer put all employees into the plan by default.

Auto enrollment lets business owners unlock savings for themselves and key personnel when they use it with a set of other practices. These include contributing 3 percent of salary into each employee’s account and increasing the amount by a required percentage each year for several years.

Taken together, the practices trigger a safe harbor in the law that lets owners and key personnel contribute their own maximum contributions, $15,500 for an individual this year, and an additional $5,000 for those over 50.

An unfortunate drawback is that the amount of communications with employees regarding their plans has also changed. A lot more is now needed. For example, quarterly statements to employee are now required where they weren’t before.

Small business owners who offer such retirement plans are encouraged to contact the plan’s administrators and ask for assistance in understanding the new changes and to take advantage of the new changes.

Studies have shown that high rates of employee turnover can cost a company upwards of 40% in annual profits.  For a business, particularly a small one, that’s a significant amount.  In addition to a loss of profits, high employee turnover impacts employee morale, productivity and efficiency.  So, how do you combat it?

There is no hard and fast formula for hiring good employees or for retaining them.  Each situation is unique to that particular business.  However, there are three general themes that can typically be found in retaining employees.

First is to consider a company’s core values.  Do you know what the core values of your business are?  Have you effectively defined and communicated to your employees what they are? Secondly, communication and listening is paramount.  You’ve probably heard about it many times before, but never under-rate its power in retaining and keeping good employees.  Employees want to know they will be heard and that their ideas are heard.  The best part of all for the employer is that this isn’t an expensive tool to implement, but the return on investment can be significant.

Finally, connect and build a community.  This doesn’t mean you have to take your employees out to lunch every day or have them over for Christmas dinner, it simply means being aware of who your employees are and what’s happening in their lives.  With as much time as Americans spend at work, for many, our co-workers can quickly become like a second family.  And, that family can either work well together and get along, or be so dysfunctional from bickering, backstabbing, and politics that it breaks down the very fabric of the company.  As a business owner, which would you prefer?  Which environment do you think would attract and retain good employees?

Depending on your business, a business card is often the first impression you are giving to a perspective new client.  Therefore, how it looks and what it says about you is important.

VistaPrint, an high-quality graphic design and custom printing group, offer these suggestions for producing a quality business card:

• Customize & Create - try to steer clear of a template, break the business card template mold!
• Choose Quality Cardstock - high-quality cards with a glossy or matte finish stand out from the competition.
• Don’t Be Afraid of Color - choose sharp and inviting colors suitable for your audience. Make sure your cards are full-color to cast a bright, eye-catching image. Avoid using hard-to-read yellow business cards.
• Face-time - consider adding your photo to your business card.  Not only does it personalize your business, but it gives your your business a face.

The deadline to send your 1099-MISC income forms to any person that you have paid at least $600 in rents, services or other income payments is fast approaching. Remember, the 1099-MISC form must be filled out and mailed to those individuals no later than January 31, 2007.

Who gets a 1099-MISC? Generally, you should issue the form to any independent contractor that you paid $600 to during 2006. For example, if you paid a web designer $1,000 to build and maintain your business website in 2006, a 1099-MISC filing is required. If you paid an independent contract $750 to write articles for your website, you would need to send that person a 1099-MISC as well. Note that you are not typically required to report payments to a corporation.

For more specific information or to order the forms, go to the IRS website at www.irs.gov.

Starting in February, the first mandatory sick leave ordinance goes into effect in San Francisco. In November, 61% of voters passed a law requiring local companies to provide up to nine sick days annually. On a federal level, Senatory Edward Kennedy has put a paid sick leave measure on the agenda which would require all employers with at least 15 workers to offer seven sick days annually to full-time employees to care for themselves or a family member. It would also cover those who work between 20 and 30 hours each week.

While advocates maintain that the manadatory sick leave law is a good thing that will save companies money and decrease employee turnover, others are not so sure.  Many businesses are concerned as to how they will be able to administratively track sick leave hours for employees, deal with last minute “sick” call-ins by employees, and how it will impact companies that have flex time policies in place.

Hopefully, somewhere in the middle common ground will be found that addresses the needs of employees while allowing employers to remain competitive in a global market.  Particularly, when the costs of handling mandatory sick leave may be passed on to the consumer as part of the expense of “doing business”.

Tax time is right around the corner and as such we thought it would be fitting to review some of the often forgot about business-related expenses that small business owners may overlook when preparing their taxes.
Of course, each business and their tax circumstances are unique so this is just a general guideline as to what type of expenses you can deduct. For specific questions regarding your business, consult with a qualified professional.Don’t forget

1. Business expenses - all ordinary and necessary expenses.
2. Business Entertainment - normally, the law allows the deduction for half of the cost of business-related entertainment.
3. Long term assets - assets you expect to last more than a year: office furniture, computer equipment, medical, dental, or other specialized equipment, buildings, automobiles, and books.
4. Retirement plans - retirement accounts designed for small business owners provide tremendous tax benefits. They allow you to put away a significant amount of money into tax-deferred accounts during your working years.
5. Workers - It’s possible you may be able to deduct most or all of what you pay someone you hire as a business expense. Additionally, expenses associated with hiring an independent contractor who performed services for your business may be deducted as business operating expenses.

Internet faxing is a fast growing industry. In 2006, Internet fax service revenues exceeding $550 million and grew at 26.8% annually. Internet faxing makes senses for many businesses because it eliminates capital and operating expenses associated with the purchase and management of software and hardware often needed with regular fax machines. Additionally, it is seen as a more efficient way in which to send and receive faxes via email and the Internet. Instead of jumping up and down all day to retrieve and send faxes or filing, organizing and scanning them into the sytem, employees can accomplish all conveniently from their desk.

Another nice feature of many internet faxing options is their ability to comply with several privacy regulations that have a significant impact on the communication practices of a business, including faxing. Safeguards provided by many internet faxing services make it easier for a company to comply with regulations such as HIPAA, the Sarbanes-Oxley Act of 2002, and the Gramm-Leach-Bliley Act .

Internet fax service providers include MyFax, Efax, Fax2Mail, RapidFax, and BroadFax and may be worth checking out.

Everyone understands and appreciates the sacrifice that American troops are making each day of their lives in Iraq and Afghanistan. Many businesses across the country impacted by the deployment of National Guardsman and other citizen soldiers have gone above and beyond the requirements of the current laws and have found ways to support their employees as they fulfill their military tours of duty. However, that is not to say that the deployments have not had a significant impact on business, particularly small businesses.Now that President Bush has decided to extend military deployments of citizens soldiers to anywhere from 24 to 48 month, many businesses are trying to figure out how to handle this new development. Some people like Ted Daywalt, president of VetJobs, an online job board for individuals who have served in the military, are concerned if will cause many employers to hesitate in hiring National Guard personnel in the future because of the issues surrounding extended deployments.

Upwards of 1.3 million citizen soldiers who work in a variety of jobs could be affected by the lift in traditional deployment caps. According to Daywalt, 70 - 80% of individuals in the National Guard or reserves work for companies with 300 to 500 employees. Some firms are even smaller and the deployments are having a major impact on those businesses.

He cites a Houston-based machine shop which lost 12 of its 21 workers in a very short time span when they were called to active duty in Afghanistan in 2002. The owner had difficulty meeting his contracts.Daywalt insists this isn’t an isolated incidence, but is occurring all across the U.S.

In addition to the labor constraints, employers are also struggling with the extended financial responsibilities required under law which mandates that they continue providing certain benefits for family members of the individuals who are on duty as well as ensure employment of citizen soldiers when they return from their missions.

There’s no question that if given a choice the majority of these citizen soldiers would rather be home spending time with their families and working their jobs. There is also no question that the majority of employers across the country have remained supportive in their efforts as well. However, given the extended deployments, there are definitely going to be increased issues that will require answers that continue to support military personnel doing their duties and employers just trying to do business as usual.