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The State of the Union for Small Business; Pointers for Renewing the Entrepreneurial Imperative
Caron Beesley
Post date: 02/02/2010 - 10:24

Note: The ARRA (Recovery Act) initiatives and/or programs referenced in this article will expire on September 30, 2010. Any statements about qualifying time periods, or extensions of these dates, as they pertain to the availability of ARRA programs are over-ridden by the expiration of the Act on September 30, 2010.


Watched by approximately 48 million people on TV and another 1.3 million via the White House's online feed, President Obama's first State of the Union address stressed the importance of collective responsibility.

In the President's words:

'I campaigned on the promise of change, change we can believe in, the slogan went. And right now, I know there are many Americans who aren't sure if they still believe we can change, or that I can deliver it. But remember this: I never suggested that change would be easy or that I could do it alone. Democracy in a nation of 300 million people can be noisy and messy and complicated. And when you try to do big things and make big changes, it stirs passions and controversy. That's just how it is.'

This message of collective action and responsibility was not lost on the small business community.

In this article, published by Allbusiness.com - '*Attack, Don't Wait for Uncle Sam's Helping Hand' - small business expert and fellow Business.gov blogger, Rieva Lesonsky outlined the President's proposals for small business', she also called for a renewed entrepreneurial imperative:

'...we entrepreneurs cannot sit around hoping the government will make good on its promises...General George Patton once advised,;Opportunities do not come to those who wait. They are captured by those who attack'....and, if you are the owner of the business...that proverbial buck stops with you.'

Planning for Growth: Equip and Arm Yourself Now

So what can small business owners do to plan for recovery and growth?

Touching on the key points of President Obama's address, I've compiled a snapshot of some of the existing government programs, resources and tools that you can put to work for your business today!

1) Small Business Finance and Lending

Recognizing that small business is key to economic recovery, the President pledged to'... take $30 billion of the money Wall Street banks have repaid and use it to help community banks give small businesses the credit they need to stay afloat.'

Keep an eye on this one in the coming weeks as more details about this and other pledges, such as the proposed $5,000 tax credit for small business who hire new employees are unveiled.

In the meantime, take the time to assess the state of your business and take a look at these business planning guides from Business.gov to determine what you can do to give your business a boost in the short-term.

From a financial perspective, many of the Recovery Act loan programs introduced last year are still available for small business owners struggling with debt, read 'Managing Small Business Debt - Government Loans and Refinancing Lifelines' for more information.

Planning for the future? Take a look at these small business loans and grants resources, including this loans and grants search tool which can help match your business needs to available government loan programs as well as prepare your loan application.

2) We Need to Export More

Pre-empting an upcoming announcement about a 'National Export Initiative' that will help farmers and small businesses increase exports and expand into new markets, the President has pledged to '... double our exports over the next five years.'

If you see exporting in your future, take a look at this 'Get Started in Exporting Guide' from Business.gov - it includes videos from experienced 'exporting entrepreneurs' as well as information on export basics, finding opportunities and navigating trade regulations.

3) A Clean Energy Economy

'...to create more...clean energy jobs, we need more production, more efficiency, and more incentives.' How does small business fit into the President's vision of a clean energy economy?

The imperative isn't just on oil companies and energy giants, small business can participate in a number of ways.

This is just the tip of the iceberg, read more from the government on how your business can adopt green business practices.

ADDITIONAL RESOURCES

President Obama's State of the Union Address - Read key points from the President's address in this abbreviated version from The White House blog.

Recession-Beating Strategies:

Financing:

Exporting:

Green Business:

*Note: Hyperlink directs reader to non-government Web site.

Message Edited by CaronBeesley on 02-02-2010 09:30 AM
Going Beyond the Hype, Managing the Risk and Finding the Right Franchise Opportunity for You
Caron Beesley
Post date: 01/28/2010 - 09:10

A new year brings with it new opportunities - not least of

which occurs in the franchise industry. In fact, for every eight minutes of

every business day a new franchise business opens (*source) - quite a

statistic.

And it's easy to see why - franchisors and franchise

associations are very good at persuading would-be franchisees that franchising

is generally a lower business risk, than independent business ownership. But is

it? Ask any franchising expert or experienced franchisee and you might hear a

different story.

Going Beyond the Hype

In '*The

Truth About Franchising' business strategist coach, Mark Munday, discredits

much of the reported 'hype' surrounding entrepreneurial franchise success

rates.

Munday points to research by Timothy Bates, a Wayne State

University Economist, which concludes that '... After four years, only 62% of franchised businesses had survived, while

68% of independent small businesses were still open for business.'

Munday goes on to suggest three 'harsh realities' as to why

some franchisees fail:

  1. Franchisees struggle to

    make a profit - especially after taking into account the initial purchase

    price of the franchise opportunity.

  2. The 'hype' and marketing

    messages used to sell franchises are paid for by franchisors themselves

    and are therefore biased and subjective. This makes getting hold of the

    information you need to make a sound business decision difficult.

  3. Franchise agreements favor the franchisor.

Managing the Risk -Tips to Help You Assess

Your Readiness to be a Franchise Owner and Find the Right Franchise for You!

Becoming a franchisee

is just as risky as starting your own independent business, if not more. Getting started is going to require quite a

bit of research, planning, and due diligence to get you beyond the hype and

misleading claims of franchisor marketing.

With a picture of

the 'harsh realities' of franchise ownership in your back pocket, take the next

step beyond the hype by building a picture your own readiness to become a

franchisee. Assess potential franchise opportunities; and equip yourself with

an understanding of what the law can do to ensure your interests are protected.

Here is a

collection of expert advice (largely drawn from fellow Business.gov blogger *Joel

Libava, otherwise known as '*The

Franchise King') to help you on your way:

  • Are You Ready to be a Franchise Owner?

It takes a

particular personality to be a successful franchise owner. More than just a

risk-taker, you need a 'franchise personality', or as Joel Libava explains '...the type of personality that is OK with

rules'. For example, not only must you follow the franchisor's operations

manual, but you'll also have to pay a certain percentage of your gross sales

revenues to the franchisor! Read more about the rules that you must follow, as

well as those the franchisor has to follow in Joel's article: 'Do You Have That Special Personality Needed To Be A Franchise Owner?'.

  • Understanding the Types of Franchise

    Opportunities Available

It's fairly easy to search for franchise

opportunities. For example the International Franchise Association offers a '*Find a Franchise'

search tool allows you to search based on industry, location, financing, etc.

Many would-be franchisees choose their franchise type based on marketing by the

franchisors - many of whom market their franchises with a certain demographic

in mind, to the exclusion of others. For example, some franchise concepts

specifically target men, when in fact women would be just as skilled in

executing the franchise strategy.

To get yourself thinking about the types of franchise

opportunities available to you (advertised or not), read Joel Libava's 'The Franchise Business Model: Opportunities Galore for Women' (and just in case

you feel excluded, Joel's article does apply to men, too!)

  • Finding the Right Franchise - Using a

    Little Detective Work and the Law!

How do you know when you've found the right franchise for

you? Read more about the vital key indicators that will help you know when

you've found the right franchise in my earlier article, 'Investigating a Franchise Opportunity - How a Little Detective Work and the Law can Help'.

You'll also learn about what the law requires to help you make informed

decisions about a particular franchise (including financial statements, contact

information of other franchisees, and so on), in addition to steps that you can

take to assess a franchise opportunity.

  • How Much Should You Invest in a Franchise?

Read more about assessing your net worth; the factors that

determine how much money you can actually make from a franchise; and a good

rule of thumb for how much you should invest in a franchise opportunity in Joel

Libava's article: 'Franchise Opportunity Exploration Starts at the Kitchen Table'. As Joel explains, 'When

you buy a franchise, *in every case except one, the amount you invest does not

have a direct bearing on what your potential income will be. In other words, there is no automatic correlation

between what you invest in a start-up franchise, and what type of

profit you can expect.'

Additional Resources

  • Small Business

    Franchise and Business Opportunities Guide - This guide from www.business.gov provides

    helpful advice on buying and evaluating a franchise and information on how to

    avoid common scams.

  • *The Franchise King - Rich with franchise

    information, resources, products, and services. If you are a prospective

    franchise owner, you'll find the resources you need to help you lower your

    risk. If you are a franchisor, you'll find great resources to help your

    franchise system continue to flourish.

  • *Buying a Franchise: A Strategic 101 (Allbusiness.com) - Four things you can do to ensure the investment you make is

    in a credible, proven franchise model and that there are no hidden pitfalls.

*Note: Hyperlink directs reader to non-government Web site.

Message Edited by CaronBeesley on 01-28-2010 08:12 AM
Tax Law Changes for 2010: What's New for Your Small Business
Caron Beesley
Post date: 01/26/2010 - 08:51

Note: The ARRA (Recovery Act) initiatives and/or programs referenced in this article will expire on September 30, 2010. Any statements about qualifying time periods, or extensions of these dates, as they pertain to the availability of ARRA programs are over-ridden by the expiration of the Act on September 30, 2010.

 

My last post included information about new tax laws that impact your 2009 business tax return, but the 2010 tax year also brings with it several changes to business tax law.

 

Tax laws often define and support your small business investment and growth strategies. So, it's important to take stock now, and assess how your business can comply with, and benefit from the changes that apply to the 2010 tax year.

 

Below is a summary of the major changes in federal income tax law that can impact your business in 2010. While some of these laws are already legislated and in the public domain; more may follow, driven by political and economic factors. This is not a comprehensive list, so be sure to talk to your tax advisor if you have questions about how your small business is affected. You can also refer to several informative online resources including the 2010 Small Business Tax Center on Business.gov or the IRS's Small Business and Self-Employed Tax Center.

 

To help you plan and manage your tax obligations throughout the year, the IRS has also provides an online Tax Calendar for Small Businesses and the Self-Employed (the print calendar is now sold out).

 

2010 Tax Law Changes that Impact Small Business

 

Major changes include:

 

  • Cancellation of Business Debt - This change was first implemented under the American Recovery and Reinvestment Act (ARRA) in 2009 and enables certain businesses to elect to delay recognition of income from the cancellation of business debt in both 2009 and 2010. Income recognition can be deferred until the 5th year after the reacquisition, and then the income is included ratably over the following five years. If you wish to elect this option refer to the guidelines from the IRS here.

 

  • Domestic Production Activities Deduction - In 2010 this deduction increases to nine percent of qualifying business net income. 'Domestic production' applies to a restricted group of businesses including construction, engineering or architectural firms. The IRS has more information on this deduction and eligibility here.

 

  • Updated Mileage Rates - Standard mileage rates for the business use of vehicles has been reduced slightly for 2010. Beginning on Jan. 1, 2010, the standard mileage rate for the use of a car (also vans, pickups or panel trucks) is:
  • 50 cents per mile for business miles driven
  • 16 cents per mile driven for medical or moving purposes
  • 14 cents per mile driven in service of charitable organizations (no change)
  • First-Time Buyers with Home-Based Businesses - If you purchase a first-time home and choose to operate your business from that home you can still qualify for an $8,000 tax credit - if you purchase your home before April 30, 2010. The IRS has more information about eligibility here.

 

  • R&D Tax Credit - This tax credit for research and development was set to expire after 2009, but the House of Representatives has since *voted for its extension, effectively pushing $31.1 billion in expiring tax provisions through 2010. Keep an eye on this one here as it pushes on to the Senate.

 

  • Section 179 Expense Deduction due to be Phased Out - The increases in the Section 179 Expense Deduction, first introduced by President Bush in 2008, phases out completely in 2010. Small business had been able to deduct up to $250,000 of the cost of machinery, equipment, vehicles, furniture and other qualifying property placed in service during 2009. In 2010, this limit is due to drop to $135,000.

 

  • Payroll Tax Changes - The maximum amount of wages subject to Social Security tax will remain the same as 2009 at $106,800. As in prior years, there is no limit to wages subject to the Medicare Tax; therefore, all covered wages are still subject to the 1.45% tax. The FICA tax rate, which is the combined social security tax rate of 6.2% and the Medicare tax rate of 1.45%, remains at 7.65% for 2010. The maximum social security tax that employees and employers will each pay in 2010 is $6,621.60.

 

These are just some of the changes for tax year 2010 - visit the IRS's Tax Changes for Business site for updates now and throughout the year.

 

Additional Resources

 

  • Get instant access to IRS tax info with the new Business.gov 'Tax Info Gadget'. Add it to your Web site or iGoogle page.
  • Managing Your Small Business Taxes - Resources from Business.gov that explain tax obligations that all business owners should work into their regular operations.
  • Tax Help and Training for Small Business - Free training and programs (online and in-person) to help small business owners understand their federal and state tax obligations.

 

*Note: Hyperlink directs reader to non-government Web site.

Message Edited by CaronBeesley on 01-26-2010 12:45 PM
Before you File your 2009 Tax Return; Take Note of Major Tax Changes that Apply this Year!
Caron Beesley
Post date: 01/21/2010 - 09:10

Note: The ARRA (Recovery Act) initiatives and/or programs referenced in this article will expire on September 30, 2010. Any statements about qualifying time periods, or extensions of these dates, as they pertain to the availability of ARRA programs are over-ridden by the expiration of the Act on September 30, 2010.


As you prepare to file your small business tax return, you'll need to be aware of several new tax laws that went into effect in 2009.

Summarized below are the major changes as they pertain to small business interests, if you need information about new tax law and the 2010 filing season, check out Small Business Tax Center on Business.gov. This one-stop shop online portal helps business owners stay abreast of tax requirements, tax changes and a whole range of tax tips to help you prepare for the year ahead.

2009 Tax Law Changes that Impact Small Business

The following list of 2009 federal income tax law changes is drawn from information provided by the IRS. Many commercially available tax preparation software tools do take these changes into account, but do your due diligence first.

This is not a comprehensive list, so be sure to talk to your tax advisor if you have questions about how your small business is impacted.

  • First-Time Homebuyer Credit - Originally set to expire on November 30, 2009, this refundable credit was extended last Fall to apply to first-time homebuyer sales occurring on or after January 1, 2009 and on or before April 30, 2010. If you operate your small business from an office situated within a first-time home purchase, you may eligible for an $8,000 credit - which is the equivalent of a 15 year interest-free loan! The IRS has more information about eligibility here.

  • Expensing Business Property and Equipment - What business expense write offs can you plan on this year? According to the IRS, many small businesses that invest in new property and equipment will be able to write off most of these purchases on their 2009 returns. This is because the American Recovery and Reinvestment Act (ARRA) extended the bonus depreciation and increased the Section 179 deduction. Normally, businesses recover these capital investments through annual depreciation deductions spread over several years - so a quick write off of up to $250,000 on the cost of machinery, equipment, vehicles, furniture, and other qualifying property place in service in 2009 is now possible. The IRS has more information on this here. And *Section179.org, a free resource for small businesses offers *advice on when and how to take the deduction.
  • Cancellation of Business Debt - The ARRA also enables certain businesses to elect to delay recognition of income from the cancellation of business debt in 2009 or 2010. Income recognition can be deferred until the 5th year after the reacquisition, and then the income is included ratably over the following five years. If you wish to elect this option refer to the guidelines from the IRS here.
  • Business Credit for COBRA Premium Assistance to Employees - Another ARRA benefit, if your small business provided COBRA assistance to terminated employees in 2009 the Act provides for a 65% credit against COBRA amounts paid. The credit is taken against employment taxes on Form 941, Form 944, or Form 943. The credit is treated as a deposit made on the first day of the return period (quarter or year). More here.
  • Business Energy Credits - Expected to expire after 2008, the business energy credit of $4,000 for purchases of qualifying fuel cells property, micro turbine property, and solar energy property are now extended through 2016. More.

There are many more tax changes that may impact or benefit your small business. To help you stay on top of these the IRS lists all its tax changes on the www.irs.gov site here: Tax Changes for Business. For information about changes to state tax law refer to your state government Web site.

Tax Season 2010 - Online Help from the IRS

The IRS has launched a portal - Tax Season 2010 - that includes news releases, fact sheets, tax tips, a YouTube video and podcasts with information about this year's filing season. The portal offers advice on choosing a tax preparer, tips to help you maximize your tax credits, and more.

Visit www.IRS.gov or its small business page for more information on how the agency is working to help business owners during tax season. You can also refer to Business.gov for small business resources.

Coming Next - Tax Changes for 2010

Don't miss my next post, which will focus on tax changes for 2010 and how these should be rolled into your tax planning for the year ahead.

Additional Resources

*Note: Hyperlink directs reader to non-government Web site.

How to Start a Non-Profit Organization
Caron Beesley
Post date: 01/18/2010 - 23:14

If your passion is to inspire, make a difference and give back to the world, then starting a non-profit is an exciting entrepreneurial proposition.

But before you start there are a few things to consider.

Starting a non-profit organization (NPO) is similar to starting any kind of business - together with commitment you need a clear objective, a niche (i.e. an original, unclaimed idea) and a communicable business plan to present to your donors.

You'll also need to understand how to structure your non-profit, what tax exemptions you may qualify for, as well as how you can obtain government grants.
Here is a basic checklist for how to start a non-profit organization:

Do Your Market Research - With over 1.4 million non-profits nationwide, can you state categorically that your chosen non-profit niche is unique? *Here are some examples of questions you should be asking yourself to help identify your niche and whether there is a market need. You can also research existing non-profits at *guidestar.org.

Write a Business Plan - Since a non-profit is simply another version of a business, you'll need to develop a solid business plan and steer its implementation. A business plan is essential for procuring non-profit funding from donors and the government, and can also help you recruit volunteers and board members. Get help with your non-profit business plan *here.

Incorporate Your Non-Profit - Becoming a non-profit corporation requires some paperwork, but for many groups the benefits of non-profit status - such as 501(c)(3) tax-exempt status - outweigh the complications. Here are *five reasons to incorporate your non-profit association.

Incorporation for non-profits is very similar to creating a regular corporation except that you have to take the extra steps of applying for tax-exempt status with the IRS and their state tax division.

Here are the steps you should take to incorporate your non-profit: 

  • Choose a Business Name - Get state-by-state information here on the various laws that apply to naming a non-profit in your state.
  • File your Incorporation Paperwork - You must next file formal paperwork, or articles of incorporation, and pay a small filing fee to your state. These 'articles' contain basic structural information, such as the NPO's name, its registered agent and office address, and the corporation's membership structure, if any. Again, you can find information about filing these articles of incorporation by state here. You can also look up your state office through the *National Association of State Charity Officials (NASCO).
  • Apply for Non-Profit Federal and State Tax Exemptions - Once you've received a copy of your article of incorporation from your state you are ready to submit an application to the IRS for your federal non-profit status as a 501(c)(3) organization. It's best to file within *27 months after the date of your incorporation. Refer to this Non-Profit Organization Tax Guide for more information on what, and how, to file.
  • Create Corporate Bylaws - These are the operating rules for your non-profit corporation. Find out how to write non-profit bylaws *here.
  • Appoint Initial Directors and Hold your First Board Meeting - Some states require that you appoint directors before filing your articles of incorporation. Get more information on choosing your board *here.
  • Obtain Necessary Licenses and Permits - To determine what licenses you need, use this license and permit *online tool from Business.gov.

Start Fundraising - Now that your NPO is officially established you'll need to pay attention to its bread and butter - fundraising. While individual donors amount to the largest contributors to NPOs, federal and state and local governments offer grants, loans and programs to fund NPO projects. Check out these resources to find funding for your non-profit:
 

  • Business.gov has a page dedicated to resources for non-profits and includes information on Grants and Financial Assistance for NPOs.
  • The online Catalog of Federal Domestic Assistance gives you access to a database of all federal programs available to non-profit organizations and institutions.
  • Grants.gov is another source to find and apply for federal government grants. The U.S. Department of Health and Human Services is a managing partner for Grants.gov, an initiative that is having an unparalleled impact on the grant community. Learn more about Grants.gov and how to find and apply for a grant that is right for your non-profit business.

You can also find other organizations that provide funds for NPOs at *foundationcenter.org.

Other Resources

The checklist above just skims the surface of the fundamentals of starting your own non-profit organization. There are many in-depth resources on the Web that are also worth bookmarking, including:
 

  • Business.gov's Non-Profit Organization Start-up Guide - This site collects links to programs and services to help non-profits find opportunities available to them from the federal government including grants and financial assistance, tax information, government sales and surplus, and more.
  • USA.gov for Non-Profits - This site is the online version of what many companies offering CFDA assistance services use to advise their clients. It is available for FREE to all who wish to reference it. It has specific information for non-profits divided into 3 sections: grants/loans, management/operations, and tax information.
  • *About.com Non-profit Portal - Covering everything from starting up, fundraising, and managing volunteers to marketing your non-profit, About.com's Non-Profit Guide is an invaluable and resource-rich Web portal.
  • *Non-profit Guides - Free Web-based grant-writing tools for non-profit organizations, charitable and educational organizations, public organizations, and other community-minded groups.

 *Note: Hyperlink directs reader to non-government Web site.Message Edited by CaronBeesley on 10-07-2009 08:20 AM