COVID-19 relief options and additional resources

April 20, 2010 - Letter to Honorable Lisa P. Jackson, Office of the Administrator, Petition to Reconsider the Construction and Development (C&D) Effluent Limitations Guideline (ELG) Final Rule.

April 2010 - Review Of Technical Issues Related to the Final Effluent Limitation Guidelines for the Construction and Development Industry prepared by Andy Bollman, E.H. Pechan & Associates, Inc.

The Bigger Financial Picture – Is it Time to Hire a CFO and Where Should You Look?

By Caron_Beesley, Contributor
Published: February 11, 2013

So, your business is growing. While you may or may not have an accountant on hand, what about your bigger financial picture? Is it time to hire a Chief Financial Officer?

More than just a bookkeeper, payroll administrator or keeper of P&L and cash flow statements, a Chief Financial Officer (CFO) can help you plan, model, forecast and make better business decisions. A CFO looks at your business holistically–this includes people, processes and systems–and ensures that together you have accurate financial information to plan for the future.

A CFO will also work with you or your accountant to understand the drivers for business performance. They’ll pick up on signals that might indicate a problem (such as a potential cash flow issue down the line), and help you make informed decisions about reaching your business goals.

Are You Ready for a CFO?

We all have sleepless nights worrying about the direction of our business; when cash flow will take a turn for the better; or where our next higher margin client is coming from. And being a small business owner, wearing all those hats, it isn’t easy to step away from the day-to-day details and look at your business as a whole.

A CFO can help with these worries–and needn’t break the bank in the process.

How to Cost-Effectively Hire a CFO

If your business is growing fast, then you could consider hiring a CFO on a part-time or as-needed basis and start delegating some of that financial angst. Management consulting firms often offer this type of service. If budget really is an issue, consider the volunteer services of SCORE.

SCORE is a nonprofit association dedicated to helping small businesses get off the ground, grow and achieve their goals through education and mentorship. SCORE mentors deliver free, confidential, valuable advice for your business needs across diverse industries and business functions including finance, marketing, operations, technology and more. Connect with a mentor here.  

Not Quite There Yet? Consider an Accountant

If you are still in start-up or growth mode—or feel you’d benefit with the help of someone to take care of your daily financial obligations such as account payables and receivables, payroll, taxes, and make sound judgments to benefit your personal and business finances—then you should really consider hiring an accountant. If you already have one, consider leaning on their services a little more.

An accountant can save you time and clear up much of the confusion that you experience when it comes to managing your finances. This blog offers tips on finding and interviewing potential accountants: How to Find an Accountant Who Can Help Your Small Business over the Long Haul.

About the Author:

Caron Beesley


Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley

7 Ways to Increase Foot Traffic to Your Small Business

By Caron_Beesley, Contributor
Published: February 7, 2013 Updated: September 12, 2016

Late last year, I hosted a web chat with the SBA offering holiday marketing tips and ideas to small business owners. And while many business owners submitted questions relating specifically to the holidays, a large percentage of the questions centered on that age-old question: “How do I get more foot traffic to my store?”

Here are seven tried and tested steps you might want to consider:

1. Start from the outside and look in

If you are in a pedestrianized area, get to know who passes by your store. Literally, sit outside or close by your window and assess the demographic of who comes and goes. Do they window shop? Have they come from another store close by first?

Next, take an objective look at your signage and window display–does it appeal to your target demographic or buyer? For example, if you run a coffee shop and most of your business is done during the hours of 8 AM to 10 AM, think of ways to optimize your merchandising and window display to attract more buyers during these times. This could be as simple as using this time to hand out coupons outside, offering bakery samples to passersby, or promoting your latest offers using sidewalk signage.

2. Host a community event with a newsworthy tie-in

One of the best ways to increase foot traffic is to host a community or charity event. A great way to do this and get noticed is to tie it to a topical event. Say, for example, your local NFL or high school team is playing a critical game. Consider teaming up with other businesses nearby to offer game-day promotions/offers or a tie-in event. Host the event as a block party or at a central location downtown (even if you have to take your business on the road for a few hours). Don’t forget to be community-oriented—consider donating a portion of your profits to charity.

Feature the event ahead of time on your website and social media. For maximum impact, don’t forget to contact local media outlets—including radio channels—and email and mail out fliers to your contact list. 

3. Host a seminar or workshop

Both retail and service-based businesses can generate a good deal of foot traffic by educating their customers about how to get more out of what they are buying (even if you don’t make a sale that day). Florist shops could host a flower arranging class or realtors could host a house-staging workshop to attract potential sellers. And of course, publicize your event—in-store, online, via press releases and advertising.

4. Use location-based services to attract passersby

You don’t have to be a tech wizard to promote your small business using mobile apps that target consumers in the vicinity of your business. Groupon, Living Social, FourSquare and ThinkNear among others let you post information about your latest offers and limited-time deals to consumers within a certain distance of your business. You can also schedule deals to get delivered during key hours, for example, if you’re looking to boost foot traffic during off-peak times.

5. Engage old customers in new ways

It’s always refreshing when a store or restaurant you’ve frequented for some time starts doing something new. And thanks to the power of social media, doing something new or different and doing it well can quickly go viral.

So think about ways you can get the attention of older or existing customers. It could be as simple as offering a new type of discount (it may sound obvious, but offering something of value at a discount for a limited period of time can be attention-grabbing) or letting customers know about a new product or service you’ve added.

A straight-out sale is always a great way to bring old customers out of the woodwork. Send out an email or e-newsletter to your contact database and post it on social media. You might even host a secret sale first for a hand-selected group of customers.

If your business is service-oriented, consider offering a referral fee to existing customers who bring in new clients for you.

6. Put on your small business customer service hat

There’s a reason why consumers opt to frequent small businesses over larger chains—personal relationships. A smile, great service, product knowledge and enthusiasm will bring customers through your door and keep them coming back. So as you host new events, sales or workshops, use your small business advantage to the max!

7. Stay in touch

Staying top of mind with new and existing customers who you’ve engaged through your new efforts is not just about offering great products and services. It’s also about staying in touch.

If you host an event that brings in new customers, encourage them to sign up for your emails. A little incentive, such as a free giveaway in exchange for an email address, is always effective. Then stay in touch, set-up an e-newsletter program, send out regular updates about new product lines, company news, and events and start to engage with your customers via social media. (For tips, check out this blog).

What tactics have you used to increase foot traffic to your small business? Leave a comment below.



About the Author:

Caron Beesley


Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley

Much Higher Surety Bond Guarantee Ceilings Enable Small Businesses to Bid on Larger Contracts and Grow

By byrned
Published: February 6, 2013 Updated: February 6, 2013

A major revision in the U.S. Small Business Administration’s Surety Bond Guarantee (SBG) Program more than triples the eligible contract amount, from $2 million to $6.5 million, the Agency will guarantee on surety bonds for both public and private contracts.

What does this mean for small businesses trying to grow?
A Los Angeles subcontractor for example, was looking to take on bigger jobs and grow its business, but needed a much larger bond to bid on and get a contract that was larger than past work it had performed.
As a direct result of higher SBA guaranteed bond limits, companies like that California contractor can now experience continued growth in bonding capacity, employ more employees and improve revenue streams. And with that kind of growth and resulting experience on bigger jobs, such companies can bid on more federal construction contracts, build an even stronger management team, and set strategic plans for bigger contracts and expansion into larger markets.
Contractors purchase surety bonds to guarantee that they will complete contracts. If the contractor fails to complete the contracted work, the surety bond is used to pay for completion. The SBA offers a guarantee of up to 90% on three types of surety bonds: bid bonds, which ensure that if a bidder wins a procurement competition the bidder will sign the contract; performance bonds, which ensure the contractor will complete the work as contracted; and payment bonds, which ensure that the contractor will pay its supplier and subcontractors.
These increases in bond capacity result from provisions in the Fiscal Year 2013 National Defense Authorization Act and are expected to bolster participation by surety bond agents and brokers and their surety companies in SBA’s SBG Program.
The changes also allow SBA to guarantee bonds for government contracts valued at up to $10 million if a contracting officer of a federal agency certifies that the guarantee is necessary for the small business to obtain bonding, and it is in the best interests of the government.
SBA partners with the surety industry to help small businesses that would otherwise be unable to obtain bonding in the traditional commercial marketplace; and now, with the increased capacity, that public/private cooperation helps these small businesses grow as well.
If your small business needs SBA assistance in locating a participating surety company or agent, and completing application forms, simply go online to, or call 1-800-U-ASK-SBA.



About the Author:

Restrictions in Franchising

By FranchiseKing, Guest Blogger
Published: February 6, 2013

If you’re thinking of becoming the owner of a franchise-type of business, there’s something you need to know about franchising…and you may not like it.

Now, what I’m about to share probably won’t be a game-changer if you’re really bent on buying a franchise, but you need to have as much factual information on this business model before you invest in one.

Here goes:

You’re going to have certain restrictions placed on you.

And according to “Buying a Franchise: A Consumer Guide” published by The Federal Trade Commission, “These kinds of restrictions may limit your ability to exercise your own business judgment in operating your outlet. That said, if the franchisor does not limit the territory where each franchisee can sell, the franchisor and other franchisees may compete with you for the same customers, either by establishing their own outlets, or by selling to customers in your area through the Internet, catalogs, telemarketing, and the like.”

Please read it again.

Surprises Not Included

One of the best parts of franchising today has to do with transparency.

Years ago, you would have to drive, walk or ride your bicycle down to your local library, and spend hours just searching for information on franchising. I’m not even talking about information on specific franchise opportunities…just basic information on a franchise business works!

Things are vastly different now, obviously. Within minutes, you can get information on the franchise business model* just by using the search engine of your choice. There are even vast amounts of information readily available about the Franchise Disclosure Document (FDD).

As a matter of fact, Item #8 (there are 23 items contained in the FDD) deals with the subject of this guest blog post: restrictions.

Item #8

Restrictions on Sources of Products and Services

This section tells whether the franchisor limits:

1.      Suppliers from whom you may purchase goods

2.      Goods or services you may offer for sale

3.      Where you can sell goods or services

4.      Use of the internet to sell goods or services to customers in and out of your territory and the right of the franchisor (or other franchisees) to use the Internet to solicit customers or to sell in your territory

According to the FTC, these kinds of restrictions may limit your ability to exercise your own business judgment in operating your outlet. That said, if the franchisor does not limit the territory* where each franchisee can sell, the franchisor and other franchisees may compete with you for the same customers, either by establishing their own outlets, or by selling to customers in your area through the Internet, catalogs, telemarketing and the like.

The FDD contains very specific things that have to do with the four items listed above. Make sure you understand what, where and how you can and cannot sell your products and services.

If you engage the services of a competent franchise attorney like I’ve been suggesting over the years, you’ll be able to have a complete understanding of any restrictions that will be placed on you as you move towards becoming your own boss.

* Non-US Government links


About the Author:

Joel Libava

Guest Blogger

The Franchise King®, Joel Libava, is the author of Become a Franchise Owner! and recently launched Franchise Business University.

Selling into the U.S. as a Foreign Business: Should You Incorporate Your Business Here?

By Caron_Beesley, Contributor
Published: February 6, 2013 Updated: August 18, 2015

Do you run an overseas business? Thinking of expanding and selling into the U.S. market?

Because U.S. residency or citizenship is not required, non-U.S. citizens can readily sell into the U.S. However, many overseas business owners aren’t clear on whether they are required to incorporate in the U.S. and the associated tax implications.

Here’s what you need to know:

Should I Incorporate My Business in the U.S.?

Essentially, if your intent is to sell goods into the U.S.—whether online or through U.S. partners such as a wholesaler—you may not have to file for incorporation in the U.S. However, if you plan to have a physical presence in the U.S. (such as an office or employees), then incorporation, whether as a corporation or limited liability corporation (LLC), is worth considering. Likewise, for online businesses in particular, remember that many U.S. consumers feel more confident buying from a registered U.S. business, so that’s another important factor to weigh up.

Each business is different and it’s important to look at incorporation in the context of your overall business goals, state incorporation laws, taxation considerations, as well as your ability to scale and manage that legal entity from overseas.

To understand the factors that might impact your decision, book some time with a good U.S. business attorney who understands both international and U.S. law.

How to Incorporate a Foreign Business in the U.S.

Once you’ve made the decision to incorporate, you’ll need to understand the process.

In the U.S., business incorporation occurs at the state level for all business owners, regardless of whether you are a citizen or a foreign national.

The process will vary from state-to-state, but generally involves two steps: applying to register in that particular state, and establishing a registered agent with a valid address in that state (no P.O. Box numbers). A registered agent can be either the business owner or another person who is authorized to receive legal papers on behalf of the business, such as an attorney or secretary.

What Business Structure Should I Choose?

The most popular choice of business structure for non-U.S. citizens is to form an LLC, although you can also legally form and own shares in a C corporation. Non-U.S. citizens cannot retain shares in an S corporation because business income is reported on personal U.S. income tax returns.

To learn more about choosing the right business structure and how to file for incorporation, check out SBA’s Choose your Business Structure guide. This blog offers more insight: Top 10 Questions About Small Business Incorporation Answered.

Which State Should I Incorporate In?

If most of your clients are concentrated in a specific state or you have an office or physical presence in a state, it may make sense to incorporate there. If you don’t plan on having a physical presence in the U.S., you can form a corporation or LLC in states such as Nevada and Delaware, both of which are considered friendly to foreign companies.

If you operate in more than one state, you can elect to incorporate in any of these states. However, you are required to register your business in the other states in which you operate; this process is called foreign qualification and you can apply for it with the help of a lawyer or online incorporation service. Again, for the best advice, consult a U.S. business attorney who has expertise in both U.S. and international law.

Do I Need to Pay U.S. Taxes?

If you are a non-resident business owner, the U.S. Internal Revenue Service (IRS) will tax you on income that is sourced in the U.S. If your business is incorporated in the U.S., you may also be required to pay an annual fee to the state where your business is incorporated.

The IRS offers a guide specifically on International Business, but if you are still left with more questions, it is always good to check with a qualified attorney or accountant.

U.S. citizens will likely need an Employment Identification Number to start up, a process that requires their social security number (SSN). In the case of foreign businesses, an Individual Taxpayer Identification Number (ITIN) will suffice. The IRS issues these 9-digit tax processing numbers to individuals who are required to pay US taxes but who are ineligible for a SSN, including resident and non-resident aliens and foreign nationals.


About the Author:

Caron Beesley


Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley

Making Procurement Better: RFP-EZ

Published: February 4, 2013 Updated: February 4, 2013


Note: This post is authored by SBA's Presidential Innovation Fellows - Clay Johnson, Jed Wood, and Adam Becker.
This past summer, our team of Presidential Innovation Fellows (PIFs) was challenged by this Administration to—in the span of six months—make it easier for small businesses to sell to the Federal government, and for the Federal government to buy technology from the private sector. Just a few weeks ago, working with our colleagues at the Small Business Administration (SBA), we launched the first iteration of an experiment we think will help make that goal a reality: RFP-EZ.
Early on in our project, we discovered that selling to government and government making purchases are two different problems with two unique audiences. The former required us to make it easier to discover new contracts and simplify the bidding process. The latter required streamlining the creation of requests for proposals (RFPs), review of bids, and improved capacity for market research.
On one side of the equation, small businesses need tools that make it easier to discover and compete for opportunities. On the other side, government contracting officers (who make purchasing decisions) need tools that streamline their work and ensure they can effectively weigh their options. The RFP-EZ system is a start at addressing both sides of the equation.
If you're a web designer or developer, see for yourself. Check out the current RFP-EZ projects and bid on one. You can probably find and bid on a government contract in less than 10 minutes.
For contracting or program officers in government, we've streamlined the process of building an RFP. For example, the system has a feature inside of it called SOWComposer, which allows government contracting officers to easily share statements of work (SOWs)—just like developers can share open source code on websites like GitHub. This allows contracting officers to collaborate on templates and share best practices, so they don’t need to reinvent the wheel along with each new procurement. And finally, with RFP-EZ, bids come in all in one place, where they are easily sortable so that contracting officers and program offices can figure out which ones are
the best ones.
The best part? RFP-EZ is built entirely as an open source platform. It's built in a PHP framework called Laravel and if you're a developer, you can check out the source code on GitHub. And, if you're a state or local government, this means there's now a freely available procurement marketplace available for you to acquire and deploy.
Since its launch just a few weeks ago, more than 200 businesses have signed up to bid, and many of them are completely new to government contracting. RFP-EZ has the potential to save taxpayers substantial amounts of money, improve services by giving government greater access to better technology, and create more jobs by making government more accessible to small businesses—that’s the promise of RFP-EZ.
As an added bonus, if you're considering applying for the next round in the Presidential Innovation Fellows (PIF) program, you're actually going to use this modified version of RFP-EZ to do it –and all of the tools on the back-end will help PIF project sponsors to better analyze the applicant pool.
We’re excited about RFP-EZ, and whether you’re a developer looking for code, a small business looking to sell, or a government office looking to buy—we think you should be too.
Clay Johnson, Jed Wood, and Adam Becker are Presidential Innovation Fellows working on RFP-EZ at the Small Business Administration.
To learn more about or apply for the Presidential Innovation Fellows program, please visit:

About the Author:

10 Tips for Veteran-Owned Businesses Seeking to Sell to the U.S. Federal Government

By Caron_Beesley, Contributor
Published: January 31, 2013 Updated: August 31, 2016

Are you a veteran-owned small business and thinking of selling to your former boss – the U.S. federal government?

Part of the mission of the SBA is to provide assistance to veterans and service-disabled veterans who return home to start, resume or grow their businesses. In addition to supporting veteran business owners through entrepreneurial training, and providing access to capital, the SBA also provides resources, tools and support to help veterans start and grow businesses through government contracting.

If you are a veteran-owned small business, check out these 10 tips for getting started selling to the U.S government and winning a government contract.

1) Boots to Business – Get Help Starting Your Business - Boots to Business is a public-private partnership program that gives service members support to help them learn the nuts and bolts of how to start and grow a business and access SBA tools and resources available to them.

2) Find a Veterans Business Outreach Center – The SBA’s Office of Veterans Business Development oversees multiple Veterans Business Outreach Centers across the country. In addition to helping veterans build a business plan and start a business, these centers can help veterans land government contracts, get access to mentoring services, and find training.

3) Review your Financing Options – In addition to a range of other loan programs, SBA’s Patriot Express Program is specifically designed for small businesses that are more than 51 percent owned or controlled by veterans or members of the military community and are available up to $500,000.

4) Familiarize Yourself with Small Business Incentives for Government Contracting – The law mandates that government agencies establish contracting goals that require them to reach out and consider small businesses and service-disabled veteran-owned businesses for procurement opportunities. Currently, 23 percent of contracts must be awarded to small businesses and three percent to service-disabled veteran-owned small businesses. These opportunities will help open doors, but you must still be able to sell your business on performance, price and ability. Contact your Veterans Business Outreach Center to learn more about these and other incentive opportunities.

5) Learn About How the Government Buys – The government applies standardized procedures to buy products and services it needs from suppliers that meet certain qualifications. The primary contracting methods used by the government include micro-purchases, simplified procedures, sealed bidding, contract negotiations and consolidated purchasing. Learn more about these in another SBA online training course, Government Contracting 101: How the Government Buys, or read a quick overview of the process in my earlier blog: Government Contracting – Learn how the Government Buys from Small Businesses.

6) Understand the Rules – Understanding the government’s procurement rules is critical to your success as a government contractor.  The FAR, or Federal Acquisitions Regulations, is the roadmap for doing business with the government. Check out these resources on to help you become familiar with the regulations that apply to most federal contractors.

7) Size Does Matter – As a small business, certain government programs may apply to you. The question then becomes: What is a small business, or, more specifically, is your firm a small business? Over the years, SBA has established and revised numerical definitions for all for-profit industries, and this numerical definition is called a "size standard."  Use SBA’s Size Standards Tool to help determine if your business is truly “small” and qualifies for government contracts.

8) Learn the Process of Selling to the Government and Find Opportunities – Selling to the government is not as big of a mystery as you might think. There are several fundamental steps you should follow:

For a deeper dive into this process, read Selling to the Government – Get Started with These 5 Steps or check out SBA’s information about Registering for Government Contracting, which explains the easy steps you need to follow to being bidding on government proposals.

9) Find Subcontracting Opportunities – An alternative to seeking prime contracts is to explore subcontracting opportunities. Subcontracting with a prime contractor can be a profitable experience as well as a growth opportunity for a business. To help small businesses find opportunities, SBA maintains SUB-Net, a searchable database of available subcontract opportunities.

10) Have a Question? – If you have questions about the federal marketplace, government contracting methods, contract opportunities or winning recovery and other federal contracts, check out the following resources:

  • SBA’s Government Contracting Guide – Explore the process of government contracting with easy how-to guides and resources.
  • Government Contracting Classroom – Available via SBA’s Learning Center, these self-paced, free online courses cover the fundamentals of selling to the government as a small business owner.
  • Get In-Person Assistance and Training – SBA and its resource partners can answer your questions about the federal market place, government contracting methods, and finding contract opportunities. Find your local SBA office, Veterans Business Outreach Center and more with this interactive map

About the Author:

Caron Beesley


Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley

Sandy Update 5: A Lending Milestone as Congress Adds Recovery Funds

By James Rivera, SBA Official
Published: January 30, 2013 Updated: February 13, 2013

Ninety days after Hurricane Sandy struck the Northeast, the U.S. Small Business Administration crossed the $1 billion threshold of approved loans to more than 16,800 homeowners, renters and businesses. This makes Hurricane Sandy, in terms of SBA disaster lending, the third largest natural disaster in U.S. history, behind Hurricanes Katrina/Rita/Wilma ($10.8 billion), and the Northridge Earthquake ($4 billion).

To put this massive storm and the coordinated federal recovery effort into context, the SBA has approved more loans for more money to Hurricane Sandy victims than what we approved for all disasters in fiscal year 2012 (Oct. 1, 2011 to Sept. 30, 2012).  In FY2012, the SBA approved 15,000 disaster loans for a total of $689 million. 

The sheer size and scope of this disaster created an increased need for more assistance.  This week Congress passed an aid package that will provide SBA with an additional $520 million to support up to $5 billion in low-interest disaster loans.

The bill also provides:

  • $249 million to cover to the administrative costs of making the loans;
  • $20 million to support SBA’s resource partners (SCORE, SBDCs, Women’s Business Development Centers) as they help business owners rebuild;
  • And $10 million to cover salaries and overhead expenses associated with the agency’s recovery efforts.

We continue to process loan applications.  Together with FEMA, we have extended the disaster loan application deadlines for states where we have seen the highest demand. The deadline for New York is Feb. 27, and March 1 is the deadline for New Jersey.   The Maryland (Worcester County) application deadline is March 4, and the deadline for Puerto Rico is March 11.

If you have a disaster loan application, complete and send it back to as us soon as possible. Don’t wait on your insurance payout. Your policy may not cover all the replacement, repair and rebuilding costs—and the SBA disaster loan can offset the difference.   In addition, the SBA will use any insurance proceeds to reduce the loan amount.

You can apply online using the Electronic Loan Application. If you think you need help filling out the application, or have questions about what documents are required to complete the process, call SBA’s Disaster Customer Service Center at 800-659-2955. Those with a speech disability or hearing loss may call 800-462-7585. You can also email the center at Visit SBA’s Hurricane Sandy website for more information.

About the Author:

James Rivera
James Rivera

SBA Official

James Rivera was named Associate Administrator for SBA’s Office of Disaster Assistance in November 2009 after serving for several months as Acting Associate Administrator. In a typical year, his office approves about 20,000 loans totaling about $1 billion. This is the SBA’s sole direct lending program.

New Year, New Benefits

By BarbaraWeltman, Guest Blogger
Published: January 30, 2013 Updated: January 31, 2013

You love your staff and want to show it by giving them more in a tangible way. Increasing their pay may not be the best strategy for you or your employees. Added pay is taxable to employees, so they net less (how much less depends on their tax bracket). And added pay has additional costs to you in the form of payroll taxes. What to do? Think about giving them fringe benefits.


You’re not obligated to provide any benefit (starting in 2014, employers with more than 50 full-time employees will have to provide health coverage or pay a penalty for not doing so). If you choose to give fringe benefits, it’s a win-win for you and your employees:

  • You reward your staff without incurring additional employment taxes, such as the employer’s share of FICA (covering Social Security and Medicare taxes) and state unemployment insurance. Some benefits won’t even cost you a penny because you merely arrange for workers to buy them on their own with favorable tax results to them (explained later).
  • Your employees get valued benefits that do not increase their taxable pay. If they’d had to buy these benefits on their own, they would have had to earn enough, after tax, to cover the cost. For example, say you offer dependent care assistance of $2,500 annually for all employees. If an employee in the 25% tax bracket had to pay this cost on her own, she should have had to earn about $3,350 more in wages to cover this cost.

If you provide any fringe benefits, you must do so on a nondiscriminatory basis (with few exceptions). This means that benefits cannot go merely to owners and highly-paid employees; they must be available to rank-and-file employees as well.

Tailor your benefits plans to the needs of your staff and to your pocketbook. Remember that health coverage and retirement plans are the top two most-valued employee benefits.

Transportation fringe benefit

Employees know that their commuting expenses are not deductible, regardless of the length of the commute or how much it costs. However, you can pay for certain transportation fringe benefits that will be tax free to employees. For 2013, transportation fringe benefits are:

  • Free parking, transit passes and vanpooling up to $245 per month
  • Bicycle assistance (to maintain and store the bicycle) up to $20 per month

Alternative: Instead of paying these benefits, you can arrange for employees to pay for them on their own on a pre-tax basis (i.e., the portion of their wages used to pay for the benefits don’t count as taxable income). Your cost: only minimal administrative costs. For more about this, look at *TransitChek or the websites of other companies that arrange for transportation fringe benefits.

Child-related benefits

You can help your staff with family obligations in a tangible way by paying some child-related costs:

  • Dependent care assistance. You can pay up to $5,000 of assistance for each employee each year; this amount is tax free. Alternatively, you can enable workers to pay for their dependent care needs on a pre-tax basis by setting up a dependent care flexible spending account (FSA). The funds in this FSA cannot be combined with funds in a medical FSA.
  • Adoption assistance. You can pay up to $12,970 for adoption assistance in 2013 (the limit increases annually for inflation).

Small employers may not be able to offer these benefits and enjoy them personally. The law prevents “highly-compensated employees” (e.g., owners) from excluding company-paid benefits if the plan skews benefits toward them. In other words, the plan must be nondiscriminatory for all workers.

Cafeteria plan

Workers usually prefer to have a menu of benefits from which they can choose. A cafeteria plan lets employees choose between cash (or taxable benefits) and tax-free benefits; they are not taxed on the tax-free benefits merely because they could have opted for cash.  Some of the benefits you can offer under the plan include:

  • Adoption assistance
  • Athletic facilities
  • De mimimis (minimal) benefits
  • Education assistance
  • Employee discounts
  • Employer-provided cell phones
  • Health benefits
  • Meals
  • Moving expense reimbursements
  • No-additional-cost services
  • Transportation commuting
  • Working condition fringe benefits

As a small employer (no more than 100 employees), you can opt to use a simple cafeteria plan. A simple cafeteria plan is presumed to be nondiscriminatory. You must make minimum contributions (e.g., at least 2% of worker’s pay) to workers in the plan who are not highly-compensated employees; all employees can enjoy benefits under the plan. Your contributions to the plan are tax deductible.

You can find more about cafeteria plans in IRS Publication 15-B, Employer’s Tax Guide to Fringe Benefits. (The 2013 version is not yet out but should be shortly.)          


Whether you offer benefits, what they are, and how much you pay depends on your company’s financial situation. Obviously, you can only do what you can afford to do, no matter how generous you may want to be. Always discuss your benefits plans with a knowledgeable tax advisor.


*denotes non-government website

About the Author:

Barbara Weltman

Guest Blogger

Barbara Weltman is an attorney, prolific author with such titles as J.K. Lasser's Small Business Taxes, J.K. Lasser's Guide to Self-Employment, and Smooth Failing as well as a trusted professional advocate for small businesses and entrepreneurs. She is also the publisher of Idea of the Day® and monthly e-newsletter Big Ideas for Small Business® and host of Build Your Business Radio. She has been included in the List of 100 Small Business Influencers for three years in a row. Follow her on Twitter: @BigIdeas4SB or at


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