The White House has published information about the new Health Care Reform legislation and what it means to small business. The following is quoted from the White House website. For more information, please visit: http://www.whitehouse.gov/healthreform/small-business
"Six Ways Health Reform will Help Small Businesses
Small businesses want to provide health coverage for their workers, but they face extraordinary challenges in doing so, including premiums that are 18 percent higher on average than large businesses pay for the same coverage. Health reform legislation signed by the President includes a number of important benefits to help make coverage more affordable:
1. Establishes a Small Business Health Care Tax Credit to Help Small Businesses Afford the Cost of Covering Their Workers.
Status Quo: Small Businesses Face High Costs in Providing Health Insurance to Their Employees. Small businesses face higher costs and few incentives to offer health insurance coverage to employees.
Solution: A New Tax Credit Takes Effect Immediately to Help Cover Premiums Small Businesses Pay. The Small Business Health Care Tax Credit can cover up to 35 percent of the premiums a small business pays to cover its workers. In 2014, the rate will increase to 50 percent. Learn more about the Small Business Health Care Tax Credit.
2. Creates Health Insurance Exchanges to Increase Bargaining Power and Reduce Administrative Costs
Status Quo: Small Businesses Have Little Bargaining Power, Face High Administrative Costs. Currently, small businesses face not only premiums that are 18 percent higher than large businesses pay, but also face higher administrative costs to set up and maintain a health plan. The premiums they pay have 3 to 4 times as much administrative cost built into them as plans in the large group market. They are also at a disadvantage in negotiating with insurance companies because they lack bargaining power.
Solution: Health Insurance Exchanges will Provide More Choice, Lower Prices, and Greater Bargaining Power for Firms with up to 100 Employees. Health reform will change this dynamic. Starting by 2014, firms with 100 or fewer workers will be able pool their buying power and reduce administrative costs by purchasing insurance through an exchange. According to CBO, coverage that small businesses purchased through an exchange “would have lower administrative costs, on average, than the policies those firms would buy under current law, particularly for very small firms.”
3. Ends Price Discrimination against Small Businesses with Sick Workers
Status Quo: Small Businesses with Sick Worker Face Higher Prices, Sudden Price Increases. Currently, small businesses with just one sick worker can face significantly higher premiums, and having a worker fall ill can lead to a precipitous price increase -- raising premiums just when insurance is needed most.
Solution: Ending Price Discrimination Based on Illness. Health reform will end this price discrimination. Starting in 2014, “community rating” rules will prohibit insurers from charging more to cover small businesses with sicker workers or raising rates when someone gets sick.
4. Increases Health Care Security to Unlock Entrepreneurship
Status Quo: Health Insurance Insecurity Creates “Job Lock,” which Inhibits Entrepreneurship. Our current health care system inhibits entrepreneurship and small business formation by locking workers -- especially those with families or with any sort of health problem --into jobs at large firms that offer family coverage and have a big enough risk pool to absorb the cost of covering pre-existing conditions. This “job lock” causes many workers to stay at large firms even if they would be more productive working at a small business or becoming an entrepreneur.
Solution: Health Security Empowers Entrepreneurship. By providing health security for every American and eliminating exclusions for pre-existing conditions and price discrimination against those who are sick, health reform will make it easier for small businesses to attract the best workers and easier for entrepreneurs to strike out on their own.
5. Reduces the Hidden Tax on Small Business Employees with Health Insurance
Status Quo: Hidden Tax Adds $1,000 to Every Premium. Currently, the cost of treating the uninsured adds a “hidden tax” of over $1,000 to every health care premium.
Solution: Reduce Hidden Tax by Dramatically Expanding Coverage. Health reform will significantly reduce this tax by covering an additional 32 million additional Americans by 2019.
6. Reduces Premiums in the Small Group Market.
Status Quo: Higher Premiums Mean Coverage Is Unaffordable for Small Businesses. In a recent national survey, nearly three-quarters of small businesses that did not offer benefits cited high premiums as the reason.
Solution: Health Reform Will Lower Costs, Making Coverage More Affordable. Taken together, the measures described above will significantly reduce premiums for small businesses. According to CBO, health reform will reduce the cost of a given plan in the small group market by 1-4 percent by 2016."
Source: United States White House website.
Thank you for visiting the blog of the Washington Women's Business Center! For more information, please visit us at: http://wbc.seattleccd.com
Wednesday, April 7, 2010
Wednesday, August 26, 2009
Five Facts about Home Office Deduction - information from the IRS
The IRS has provided the following information to small business owners about the Home Office Deduction:
"Five Facts about the Home Office Deduction"
"With technology making it easier than ever for people to operate a business out of their house, many taxpayers, entrepreneurs and small business people may be able to take a home office deduction when filing their 2009 federal tax return next year.
Here are five important things the IRS wants you to know about claiming the home office deduction.
1. Generally, in order to claim a business deduction for your home, you must use part of your home exclusively and regularly:
---As your principal place of business, or
---As a place to meet or deal with patients, clients or customers in the normal course of your business, or
---In the case of a separate structure which is not attached to your home, it must be used in connection with your trade or business
For certain storage use, rental use or daycare-facility use, you are required to use the property regularly but not exclusively.
2. Generally, the amount you can deduct depends on the percentage of your home that you used for business. Your deduction for certain expenses will be limited if your gross income from your business is less than your total business expenses.
3. There are special rules for qualified daycare providers and for persons storing business inventory or product samples.
4. If you are self-employed, use Form 8829, Expenses for Business Use of Your Home, to figure your home office deduction. Report the deduction on line 30 of Schedule C, Form 1040.
5. Different rules apply to claiming the home office deduction if you are an employee. For example, the regular and exclusive business use must be for the convenience of your employer.
For more information see IRS Publication 587, Business Use of Your Home, available on IRS.gov or by calling 800-TAX-FORM (800-829-3676).
To get the most timely IRS information, news and products and services, subscribe to e-News on IRS.gov at http://www.irs.gov/businesses/small/article/0,,id=154825,00.html, click “Subscribe Now” at the bottom of the page and enter your e-mail address."
"Five Facts about the Home Office Deduction"
"With technology making it easier than ever for people to operate a business out of their house, many taxpayers, entrepreneurs and small business people may be able to take a home office deduction when filing their 2009 federal tax return next year.
Here are five important things the IRS wants you to know about claiming the home office deduction.
1. Generally, in order to claim a business deduction for your home, you must use part of your home exclusively and regularly:
---As your principal place of business, or
---As a place to meet or deal with patients, clients or customers in the normal course of your business, or
---In the case of a separate structure which is not attached to your home, it must be used in connection with your trade or business
For certain storage use, rental use or daycare-facility use, you are required to use the property regularly but not exclusively.
2. Generally, the amount you can deduct depends on the percentage of your home that you used for business. Your deduction for certain expenses will be limited if your gross income from your business is less than your total business expenses.
3. There are special rules for qualified daycare providers and for persons storing business inventory or product samples.
4. If you are self-employed, use Form 8829, Expenses for Business Use of Your Home, to figure your home office deduction. Report the deduction on line 30 of Schedule C, Form 1040.
5. Different rules apply to claiming the home office deduction if you are an employee. For example, the regular and exclusive business use must be for the convenience of your employer.
For more information see IRS Publication 587, Business Use of Your Home, available on IRS.gov or by calling 800-TAX-FORM (800-829-3676).
To get the most timely IRS information, news and products and services, subscribe to e-News on IRS.gov at http://www.irs.gov/businesses/small/article/0,,id=154825,00.html, click “Subscribe Now” at the bottom of the page and enter your e-mail address."
U.S. Small Business Administration publishes new YouTube informational channel
The SBA has launched it's own YouTube channel, and is now posting informational videos on the site: http://www.youtube.com/sba.
The site currently includes an introduction to SBA programs and services, plus a 10-part "Delivering Success" series co-produced with the U.S. Postal Service. Future videos will provide more in-depth information about SBA programs and services, including how to take advantage of the Recovery Act loan programs, government contracting opportunities, exporting, counseling and training on starting and growing a small business, and small business success stories.
The site currently includes an introduction to SBA programs and services, plus a 10-part "Delivering Success" series co-produced with the U.S. Postal Service. Future videos will provide more in-depth information about SBA programs and services, including how to take advantage of the Recovery Act loan programs, government contracting opportunities, exporting, counseling and training on starting and growing a small business, and small business success stories.
Friday, August 14, 2009
The IRS reminds small businesses that the Fall filing deadline for taking advantage of the expanded business loss carryback option is coming up soon. Eligible individuals have until October 15th and eligible calendar-year corporations have until September 15th.
Under this option, losses from 2008 can be carried back for up to five years, instead of the usual three years, which could mean a special tax refund. For more information, visit: www.irs.gov/newsroom/article/0,,id=211964,00.html
Under this option, losses from 2008 can be carried back for up to five years, instead of the usual three years, which could mean a special tax refund. For more information, visit: www.irs.gov/newsroom/article/0,,id=211964,00.html
Friday, July 17, 2009
Business Book Review - Blue Mountain Arts
Blue Mountain: turning dreams into reality: the story of Blue Mountain Arts and bluemountain.com, and two unlikely entrepreneurs, who went from living out of their pickup truck to being the most successful husband-wife team in publishing with over 1.5 billion greeting cards sent.
Recently, in doing some research for a client who wants to start a greeting card line, I came across a different kind of business book by Susan Polis Schutz, of Blue Mountain Arts, a multi-million dollar greeting card business and early innovators of the electronic greeting card.
Expecting it to be a “how to” book about starting a greeting card business, I was pleasantly surprised to learn that it is more about “how they started, adapted and successfully defended their products."
I don’t want to give away all of the good stuff. It’s a quick read and a book that every business owner or soon to be business owner should read.
Check it out at your local library, read it and let me know what you think.
Recently, in doing some research for a client who wants to start a greeting card line, I came across a different kind of business book by Susan Polis Schutz, of Blue Mountain Arts, a multi-million dollar greeting card business and early innovators of the electronic greeting card.
Expecting it to be a “how to” book about starting a greeting card business, I was pleasantly surprised to learn that it is more about “how they started, adapted and successfully defended their products."
I don’t want to give away all of the good stuff. It’s a quick read and a book that every business owner or soon to be business owner should read.
Check it out at your local library, read it and let me know what you think.
Friday, March 6, 2009
25 Ways to Help Survive The Recession
Growth masks problems, and many of these things you should be doing all the time, recession or boom times.
1. Be responsive – innovate – look for opportunity – look at trends in your industry. The federal government’s stimulus package is putting money into lots of things, including education, green technology and public infrastructure. There is also a safety net for those who have lost their jobs. What opportunities are there for your firm?
2. Cash flow, cash flow, cash flow. Although an appropriate amount of debt can help you grow your business, too much debt creates too much risk, due to negative effect on cash flow. Do REALISTIC cash flow projections and update them at least once a month. It is possible to survive decreased profits, but you can’t survive a continuing negative cash flow.
3. Keep good, accurate, timely books and pay attention to the trends – identify problems in advance.
4. Lower costs. Negotiate lower lease rates, or even rent relief for a few months. Look around…do you see empty store fronts? You may have more negotiating power than you think.
5. Analyze your greatest expense and do what you can to lower it. If sales are slow you may need to lay off staff – don’t wait too long to take action.
6. Look at every expense to lower it. Even small savings can add up.
7. If you have cash and you are looking for equipment, you may be able to find huge bargains now.
8. Focus on the customer – if you are less busy, you have time to give A-1 platinum-level service to each of them. If they stick with you, they are worth their weight in platinum!
9. Sell, sell, sell – get out there – remember to sell the benefits!
10. With the extra time available from decreased demand, sharpen up those marketing materials, website and selling skills. Analyze your marketing and advertising expenses and focus on the ones that provide a return – the ones that work.
11. Get on social networking sites like Facebook, MySpace, Linked In, BizNik, etc.
12. Network!
13. Talk to customers, find out what they need and find a way to provide it if possible.
14. Restructure debt to create a more positive cash flow.
15. Educate yourself – learn about financial statements and how you compare to industry standards – (often marvel at how ignorant most small businesses are about their finances – now is the time to learn the meaning and importance of a balance sheet, P&L and ratios).
16. Training opportunities are everywhere – some are free and others are quite reasonable.
17. Shop around for bargains!!!
18. If you have the cash flow, negotiate discounts for paying upon delivery.
19. It may not make sense to totally cut advertising – you can continue to build your brand while other companies retreat.
20. If something isn’t selling, mark it down, move it out and get the cash to buy newer, fresher inventory.
21. Get a handle on A/R – don’t let them get out of control, you need the cash to operate on. Invoice immediately, don’t wait until the end of the month.
22. Listen to your employees – they are a great source of information – ask them for ideas on how operations can be improved and expenses curtailed.
23.Negotiate better rates with service providers such as accountants and attorneys.
24. Negotiate better rates for employee benefits such as health insurance. Find a cheaper credit card processor.
25. GET SOME HELP! A lot of people come to us looking for grants – the best grant you’ll get is a grant of time and expertise from the WBCs, the SBDCs and SCORE.
1. Be responsive – innovate – look for opportunity – look at trends in your industry. The federal government’s stimulus package is putting money into lots of things, including education, green technology and public infrastructure. There is also a safety net for those who have lost their jobs. What opportunities are there for your firm?
2. Cash flow, cash flow, cash flow. Although an appropriate amount of debt can help you grow your business, too much debt creates too much risk, due to negative effect on cash flow. Do REALISTIC cash flow projections and update them at least once a month. It is possible to survive decreased profits, but you can’t survive a continuing negative cash flow.
3. Keep good, accurate, timely books and pay attention to the trends – identify problems in advance.
4. Lower costs. Negotiate lower lease rates, or even rent relief for a few months. Look around…do you see empty store fronts? You may have more negotiating power than you think.
5. Analyze your greatest expense and do what you can to lower it. If sales are slow you may need to lay off staff – don’t wait too long to take action.
6. Look at every expense to lower it. Even small savings can add up.
7. If you have cash and you are looking for equipment, you may be able to find huge bargains now.
8. Focus on the customer – if you are less busy, you have time to give A-1 platinum-level service to each of them. If they stick with you, they are worth their weight in platinum!
9. Sell, sell, sell – get out there – remember to sell the benefits!
10. With the extra time available from decreased demand, sharpen up those marketing materials, website and selling skills. Analyze your marketing and advertising expenses and focus on the ones that provide a return – the ones that work.
11. Get on social networking sites like Facebook, MySpace, Linked In, BizNik, etc.
12. Network!
13. Talk to customers, find out what they need and find a way to provide it if possible.
14. Restructure debt to create a more positive cash flow.
15. Educate yourself – learn about financial statements and how you compare to industry standards – (often marvel at how ignorant most small businesses are about their finances – now is the time to learn the meaning and importance of a balance sheet, P&L and ratios).
16. Training opportunities are everywhere – some are free and others are quite reasonable.
17. Shop around for bargains!!!
18. If you have the cash flow, negotiate discounts for paying upon delivery.
19. It may not make sense to totally cut advertising – you can continue to build your brand while other companies retreat.
20. If something isn’t selling, mark it down, move it out and get the cash to buy newer, fresher inventory.
21. Get a handle on A/R – don’t let them get out of control, you need the cash to operate on. Invoice immediately, don’t wait until the end of the month.
22. Listen to your employees – they are a great source of information – ask them for ideas on how operations can be improved and expenses curtailed.
23.Negotiate better rates with service providers such as accountants and attorneys.
24. Negotiate better rates for employee benefits such as health insurance. Find a cheaper credit card processor.
25. GET SOME HELP! A lot of people come to us looking for grants – the best grant you’ll get is a grant of time and expertise from the WBCs, the SBDCs and SCORE.
Monday, March 2, 2009
Hello!
We are all wondering about this recession...have we reached the bottom, and how long will it take to recover? There seem to be a lot of differing opinions out there...the fact is, nobody really knows. What can you do to help your business weather the storm?
Unfortunately, some businesses may not make it through, but we are still seeing people starting businesses, some businesses haven't been too badly impacted, and others are taking this opportunity to reinvent themselves.
Cutting costs is the first place to start, but concentrating on marketing and sales will help generate the revenue your business needs. Revisit your marketing plan and take a look at each of your marketing efforts to see if they are effective. If you find yourself with extra time, take the time to update your brochures, website and other marketing materials. This is also the time to ensure the very best buying and after-the-sale experience for your valuable customers.
We are all wondering about this recession...have we reached the bottom, and how long will it take to recover? There seem to be a lot of differing opinions out there...the fact is, nobody really knows. What can you do to help your business weather the storm?
Unfortunately, some businesses may not make it through, but we are still seeing people starting businesses, some businesses haven't been too badly impacted, and others are taking this opportunity to reinvent themselves.
Cutting costs is the first place to start, but concentrating on marketing and sales will help generate the revenue your business needs. Revisit your marketing plan and take a look at each of your marketing efforts to see if they are effective. If you find yourself with extra time, take the time to update your brochures, website and other marketing materials. This is also the time to ensure the very best buying and after-the-sale experience for your valuable customers.
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