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Thursday, July 17, 2008
Bids for Work Falsified, GAO Reports
The Washington Post
By ANITA HUSLIN
Over the past two years, at least 10 Washington area companies have won more than $100 million in prime government contracts set aside for small businesses in economically distressed areas by claiming they had residency in those communities.
A Government Accountability Office report released yesterday challenged those claims and said the agency plans to ask the Small Business Administration's inspector general to investigate.
(Click here to read the complete article)
(Click here to review information on the committee hearing)
Friday, June 27, 2008
Airline woes costing small businesses
The Cincinnati Enquirer
By MALIA RULON
The skyrocketing cost of airline tickets may be enough to keep would-be tourists close to home. But for Terry Segerberg - who operates her family's company in Cincinnati's East End, Los Angeles and Houston - travel isn't a perk, it's a necessity.
Segerberg told members of the House Small Business Committee on Thursday that as the cost of fuel jacks up airline ticket prices, small businesses like Mesa Industries, which makes equipment and other products for the petroleum industry, are being hit hard.
"We have been forced to reduce our intra-company travel," she said, explaining that the cost to fly from Cincinnati to Los Angeles has risen from $390 two years ago to $630.
"Multiply this increase by 20 to include all of our sales staff and key administrative staff, and the impact is in the thousands and thousands of dollars each month," she said.
(Click here to read the complete article)
Friday, June 27, 2008
Business air travelers facing ‘full-blown crisis’
Cox News Service
By MARILYN GEEWAX
Hearing witness Terry Segerberg, chief executive of Mesa Industries Inc. in Cincinnati, said business owners in southwestern Ohio already are struggling with rising fares and would suffer from any loss of competition in the region.
"The average cost in the last two years for me to fly from Cincinnati to Los Angeles and return has escalated from $390 to $630," she said. "Even with the advance purchase we now pay 62 percent more for a ticket" than two years ago.
Lawmakers said they share the business travelers' alarm at the prospect of more flights being eliminated as oil prices rise. Rep. Steve Chabot, R-Ohio, noted that airline fuel costs have increased from $16 billion in 2000 to about $61 billion in 2008.
Given such rising costs, "by this time next year, there could be as many as 20 percent fewer seats available" nationwide, he said.
(Click here to read the complete article)
Thursday, June 26, 2008
Oil Soaring, Airlines Nosediving
Talk Radio News Service
By STAFF
The airline industry’s impact on entrepreneurs and the US economy was discussed by the House Committee on Small Business. Rep. Nydia Velazquez (D-N.Y.) said that the United States is in an air travel crisis and that small business owners across the country will feel the impact of struggling airlines.
Paul Ruden, vice president of legal affairs for the American Society of Travel Agents, said demand for airspace and runways exceeds supply in the United States. Ruden stated that excess demand for seats, congestion in airports, the introduction of fees for services once included in the ticket price, and the increased cost of oil leave consumers alienated.
Rep. Steve Chabot (R-Ohio) said airline fuel costs have increased from $16 billion in 2000 to an estimated $61 billion in 2008. Chabot suggested increasing domestic oil production, citing a FOX News survey which says 76 percent of Americans support drilling offshore and in Alaska.
(Click here to read the complete article)
Tuesday, June 24, 2008
Soaring Fuel Costs Carry Risk of Airline Collapse
The Tampa Tribune
By TED JACKOVICS
The impact of skyrocketing aviation fuel prices could result in massive job losses, declining business activity and reduced tourism as early as the second half of 2008, the Business Travel Coalition, a Radnor, Pa.,-based business consumer group, warned Monday.
With airlines paying about twice as much for fuel this year as last year, fuel costs have increased to more than 40 percent of airlines' operating expenses, which could push air travel far beyond affordability for the majority of the traveling public, the coalition report stated.
"The impact ... goes far beyond charging $2 for a can of Coke or $15 for a checked bag - two consumer annoyances that will have little impact on the airlines' prospects for survival and should not distract anyone from the catastrophe that is looming on the near horizon," the report stated.
(Click here to read the complete article)
Friday, June 20, 2008
SEC OKs 1-year compliance extension for small firms
Forbes.com
From REUTERS
The U.S. Securities and Exchange Commission agreed to give small businesses one more year to meet certain auditing requirements of the Sarbanes- Oxley corporate reform law, the SEC said Friday.
That means small companies, those with a market capitalization below $75 million, will not have to comply with auditing part of the financial controls section of the law for one more year.
The so-called Section 404 requires companies to assess their internal controls over financial reporting. It also requires external auditors to report on management's assessment and on the controls itself.
(Click here to read the complete article)
Thursday, June 19, 2008
New S Corp Rules May Help Small Businesses Weather Economy
AllBusiness.com
By KEITH GIRARD
Small businesses are being squeezed by troubled credit markets, high energy prices, and sharply rising costs. In many cases, their ability to weather the economic downturn will hinge on cost cutting and maximizing cash flow.
Next to labor, taxes are the biggest expense facing small businesses, and that's unlikely to change anytime soon. But a movement is afoot in Congress to provide relief by modifying rules that govern S corporations. The changes could not only reduce taxes, but also help S corporations tap new sources of capital. According to the U.S. Chamber of Commerce, more than 55 percent of all corporations file taxes as S corporations; of those, about 3.5 million are considered small.
The debate is important because it marks the first significant examination of S corporation rules since that the tax code provision was enacted 50 years ago. The House Small Business Committee's Subcommittee on Finance and Tax held a hearing on the issue this week, and several bills are pending in Congress that would make important changes. "As everybody knows, the times are changing. What was right and proper 50 years ago doesn't always add up to what is right and proper today," said the subcommittee's ranking member, Rep. Vern Buchanan, R-Fla.
(Click here to read the complete article)
Thursday, June 12, 2008
Cincinnatian Testifies at Hearing
Cincinnati Enquirer
By MALIA RULON
Donald Boeding of Fifth Third Bank, based in Cincinnati, was in Washington today to testify before the Small Business Committee, of which Rep. Steve Chabot is the top Republican member.
Boeding is senior vice president and general manager of merchant services for the company and he had quite a lot to say about a new IRS proposal to require information tax reporting on all credit card receipts of small businesses. Basically, he said it could drive merchants to avoid electronic payment systems and instead use cash - and certain withholding provisions would substantially reduce their cash flow.
"The enactment would come at a very difficult time in the economy and would require significant IT investment," he said.
Chabot, R-Westwood, also opposes the proposed change, which he said is the wrong way for the government to go after an estimated $290 billion in delinquent tax payments. Chabot says the government should instead simplify the tax system and cut spending.
(Click here to read the complete piece)
Thursday, June 5, 2008
How the Real Estate Crisis Hurts Small Business
AllBusiness.com
By KEITH GIRARD
John Puffer, chairman and president of Pilot Bank, a community bank in Tampa, Fla., has had a ringside seat to the real estate crisis. Florida is one of the states hardest hit by the market crash, and Puffer has witnessed the economic devastation that foreclosures and declining prices have caused on businesses in his community.
"The weak housing sector continues to have a ripple effect throughout the entire nation and is putting severe stress on households and small businesses nationwide," he told the House Small Business Committee this week. "Restoring confidence in the housing market is vital to restoring economic growth."
The most immediate impact on small businesses is in credit markets. They have been severely damaged by the sharp decline in housing prices and the decline in collateral that real estate represents, said Puffer. Some 45 percent of outstanding small business loans are collateralized by some type of real estate asset. Small business owners, in particular, often rely on the equity in their homes and widely use home equity loans and lines of credit.
Beyond tapping their homes for financing, small businesses are closely tied to the housing market, even if they aren't directly involved in the construction or sale of homes. "The housing sector's weakness affects not only home builders, realtors, mortgage brokers, and others directly involved in home sales," but also related small businesses that provide such services as landscaping and home improvements as well as products such as furniture and appliances, said Rep. Steve Chabot, R-Ohio, ranking member on the House Small Business Committee.
(Click here to read the complete article)
Wednesday, May 28, 2008
Gas Crunch Rattles Business
Upstate Today
By CARLOS GALARZA
It used to be that Americans would take solace in rising gasoline prices by pointing out that at least a gallon of gas was still cheaper than a gallon of milk.
That’s no longer the case in many areas.
The current crunch that escalating gasoline prices are having up and down the U.S. economy comes as no surprise to those who have taken time to read the tea leaves.
For example, here is a warning found in a U.S. House committee report:
“With no end in sight, public concerns have surged over the seemingly perpetual state of an energy crisis … If these conditions continue the economic climate will become increasingly harsh for this country’s small businesses and entrepreneurs.”
(Click here to read the complete article)
***Ranking Member Chabot recently discussed the energy crisis and methods to help bring costs down. You can read his comments here.
Thursday, May 01, 2008
Lakewood Ranch Jeweler Appeals to Congress
The Bradenton Herald
By LESLEY CLARK
Vanessa Baugh knows firsthand the obstacles facing small business owners. She once had three jewelry stores, but is now down to one, worried about rising insurance costs and Florida's slumping economy.
"I'm in a holding pattern, where I'm sitting back waiting to see what's going to happen to the economy," the Lakewood Ranch businesswoman Wednesday told a House subcommittee looking into ways to help businesses like hers cope with a credit crunch that has made it increasingly difficult to secure loans to grow their businesses. "I'm sitting back, hoping to survive."
(Click here to read the complete article)
Tuesday, April 22, 2008
SBA Administrator Preston Answers Questions in a Washington Post Chat
Small Business Committee Ranking Member Steve Chabot appeared on Jim Blasingame’s Small Business Advocate Show this morning to talk about National Small Business Week and the current economy.
This week marks the 45th annual National Small Business Week and presents an opportunity to say thank you to the entrepreneurs that create the jobs that will keep our economy running in tough times.
(Click here to listen to the broadcast)
Sunday, April 20, 2008
The Small Business Booster: As incubator and SBA lender, group has helped the smallest of small enterprises across region for 25 years
The Cincinnati Enquirer
By MIKE BOYER
When Mark and Jerry Becker wanted a construction loan in 1988 to expand their family's 50-year-old fitness equipment business, their banker laughed at them.
"He said we were in no position to take on the $750,000 loan," Mark Becker said.
Undaunted, their Exercise & Leisure Equipment Co. in Columbia Township went for help from the Hamilton County Development Co. and the Small Business Administration's 504 loan program it administers. Since then, the company has expanded twice in the last 20 years, increasing employment from five to 26 and its revenues more than 20 times.
"They were a godsend," said Mark Becker of HCDC, the county's nonprofit development company, which is marking its 25th anniversary at a black-tie dinner Thursday night at the Cincinnati Club downtown with Ohio Lt. Gov. Lee Fischer as keynote speaker.
Quietly over the last quarter-century, the Norwood-based HCDC has grown from a one-man operation created to support the SBA loan program into a full-service economic development agency helping create 30,000 jobs and more than $2.6 billion in business investment.
(Click here to read the complete article)
Monday, April 14, 2008
SBA Administrator Preston Answers Questions in a Washington Post Chat
The Washington Post
By STEVE PRESTON
Steve Preston, Administrator of the U.S. Small Business Administration, was online for a chat with washingtonpost.com’s small business blog readers to talk about issues ranging from the economy, lending assistance, federal contracting and much more.
(To read a transcript of the chat, click here.)
Friday, April 4, 2008
Restrictive Bank Terms Fuel SMB Credit Crunch
AllBusiness.com
By KEITH GIRARD
Although the growing use of credit cards has gotten a lot of the blame for the rising cost of small business credit, local banks are also a big part of the problem. Wayne M. Gatewood, Jr., president and chief executive of Quality Support in Landover, Md., is a case study of the hurdles small business owners face, and why so many owners are turning to credit cards to finance their businesses.
Gatewood appeared before the House Small Business Committee this week as part of its continuing examination of the role of credit cards in small business financing. “Cash management is an absolutely critical matter for small companies. Careful management of cash and credit may mean the difference between whether a business expands or doesn’t, and whether it succeeds or fails,” said Rep. Steven Chabot, R-Ohio, the committee’s ranking member.
(Click here to read the full article)
Thursday, March 27, 2008
Finding Health Insurance if You Are Self-Employed
The New York Times
By MARCI ALBOHER
If there is one thing that separates the self-employed from those employed by others, it is their preoccupation with health insurance.
I was reminded of this on Feb. 14, when I wrote a post on the Shifting Careers blog asking small-business owners and would-be entrepreneurs what they were doing about health insurance. Within hours, scores of people posted comments about their own experiences and, if they had managed to find good resources, shared those. I have been reading e-mail messages and trying to make sense of the subject ever since. In short, it is not pretty out there.
A 43-year-old woman wrote about going without insurance in the first year of her business. “I lived in terror of needing a doctor visit or worse yet, lab tests or something more,” she said. She then moved to an H.M.O. for sole proprietors through a local chamber of commerce. The cost of that plan, which she said was $171 a month in 2001, has now risen to $500 a month. At the same time, she wrote, co-payments have increased and services have been cut.
That woman’s experience reflected the exasperated tone of several of the other writers. Many entrepreneurs seem to find health insurance after doing a lot of research, though they generally pay more than they think they should. Some who are in good health bet on remaining that way and forgo health insurance or get policies with low premiums and high deductibles, choosing to insure themselves for mostly catastrophic illness. Some are lucky enough to have a well-insured partner.
(Click here to read the complete article)
Monday, March 10, 2008
2008 Small Business Outlook: Where is the U.S. Economy Going?
Forbes.com
By PAUL MAIDMENT
You can forgive entrepreneurs their pessimism about the economy, though it may well be misplaced.
While the rest of 2008 looks a bit rough, and the fire sale of Bear Stearns to JPMorgan Chase has the doomsters swapping the "R-word" for the "D-word," the darkest clouds may be lifting on the horizon, even if flat growth--or worse--is already here. Better still, Congress is giving small-business owners an investment tax break on top of the $168 billion stimulus package it is preparing for consumers.
How much will those two measures stimulate spending and investment? The answers differ by region and industry. For instance, as conditions soften in New England (thanks to cutbacks at big banks stung by the credit crisis), economies in the West South Central region (buoyed by energy companies) are still chugging along.
(Click here to read the full article)
Also worth a look: Maureen Farrell’s piece, They Call This Intellectual Property? Learn how new regulations may drive up costs for patent filers. The culprit? Too many goofy proposals.
Happening Now
Thursday, March 6, 2008
Federal Law Fails to Stem SMB Red Tape
AllBusiness.com
By KEITH GIRARD
There's nothing new about government red tape. Charles Dickens wrote about it in 1869, when petty clerk David Copperfield dryly observed that Britain was "bound hand and foot" by it. Not much has changed. Government red tape is still a huge obstacle facing small businesses.
The Small Business Administration (SBA) has created such programs as the Business Gateway Initiative to give businesses a single access point to federal forms and other tools to help comply with federal regulations. But like most government snafus, the problem goes deeper than that. Congress tried to do its part when it passed the Paperwork Reduction Act (PRA) in 1980, specifically to cut red tape. The result? Government paperwork has increased by 400 percent since then. That's no laughing matter to the countless small business owners who must wade through mounds of government forms to run their businesses.
Take, for example, Drew Greenblatt, president and owner of Marlin Steel Wire in Baltimore. He's in a tough business, competing with foreign manufacturers in a global economy. His firm, which employs 27 people, has managed to grow 33 percent in the last two years and has tripled over the past decade. That's no small achievement, especially since Greenblatt must comply with regulatory requirements from more than six federal agencies, from the IRS, EPA, and OSHA to the Department of Commerce and the State Department, not to mention state and local governments.
"I compiled all the forms my business fills out in a single year, and when piled on top of each other, they are more than six feet tall," he told the House Small Business Committee. The committee hasn't revisited the PRA since 1995, and its hearing this week is the first step in a comprehensive review of the measure.
(Click to read the complete article)
Wednesday, March 5, 2008
What can self-employed workers deduct?
Fortune Small Business
By JULIE FREESE
Dear FSB: My husband is a self-employed construction worker. How can I determine what tax deductions we can take off? Our tax preparer mentioned work clothes and supplies? Can we use our medical receipts as a business deduction or can we only deduct insurance premiums?
- Tiffany, Holcomb, Mo.
Dear Tiffany: You are asking the right questions - determining what work expenses are deductible for the self-employed isn't easy and you should not just rely on a tax preparer. Do your own research as well.
There are several IRS publications that can help make filing your taxes easier. Thomas D. Klein, CPA and Professor of Accounting and Taxation at the University of Arizona, Eller College of Management, suggests you read Form 1518, "IRS Tax Calendar for Small Businesses and Self-Employed" and Form 535 "Business Expenses". Both documents are available at IRS.gov and are written in layman's terms.
Mark Nash, Partner, Private Company Services for PriceWaterHouseCoopers agrees that the IRS resources are a helpful, and suggests the next step is going to your tax professional with specific questions.
(Click to read the complete article)
Thursday, February 14, 2008
Small Businesses Protest Backdoor State “Activity” Taxes
AllBusiness.com
By KEITH GIRARD
When Barry Godwin, the comptroller of a South Carolina pleasure boat company, received a call from a New Jersey revenue agent last July, he could hardly believe his ears. A truckload of boats bound for Massachusetts had been stopped at a weigh station, and the agent was demanding $46,200 in "back taxes."
Goodwin's 240-employee company, Stingray Boats, has never had a physical presence in New Jersey. But the revenue agent had determined through a conversation with the driver that Stingray had a "business nexus" with the state because it supplied boats to an independent New Jersey dealer. Therefore, it owed state taxes. It was either pay up or the boats would be impounded, he was told. The company had little choice; it paid.
"The manner in which the State of New Jersey acted is commonly defined as extortion," Goodwin told the House Small Business Committee this week. The hearing was called to examine a trend that is alarming small businesses across the country. A growing number of states are imposing so-called "business activity" taxes on companies that have a connection, or "nexus," with the state. A nexus can exist, even though a business has no employees or physical presence in the state.
Rep Steve Chabot, R-Ohio, the committee's ranking member, said the hearing revealed that the definition of what constitutes "economic activity" left too much room for small businesses' comfort. "These new avenues of commerce have become frequent and favorite targets of overeager tax assessors," he said.
(Click here to read the complete article)
Friday, February 08, 2008
Locals shed light on health crisis
The Cincinnati Business Courier
Opinion Page
In the midst of a presidential primary election, a Cincinnati doctor helped the U.S. House committee on small business dip its toe into a debate about which both its Democratic leadership and its Republican leader - Congressman Steve Chabot - can easily agree.
At a hearing last month before the House Small Business Committee, physician R. Stephen Eby spoke about how the nation's health care crisis is affecting his practice. In each of the last five years, the cost of a health insurance policy has increased an average of 16 percent…
…Chabot said the testimony of Eby and five other small-business owners were solicited to make the point to Congress that action on health care legislation for small groups is needed even before a major fix is readied by the next administration.
"What is most troublesome about these stories is that they are not exceptional," Chabot said. "Millions of small-business owners live on the fringe of providing or suspending care."
(Click here to read the complete article – subscription required)
Thursday, January 24, 2008
Putting a human face on the health care crisis
The Washington Post and AllBusiness.com
By KEITH GIRARD
For the past 18 years, Cathey Sandman has owned her own small business, catering to as many as 18 children a day in her home-based child care center in Lockport, N.Y. To the 13 families who rely on her, she provides a critically needed service. Without the center, she knows many would be hard-pressed to find care elsewhere.
It's one of the reasons she keeps working even though two years ago she joined the ranks of 27 million other people who own or work for a small business, yet have no health insurance. "Five years ago my husband joined my business as my assistant and business partner," she told lawmakers at a congressional hearing this week. "We had to purchase our own health insurance and found it expensive but affordable."
But after consecutive annual premium increases (up 100 percent in six years), they made the painful decision to give up their coverage. "It was not an easy choice, but after the last few premium increases the monthly cost for our health insurance was the same as the cost of our monthly mortgage payment," she says.
(Click here to read the complete article)
Thursday, January 24, 2008
Doctor Testifies about High Health Premiums
The Cincinnati Enquirer
By MALIA RULON
A Cincinnati doctor told members of the House Small Business Committee on Wednesday that the cost of getting health insurance through his practice is so high that he and his wife can't even manage to pay for it.
"The premiums are unaffordable," said Dr. Stephen Eby, a primary care physician at Western Family Physicians.
Eby said that his wife, a registered nurse, had to take a second job with a large hospital system so they could have access to affordable health insurance.
"The inability of medical doctors to offer adequate health insurance benefits to their employees, or in some cases even themselves, is more proof that a health insurance crisis exists today in this country," Eby told lawmakers.
Several small business owners, including Eby, testified at Wednesday's hearing about their plight in trying to provide health care insurance to employees.
(Click here to read the complete article)
Tuesday, January 15, 2008
How to help women-owned small businesses
The Hill
By STEVEN PRESTON, Guest columnist and SBA Administrator
In 1994, Congress set a government-wide target that 5 percent of all federal contracts should go to women-owned small businesses (WOSBs). More recently, legislation was signed into law creating a set-aside for such businesses but requiring that the Small Business Administration study the issue to determine in which — if any — of the government’s 313 contracting categories, many of which are defense-related, WOSBs were underrepresented.
Since then there has been an SBA study, a National Academy of Sciences review, a court case, and an external, independent study by the respected RAND Corporation on the issue. The RAND study concluded that WOSBs were underrepresented in four contracting categories, based on a review of dollars going to such firms.
Two weeks ago, based upon the RAND study, statutory law and constitutional precedent, SBA issued a proposed set-aside rule for women-owned small businesses. Our responsibility was to implement the statute in a constitutional manner, and that is what we’ve done.
(Click here to read the complete article)
Tuesday, January 08, 2008
Business.gov Unveils New State and Local Features
Courtesy of the SBA Press Office
Business.gov, the official business link to the U.S. government, has launched a new Google-based custom search and expanded content that make it easier for small business owners to find essential information needed to run their operations, including forms, licenses, permits and regulatory information from federal, state and local governments.
The new search capabilities have been tailored to meet the needs of the nation’s small businesses using the Google Custom Search Engine service. The new search engine filters the Google.com index for results business owners can trust.
Business.gov has also expanded the scope of its content. Business owners now have access to over 8,000 state, territory, county, and city government web sites providing information on starting and managing a business while complying with regulations from all levels of government.
(Click here to access the site’s small business guides and other information)
Thursday, January 3, 2008
Can’t Live Without Credit Cards? Here’s How to Live with Them
AllBusiness.com
By KEITH GIRARD
Small businesses are hooked on plastic. Credit cards are now the No. 1 source of small business financing, but on the downside, more than 70 percent of business owners carry a month-to-month balance. For many, it's a love-hate relationship. But lately it's grown to become more of the latter and less of the former.
A majority of small business owners (53 percent) say their credit card terms have grown worse over the past five years, according to a recent survey by the National Small Business Association (NSBA). The Washington, D.C., group has become a leading advocate for credit card reform on Capitol Hill, where bills are pending to change some controversial industry practices.
(Click here to read the complete article)
Thursday, December 20, 2007
SBA Unveils its 2007 Year in Review Report
The U.S. Small Business Administration
NEWS RELEASE
Washington - The U.S. Small Business Administration today released a 10- page report marking the agency’s accomplishments during calendar year 2007.
The agency’s accomplishments during the year enabled it to more effectively foster small business ownership and help people quickly get back on their feet after natural disasters.
Looking back on the year, it is clear the SBA has made substantial progress. Internal operations are more effective and efficient, with every SBA department taking on new challenges, goals and initiatives launched by Administrator Steve Preston, who took the reins at the agency in July 2006.
Looking forward, the SBA has much to do in 2008 to achieve Administrator Preston’s reforms, but 2007 was a turning point indicating positive results to come.
(Click here to read the report)
Wednesday, December 12, 2007
Small Businesses Can Cope With Illnesses
The New York Times
By FLOYD NORRIS
The Securities and Exchange Commission plans to delay for another year the requirement that small companies report on the state of their internal financial controls, the agency’s chairman, Christopher Cox, is expected to tell lawmakers on Wednesday.
In testimony prepared for a hearing of the House Small Business Committee, Mr. Cox said that he would propose delaying the rules until 2009 and that the decision on whether to require compliance would then be based in part on a study of costs to be conducted by the commission’s economists.
"More than five years since the Sarbanes-Oxley Act was signed into law, there are roughly 5,000 firms in the smaller public companies category that still aren’t required to provide an auditor’s report on their internal controls, as required by Section 404(b)," Mr. Cox said, according to a copy of his prepared testimony provided by a Congressional staff member.
(Click here to read the complete article)
Thursday, December 06, 2007
How I just said no to low-cost offshoring
Fortune Small Business
By LUCIE VOVES
I love a challenge. But I was discouraged by the reaction one of my sales reps got when she asked a university bookshop in Boulder to carry our custom diploma frames. The manager told us she could barely get students to buy low-end metal models. "How do you expect me to sell a $99 product if I can move only 30 frames a year at $34.95?" she asked. I knew from the prices she was charging that she had chosen a brand that was mass-produced overseas. The encounter was a harsh reminder of how much work I had to do to keep my firm alive.
Competition from the Far East was the last thing on my mind when I started Church Hill Classics in the basement of my house in Newtown, Conn. As a former corporate marketing executive, I had noticed that few university bookstores sold top-quality frames that incorporated their school logos. I decided to fill this niche. Starting with my alma mater, Dartmouth College, I built my company into a one-stop source. Today nearly 700 campus bookstores carry our products. We expect to bring in $6 million in sales this year and are profitable.
(Click here to read the complete article)
Thursday, December 06, 2007
Small Businesses Can Cope With Illnesses
The New York Times
By THE ASSOCIATED PRESS
The winter can be a hard time for staffing at small businesses -- it's not just the holidays that thin employee ranks, it's also colds and the flu. Owners can cope by making it easier for staffers to telecommute and by having a pool of workers who can fill in.
In short, planning ahead will make it far easier for a small company to get through a spate of employee absences.
"You always have to have a contingency plan," said Jeff Evans, general manager of Lake Naomi Club, a country club community in Pocono Pines, Pa. "People are going to come to the facility regardless of the fact that a lot of people have been hit with the flu."
(Click here to read the complete article)
Thursday, November 22, 2007
The Business of Thanksgiving
Small Business and Entrepreneurship Council
By RAYMOND J. KEATING
The Pilgrims celebrated the first Thanksgiving in 1621. But it wasn't until 1863 when President Abraham Lincoln declared it a national holiday.
It's a day for families across the nation to gather together and give thanks for the considerable blessings we have in the United States. That appreciation and celebration, of course, are expressed in part around the dinner table during a Thanksgiving meal.
It turns out that small businesses play a major role in making the Thanksgiving dinner a reality. The SBA defines small businesses as firms with fewer than 500 employees. That's fine, but some might debate if a company with 300 or 400 workers is small or mid-sized. But most would agree that firms with less than 20 employees certainly are small.
(Click here to read more about what small businesses are bringing to the table this Thanksgiving)
Monday, November 19, 2007
House helps minority contractors, hurts HUBZones
Washington Business Journal
By KENT HOOVER
Minority-owned businesses could benefit at the expense of businesses located in low-income areas if the Senate goes along with legislation passed by the House.
The Small Business Contracting Improvements Act, which passed the House by a 334-80 vote Oct. 30, would increase the net-worth limit for owners of small businesses entering the 8(a) program from $250,000 to $550,000.
Companies in the 8(a) program, which is open to socially and economically disadvantaged businesses, are eligible for contract set-asides and other procurement preferences. Racial minorities are presumed to be socially and economically disadvantaged.
(Click here to read the complete article)
Note: Ranking Member Chabot voted against the legislation. The article goes on to discuss Chabot’s view on the bill:
Rep. Steve Chabot, R-Ohio, said the House bill would hurt the Hubzone program's ability to promote economic development in low-income areas.
"Rather than growing opportunities for all small businesses," the legislation "pits all of these deserving groups against one another," said Chabot, the ranking Republican on the House Small Business Committee.
Tuesday, November 14, 2007
U.S. angels see heavenly returns
Fortune Small Business
By MALIKA WORRALL
Angel investors operating in organized groups are seeing average returns on investment similar to those enjoyed by venture capitalists, according to a new study.
Angel financing has long been a first-stop source of capital for startup businesses. But angel returns on investment have mostly been a matter of speculation for investors and entrepreneurs alike.
Released Monday by the Ewing Marion Kauffman Foundation and the Angel Capital Education Foundation, the "Returns of Angel Investors in Groups" study claims to be the largest of its kind. The study shows that organized angel investor groups in North America have seen average returns of as much as 2.6 times their initial investment over three and a half years from investment to exit.
(Click here to read the complete article)
Thursday, November 8, 2007
What Economic Slowdown? Small Businesses Grow Stronger
The New York Times
By BRENT BOWERS
EVEN as oil prices surge, the housing market contracts, Wall Street reels and multibillion-dollar deals falter, small businesses are flourishing and, in fact, are helping to buoy the economy, experts say.
Last week, for example, a monthly report released jointly by Automatic Data Processing Inc., the nation’s largest provider of payroll services, and Macroeconomic Advisers, a St. Louis consulting firm, showed an increase in private sector employment in October of 106,000. That included a surge of 63,000 at businesses with fewer than 50 employees, a gain of 50,000 at businesses with 50 to 499 employees — and a loss of 7,000 at companies with more than 500 employees.
“I travel a lot and speak to a lot of small business groups,” said Joel Prakken, chairman of Macroeconomic Advisers. “What I hear is much more upbeat than what you read in the financial press. Small business owners know about the worries hanging over Wall Street. But they are doing well. Interest rates are low, the stock market is high. They can raise money. The global economy is very strong. They can expand their global reach, and they are doing it.”
The latest numbers marked an acceleration in job growth from an average of 43,000 over the previous three months, Mr. Prakken said. During that time, small businesses were also the main engine of job creation, he added.
(Click here to read the complete article)
Note: On Wednesday, November 7, Governor Frederic Mishkin of the Federal Reserve Board, appeared before the Committee to discuss the state of the small business economy. Mishkin said that though “credit conditions have no doubt tightened,” the Fed has seen U.S. “small businesses seem generally to have been able to retain access to credit.” He delivered his strictest warning on the subject of fiscal sustainability. Acknowledging the “current level of uncertainty about the future is unusually high,” Mishkin said he was concerned about not only spending today, but about the government meeting its future obligations, namely Social Security and Medicare.
Wednesday, November 7, 2007
Tax bill has small businesses seeing red
Market Watch
By ROBERT SCHROEDER
The House's top tax-writer claims that small business owners would enjoy "overwhelming" relief under a major reform bill he recently introduced. So why are small business advocates underwhelmed -- and in many cases downright worried?
The answer: despite a proposed elimination of the alternative minimum tax and an extension of expensing rules, the so-called "mother of all tax reforms" also contains a potentially punishing hike in rates small businesses would have to pay, as well as a repeal of a deduction for making things in the United States.
Add all that up, and the big tax reform bill is off to a bad start with the "little guy" -- just in time for election season.
"We're very concerned about the Rangel tax bill," says Ron Bullock, chairman and chief executive of Bison Gear and Engineering Corp., a St. Charles, Ill.-based motor manufacturer that employs 250 people and does sales of about $50 million a year. "It's enough to make me plum upset."
(Click here to read the complete article)
Note: The House Ways and Means Republicans issued a warning that small businesses would face a “triple whammy” under the Rangel tax plan:
Millions of Americans who own small businesses and who pay taxes on that income on their individual tax returns are going to face a triple-whammy. First, they will be hit with the 4% surtax on some of their income. Second, many of them will lose the Section 199 manufacturing deduction that lowers taxes on their business income. And third, this is happening at the same time as incorporated businesses get an across-the-board rate cut, making it even tougher for these small business engines of job-creation to compete.
Monday, November 05, 2007
Tax plan could hurt more firms than it helps
The Washington Business Journal
By KENT HOOVER
Corporate tax rates would be reduced under the tax reform plan proposed by a powerful House Democrat, but many small business owners who pay individual income taxes on their company's profits could face higher taxes.
Rep. Charles Rangel's plan is significant because of who he is: chairman of the House Ways and Means Committee, which handles tax legislation. It's also significant because of what it represents: a preview of tax reforms that eventually may be passed by Congress.
The bill won't even be voted on until next year, but Rangel plans action this fall on a one-year fix of the alternative minimum tax and one-year extensions of popular tax breaks, such as the research and development credit.
(Click here to read the complete article)
Friday, November 02, 2007
Exec favors free-trade deal
The Cincinnati Enquirer
By MALIA RULON
The president of a Harrison-based plastics company that makes the material used on the bottom of high-end snowboards told lawmakers Thursday that free-trade deals benefit his business.
"It makes it less costly for me, and there's a lot less red tape," said Gary R. Ellerhorst, president and CEO of Crown Plastics.
Ellerhorst was one of several small entrepreneurs who testified at a House Small Business Committee hearing on four trade agreements - with Peru, Panama, Colombia and South Korea - that are now pending before Congress.
U.S. Rep. Steve Chabot of Westwood, the top Republican on the committee, said free-trade agreements help U.S. workers, farmers, ranchers and small businesses.
(Click here to read the complete article)
Friday, November 2, 2007
Payrolls Grow by Strong 166,000 in October
The Associated Press
By JEANNINE AVERSA
Employers boosted payrolls by a surprisingly strong 166,000 in October, the most in five months, an encouraging sign that the nation's employment climate is holding up relatively well against the strains of a housing collapse and credit crunch.
The Labor Department's report, released Friday, also showed that the unemployment rate held steady at 4.7 percent for the second month in a row. It's a figure that is considered low by historical standards.
Job gains were logged for professional and business services, education and health care, leisure and hospitality, and for the government. Those employment increases more than offset jobs losses in manufacturing, construction and retail _ casualties of the problems plaguing the housing market.
(Click here to read the complete article)
Wednesday, October 31, 2007
Halloween: Powered by Small Business
The Washington Post
By Sharon McLoone
As you dutifully dole out Halloween treats today and enjoy your neighborhood costumes, peruse some of these statistics culled from 2004 U.S. Census Bureau data.
- Ninety-four percent of the 135 businesses in the nation that made chocolate and confections from cacao beans had fewer than 500 employees. Seventy-six percent of the total, or 103 firms, had fewer than 20 workers.
- About 1,038 entities were in the business of making confections from purchased chocolate and 78 percent of them, or 807, had fewer than 20 employees.
- There were 479 makers of non-chocolate candies across the nation and 95 percent of them, or 457, boasted fewer than 500 employees while 351 had fewer than 20 staffers.
(Click to read complete article)
Monday, October 22, 2007
House delays contractor withholding requirement
The Washington Business Journal
By KENT HOOVER
The House approved legislation that delays a requirement that local, state and federal governments withhold 3 percent of their payments to contractors.
The Tax Collection Responsibility Act moves back the effective date of the withholding requirement from 2011 to 2012. The requirement, which is aimed at making sure the federal government collects what it is owed in income taxes, originally was included in a tax bill enacted in 2006. Business groups and local and state officials have been pushing for its repeal ever since.
(Click here to read the complete article)
Note: The Committee held a hearing on the three percent withholding issue in March. At the hearing, Ranking Member Chabot noted, “Some [government contractors] may be forced to pass some of the withholding amount down to subcontractors. This can be especially harmful to small businesses down the supply chain… We need to be looking at ways to foster growth and productivity in the small business sector, not penalize everybody for the actions of a few.”
Friday, October 19, 2007
Changing Internet tax setup would hurt small businesses
The Cincinnati Business Courier
By STEVE CHABOT
Uncle Sam might never have opened up a laptop to surf the Net, but logged on or not, he seems determined to get a piece of the action.
On Oct. 16, the House voted to extend the federal Internet tax moratorium another four years. However, by refusing to allow a vote on making the tax ban permanent, Democratic leadership has left the door open for needless government regulation and taxation. It is time to ensure that door is closed.
The evolution of the Internet has contributed directly to the growth of the U.S. economy and accelerated the pace of innovation. Taxing Internet access would negatively impact the lives of hundreds of millions of Americans, from old friends who use it to keep in touch, to soldiers overseas who use it to communicate with their families, to businesses that rely on e-commerce for a healthy bottom line.
Small businesses, in particular, would feel the sting of Internet taxation. The Internet has broken down barriers faced by Main Street, USA. A 2006 survey conducted by www.allbusiness.com found that 61 percent of small-business owners said that the Internet had helped open new markets for their businesses. It is not unprecedented to find a mom-and-pop auto shop that finds success selling rare parts to classic car enthusiasts scouring eBay for the perfect seat cushion, or a stay-at-home mom who uses the online marketplace to sell handmade jewelry to a customer 300 miles away.
(Click here to read the complete article – subscription required)
Tuesday, October 16, 2007
Should I raid my IRA to grow my business?
Think again, says FSB’s Anne Fisher
Fortune Small Business
By ANNE FISHER
Dear FSB: I'm thinking of withdrawing funds from my IRA early to invest in building the next phase of our guest ranch - Mongolian-style yurts - on the land we own. My partners and I expect the expansion to generate solid revenues. Should we consider using retirement savings as a source of capital?
- David Capocci, Co-Owner, Paca Pride Guest Ranch Granite Falls, Wash.
Dear David: According to Martin Robins, a lawyer in Buffalo Grove, Ill., who often advises entrepreneurs seeking to raise capital, you should only think of tapping into an IRA when you have several decades before you plan to retire - and even then, he dislikes the idea. "Taking money from an IRA will cost you 10% of the balance of the IRA in penalties, and the amount you withdraw will also be subject to state and federal income tax," says Robins. "Your withdrawal could even bump you into a higher tax bracket."
(Click here to read the complete article)
Note: Looking for capital to grow or expand your small business? Visit our Resources section to get more information and learn about lending opportunities.
Monday, October 15, 2007
Female Ownership Matters
Business Week
By STACY PERMAN
Patricia Karter, Dancing Deer Bakery CEO, thinks a better gender balance in the business world could improve society as a whole
The Entrepreneur: Patricia Karter, 51
Background: An artist with an MBA, Patricia Karter is the co-founder and CEO of Dancing Deer Baking. Based in Roxbury, Mass., the little bakery with a strong social mission aims to grow into a $50 million business—without sacrificing its core values and practices: community philanthropy, employee development, and the use of only natural ingredients. Today, Karter, who has received a round of institutional capital, is pursuing another equity capital round—this time using women angel investors.
The Company: Launched in 1994, Dancing Deer Bakery has clung to a simple yet unconventional business philosophy: If bakers love what they do, it shows in the food. More than a decade later, that guiding principle has helped propel the all-natural baked goods outfit into a fast-growing business.
(Click here to read the complete article)
Monday, October 8, 2007
A Halloween Reminder to Avoid Tax Audit Hobgoblins
AllBusiness.com
By KEITH GIRARD
October is a witching month. Summer fades; leaves turn golden hues and divine beings and spirits return, if only for one night on Halloween, to haunt us for our past transgressions. At least that's according to old Celtic folklore.
But ghost and goblins aside, Halloween is good reminder for small business owners to get cracking on organizing tax records and making plans for any last-minute deductions to minimize your taxes. Deductions and such have to be taken before Dec. 31, in most cases, to qualify for the current tax year.
In its quest to close the so-called "tax gap" (the amount of tax collected versus the amount taxpayers really owe), the Internal Revenue Service this year will be stepping up audits and other enforcement actions, aimed principally at small businesses. The best way to avoid a dreaded audit is to make sure your records are organized and your returns are filed on time.
(Click here to read the complete article)
Monday, October 1, 2007
Small Firms Keep an Eye on High Court Cases
The Washington Post
By SHARON McLOONE
The Supreme Court term that opened today will see the justices weigh a handful of cases involving large corporations that could have big repercussions for small business.
Hall Street Associates v. Mattel concerns arbitration awards. The National Federation of Independent Businesses asked the judges in a friend-of-the-court brief to allow parties entering arbitration proceedings to ask for judicial review if one or both of the parties believes that the arbiter came to a decision erroneously.
The Federal Arbitration Act's "limited standard of judicial review exposes businesses to the risk of irrational or excessive arbitral awards that are unreviewable on the merits," the NFIB and the New England Legal Foundation co-wrote in a brief.
An NFIB research poll found that 21 percent of small businesses use arbitration to resolve disputes, according to Karen Harned, executive director of the association's legal foundation.
(Click here to read the complete article
Thursday, September 27, 2007
Small Business, Big Clients: Don't fear taking on giant corporations as clients and business partners. Everyone benefits when Goliath hires David.
Entrepreneur.com
By LAURA TIFFANY
Does size matter? It's a cheeky question, but also a valid one. As a small company, can you take on a large corporate client and serve them just as well as--if not better than--a big vendor can?
Michael Fallone can offer a resounding "yes" to that question. After all, he and his co-founder, Doug Bartow, 39, and just four employees developed the design and creative foundation and executed many of the elements for the Harry Potter & the Deathly Hollows U.S. marketing campaign.
A self-promotional mini-poster got Fallone's creative agency, id29, in the proverbial door at Harry Potter publisher Scholastic. Serendipitously, Scholastic's creative director plucked the poster from the mailroom where it was wallowing, as it was addressed to someone who no longer worked there.
(Click here to read the complete article)
Wednesday, September 26, 2007
Small Business on Capitol Hill
The Washington Post
By SHARON McLOONE
Lawmakers and others in the Capitol Hill community are in full swing this month addressing small business issues. Here are some highlights of recent action on the Hill…
… Access to Capital: The House Small Business Committee this week voted to adopt the Small Business Investment Improvements Act introduced by Rep. Jason Altmire (D-Pa.), chairman of the Subcommittee on Investigation and Oversight, to aid entrepreneurs in securing funding. H.R. 3567 would overhaul two Small Business Administration programs designed to aid small firms. It also would create the Angel Investment Program to offer seed capital. The panel is holding a hearing Thursday morning on the issue of small enterprises' access to money to grow their businesses. Meanwhile, a House Small Business subcommittee was scheduled to hold a hearing this morning on renewable energy tax incentive possibilities.
(Click here to read the complete article)
Monday, September 24, 2007
Avondale Project Nears Launch
The Cincinnati Enquirer
By LISA BERNARD-KUHN
Momentum is building on a nearly $100 million redevelopment effort that community and business leaders say is vital to the neighborhood's rejuvenation.
Today officials with the Uptown Consortium and community leaders in Avondale are slated to gather at 9 a.m. to mark the dedication of a mixed-use project that includes:
A 100,000-square-foot office building along Burnet Avenue and multilevel parking garage at Northern Avenue for Cincinnati Children's Hospital Medical Center estimated at $50 million
A neighboring $8 million, 45,000-square-foot office building for the Cincinnati Herald, which will include street-level retail.
An estimated $10 million townhouse development along Harvey Avenue, between Erkenbrecker and Northern avenues.
(Click here to read the complete article)
Note: Earlier this year, the Committee held a field hearing in the Avondale neighborhood of Cincinnati, Ohio to explore community revitalization through the New Markets Tax Credit program and SBA loan programs.
Thursday, September 20, 2007
Forbes: Secrets of the Self Made 2007
Forbes Magazine
By LISA LaMOTTA
As kids, America's richest entrepreneurs dreamt of curing patients, flying jets, writing plays and bagging base hits for the Chicago Cubs. Instead, they started hundreds of companies, employed hundreds of thousands of people and bagged $1.06 trillion.
In the accompanying slide shows, 21 self-made members of the 2007 Forbes 400 list offer an exclusive, introspective and often playful peek into their best days, worst qualities and hardest lessons.
We also coaxed them into sharing their thoughts on how to invest $100,000 right now (a few said put it with them); luck's contribution to their success (95%, says Kenny Troutt, founder of Excel Communications); and the pitfalls of leaving too much to the kids (money man Richard Rainwater says $50 million is too much, while $1 billion each works for supermarket and oil titan John Catsimatidis).
They even told us with whom they would most want to share a cocktail--two said "me."
(Click here to explore the feature)
Monday, September 17, 2007
Women’s Business Centers in the Spotlight
The Washington Post
By SHARON McLOONE
Lawmakers on Capitol Hill are turning their sights to women's business issues with an eye on Women's Business Centers, a program partly funded by the Small Business Administration.
The Senate Small Business and Entrepreneurship Committee has scheduled a Sept. 20 hearing on the future of women's small business programs that is expected to be lively. The House Small Business Committee plans a hearing on SBA contracting issues, including women's programs, on Wednesday.
(Click here to read the complete article)
Monday, September 17, 2007
Women’s Business Centers in the Spotlight
The Washington Post
By SHARON McLOONE
Lawmakers on Capitol Hill are turning their sights to women's business issues with an eye on Women's Business Centers, a program partly funded by the Small Business Administration.
The Senate Small Business and Entrepreneurship Committee has scheduled a Sept. 20 hearing on the future of women's small business programs that is expected to be lively. The House Small Business Committee plans a hearing on SBA contracting issues, including women's programs, on Wednesday.
(Click here to read the complete article)
Friday, September 14, 2007
Contentious Debate Looms Over Small Business Venture Capital
The New York Times
By KEITH F. GIRARD
In the parlance of venture capitalists, it's known as the "valley of death," a place that small technology companies fear. No matter how good their science, the valley awaits if they can't bridge the financial gap between the lab and their first commercial product.
In many cases, however, nascent tech firms can bridge the valley by tapping the government's small business programs, which provide everything from loan guarantees and grants to fee waivers for government services. But therein lies the rub. Can a small business still be considered small if it's substantially owned by a venture capital firm with hundreds, if not thousands, of employees?
The question is at the heart of a brewing debate on Capitol Hill that could become one of the most contentious facing small businesses in recent memory. Right now, the correct answer is "no." But a legislative proposal would amend the landmark Small Business Act to make it possible for venture-backed companies to be considered small businesses.
While the measure would be a boon to the venture capital industry, a recent hearing on Capitol Hill previewed just how heated the issue will be. Rep. Steve Chabot, R-Ohio, the ranking minority member on the House Small Business Committee, called the proposal "eviscerating." It would, he said, "drastically change the long-held standard [under the act] that a small business is one that is 'independently owned and operated.'"
(Click here to read the complete article)
Wednesday, September 12, 2007
Ranking Member Chabot on Jim Blasingame’s | 