What are the small business health care options?

• If you don’t have employees, you can rely on a spouse or domestic partner’s health insurance, and hope it doesn’t get cut.  If your spouse’s health care is eliminated, you will have to pay the monthly premiums, which could cost you more than you can afford.

• You can hire only contract workers, so you don’t have employees to worry about.  But you don’t have as much control over these workers, and you don’t have loyal, full-time people to count on.

• You can find a health care policy with a high deductible (including a Health Savings Account), which means you are only providing catastrophic care.  This option is more affordable than paying for full coverage.

• You can require employees to pay part of the cost, or you can pay for employee coverage and not families, or some variation on this option.  But you are back to the problem of competition, because larger companies are offering better coverage, and many people are looking for jobs just for the health coverage these days.

• You can hope that the new government health plan will include something for small businesses, but, as the National Federation of Independent Business says, it will probably be a “healthcare system run with the efficiency of the Post Office and the compassion of the IRS, at Pentagon prices.”

For now, I’m watching from the sidelines. I’m hoping that, when the dust clears on the Obama health care plan, there will be reasonable options for small businesses, like co-operatives, which could reduce costs by spreading them over a larger group.  I hate to say things will get better, but they can’t get much worse, can they?

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Post from: EveryJoe

Small Business and the Health Care Dilemma

The average income for these solo small businesses is under $10,000 in annual receipts.  Not a wealthy group, by any means.  Small businesses struggle in the best of times, and these certainly aren’t great times for business.  And it is difficult for small businesses as a group to be heard and to have issues understood by local, state, and federal government entities.

Imagine what power small businesses would wield if we could all unite!  Is it going to happen? Probably not.  Small businesses are both isolated (most operating in homes) and widely dispersed across the U.S.  And we are too busy trying to keep our businesses going to stop to talk to legislators.  There are some advocacy groups for small business, particularly the National Federation of independent Business (NFIB), which has lobbyists in Washington and state capitals.  The organization lobbies on behalf of small businesses on issues such as the “Cap and Trade” energy bill, Employee Free Choice Act, and health care reform.

But small businesses are not going in Washington and the states to get favorable legislation or help with easing credit unless we band together more vocally and visibility. During the presidential elections last year, no one stood up and spoke for small business interests.

What can small businesses do? You can:

• Get together locally with other small businesses, through your local Chamber of Commerce or other local business organization, and make your voice heard on small business issues at the local government level.
• Keep in touch with issues through feeds and other online resources.
• Contact state legislators about state issues that concern you.
• Join with other small businesses to lobby Congress, through the NFIB or other organizations.
• Use Twitter and other social media to follow and contact legislators.

If each small business owner spent just a few minutes a month speaking out on small business issues, legislators might realize we are serious.  And if we banded together more, we might even make changes to help all small businesses survive, even thrive.

The statistics in this post are from a recent report on small businesses and credit/finance, from the SBA’s Office of Advocacy.

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Post from: EveryJoe

Small Business Owners – Unite!

“There’s a lot more business out there in small town America than I ever dreamed of.” Sam Walton.

When I talk to people who are considering where to start a business, I try to steer them to a small town.  I know I am biased – I grew up in a small town, and I love the feel and the workings of a small town.  I have lived in big towns and small towns and I will take a small town any day.

Besides the quality of life in small towns, there are other reasons why small towns are great for business.  In just about any small town, you will find friendly people.  These are people who will welcome your business, as long as you provide something of value at a fair price.  It sounds really too simple, but it is true.

A chiropractor friend of mine spent a lot of time searching for a location.  She ended up in a small town and she worked hard to gain the trust of the people.  She bought an old house and turned it into a home/office.  She went to church and participated in community events.  Today, seven years later, she is very successful, with a full practice and many friends.

If this doesn’t sound like you, that’s OK.  There are plenty of reasons to move to a big city and set up your business.  And if you don’t want to stay in the small town, you can always move on or move up later.  After all, if it worked for Sam Walton, it can work for you.

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Post from: EveryJoe

Small Towns Best Places for Small Business

Benefits of Running Your Business on a Laptop

It is convenient, easy to transport from room to room or from home to office.  Everything is in one place, so you don’t have to switch files back and forth.  You know your software is compatible, because it’s the only software you have. Laptops are often less expensive than PC’s.

Disadvantages of a Laptop-Based Business

You must plug in and out of the laptop every time you change location.  A docking station can eliminate much of this problem, and you can find a docking station to fit your laptop, but the whole docking/undocking process is a pain.  I keep my laptop in one place, and only grudgingly move it.

The biggest disadvantage for me is the lack of a real keyboard.  I have a separate keyboard that I plug in to my laptop because it’s just too tiring to be typing all day on a tine laptop keyboard.  And, yes, I have the wrist rest and the mouse rest, to save my wrists.  The small screen is a problem, too, which means buying a large screen, if you are on the computer all day.

When you get all done with the docking station, large monitor, and the other accessories, what is really the advantage of the laptop?  Only one thing, that I can see: If you need to take it with you when you travel, you have everything you need from your computer ready to go.

Maybe one of these days no one will use PC’s any more. I’m betting the end of the PC will be later, rather than sooner.  What do you think?

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Post from: EveryJoe

Small Business Computing via Laptop

Insurance. You will need insurance, primarily health insurance.  If your spouse works, or if you have health insurance as a retiree or from some other source, you have this covered. If not, you will need to find insurance. You can buy health insurance and consider it a business expense, but check with a tax adviser if you have employees; you will probably have to include them in the policy. Disability insurance that pays if you are ill or out of work for some time seems like a luxury, but it can mean the difference between keeping the business or shutting down.

Emergency Back-up People. Having backups is important.  I’m taking about back-ups at home and at work.  If you have children, how will you handle the inevitable daily issues – sick children, after-school activities, household chores?  At work, do you have someone to keep your business going if you are ill or if you need to leave for a family emergency?  You can’t wait until the emergency happens to figure this stuff out; you need to do it before you start your business.

Cash in the Bank. Most small business advisers suggest you have at least six months’ household expense money in the bank, readily accessible, during your start-up.  Every family should have an emergency fund anyway, but if you are considering starting a small business, you definitely need it.  You can’t count on taking money from your business to pay personal expenses during the first year.  What if your car breaks down and your business is short this month?  Even if you have a spouse who works or other income, having an emergency fund is a necessity.

What If You Don’t Have These Parachutes? You can still open your business, but you are extremely vulnerable.  Getting a big credit line from a bank can help (you can pay for insurance needs and to cover emergencies, and you can hire help for home emergencies, but good luck getting that big bank loan.  In these tough times, small businesses are lucky to get any loan at all to start a business.  Getting these parachutes can also help you sleep at night, and that is a big benefit when you have so many issues to consider in starting your business.

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Post from: EveryJoe

Jumping Into Business? Get a Parachute

According to the Adology survey, small businesses say they will spend money for online advertising (69%), Yellow Pages (54%), newspapers (51%), and direct mail (51%).  This is pretty typical, standard marketing; nothing new and exciting here.  Even online marketing has been around for almost 15 years.

Top of the list. Most small businesses (74%) believe their company “must be one of the first 2-3 that come to a customer’s mind” when they need what the small business owner is selling. This idea is borne out by the fight to be at the top of a Google search for that type of business in that area.

But the survey found that small businesses are not venturing out to try newer forms of marketing: 77% do not use online video, 83% do not podcast, and 82% do not use mobile advertising.

Mobile advertising? Mobile advertising  is advertising on mobile phones, PDAs and wireless devices.  Since the mobile phone/PDA industry has grown exponentially, it has seemed inevitable that mobile advertising would grow at the same rate, and the predictions in late 2007 were optimistic.  An article in Wireless Week said:

Mobile advertising seems to be an industry that’s about ready to explode, chasing the billions already being spent on Internet advertising.

And Yahoo says mobile advertising is primed to total $19 billion by 2012.  But  small businesses seem to have backed off this form of advertising in favor of more traditional forms.  It’s my guess that small businesses don’t have the dollars to spend and their markets are more local and specific.  It doesn’t make much sense for a small business to advertise on a mobile network when their customers are primarily in Des Moines.

If you have experience with newer forms of advertising and marketing, let me know.

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Post from: EveryJoe

Small Businesses Stick to Marketing Basics

Why Give Stuff Away? Three reasons why you should be giving stuff away to people: (1) People respond to gifts by feeling a sense of obligation.  It’s the principle of Reciprocity I talked about several months ago.  If you give them something, they will feel they should do something for you. (2) People can put the gift somewhere to remember your business. (3) They can share the gift with friends as they refer your business to them.

Business cards. This one is pretty obvious.  Every business needs business cards.  The main thing to remember about business cards: They only work if you use them.  You have to give out hundreds of cards to get one person to use it and call you.

Flyers/Brochures. A brochure or flyer can help promote your business if you can get them in the hands of people who will call you.  Flyers are for posting on bulletin boards around town; brochures are for handing out at those events where you will be working.  In both cases, don’t be stingy and order just a few.  Order lots and make sure people take them.  Better yet, get a brochure or flyer in the packet or “goodie bag” that gets handed to everyone at the convention, health fair, or other event.

Something related to  your business. Chiropractors give out bend pens; dentists give out toothbrushes. Health food companies give out water bottles at races.  My hairdresser gives out candy wrapped in paper with her business information on it.  If you can give people something that is cute and funny and reminds them of your business, they will remember you.

Refrigerator Magnets.  I’m a huge fan of refrigerator magnets, especially the ones that look like business cards.  What better place than the refrigerator to put your information so people will see it?  I have magnets on my refrigerator for my veterinarian, appliance repair place, my hairdresser, and my favorite bed and breakfast.

T-shirts. These are a little pricier, but they are fantastic give-aways because people love to wear t-shirts and they will wear them forever.  I worked for a company several years ago that gave away t-shirts at a race, and I still see those t-shirts around town.  Kids particularly love t-shirts, and they get handed down and sold at garage sales, so your good name gets spread everywhere, for many years.

One final thought about give-aways.  Be sure the give-aways are:

(1) Perfect.  Every piece of information should be proofread and double-checked.  A wrong phone number on your business card isn’t going to get you any new customers.

(2) High qualify.  A give-away that doesn’t work, falls apart, or breaks, is not going to help you.

Give-aways are an important part of your business promotion effort, so find a couple that work for you, spend the money and get lots of them.  You will be glad you did.

Post from: EveryJoe

5 Best Small Business Promotion Give-aways

You have a great business, I know.  And you are working hard to do everything you need to do, including marketing, customer service, and managing your finances.  Just don’t forget to promote your business.  What I’m talking about when I say “promotion” are those things you do to keep your small business in the “eye” of the community, to keep people aware that you are still out there, especially if you are selling to the community.

Ways to Promote Your Business. I suggested some ways the small business owner could make sure people were aware of her business:

Get involved in a community event. Every season has some events in the community that you could join.  I am sure you can find some that relate to your business products or services.  If you have a fitness-related business, sponsor a race.  If you are a restaurant, participate in a cook-off or food fest. Set up a booth at the county fair or at a mall event.

Volunteer. There are many ways businesses can help out in any community.  Just being out there and helping, especially if you bring employees along, keeps your name in the public eye and generates lots of good feeling.  Ask for employees to help you volunteer on a Habitat for Humanity house or a Red Cross blood drive, for example.

Create a community event and publicize it. Create your own event, maybe centered around a special day for your type of business, and publicize it.  Get one of the radio stations to do a promotion for the event and invite the community to help you celebrate.

Talk to community groups. I am a big advocate of public speaking to promote your business.  Find community groups that need speakers (they all do!) and get out and talk to them.

Promote on Your Website. Keep your website up to date and use it to promote community events, your own events, your speaking engagements, and anything you can think of that will draw people in.  Have a “What’s Happening In [name of community]” page on the site, and promote the activities you are participating in and those you want people to know about.

Keeping your name out in the community doesn’t take a lot of time and money, but it’s something you should continue to do to let people know you are “still in business.”

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Post from: EveryJoe

5 Great Ways to Promote Your Small Business

Joshua Kennon, who writes the Investing for Beginners GuideSite for About.com, says,

The single biggest threat for those who want to move from the lower or middle class to the “capitalist” class, as some academics have called it, is the payroll tax….[which] effectively serves as a barrier that makes it nearly impossible for the average American to accumulate wealth, especially if he or she is self-employed and forced to pay the entire 15.3% themselves.

A friend told me a story that illustrates this problem. She started her small catering business a couple of years ago and until this year she never had a profit.  This year, her CPA tells her, she will have a profit.  But she won’t see much of that money, because she will have to turn around and give it back in both income taxes and payroll taxes on the profits.  By “payroll taxes” I mean Social Security and Medicare, which business owners must pay at the rate of 15.3 percent on the profits of their businesses.  So if my friend has a $10,000 profit, she must pay income tax on that profit, plus $1530 in payroll tax.

You might say that’s good, because she is building up credits toward her retirement.  Sure, but if she had a capital gain of $10,000, she would not have had to pay the $1530 payroll tax on it.  (The short-term capital gains tax rate is the ordinary income tax rate; the long term capital gains tax rate is currently 15%.) If she had a profit of $10,000 on rental income, she would not have to pay payroll tax on it.  If she earned $10,000 as an employee, she only has to pay half (her employer must pay the other half.)

So how does a small business owner get ahead?  The only way to avoid payroll taxes is not to make a profit, or to shelter some of that profit in qualified benefit plans, like SEP IRA, 401k, or other plans. If your small business is going to make a profit this year for the first time, run, don’t walk, to a reputable financial planner and start talking to this person about what you can do to legitimately and legally get into a qualified plan.

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Post from: EveryJoe

Is Business Profit An Impossible Goal?

Many small business people think they can create a great product, get funding, and start producing that product, and everyone in the world will flock to their business to get that product.  It’s not going to happen.  The “better mousetrap myth” ignores one concept: you have to tall people about your mousetrap so they know where to find you.  Even more, you have to convince them they want that mousetrap, need that mousetrap, and can’t live without it.

Napoleon Hill, author of the classic motivational work Think and Grow Rich, said:

In the end, the customer doesn’t know, or care, if you are small or large as an organization.  She or he only focuses on the garment hanging on the rail in the store.

And Peter Drucker, probably the greatest management guru, said,

“Quality in a product or service is not what the supplier puts in. It is what the customer gets out and is willing to pay for. A product is not quality because it is hard to make and costs a lot of money, as manufacturers typically believe. This is incompetence. Customers pay only for what is of use to them and gives them value. Nothing else constitutes quality.”

if you want your small business to succeed, it’s not enough to build a better mousetrap.  Think first about what problem your customer has and how your mousetrap can solve it. That’s value.  That’s what will make your business successful.

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Post from: EveryJoe

The Better Mousetrap Myth of Business