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Small Business Success Index 5

Index Score*   Grade
SBSI INDEX 73 C- marginal
Capital Access 67 D+
Marketing & Innovation 65 D
Workforce 76 C
Customer Service 88 B+
Computer Technology 75 C
Compliance 92 A-
*Index score is calculated on a 1-100 scale.
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Small Business Owners Face Growing Pains

February 16th, 2012 ::

By Maria Valdez Haubrich

Are you feeling optimistic about 2012 so far? If so, you’re not alone. An overwhelming 85 percent of small business owners believe that 2012 will be a better year for small business than 2011, according to a new survey conducted by RocketLawyer. Only 10 percent thought it would be “about the same.”

But despite the positive outlook, entrepreneurship is not all fun and games. As your company grows, you face new challenges, such as hiring employees, negotiating contracts and expanding to new office space. These growing pains are likely to bring some key challenges in the coming year, admitted entrepreneurs in the survey.

When asked what is the hardest part of running a small business, the top response was “dealing with legal issues.” Cited by 29 percent of respondents, this outranked responses including “managing profit” (26 percent) and “staying ahead of the competition” (19 percent).

What specific legal areas caused the biggest problems for small businesses? The areas that small businesses struggled with most were contract negotiations (cited by 15 percent), real estate transactions (13 percent), corporate compliance and debt collection (both at 12 percent) and incorporation (10 percent).

What are small business owners’ biggest fears about their business? When asked for their number-one legal concern, by far the biggest worry was facing an IRS audit. Even though IRS statistics show that just 1 percent of businesses with under 1 million in sales were audited last year, nearly 37 percent of businesses said they worried about being audited.

In addition, 13.9 percent said their top fear was being victimized by theft or fraud. Another 13.9 percent said they worried most about trademark or patent issues.

These fears aren’t entirely unfounded, either. The majority of small business owners in the survey (52 percent) said they had faced a legal issue or problem in the past year.

Have you faced a legal challenge in your business, or are worries keeping you up at night? Find out how you compare to other entrepreneurs–view full survey results at the RocketLawyer site.

Image by Flickr user Pedro Vera (Creative Commons)

 

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Posted in Business Law, Compliance, Small Business, small business | No Comments »

Small Biz Resource Tip: PayLane

February 9th, 2012 ::

PayLane

If your website is not set up to take payments online, you could be missing out on a multitude of sales opportunities. But getting a merchant account can be costly and time-consuming.  PayLane is a customer-focused online payments provider that processes payments in currencies from over 50 countries and can simplify the merchant account process for your business. Customers can pay by Visa, MasterCard, American Express and PayPal, and your business pays lower fees than with traditional merchant accounts. Check out the PayLane Blog to see what insiders are saying about the features before you sign up.

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Posted in Accounting and Taxes, Compliance, Resources, Small Business, small business, Technology | No Comments »

Small Biz Resource Tip: e-SignLive.com

February 2nd, 2012 ::

e-SignLive.com

No one likes to wait for the signed document to show up in the mail, but a live signature is still required for many business contracts and forms. e-SignLive.com offers a free high-tech solution and an alternative to the pen-on-paper signature. Signers can sign from any device, and there’s no software to download. You can even have multiple signers, and everything is customized to the authentication level you require. If your business requires similar documents be signed over and over, you can create a template to use multiple times. Also, set a due date so signers know when the signature deadline is coming up.

 

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Posted in Business Law, Compliance, Resources, Small Business, small business, Technology | No Comments »

Does This New IRS Form Affect Your Small Business?

January 31st, 2012 ::

By Maria Valdez Haubrich

Will your business be affected by the new 1099-K form the IRS is rolling out this year? Business Finance reports that businesses accepting payments by credit card, debit card, gift card or online payment options such as PayPal, you could be getting 1099-K forms in the mail.

The form or forms will be sent to you payment settlement entities such as banks if gross payments to your business by that entity in 2011 totaled 1) more than $20,000 and 2) more than 200 transactions. Payment settlement entities report the information to the IRS as well; the forms are due to small businesses by today, January 31.

The new reporting requirement was created as part of the Housing Assistance Tax Act of 2008 and is intended to make sure that merchants accurately report their income from credit and other payment cards. The goal is to increase compliance in reporting income among merchants, and over 10 years, the new requirement is expected to raise more than $9.5 billion in taxes on income that would otherwise have gone unreported or underreported.

Business Finance says the 1099-K forms will include contact information on both the entity filing the tax return and the payee; the gross amount of merchant card or third-party network payments the payee received in 2011, detailed by month. If your company gets a 1099-K, you must report the amounts on your business taxes.

If you sell products and services, you might get a 1099-K and a 1099-MISC reporting the sale of the same service, Business Finance notes. If so, you will have to contact the entity that issued the forms and ask them to correct the error, or they will be reporting your income twice to the IRS.

You can find detailed explanations about 1099-K forms and information on how to report the income on your tax forms at the IRS website.

Image Courtesy Karen Axelton

 

 

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Posted in Accounting and Taxes, Compliance, Small Business, small business | No Comments »

Small Biz Resource Tip: Wave Accounting

January 24th, 2012 ::

Wave Accounting

For many businesses just starting out, and even for those running operations with just a few employees, hiring an accountant is an unnecessary expense. Wave Accounting is a free online accounting solution that can help you with features such as unlimited invoicing, expense tracking, reporting, personal finance and more. Perfect for businesses with less than nine employees, Wave Accounting gives you multiuser and multi-business access and eliminates the pain of manual entries for many business transactions. To enable the solution for free, Wave offers business suppliers a place on their site to offer you other needed business solutions.

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Posted in Accounting and Taxes, Compliance, Resources, Small Business, small business, Uncategorized | No Comments »

If You’ve Misclassified Workers, IRS Program Can Help

January 17th, 2012 ::

By Karen Axelton

Has your business classified workers as independent contractors who should really be classified as employees? This sensitive issue is a big concern for small business owners. More and more entrepreneurs are relying on independent contractors to handle their workloads, but the definition of “independent contractor” can be hazy. The Department of Labor is taking new aim at this problem for 2012, according to Compensation Café, and is joining with the IRS to share information, help reduce misclassification of employees and improve employer compliance.

The Labor Department will be focusing on enforcing laws and auditing employers, but the IRS is being a bit more forgiving. The agency’s Voluntary Classification Settlement Program, part of its “Fresh Start” initiative, allows business owners to come forward voluntarily and settle their misclassification issues instead of trembling in fear of an audit.

VCSP has several advantages:

  • Businesses can reclassify workers as employees for future tax periods and pay just 10 percent of the employment tax liability that results from this reclassification for the most recent tax year.
  • There are no penalties or interest on the employment tax liability.
  • The IRS will not audit your business on these workers’ classifications for prior years.

However, it’s not all peaches and cream. In order to get these terms, you must agree that the standard three-year “look-back” window for the IRS to review your employment taxes (and see if you owe more money) is extended to six years.

To apply for VCSP, complete Form 8952, Application for Voluntary Classification Settlement Program, at least 60 days before you want to begin treating the workers as employees. Your business must also meet these eligibility criteria:

  • Workers to be reclassified must have been consistently treated as non-employees;
  • Employer must have filed the appropriate 1099 forms for the prior three years;
  • Employer cannot currently be undergoing a classification audit by the IRS, Department of Labor or any state agency;
  • If the employer was previously audited by the IRS, DOL or any state agency, it must have complied with the results.

Being accepted into the VCSP program is not automatic; however, even if the IRS rejects your application, the agency has said that this rejection doesn’t automatically trigger an audit of your business. You are also allowed to reapply for the program in the future.

Compensation Café notes, however, that although the IRS and the DOL are collaborating on this issue, the DOL isn’t offering amnesty. That means participating in the VCSP program could lead to your business being assessed back taxes, penalties and fines by the DOL and/or state agencies. So before plunging into VCSP headfirst, talk to your accountant to determine how this could affect your payroll, benefits programs, unemployment and workers compensation insurance, and the possible additional penalties you might face.

Image by Flickr user MoneyBlogNewz (Creative Commons)

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Posted in Accounting and Taxes, Business Law, Compliance, Small Business, small business | 3 Comments »

Small Biz Resource Tip: Timesheet

January 12th, 2012 ::

Timesheet

Sometimes keeping track of the time spent on a project can get complicated, and when there’s more than one project going on, time can “get away” from you. For an easy solution for recording how much time is spent on a project, check out the Timesheet app available on the Android Market website. The app makes it easy to start the clock on a project, add breaks, make notes and add project details. At any time you’ll be able to see overviews and statistics on the project, and you can export the data to an Excel file (XLS, CSV) or to XML format.

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Posted in Accounting and Taxes, Compliance, Resources, Small Business, small business | No Comments »

Small Biz Resource Tip: IRS: Starting, Operating, or Closing a Business

January 5th, 2012 ::

IRS: Starting, Operating, or Closing a Business

No matter what stage your business is in, it’s important to know what the legal requirements are, especially when it comes to paying taxes. The IRS website has dedicated information to help small business owners navigate through the confusing waters of tax compliance. If you’re starting out you can find out the tax implications of each type of business structure (corporation, LLC, etc.) plus how to select an accounting method and retirement plan. Other sections include operating a business (employment taxes and deductible business expenses) and information on closing a business, such as what documents need filing and what to do with revenue received.

 

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Posted in Accounting and Taxes, Business Law, Compliance, Resources, Small Business, small business | No Comments »

The New Risk to Your Business From Employees’ Social Media Use

December 28th, 2011 ::

By Rieva Lesonsky

I know you’ve heard about the risks to your business’s reputation from employees using social media irresponsibly. Whether it’s an employee who gives a flippant response on your company’s Facebook page, accidentally reveals future business strategies or posts criticism of your company on his or her own personal accounts, there are many ways social media can go haywire. But now there’s a new worry: Employees who run social media accounts for your business could quit your company—and take their “followers” with them when they enter competitive businesses.

CFO.com recently reported on a California case in which an employee who managed a company Twitter account left the company and took the account—and its 17,000 followers—with him. (He just switched the account into his own name.) The company valued the followers at $42,000 and sued the ex-employee for stealing company property and causing “damages to its business, reputation and goodwill, including lost users and user opportunities.”

A federal court denied the employee’s motion to dismiss the suit, which is moving forward. However, the company has some hurdles to jump to prove its case. First, they’ll have to prove they owned the account and went through the proper measures to protect it, such as keeping the password confidential. They’ll also have to prove the monetary value of the account.

With social media being such an informal mode of marketing, it’s easy to see how this type of situation could arise. You have an employee start a Facebook or Twitter account, he or she gets good at it and catches on—and you never put anything in writing as to your ownership of the account or restrictions on it. CFO.com notes that social media can now be considered part of a company’s “goodwill” and, as such, needs to be valued and protected like any other form of goodwill.

CFO.com suggests three steps to protect your business from such a situation:

  1. Review all the social media accounts your company uses and which employees manage them.
  2. Update your written social media policies (you do have them, right?) to reflect your ownership of the accounts and set parameters.
  3. Finally, regularly monitor and measure the ROI on your social media accounts to that, if worse comes to worst, you’ll be able to put a monetary value on the accounts.

Your own attorney can give you specific advice on protecting your accounts. As social media becomes an ever more important part of a small business’s marketing mix, cases like these will only grow in number. Take the right steps to make sure you never find yourself in the middle of one.

Image by Flickr user David Drexler (Creative Commons)

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Posted in Business Law, Compliance, Marketing, Small Business, small business, Social Media, social media, Technology, Workforce | 1 Comment »

Small Biz Resource Tip: Small Business Health Care Tax Credit

December 27th, 2011 ::

Small Business Health Care Tax Credit

Your business may be eligible for the Small Business Health Care Tax Credit. Enacted as an incentive for small businesses to provide health insurance coverage to their employees, the Patient Protection and Affordable Care Act includes a tax credit worth up to 35 percent of health care costs for tax years 2010 through 2013. On January 1, 2014 the rate will increase to a maximum 50 percent credit. Even if you did not owe any taxes, you can carry the credit back or forward to years you do owe. And if you qualify but forgot to claim the credit, you can still submit an amended claim. To see if you qualify, check the “3 Simple Steps” document on the IRS website.

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Posted in Accounting and Taxes, Compliance, Resources, Small Business, small business | 1 Comment »

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