SBA Sponsors National Small Business Week May 20-26

Posted on May 15, 2012 by admin

National Small Business Week ConferenceNational Small Business Week, an annual event that celebrates American small business and its importance to the U.S. economy, will kick off this year on Sunday, May 20.

The week begins with a three-day convention of small business owners May 20-22, which will be held in Washington, D.C., and is hosted by the Small Business Administration. The SBA created National Small Business Week in 2008 as a way to honor, promote and assist small business.

The Washington conference gives small businesses from across the country a chance to network with each other as well as with potential customers in private industry and government.

The National Small Business Week conference includes seminars and presentations by small business consultants, government officials, business financial services companies and large corporations that partner with small business suppliers. Almost all of the conference’s sessions will be webcast for interested parties who are unable to attend the gathering.

Some of the topics to be featured during this year’s National Small Business Week include:

  • the importance of small business to “an economy built to last”
  • small business marketing through social media
  • getting your small business’s product noticed by big retailers
  • getting your small business into the overseas export market
  • government contracting basics for small businesses
  • growing your business through sub-contracting to larger enterprises

A highlight of National Small Business Week is the announcement of the winner of the National Small Business Person of the Year award from among previously selected finalists in each of the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands and Guam. A diverse range of small entrepreneurs is nominated for the honor each year, with last year’s award going to a medical services company in Vermont. Runners-up were a Wisconsin brewery and an Italian restaurant in South Dakota.

In addition to the Small Business Person of the Year, awards are given at the conference to the year’s top family-owned business, top small business exporter, top home-based business, top minority-owned business, top veteran-owned business and top woman-owned business.

This year, the SBA is also sponsoring a video competition for the first time. Senior SBA officials will choose a winner among short videos submitted by small business owners who have benefited from the agency’s assistance. Each 1- to 2-minute video will illustrate how the SBA helped a particular business to grow, and all qualifying video submissions will be posted on the SBA’s YouTube channel.

For a reliable small business partner who can help your company prosper with expert bookkeeping, payroll and tax services, turn to the small business professionals at Padgett Business Services®. Padgett has more than 400 offices in both the U.S. and Canada to serve the small business community across North America. To learn more about the advantages we can bring to your enterprise, call Padgett Business Services® today at 866-729-8725.

Posted in Small Business News | Leave a comment

Interest Rates Rise for Some Small Business Borrowers As Congress Debates Higher Lending Rates for Credit Unions

Posted on May 7, 2012 by admin

Small Business LendingMany small businesses continue to struggle when it comes to borrowing capital, with two-thirds of small business owners in one recent survey saying that obtaining credit is still more difficult today than it was a few years ago. But legislation is pending in Congress that could give credit unions more freedom to fill the lending void that has existed since 2008.

Although the big banks reported fairly glowing statistics in their financial reporting on their small business lending activity for 2011, they use a definition of “small business” –firms with less than $20 million in annual revenue – that may seem a little too inclusive to many people. For the 95 percent of small businesses that bring in less than $1 million in annually, lending actually went down last year, according to one Philadelphia-based small business consultant who helps small companies find funding.

In another twist to the difficult borrowing environment, the Wall Street Journal reported that some small business owners will begin paying significantly more for credit beginning this month. The Journal found that a number of small businesses with lines of credit from Wells Fargo, one of the top four small business lenders, are facing imminent rate increases of 2.5 percentage points.

Wells Fargo would not disclose the number of businesses affected, but said that they are all former Wachovia customers who were notified a year ago that their terms could be changed in April 2012. (Wells Fargo absorbed Wachovia in late 2008 during the crisis in the U.S. banking and financial services sector.)

The Wells Fargo situation comes after news in January that some small business customers at Bank of America, another top small business lender, were having their credit lines cut off. Bank officials said the number of customers affected was very small and that they were also notified a year prior to having their credit lines called in.

Meanwhile, some in Washington are looking to the nation’s credit unions as a possible solution to the business credit crunch. Bipartisan legislation currently under consideration would allow credit unions to increase their business lending from 12.25 percent of assets to 27.5 percent.

The National Credit Union Administration says that raising the cap to 27.5 percent could lead to more than $13 billion in new loans, which could in turn result in more than 140,000 new jobs being created with a year. Nine out of 10 small business owners polled said that lack of credit is preventing them from hiring additional employees. Banks, on the other hand, oppose letting credit unions expand their presence in the business lending market, saying that credit unions have unfair tax and regulatory advantages.

Being a small business owner is never easy, and that’s true today more than ever. Fortunately, you have a friend and ally in Padgett Business Services®. With more than 400 offices across North America, Padgett provides expert small business bookkeeping, employee payroll and business tax services to thousands of satisfied and successful clients. Call Padgett Business Services® today at 866-729-8725 to see how we can play an important role in your company’s success.

Posted in Financial Services, Small Business Credit, Small Business News | Tagged , , , , , , , , , , , , , , , , , , , , | Leave a comment

Understanding Business Tax Basics

Posted on May 3, 2012 by admin

People aspiring to become small business owners must familiarize themselves with the various federal, state and local business taxes that their enterprises will be subject to.

The system of taxation on business operations is complicated, especially for businesses that have employees. Understanding and complying with business tax law is not one of the more pleasant tasks for an entrepreneur, but calculating taxes incorrectly or failing to remit them on a timely basis to the applicable taxing authority will result in serious penalties.

For a fledgling business, or for one struggling to turn a profit, avoiding a substantial tax penalty can mean the difference between solvency and bankruptcy.  Because the stakes are so high, many small businesses rely on business tax specialists to help them navigate the tax code and properly file their returns.

At the federal level, business taxes fall into four categories, although not all of them will apply to all companies:

Income tax – The profits of a business venture are subject to taxation by the IRS. Unlike corporate taxes levied on large limited liability companies, however, small business taxes are more likely to be accounted for on the personal income tax returns of an individual sole proprietor, the partners in a partnership or the shareholders in an S corporation.

Self-employment tax – The self-employment tax (SE tax) is method by which the IRS collects Social Security and Medicare contributions from self-employed persons. This is separate and distinct from the income tax paid on the profits that a business generates for its owner or owners. Unlike Social Security and Medicare taxes that are withheld from each employee paycheck, SE tax is estimated and remitted quarterly.

Payroll taxes – In addition to withholding income taxes from their employees’ pay, employers must deduct employees’ Social Security and Medicare contributions. The employer also pays a share into the Social Security and Medicare programs from its own funds. In addition, the employer alone pays federal unemployment insurance tax.

Excise taxes – Only certain kinds of businesses have to pay federal excise taxes, which are levied on specific products and services. The most familiar examples are gasoline and other fuels, alcohol and tobacco products. Federal excise tax is also paid by companies that operate heavy trucks on highways. Some other business activities subject to excise taxes include the manufacture of fishing and archery equipment and the provision of indoor tanning services.

States and localities impose taxes on business, too. Almost all states have a business or corporate tax. All states require employers to pay taxes for state workers’ compensation insurance and for unemployment insurance. Five states and Puerto Rico also require a business to pay for temporary disability insurance. And, of course, employers must withhold and remit their employees’ state income tax, except in the few states that don’t impose an income tax on their residents.

In addition, almost every state collects a sales tax on some or all retail transactions. States and localities can also impose excise taxes on selected products or services.

The professionals at Padgett Small Business Services provide small business tax preparation services for business owners who want to make sure that their taxes are done right. We can also assist with your business financial planning, including tax planning. Padgett also provides a range of other small business services such as bookkeeping, consulting and payroll. Contact Padgett Business Services today at 800-PADGETT (800-723-4388) and see why small business owners have considered us a friend and partner for more than 45 years.

Posted in Tax Preparation | Tagged , , , , , , , , , , , , , , , | Leave a comment

Not Everyone Agrees Which States Are the Most Business Friendly

Posted on April 27, 2012 by admin

Small Business RankingsIn which state in the country does small business have it best? That depends on the criteria you use to determine each states’ business climate, and different small business consultants are likely to come up with different answers to that question.

Each state’s economic conditions, tax structure and regulatory code all play a part in determining how well small businesses there are doing and how profitable they are, and there are many less tangible factors, too. Although asking which states are best may be an impossible question, several different organizations try to answer it every year by rating and ranking the them on their environments for businesses in general or small businesses in particular. Perhaps not surprisingly, the results of these rankings do not necessarily agree with each other – or even with the actual amount of small business activity taking place within each state.

Every year for the past 16 years, the Small Business & Entrepreneurship Council has ranked states’ favorability toward small business entrepreneurs on its “Small Business Survival Index.” For the 2011 index, the most recent, the SBE Council’s chief economist crunched numbers for 44 statistics, all related to state and local government policies, that could affect small business success. Among the factors studied were the rates for various business taxes, fuel taxes and wireless telecom taxes, as well as the level of state and local government spending, the number of health insurance mandates, the crime rate, electric utility costs and “highway cost effectiveness.”

South Dakota has topped the SBE Council index two years in a row. New York and New Jersey were the lowest-ranked states for both years, although the very bottom 51st spot on the list was taken both times by the District of Columbia.

Looking at the rankings, one professor of entrepreneurship noted that South Dakota’s high ranking hasn’t necessarily made it a magnet for small business. In fact, another Upper Midwest state, Wisconsin had the highest number of small businesses per capita in the country in 2010, while ranking only 31st on the SBE Council’s index that year.

Wisconsin fared similarly, but slightly worse at #40, on a list of the best states for business compiled by Forbes in 2011. Forbes’ rankings give heavy weight to three major business costs in each state – labor, energy and taxes, and while they’re not specifically oriented toward small business, the Forbes rankings do have points of agreement with the SBE Council’s index. Utah has been at the top of the Forbes list for two year in a row (it’s ranked #14 by the SBE Council) and Maine has been at the very bottom for the same years (which aligns with its lowly #45 and #46 rankings on the “Survival Index”). But the top choices of the SBE Council, South Dakota and Nevada, fall to #17 and #36 respectively on the Forbes list. The state of North Carolina presents another huge disparity – Forbes ranked it #3 in 2011, while the SBE Council placed the Tarheel state way down at #37.

The U.S. Chamber of Commerce ranks states on their friendliness toward business in terms of the level of taxation and business regulation in each state. The Chamber concurs with the SBE Council on South Dakota, putting it at #2 on its 2011 list, but gives its top spot to Tennessee, which has a middling ranking on the SBE Council list. Like Forbes and the SBE Council, the U.S. Chamber of Commerce gives top 10 rankings to Utah and Texas. Wyoming makes the top 5 on both the Council and the Chamber’s lists, and Forbes puts the Cowboy State fairly high at #14.

Meanwhile, the Small Business Administration’s Office of Advocacy compiles an annual snapshot of small business activity by state (including openings, closings and bankruptcy filings). The SBA figures give the number of active small business operations in each state without weighting them on a per-capita basis, so it may not be too surprising that low-population states like South Dakota and Wyoming don’t even make its top 20. But among the states with the most small business are ones that placed both very high (Texas, Florida, Washington, Tennessee, Ohio) and very low (New York, New Jersey, Michigan, Minnesota, Maryland, Massachusetts) on other organizations’ rankings of friendliness toward business.

Wherever your enterprise is located, Padgett Business Services can help you with expert bookkeeping, payroll and tax services. Padgett has more than 400 offices across the United States and Canada. We take the accounting burden off of small business owners so that they can focus on innovation and their companies’ growth. We also offer business advising and consulting services. To learn more about how we can help you, call Padgett Business Services® today at 866-729-8725.

Posted in Small Business News | Tagged , , , , , , , , , , , , , , , , , , , , | Leave a comment

Financial Services Employment Still Under 2008 Levels in 90 Percent of States

Posted on April 24, 2012 by admin

Financial Services Business Employment ReductionsEmployment prospects in the financial services industry tanked in the wake of the crisis in the financial sector several years ago and during the severe recession that followed. According to the U.S. Bureau of Labor Statistics, the number of jobs in the U.S. financial services industry so far has yet to recover to 2008 levels.

In late March, the Bureau reported that 45 states and the District of Columbia still had fewer people employed in the financial services sector as of January than they did four years earlier in January 2008. Of the few states with net increases – Louisiana, North Dakota, Texas and Nebraska – only one, Texas, is a sizeable player in the financial services industry. And the increases are meager, too; all four states combined had an aggregate net increase of only 4,600 jobs.

The state of Alaska alone had no net change in its number of financial services employees, and all remaining states, along with the nation’s capital, showed reductions compared to 2008 that ranged from about 2 percent to almost 18 percent.

The financial services employment sector includes people in a wide variety of occupations working for companies that range from large banks, brokerages and insurance companies to smaller accounting and tax preparation firms. The sector employs millions of people in the United States, particularly in the Northeast.

Comparing the number of financial jobs in January 2008 to January of this year, the Bureau of Labor Statistics found that California experienced the largest loss, with a net reduction of more than 100,000 financial jobs over the four-year period. In percentage terms, the Golden State suffered the third-highest reduction, losing nearly 12 percent of its financial jobs. The only states to experience a higher percentage reduction in financial services employment were Washington, down slightly more than 12 percent compared to 2008, and Nevada, with a whopping loss of almost 18 percent.

In raw number terms, no other state can even compare to California’s financial sector employment losses over the last four years. The second-biggest loser, Florida, shed just under 55,000 financial services employees since 2008. Other states bearing the brunt of the losses included traditional financial services centers such as New York, Illinois, New Jersey, Pennsylvania and Massachusetts.

According to The Business Journals online, three states count on financial services activity for 10 percent or more of all their private-sector jobs – New York, Connecticut (the nation’s insurance capital) and Delaware (home to credit card giant FIA Card Services). Compared to 2008, Connecticut lost 8 percent of its financial services jobs while Delaware’s lost nearly 6 percent.

Business consultants don’t think that the shakeout in the financial services sector will be over any time soon. Last year, financial services companies worldwide announced plans to trim their payrolls by a combined total of about 200,000 employees during 2012 and 2013, according to Bloomberg News. Four large companies alone have plans to cut a total of about 80,000 jobs as financial reporting from the sector continues to bring dismal news such as severe earnings shortfalls.

In challenging economic times, Padgett Business Services® is an ally of small businesses across all of the U.S. and Canada. With more than 400 offices in North America, we help small business owners with specialized bookkeeping, payroll and business tax services. Call Padgett Business Services® today at 866-729-8725 to talk to us more about how we can help your small enterprise succeed even in a difficult business climate.

Posted in Financial Reporting, Financial Services | Tagged , , , , , , , , , , , , , , | Leave a comment