It's a bright, cold day in January. Traffic is sparse and sunlight glitters on freshly fallen snow. Inside the industrial-zoned building on Fay Street just northeast of downtown Columbia, sparks fly and construction workers grind, weld, nail and otherwise ready the former meatpacking plant to become Logboat Brewing Co. LLC in February.
Tyson Hunt, CEO and one of four partners of Logboat, graciously points out the offices and a conference room and the tap room, where thirsty patrons can sip at tables. He explains the purpose and location of steam generators, a glycol cooling system and the huge stainless steel tanks trucked in from Oregon.
It looks like a complicated process — and it is.
Every beer lover knows it takes a combination of hops, barley, malt and water mashed together and cooked to make beer. But there's much more to brewing than that. The resulting fragrant mash, blended to exacting specifications, must then be steam-heated and vented through stacks that will carry the steam out of the brewery, giving the whole building that intoxicating, malty-sweet aroma of beer in the making. The beer must then be pumped and cooled into fermenters, mixed with carbon dioxide, aged and then finished before it can flow from a tap or keg into a frosted glass.
In the past three years, the University of Missouri Extension Business Development Program (BDP) assisted Missouri companies with technical assistance and education resulting in:
- $666 million in increased sales
- $661.9 million in new investments
- $608.2 million in government contracts
- $16.8 million in research grants
In addition, the programs assisted clients in creating or retaining 30,383 jobs.
"Small businesses are the job creators in our state and nation, creating investments, sales and quality of life in our communities," says Mary Paulsell, director of communications for the BDP. "These results validate what economic development research has said for some time — that small, innovative and entrepreneurial companies hold the key to economic recovery."
The BDP program works with a wide variety of companies each year. The economic impact many of those firms realize is self-reported by the business owners themselves through a verifiable process that guarantees their accuracy.
"These results demonstrate not only the ingenuity, determination and skill of the state's businesses, but also the power of our technical assistance and education in creating healthy and sustainable Missouri companies," Paulsell adds.
The Affordable Care Act, signed into law in 2010 and upheld by the Supreme Court in 2012, picked up steam in 2013 as open enrollment began and other significant pieces of the law fell into place. And 2014 is shaping up to be even more significant for small business owners as the ACA kicks in.
Here are just a few highlights of the law that became effective Jan. 1:
- Universal coverage. Under the law, most individuals who can afford it will be required to obtain basic health insurance coverage if you have none, whatever your status — unemployed, small business owner or U.S. senator. If not, you'll have to pay a penalty in 2015. That penalty is set at 1 percent of yearly taxable household income or $95 per person ($47.50 per child under 18), whichever is greater.
- Tax credits. Tax credits are now available for small business owners. You may qualify for tax credits if you have fewer than 25 full-time equivalent employees making an average of about $50,000 a year or less. To qualify for the Small Business Health Care Tax Credit, you must pay at least 50 percent of full-time employees' premium costs and purchase coverage through the Federal Small Business Health Options Program (SHOP) marketplace. The credit is worth up to 50 percent of your contribution toward employees' premium costs (up to 35 percent for tax-exempt employers). You don't need to offer coverage to part-time employees or to dependents, however. Credits are also available for individual market coverage if your income is between 100 and 400 percent of the poverty line and you're not eligible for other affordable coverage.
For tax year 2014, the IRS has announced annual inflation adjustments for more than 40 tax provisions, including the Affordable Care Act, work opportunity tax credit, alternative minimum tax, standard mileage rate and other regulations.
Items of greatest interest to small businesses include:
Release of the 2014 tax calendar (PDF). First noteworthy date: Jan. 31. All businesses must provide annual information statements to recipients of certain payments made during 2013. You can use Form 1099 or another information return.
- The small employer health insurance credit, which provides that the maximum credit is phased out based on the employer's number of full-time equivalent employees in excess of 10 and the employer's average annual wages in excess of $25,400 for tax year 2014, is up from $25,000 for 2013.
- Don't forget to claim the Work Opportunity Tax Credit for all eligible employees, such as veterans, if hired on or after Jan. 1, 2011, or before Jan. 1, 2014.
- Beginning Jan. 1, standard mileage rates for business use of a car, van, pickup or panel truck are:
- 56 cents per mile for business miles driven
- 23.5 cents per mile for medical or moving purposes
- 14 cents per mile in service of charitable organizations.
- The alternative minimum tax exemption for tax year 2014 is $52,800 ($82,100 for married couples filing jointly). The 2013 exemption was $51,900 ($80,800 for married couples filing jointly).
- The maximum earned income credit is now $6,143 for taxpayers filing jointly who have three or more qualifying children, up from $6,044 in 2013. The IRS has tables of maximum credit amounts for other categories, income thresholds and phaseouts.
- The Social Security Wage base for 2014 will be $117,000, up from $113,700 for 2013.
- The top tax rate of 39.6 percent affects singles whose income exceeds $406,750 ($457,600 for married taxpayers filing a joint return), up from $400,000 and $450,000, respectively. Thresholds for the other rates — 10, 15, 25, 28, 33 and 35 percent — have also risen.
- The standard deduction rises to $6,200 for singles and married persons filing separate returns and $12,400 for married couples filing jointly, up from $6,100 and $12,200, respectively. The standard deduction for heads of household rises to $9,100, up from $8,950.
- The limitation for itemized deductions claimed on tax year 2014 returns of individuals begins with incomes of $254,200 or more ($305,050 for married couples filing jointly).
- The personal exemption rises to $3,950, up from 2013's $3,900. However, the exemption is subject to a phase-out that begins with adjusted gross incomes of $254,200 ($305,050 for married couples filing jointly). It phases out completely at $376,700 ($427,550 for married couples filing jointly.)
For more, go to irs.gov.
On January 1, the minimum wage in Missouri increased 15 cents an hour to $7.50 an hour.
That's 25 cents more than the federal minimum wage of $7.25 an hour and up from Missouri's 2013 minimum wage of $7.35. The new increase would result in an annual income of about $15,600 for a full-time worker.
The impact on small businesses is unknown, with critics and proponents divided on the increase's effect.
Veterans Business Resource Center
The mission of the Veterans Business Resource Center (VBRC) is to assist veterans and former service members who want to launch, grow or sell a business. The center provides counseling, mentoring, resources and education for those looking to boost their business to the next level.
The center also serves active duty personnel transitioning to civilian life and active Reserve and National Guard members. The center, located in south St. Louis just off I-55, serves service members in Missouri, Iowa, Kansas and Nebraska.
Here's a testimonial from 13-year National Guard veteran Christine Zika, president and concierge, CZ Concierge Services, L.L.C.
"In January 2010, I had been unemployed for over six months when an idea for a business was conceived. I knew that I would need assistance to prepare me and my business for success," she writes. Zika then applied and was accepted into a six-week crash Boot Strap Training course to help her clarify her business plans.
"I started with an idea to 'run errands' but through their one to one counseling, Bootstrap classes and encouragement, CZ Concierge Services landed a sizable contract in its first year and continues to seek their counseling almost four years after first finding out about their services," Zika writes. "And I am not their only success story!"
The VBRC opened in 2004 following passage of the Veterans Entrepreneurship and Business Development Act in 1999 that opened the door for community organizations to establish veterans' business assistance and information centers.
Veterans Business Resource Center
315 Lemay Ferry Rd. #114
St. Louis, MO 63125
As a small business owner, you wear many hats — probably too many. One of the most important things you can do, however, is set your company's budget. Budgeting is absolutely essential for determining whether you have the resources to operate, diversify or expand this year.
Now is the time to prepare your budget for next year. If you're reluctant to get started, you're not alone. But you'll be rewarded if you don't procrastinate. Here are five tips to help you prepare this year's budget now.
- Know your industry. If this is your first time or you're still relatively new to budgeting, it's helpful to understand how similar businesses compare. Of course, no other business will be exactly like yours. However, there will be similarities you can use to make informed budgeting decisions. Browse resources for data on small businesses in your area, and review IRS data for an idea of what percentage of your budget will likely be dedicated to different expenses like utilities, rent, marketing and so on.
- Be flexible. Budgets require educated guesswork. You may not bring in as much revenue or see as much growth as you originally predicted. On the flip side, you may bring in more than you anticipated. Understand that a budget will guide you through your spending decisions throughout the year, but be ready to go off script. Leave yourself some wiggle room by making conservative estimates, and have a Plan B ready to handle extra revenue if your year goes better than expected.
2013 was a monumental year in retail. From mobile technologies changing the way consumers shop to new ways of accepting and processing payments, these trends are just the beginning. Whether you run a brick-and-mortar establishment or an e-commerce website, 2014 has plenty more in store.
Some of the changes retailers saw in 2013 included more robust and flexible mobile credit card processing solutions that enabled businesses to take payments anytime, anywhere; mobile payments that let consumers shop conveniently from smartphones and tablets; and digital wallets aimed at replacing cash and credit cards for online and in-store purchases.
Some of the biggest game changers were Square, PayPal and Google, with BitCoin assuming a larger profile on retailer and industry radars. Some proposed increasing the use of direct-carrier billing for in-store purchases, while others have taken to app development to disrupt the retail space.
Expect these trends to play even more significant roles in 2014 by enabling mobile commerce (m-commerce) and e-commerce to take businesses and consumer expectations to the next level. Not only will there be strong consumer demand that will make m-commerce the norm for retailers, but small businesses will have an even greater opportunity to work with and expand global markets via e-commerce.
The BDP offers a variety of outstanding educational opportunities throughout the year. Here are highlights of upcoming events.
The ninth annual St. Louis Business Journal Women's Conference will be held Jan. 31 from 7 a.m. to 5 p.m. at the St. Louis Union Station Hotel, 1820 Market St., St. Louis. Speakers will include Cheryl Strayed, author of The New York Times No. 1 bestseller Wild; Mary Mack, president, Wells Fargo Advisors, LLC; Katherine Button Bell, vice president and chief marketing officer, Emerson; Tanya Abreu, president, Spirit of Women, a coalition of hospitals in more than 100 cities dedicated to raising the bar in women's health; and Dr. Elizabeth Stroble, president, Webster University, among many others. Tickets are $250 per person and suggested dress is business casual. Men are welcome, too. More information.
Don't miss the 15th annual InvestMidwest, to be held March 26-27 at the Hyatt Regency St. Louis at the Arch. This internationally known venture capital conference will showcase about 40 companies from throughout the Midwest in the life sciences, technology and food/ag/bioenergy industries, with investors from top venture capital firms on hand. According to InvestMidwest, the event has helped generate more than $1 billion of investment in the past 14 years. For more information, to register as an attendee or as a presenter, go to investmidwestforum.com.
Feb. 6: MTC Seed Capital Co-Investment, Venture Capital Co-Investment and High-Tech Industrial Expansion programs
Do you have a great idea but little capital? Apply for one of three available programs from Missouri Technology Corporation, the Seed Capital Co-Investment Program, Venture Capital Co-Investment Program or High-Tech Industrial Expansion Program. The Seed Capital Co-Investment Program is for firms seeking to advance animal health, plant science, biomedical science, applied engineering, defense and homeland security. Individual awards will not exceed $500,000. The Venture Capital Co-Investment Program is for high-tech, potentially high-growth tech firms, and awards will not exceed $2,500,000. The High-Tech Industrial Expansion Program supports industrial expansion that will result in significant capital investment and high-paying jobs in targeted biotech and high-tech clusters, with firms preferred that can leverage Missouri's rich agricultural history. Awards won't exceed $3 million. All awards are highly competitive. Deadline for all three is Feb. 6. To apply or for more information go to missouritechnology.com/commercialization-programs.
Arch Grants, a startup competition that awards $50,000 grants to startups already in or willing to relocate to St. Louis, is holding its annual competition. Winners will also receive pro bono services from top tier companies in the region: accounting, marketing, legal and IT; plus introductions to venture and angel capital networks. Two winning companies will receive an additional $100,000 in follow-up grants. Last year, according to the organization, 20 companies received $50,000 grants each. The grants are aimed at innovative, high growth, early stage ventures with national or international sales potential, not lifestyle or consulting businesses. Winning an Arch Grant is a multi-step process. Applicants will be notified on or before March 28 and Finalist Weekend held in late April. To apply, go to archgrants.org/2014.
Accredited Member of the ASBDC
America's Small Business Development Centers
Funded in part through a cooperative agreement with the U.S. Small Business Administration. All opinions, conclusions or recommendations expressed are those of the author(s) and do not necessarily reflect the views of the SBA.
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