These two outstanding small businesses received a 2013 Excellence in Business Award from the statewide network of Missouri Small Business & Technology Development Centers (MO SBTDC), the Missouri Procurement Technical Assistance Centers (MO PTAC), the Economic Development Administration University Center and the Mid-America Trade Adjustment Assistance Center (TAAC) at a gala banquet in Jefferson City on Jan. 30. Both firms were also presented with legislative resolutions at the Missouri Capitol from their state senator and representative.
Whom do people in southwest Missouri, northwest Arkansas, northeast Oklahoma and southeast Kansas call when grandmother's rocking chair is broken, when the back on the recliner snaps or when the cat rips up that favorite sofa?
Furniture Rescue in Joplin, founded by Dewey Sheets, Jr. and April Sheets.
But whom did the Sheets call when their business was devastated first by the 2011 Joplin tornado then by a warehouse fire?
The staff at the Missouri State Southern University (MSSU) SBTDC in Joplin.
Furniture Rescue was founded in 2002 as a furniture retailer. With guidance from staff at the MSSU SBTDC, it grew into furniture repair and restoration and warranty work for furniture manufacturers. Then the May 2011 tornado hit the company hard; Sheets salvaged what he could and put equipment in storage in a warehouse on Fourth Street.
One morning Sheets woke up and saw a plume of smoke rising above downtown about 10 miles south.
Lawrence Fabric & Metal Structures, Inc., a leader in the manufacture of awnings, canopies, tension structures, exhibit components, banners and industrial products, is responsible for some of the more notable architectural icons of St. Louis — the bright red bow wrapped around the St. Louis Science Center Planetarium during the holidays; the sleek awnings at Busch Stadium; and the bright, festive awnings of St. Louis Children's Hospital.
Just a few years ago, Lawrence wasn't sure it would be manufacturing much of anything, much less icons.
From 2007 to 2009, sales dropped 36 percent to an all-time low of $5 million in 2009, and the company was forced to lay off a substantial portion of its workforce. The company had been doing well, with 2007 sales of more than $8 million. But in the ensuing years, the recession magnified the disparity of cost from competition as the firm was heavily hit by cheap, imported awnings and industrial products sewn overseas.
So the company decided to enter the Trade Adjustment Assistance for Firms (TAAF) program, a matching U.S. Department of Commerce Economic Development Administration grant that boosts American manufacturers' ability to compete globally. TAAF, a sister initiative of the MO SBTDC, is administered by the Mid-America Trade Adjustment Assistance Center (TAAC) to help manufacturers in Missouri, Kansas and Arkansas — assistance that has resulted in millions of dollars of manufacturing production improvements and increased sales. In this case, it was TAAF project manager Rebecca Nace who stepped to the plate to assist Lawrence.
Nace and Lawrence agreed that the firm needed to respond to the flood of imports decisively and began an earnest review. Detailed consultations over a period of a few months revealed the company needed a wage analysis and should offer additional training for their workforce, particularly in a specialized software suite called CAD, which when implemented reduced cost and errors.
Twenty-two outstanding Missouri small businesses were honored as 2013 Excellence in Business Award winners at a banquet in Jefferson City on Jan. 30. Each winner was also honored by legislative resolutions from their state senators and representatives. Two of these innovative businesses are highlighted above.
The event was sponsored by the statewide network of Missouri Small Business & Technology Development Centers (MO SBTDC), the Missouri Procurement Technical Assistance Centers (MO PTAC), the Economic Development Administration University Center and the Mid-America Trade Adjustment Assistance Center (TAAC) at a gala banquet in Jefferson City on Jan. 30.
Award winners come from every corner of the state and represent a diversity of businesses from document shredding and live sonographic imaging to manufacturing efficient window shades. Please visit the Feb. 2013 issue of TRANSFORMATION for a complete list of award winners and to learn more about them.
The American Taxpayer Relief Act of 2012 enacted in early January sought comprehensive tax reform and will result in some definitive IRS changes for tax year 2013 (filing deadline April 15, 2014).
- Tax breaks for new hires. Employers can qualify for as much as $2,400 in business tax credits per eligible worker when hiring job seekers who face barriers to employment. These tax credits apply only when a business hires a job seeker from a target group as indicated on Federal Form ETA-9061. Tax credits cannot be claimed on previous employees, relatives, domestic employees or on wages federally subsidized by on-the-job training programs. There is no limit to the number of qualifying new hires or total amount of credits distributed per year. The Work Opportunity Tax Credit (WOTC) may still be claimed by any private, for-profit business.
- New tax rates. The act also provides for a new tax rate of 39.6 percent for individuals whose income exceeds $400,000 ($450,000 for married taxpayers filing a joint return). The other rates — 10, 15, 25, 28, 33 and 35 percent — remain the same.
- Deductions, exemptions. The standard deduction rises to $6,100 ($12,200 for married couples filing jointly), up from $5,950 ($11,900 for married couples filing jointly); the personal exemption rises to $3,900, up from the 2012 rate of $3,800. However, beginning in tax year 2013, the exemption is subject to a phase-out that begins with adjusted gross incomes of $250,000 ($300,000 for married couples filing jointly), phasing out completely at $372,500 ($422,500 for married couples filing jointly.) There is also a limitation for itemized deductions claimed on 2013 returns for individuals with incomes of $250,000 or more ($300,000 for married couples filing jointly).
- Home-based business and worker deduction. The deduction for business use of a home or for workers who work out of a home is capped at $1,500 per year based on $5 a square foot for up to 300 square feet. In tax year 2010, the most recent year for which IRS figures are available, nearly 3.4 million taxpayers claimed deductions for business use of a home.
- Alternative Minimum Tax. The Alternative Minimum Tax exemption rises to $51,900 ($80,800 for married couples filing jointly) from $50,600 ($78,750 for married couples filing jointly).
- Earned Income Tax Credit. The maximum Earned Income Credit amount rises to $6,044 for taxpayers filing jointly who have three or more qualifying children, up from $5,891 from 2012. The IRS feels this credit for low- and moderate-income workers and working families is so underutilized and misunderstood that it even declared Jan. 25 Earned Income Tax Credit Awareness Day, with about 250 news conferences and other events.
These changes are just a sample; consult a tax specialist before you claim any tax credits and benefits with which you are unfamiliar. For the most recent announcements or the new tax tables, go to irs.gov.
Last year, the IRS says it received more than 148 million returns. Electronic filing reached 80 percent, a trend that tax experts expect to continue; and more than 110 million people received refunds last year totaling nearly $310 billion. The average refund was $2,803, slightly less than in 2011.
SBTDC technology and commercialization specialists help innovators access capital through SBIR, STTR
The MO SBTDC is one of a handful of SBTDC programs nationwide offering assistance to firms working in technology development and commercialization. The process to be designated as an SBTDC involves an intensive certification accreditation that demonstrates the program's capabilities and expertise in assisting these specialized companies with their unique issues.
In addition to addressing management and marketing issues, SBTDC staff assist these firms with access to capital. Two sources of capital for technology development are the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. The Small Business Administration offers these programs through which small businesses can acquire federal government research and development contracts from several federal agencies. The agencies are required to reserve a portion of their R&D funds to go to small, high-tech businesses.
Hiring your first employee is a milestone for your small business and a good indication your company is growing.
But it also signals your transition into a management role in addition to the many hats you already wear. Before you take this important step, you'll need to understand the legal requirements of being an employer and how to protect your company.
Meet your legal requirements
There are numerous forms and regulations involved in hiring. Most employers will need to take these steps:
- Get an Employer Identification Number (EIN). Also called an Employer Tax ID or Form SS-4, EINs are available from the U.S. Internal Revenue Service. You'll need that number to report taxes and other documents to the IRS and to complete employee information required by the state.
- Set up withholding tax records. You'll be responsible for:
- Federal income tax withholding, which requires a Form W-4 from each employee
- Federal wage and tax statement, Form W-2
- State taxes
- Verify employee eligibility. You must complete a federal Form I-9 within three days of hiring an employee confirming the employee's citizenship or eligibility to work in the U.S.
- State reporting. Within 20 days, you must also report newly hired or re-hired employees to Missouri's new hire reporting program, which can be found at dss.mo.gov/cse/newhire.htm
- Get workers' compensation insurance. This is available from commercial carriers on a self-insured basis or through the state workers' compensation insurance program. Go to https://www.labor.mo.gov/DWC/Employers/insurance.asp
- Post required notices. You are required to prominently display certain posters that inform employees of their rights and your responsibilities.
- File quarterly taxes. If you pay wages subject to income tax withholding, Social Security and Medicare taxes, you'll need to file IRS Form 941 Employer's Quarterly Federal Tax Returns.
- Pay unemployment insurance tax registration (labor.mo.gov/DES/Employers) and/or disability insurance.
Protect your company
More than 50 percent of all job applications and resumes contain untrue or inflated facts. In this age of identity theft and computer fraud, it pays to be cautious, so consider taking these steps:
- Background check. Typical background checks include confirming prior employment, workers' compensation claims, criminal records, credit history and driving records. If you hire someone to carry out a background check, you are required to notify the job applicant in writing.
If you don't or can't do a background check, at a minimum you should:
- Verify the job applicant's Social Security number. This will at least confirm the applicant is not using an assumed name.
- Run a credit report. You'll need to contact the major credit reporting agencies (Experian, Equifax and TransUnion).
- Perform a criminal history search. This can only be done at the local level and, by federal law, covers only the last seven to 10 years.
- Check references. Sometimes, potential employees come recommended, and you feel you don't need more. This is a mistake. Typically, former employers provide as little information as possible, but at the very least, you'll be able to confirm the applicant worked for that employer.
- Google them. You may find helpful — or damaging — information on Facebook, Twitter, LinkedIn and a host of other sites.
Be meticulous in fulfilling your responsibilities with your first employee, and you'll establish a process that will make subsequent hires go smoothly.
We all think we know a can't-miss opportunity from a bad one when we see it. But can we?
According to the SBA, an estimated 552,600 businesses opened in 2009, the last year for which statistics are available; of these, half will close their doors in five years and two-thirds in 10 years.
Some business ideas — like a video rental store, typewriter repair or record store — come with obvious red flags. Others, like the ones below, may not be so obvious, but recent history has shown they might not work out very well.
- Frozen yogurt shop. These days there seems to be a frozen yogurt shop on every corner. The market is saturated! Option. A food shop that meets a genuine community need, such as a doughnut shop in a town that has none or a food truck that goes to areas with many workers and few nearby restaurants, may be better options.
- Deal a day. This industry exploded in the '00s as firms like Woot, Groupon, Facebook and others created daily deal websites. But this industry sputtered, and the daily deal business began to slide in 2011 and through 2012. Many merchants no longer want to give up their margin to find new customers. Option. Social media contests or flash sales may be as effective, and you know they will at the very least be seen by existing customers.
- Restaurant. The restaurant business is notoriously iffy — customers are fickle, and it takes time to build up a loyal following. There are many codes and permits to be obtained, plus there's high employee turnover and abundance of competition. Option. Consider instead the options of No. 1.
The MO SBTDC and MO PTAC offer a variety of outstanding educational opportunities throughout the year. Here are highlights of upcoming events.
Feb. 27 — Business Essentials: Understanding Financial Statements for Informed Executive Business Decisions
Knowing what to look for and how to find it in your financials is the first step toward true business growth. Using case studies and Excel templates, SBTDC business specialist Jim Gann will show how to turn your business financials into powerful information and sound decision-making. The event, the first of a business essentials trilogy, will be held from 1:30 to 4:30 p.m. at the SBTDC, 500 E. Walnut Street, Suite 103, Columbia. Registration deadline is Feb. 22, and the fee is $49 for an individual or $99 for the entire series. Contact Olivia Gill at firstname.lastname@example.org for more information, or register online.
Marketing is part science, part art form, part logic and a lot of passion for your business. This class will help you better understand advertising and promotional techniques, determine effective methods to promote your company and how to use these approaches for maximum ROI. Getting good results from your investment requires a methodical approach to marketing strategies; learn how at Missouri State University's Glass Hall (the west entrance), 901 S. National Ave., Springfield. The seminar begins at 8:30 a.m. and concludes at 12:30 p.m. Registration deadline is March 8, and preregistration is required. Seminar fee is $119. Contact Tara Horton at email@example.com for more information, or register online.
Early-stage technology startups can apply for SparkLabKC, an intense, 90-day, in-residence program geared to accelerating their early progress. Selected companies will receive seed funding of $6,000 per founder ($18,000 max), office space, business advisory services, access to a deep pool of mentors and an opportunity to connect with investors during formal presentations.
The program, led by five serial entrepreneurs from Kansas City and Silicon Valley, is based on a proven accelerator model adapted to the Kansas City market.
SparkLabKC will accept applications until March 31. Visit SparkLabKC.com for more information or to apply.
Save the date: The 11th Annual National Economic Gardening Conference will be held at the historic Muehlebach Hotel, Kansas City, from June 5 to 7, 2013. The conference will feature two tracks: "Nurturing Entrepreneurs," for economic gardening program developers and specialists; and "Growing Economies," for policymakers, economic and community development professionals and entrepreneurial support services staff. Chris Gibbons, widely considered to be the father of economic gardening as a tool for economic development, will speak on latest innovations on June 7. Participants will also go to economic "watering holes" to meet local vendors, service providers, investors and clients. The conference is coordinated by three economic gardening programs: the MO SBTDC's Business Growth Services, Network Kansas and Advance Iowa.
Accredited Member of the ASBDC
Association of Small Business Development Centers.
Representing America's SBDC Network
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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