Success story:
Affordable Moving Services Inc.
Branson moving company
taps SBTDC expertise
during downturn
Three years ago the moving industry faced a turning point, according to John Cheary. He should know. He owns Affordable Moving Services Inc., the National Van Lines affiliate in Branson.
The moving industry is to the economy like the canary is to the coal mine ... a precursor of things to come, says John. Demand for moving services dried up across the country in 2007, a year ahead of the national downturn in the economy.
"We could tell something was up," John recalls. "Commercial moves, military moves, private moves all virtually disappeared. Business was bad. I thought we were going under."
To determine his next move, Cheary sought advice from a long-time source of entrepreneurial guidance ... the business development specialists at Missouri State University's Small Business and Technology Development Center. Rayanna Anderson, director of the center, and Isabel Eisenhauer, SBTDC consultant, listened to John's dilemma and offered alternatives for him to consider.
"They can't make decisions for me and they can't sit in my seat, but they opened up my mind and gave me additional avenues to consider," says John. "Being a small business owner can be lonely. You can't confide many things with your employees or your customers or even with other small business owners, so where do you turn? I turn to the SBTDC."
Since then John has successfully consolidated his business. He reduced expenses, moved his business to a more efficient location, and downsized his staff while maintaining cash flow and retaining the focus of his business on the customer.
Read this complete success story with additional photos.
Expect the unexpected:
Sudden disaster
could be stalking your business
You have no doubt heard the old saying that "bad things happen to good people." Of course we all know this to be true.
There are so many "bad things" looming out there that can put an abrupt end to your business if you aren't prepared. You can't prevent natural disasters like ice storms, earthquakes or tornadoes. Other dangers such as fire, flood, theft, loss of key employees, new competitors, etc., add to a seemingly endless list. What can a business owner or manager do to reduce these types of risk?
Regardless of your company's size, whether you own a small home-based business with no employees or a large thriving company, you still need to be prepared to deal with unexpected calamities. Every firm needs to develop contingency plans for its business.
You may have heard the terms "disaster recovery plan," "emergency preparedness plan," "business resiliency plan," "crisis risk management plan," or "business continuity plan." Most medium or large companies have some type of formal plan in place. However, if you operate a small business, it can be difficult to develop some type of plan.
Read more about expecting the unexpected.
Business going green
Advances in renewable energy
technology,
policy
have implications for
Missouri's economy
Is Missouri ready to sow the seeds of a clean energy economy? According to Renewable Energy for America, a Natural Resources Defense Council project that features reports about states with great potential for renewable energy, it is. The report discusses the byproducts of Missouri's vast farm economy — agricultural waste — that can be turned into a variety of fuels, as well as the potential for a renewable energy industry in Missouri to create new jobs and provide substantial new sources of income.
Policies are in place
When Missouri voters passed Proposition C in November 2008, they approved a Renewable Electricity Standard that requires 15 percent of the state's energy to come from renewable sources by 2021.
Missouri is among 42 states with net metering that allows small-scale renewable electricity generators (up to 100-kilowatt capacity under Missouri law) to connect to the grid. Missouri's net-metering law enables customers who generate their own electricity to receive credit at the retail-price level for electricity generated in excess of their demand. The electric meter measures the surplus energy by running backwards.
Read the rest of this going green.
South central Missouri small business
leaders to gather at annual
conference Oct. 20 in Rolla
Small business owners and operators are invited to the 2010 Business Conference Oct. 20 at the Havener Center on the Missouri University of Science and Technology campus in Rolla. The event is co-sponsored by the Rolla Area Chamber of Commerce and the Missouri S&T Small Business and Technology Development Center.
The day-long event starts at 9:30 a.m. It will feature sessions on improving customer communications, profit mastery, best practices for hiring the best employees and using social media to attract and retain customers. Luncheon keynote speaker will be Rep. Jo Ann Emerson (R-8th District). A meet-the-candidates forum will follow the conference at 4:30 p.m., according to Barry White, chamber president and director of the Missouri S&T SBTDC.
Conference registration — $40 for chamber members, $50 for non-members and $15 for students — and additional information are available by calling the Chamber (573-364-3577) or visiting www.missouribusiness.net.
Get the flyer with details (pdf).
IRS roundup
Employee vs. independent contractor:
seven tips for business owners
As a small business owner you may hire people as independent contractors or as employees. There are rules that will help you determine how to classify the people you hire. This will affect how much you pay in taxes, whether you need to withhold from your workers' paychecks and what tax documents you need to file.
Here are seven things every business owner should know about hiring people as independent contractors versus hiring them as employees.
- The Internal Revenue Service uses three characteristics to determine the relationship between businesses and workers:
- Behavioral Control covers facts that show whether the business has a right to direct or control how the work is done through instructions, training or other means.
- Financial Control covers facts that show whether the business has a right to direct or control the financial and business aspects of the worker's job.
- Type of Relationship factor relates to how the workers and the business owner perceive their relationship.
- If you have the right to control or direct not only what is to be done, but also how it is to be done, then your workers are most likely employees.
- If you can direct or control only the result of the work done — and not the means and methods of accomplishing the result — then your workers are probably independent contractors.
- Employers who misclassify workers as independent contractors can end up with substantial tax bills. Additionally, they can face penalties for failing to pay employment taxes and for failing to file required tax forms.
- Workers can avoid higher tax bills and lost benefits if they know their proper status.
- Both employers and workers can ask the IRS to make a determination on whether a specific individual is an independent contractor or an employee by filing a Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding, with the IRS.
- You can learn more about the critical determination of a worker's status as an independent contractor or employee at IRS.gov by selecting the Small Business link. Additional resources include IRS Publication 15-A, Employer's Supplemental Tax Guide, Publication 1779, Independent Contractor or Employee, and Publication 1976, Do You Qualify for Relief under Section 530? These publications and Form SS-8 are available on the IRS website or by calling the IRS at 800-829-3676 (800-TAX-FORM).
IRS releases form to help small businesses claim
new health care tax credit
IRS also announces how tax-exempt organizations will claim credit
The IRS has posted a draft of Form 8941 on IRS.gov. Both small businesses and tax-exempt organizations will use the form to calculate the credit. A small business will then include the amount of the credit as part of the general business credit on its income tax return.
Tax-exempt organizations will instead claim the small business health care tax credit on a revised Form 990-T. The Form 990-T is currently used by tax-exempt organizations to report and pay the tax on unrelated business income. Form 990-T will be revised for the 2011 filing season to enable eligible tax-exempt organizations — even those that owe no tax on unrelated business income — also to claim the small business health care tax credit.
The final version of Form 8941 and its instructions will be available later this year.
The small business health care tax credit was included in the Affordable Care Act signed by the President in March and is effective this year. The credit is designed to encourage small employers to offer health insurance coverage for the first time or maintain coverage they already have.
In 2010, the credit is generally available to small employers that contribute an amount equivalent to at least half the cost of single coverage towards buying health insurance for their employees. The credit is specifically targeted to help small businesses and tax-exempt organizations that primarily employ moderate- and lower-income workers.
For tax years 2010 to 2013, the maximum credit is 35 percent of premiums paid by eligible small business employers and 25 percent of premiums paid by eligible employers that are tax-exempt organizations. Beginning in 2014, the maximum tax credit will go up to 50 percent of premiums paid by eligible small business employers and 35 percent of premiums paid by eligible, tax-exempt organizations for two years. The maximum credit goes to smaller employers — those with 10 or fewer full-time equivalent (FTE) employees — paying annual average wages of $25,000 or less.
The credit is completely phased out for employers that have 25 FTEs or more or that pay average wages of $50,000 per year or more. Because the eligibility rules are based in part on the number of FTEs, and not simply the number of employees, businesses that use part-time help may qualify even if they employ more than 25 individuals.
More information about the credit, including a step-by-step guide (pdf) and answers to frequently asked questions, is available on the Affordable Care Act page on the IRS website.
SBA news:
SBA study finds U.S. ranks third in
entrepreneurship worldwide
WASHINGTON, D.C. - How does the United States compare to other nations in the field of entrepreneurship? A paper released this month by the SBA's Office of Advocacy titled Global Entrepreneurship and the United States looks at this question.
Using the Global Entrepreneurship and Development Index, the United States ranks third overall, according to the paper's authors, Zoltan J. Acs and Laszlo Szerb. They found the U.S. ranks first on the entrepreneurial aspirations, sixth in entrepreneurial attitudes, and eighth in entrepreneurial activity. The GEDI is a research tool that captures the contextual features of entrepreneurship in 71 countries.
"Entrepreneurship is essential for an economy to grow and flourish," said Winslow Sargeant, chief counsel for advocacy. "This important study provides a better understanding of our strengths and where we need to improve in order for us to compete in a global economy."
The GEDI's detailed rankings compare U.S. entrepreneurship and U.S. performance vis-à-vis the world's other major economies. In particular, the index reveals that the United States is among the world leaders in startup skills; it is a leader in competition; and it is first in developing new technologies.
Comparatively, the United States needs to strengthen its technology sector and cultural support for entrepreneurship and for high-growth businesses. The report found that in many respects a slowdown in U.S. entrepreneurial activities may be a reflection of the progress made by the rest of the world — learning from the U.S. model and beginning to catch up.
The GEDI captures the contextual features of entrepreneurship by focusing on three broad areas. The first is entrepreneurial attitudes, a society's basic attitudes toward entrepreneurship through education and social stability. The second area of focus is entrepreneurial activity, what individuals are actually doing to improve the quality of human resources and technological efficiency. The final area is entrepreneurial aspirations, how much of the entrepreneurial activity is being directed toward innovation, high-impact entrepreneurship and globalization.
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