• Best Strategies for Your Loan Applications
    You may need a loan to expand your business, undertake a marketing campaign, purchase equipment or a building, or for some other very good purpose. Borrowing money for business is a common practice, but how to do it isn’t commonly understood. How do you go about deciding which type of loan is best? What documents do you need? How much debt can you afford to carry? How do you go about the application process? Loan options There are many types of loans and it’s important to apply for the right one. The right one depends on what you need the money for and how much money is involved. For example, if you need immediate cash but sell only to consumers, then factoring isn’t the right type of loan for you. Here’s a list of the various types of loans to consider, depending on your needs: SBA loans are loans made by banks and other lenders which are guaranteed by the U.S. Small Business Administration. There are different SBA loan programs (e.g., working capital loans repayable up to seven years; real estate purchase loans repayable in 25 years). Term loans to receive a lump sum that is repaid over a set period. These are regular business loans from banks, credit unions, and online lenders and range from microloans (e.g., $500) to substantial capital (e.g., $1,000,000 or more). Lines of credit which allow you to borrow up to the limit of the line, paying interest only on the amount used. Equipment loans to finance purchases or leases of equipment or vehicles, with repayment periods tied to the life of the equipment. Factoring, which is a financing method based on business customers’ invoices (you receive cash now at a discount to the face amount of the invoice). Merchant cash advances, which are based on monthly credit card payments. Personal loans from owners (such as borrowing with a home equity loan or with retirement savings), family, and friends. The interest rate you pay on the loan depends on the type of loan you need and your credit worthiness. A term loan will have a fixed rate for the length of the loan, while a line of credit will have a variable interest rate that usually adjusts monthly. Loan application process Once you’ve decided on the type of loan that works best for you, begin the application process. Again, the time involved in application preparation… Read more »
  • Mental Health Issues in the Workplace
    May is Mental Health Month and a good time to think about mental health issues in the workplace. According to the World Health Organization (WHO), depression and anxiety cost an estimated $1 trillion per year in lost productivity worldwide. Employers may be well aware of the need to create a safe workplace by employing safety measures (e.g., using safety equipment such as hardhats for construction workers and disposable nitrile gloves for health care workers). But the need for policies and practices with respect to the mental health of employees may not be properly addressed. Here are some issues to consider. What are the workplace risks to mental health? Happify Health found that in 2018 39% of young employees (ages 18 to 24) had depression, and that this was significantly higher than in 2014. But depression was reported in all age groups. It’s a difficult conversation when it comes to mental health. How much can or should employers do to minimize risks and support good mental health? WHO lists the following as key risks to mental health: Inadequate health and safety policies; Poor communication and management practices; Limited participation in decision-making or low control over one’s area of work; Low levels of support for employees; Inflexible working hours; and Unclear tasks or organizational objectives. Other stresses to mental health include bullying and psychological harassment (“mobbing”). What are the strategies for addressing mental health issues? Obviously the first step in crafting policies for your company is to recognize that there’s a need for being proactive to protect and promote mental health. Workplace Strategies for Mental Health, a site that builds awareness and promotes mental health, offers a variety of suggestions on how to do this. For example, consider offering healthy break activities that support calming, energizing, or relaxing. Here are some other suggestions: Be sure that employees understand how company health insurance can be used for those experiencing mental health issues (e.g., depression). Make sure employees experiencing mental health issues take their sick or personal days or other time off as needed. Consider posting a list of referrals for mental health resources in the community (e.g., suicide prevention lifelines, domestic abuse resources, support groups). Offer a mental health first aid course, which informs employees of how to help someone experiencing a mental health crisis. Can you terminate a worker with mental illness? According to the EEOC, it is illegal for an employer… Read more »
  • Summer Vacations in Review
    In the next several weeks and months, employees will be taking time off from work for summer vacations. Now is a good time to determine what your company’s needs will be this summer. Also, given the tight job market, it’s a good time to assess your vacation policy. How many employees take summer vacations? According to a survey by, only 38% of employees with paid vacation days plan to use them all this summer. Other findings: 59% plan to use more than half 5% plan to use less than 25% of their days 6% won’t use any time Have you planned for a reduced work staff? Determine what will need to be done during the time when you/employees are off. Do what’s possible in advance. For me, this always means working double time for weeks in advance to satisfy the work deadlines that fall during my vacation. If possible, discuss with customers and clients about scheduling work after your/your employees’ vacations. Employees in your company may or may not fall within the survey’s findings mentioned earlier. Make sure you’re covered for any problems that need to be addressed while you are away. This can be done by giving an employee added responsibilities. Also, see that employees can cover for each other when needed. If necessary, hire temporary workers to fill in gaps in your staffing. With temporary workers, you pay the agency a fee for their services; they remain the employees of the agency. Summer interns may be helpful too. What’s your vacation policy? How many vacation days do you offer? Federal law does not mandate that you give any paid time off, but you’d be hard-pressed to hire and retain good workers without a paid vacation policy. According to the BLS, 73% of all workers in the private sector have paid vacations. The number of annual paid vacation days workers receive varies with length of service. After one year of service, workers are most likely to have 10 to 14 days of paid vacation (38%). After 10 years of service, workers are most likely to have 15 to 19 days of paid vacation (39%). Those with at least 20 years of service are most likely to have either 20 to 24 days of paid vacation (32%) or more than 24 days of paid vacation (29%). Vacation policies at small companies may differ from those at large corporations. According… Read more »
  • State of Small Business: Let’s Celebrate!
    National Small Business Week (May 5-11, 2019) is a time to honor the contributions of entrepreneurs and small business owners to the U.S.  As the SBA says: “More than half of Americans either own or work for a small business, and they create 2 out of every 3 new jobs in the U.S. each year.” It’s also a time to look even harder at what small business means to the U.S. economy. About small business According to the SBA Office of Advocacy’s most recent Small Business Profile, there are 30.2 million small businesses and this represents 99.9% of all U.S. businesses. These businesses employ 58.9 million workers, representing 47.5% of all U.S. employees. Births and deaths among small businesses showed improvement as compared with the period of the Great Recession through 2014. There were 240,000 new businesses, while 215,000 “exited.” This occurs when companies go from having at least one employee to none and then remain closed for at least one year. Small businesses are big exporters. Of all the U.S. companies that exported goods from the U.S., 97.6% of them were small businesses. They generated 32.9% of the U.S. $1.3 trillion in total exports. About small business owners’ confidence There are numerous surveys that take the pulse of small business owners to see how they feel about the economy. According to SunTrust’s Small Business Pulse Survey, there’s strong confidence in the economy. Two-thirds (68%) report strength in their local communities and in the U.S. economy (65%). In fact, 85% said their company’s financial well-being is equal to or greater than last year, and that they have less work-related stress. The head of business banking at SunTrust said: "Small businesses are a cornerstone of successful communities so we should celebrate their optimism about the economy and their business." About National Small Business Week The week is a time to honor various small business owners and companies with awards. There is also a free virtual conference (May 7 and 8) on various topics. And there’s a Twitter Chat (@SBAgov) on May 10 at noon ET (9 am PT) on how to start and grow a small business (I’m participating as an invited industry expert). Follow the conversation at #smallbusinessweek. The post State of Small Business: Let’s Celebrate! appeared first on Barbara Weltman. Read more »
  • Crafting a Social Media Policy and Practice Guide
    According to a survey from Visual Objects, 38% of small businesses don’t have social media accounts, although another 22% plan to have them. Have you considered how social media can help your business and how to manage your social media activities? What social media can do for you The purpose of social media…Facebook, Twitter, Instagram, Pinterest, YouTube, LinkedIn, and other sites…is essentially to engage with current customers and to attract new customers. This is a big generalization, so let’s get specific. You can use social media to: Offer promotions. You can post news on upcoming sales events and offer coupons. Be responsive to questions or problems from customers. For example, if you see a negative post about your company, service, or product, you can post a response to address. Provide information and help. For example, if you sell a product requiring assembly, you can post a YouTube video demonstrating how to do it. Build brand awareness. This can be through sharing about what’s happening at your company (e.g., how employees are volunteering in the community). Product advertising. Content marketing and influencer marketing can be used to advertise products. Handling social media More than half (56%) of small businesses handle social media in-house, according to the survey referenced earlier. About a third (32%) use freelancers for this purpose. Others use agencies or influencers. If you are handling social media in-house, consider using tools to help you. Hootsuite helps you schedule posts and monitor your social media activities with its analytics. TubeBuddy helps you manage a YouTube channel. Buffer has a list of the top social media tools for 2019. Budget for social media You may be thinking that social media is free. Well, it largely is, but there are some things you may want to budget for: Social media tools. Some of the tools have monthly fees. For example, Buffer, which is a tool like Hootsuite to schedule posts, analyze performance, and manage all social media accounts, has a plan starting at $15 per month. Ads. If you want to supplement postings, it will cost you. You may have to pay for content postings or influencer activity on your company’s behalf. And don’t forget the invisible cost of time…yours or your employees’. Final thought Someone wise (but unknown) said: “Social media is just a buzzword until you come up with a plan.”   The post Crafting a Social Media Policy and… Read more »
  • Borrowing: The Good, The Bad and The Ugly
    According to the March 2019 NFIB Small Business Optimism Index, more than half (51%) of owners reported that they weren’t interested in a loan. But companies need to borrow money from time to time and should think about how a loan can impact a business and its owners. The good There are some compelling reasons why it makes good business sense to borrow money. To raise capital that is needed for expansion and growth. If a company wants to introduce a new line of products, expand to a new location, do research, or engage in other activities to grow, a loan can provide the capital that’s needed. To provide working capital. If a business needs to pay suppliers or other expenses and is having difficulties with cash flow, a loan can help to smooth out the rough times to ensure sufficient cash on hand to pay bills. Of course, a business must have the financial wherewithal to qualify for a loan; the midst of a cash flow crisis isn’t the time to apply. To reduce an owner’s personal investment. If an owner has put his/her own funds into the business (e.g., used home equity dollars or borrowed from a retirement plan), a business loan can be used to repay the owner some of this investment. The bad Loans entail some downside to consider: Repayment. Borrowing means having to repay the principal, plus interest. Typically, this must be done on a monthly basis. So repayment is a drag on cash flow. Interest cost. Borrowing money isn’t free; there’s an interest cost to consider. In today’s interest rate environment, the cost is not too high (higher, though than in previous years). However, looking ahead, as the Federal Reserve continues to raise the Fed Funds Rate, expect to pay more for commercial loans. Tax write-off limitation. In broad terms, a deduction for interest expense is limited to 30% of the business’ adjusted taxable income. However, there is a small business exception: those with average annual gross receipts below a set amount (e.g., $26 million in 2019) can deduct all of the interest payments. The ugly Loans can turn out to be very bad mistakes in some situations. This can result in: Personal liability for owners. Typically, small business owners must personally guarantee loans to the business. If the business defaults, the owners are on the hook for the balance and the lender can… Read more »
  • It's a Balancing Act: Managing Your Employees and the Workplace
    As a business owner, you have to balance your vision for your business with handling employees. You may want employees to behave in certain ways to further your vision. But you also want to refrain from exercising too much control over their behavior for fear of alienating them and, perhaps worse, violating the law. Here are some aspects of control you may want to think about. Discriminating on the basis of appearance The federal law bars employers from discriminating on the basis of religion, national origin, race, color, or sex. There are also bans on discrimination based on age, sexual orientation, marital status, disability, and pregnancy and maternity. The laws in your state may go even further. For example, states are starting to ban discrimination based on height and weight. Michigan permits workers to file actions if they have been discriminated on the basis of  height and/or weight. Massachusetts is considering a similar measure this year. Personal use of cell phones You’d like employees to be working on business during their time on the job. But it’s reality that employees use their own phones for various personal matters while they’re on the clock. They may be shopping online, playing games, or just surfing the web. What can you do, or should you do anything? The NLRB weighed in the matter concerning ADT, Inc., a company that is unionized. The company, recognizing that the use of cell phones during business hours was a distraction, had a policy that allowed cell phones to be used only for work-related or critical, quality of life activities (e.g., contacting a babysitter or a doctor). The NLRB said in a memo posted on March 15, 2019, that the company’s policy violated the law because it wasn’t clear that communications regarding union activities were permissible. So, even if your business isn’t unionized, you may want to think about how to craft a company policy that balances the need of avoiding distractions and optimizing productivity with the concerns and practices of employees. Not an easy thing. Medical and recreational marijuana Even though marijuana is a controlled substance under federal law, 34 states and the District of Columbia permit its sale for medical and/or recreational purposes. How does this impact employers in these locations? This is an area of emerging law that you need to monitor. For example, a court in New Jersey held that an employer was in violation… Read more »
  • Association Health Plans (AHPs): Where They Stand Now
    One of the key issues for small businesses is how to pay for health coverage for employees. These employers want to offer coverage to their staff to help keep them healthy as well as to compete in a tight labor market with large companies that almost universally offer health coverage. Businesses considered too small to participate in the large group market, which is where large companies obtain coverage with lower premiums than those offered to the small group market, pay a higher price for comparable coverage. Last year, the Department of Labor issued a rule that permitted the creation of Association Health Plans (AHPs). Under the rule, small businesses, including self-employed individuals who have no employees, could band together by geography or industry to obtain health coverage as if the group were a large employer. The problem Eleven states (CA, DE, KY, MA, MD, NJ, NY, OR, PA, VA, and WA) and the District of Columbia, led by New York, challenged the DOL’s rule, arguing that it unreasonably expanded the definition of “employer;” it didn’t restrict what could be considered an employer for purposes of AHPs. The attorneys general in these states reasoned that AHPs, which are not required to be compliant with the Affordable Care Act (ACA), would undermine ACA and expose consumers to a risk of fraud and harm (i.e., higher premiums in the non-AHP market). A federal court held largely sided with the challengers, holding that parts of the DOL rule were impermissible because they were contrary to ERISA and circumvented the Affordable Care Act. Status of association health plans (AHPs) now Association health plans in effect prior to the DOL rule are not impacted; these older AHPs were ERISA compliant. But the status of AHPs established in light of the DOL rule is unclear. The DOL disagrees with the court. At the moment, the status of AHPs are uncertain. Here’s what could happen: New AHPs may still qualify under rules in effect before the DOL’s rule or could qualify by making some changes. The federal government could ask the court to stay the decision pending an appeal. AHPs that have been created under the DOL’s rule would continue. The DOL could issue an amended rule incorporating the court’s guidance as contained in the decision. (Only parts of the DOL’s rule were invalidated by the court.) The court said that the DOL’s rule failed to put a… Read more »
  • Long Working Hours Can Be a Trap: How to Get Free
    As singer/songwriter Jim Croce wrote many years ago,  “There never seems to be enough time to do the things you want to do.” With business growth and, in some companies, under-staffing, working more than the traditional 9 to 5 is common. But stop and think whether long working hours makes sense to continue. Here are reasons for closing your doors after 35 or 40 hours and some ideas for achieving this result. Business cost for long working hours There are things that need to be done, but having workers do them on overtime hours is not necessarily a good solution. It’s been reported that those who work more than 50 hours a week are less productive. Those who work more than 55 hours a week are significantly less productive. What’s more, working long hours can lead to absenteeism and increased worker turnover. Beyond this, there’s dollars and cents to consider. Unless salaried workers are “exempt,” you must pay time-and-a-half for those working more than 40 hours per week. A proposed change in the salary amount for determining exempt workers was issued by the U.S. Department of Labor. The rule, which is expected to go into effect later this year, would raise the weekly wage from the current $455 to $679. This translates into an annual salary of $35,308 under the new rule (up from $23,660). So having employees who are subject to this overtime pay rule work more than 40 hours a week is going to cost you. And more employees will fall within this pay rule under the new weekly wage amount. The DOL has posted FAQs on the proposed rule. Health cost of long working hours Small business owners typically regularly work long hours. SCORE found that 39% of owners work over 60 hours a week. Many employees also work more than 40 hours a week from time to time. Whether this describes you or your employees, understand the health risks involved in working long hours. Increased cardiovascular problems. According to a study published last year, working 61 to 70 hours a week increased the risk of coronary heart disease by 42%. That risk rose to 63% for those working 71 to 80 hours a week. Increased risk of stroke. A study reported in The Lancet found that those who worked long hours increased their risk of having a stroke. Increased risk of suicide. A 2017 study found that… Read more »
  • Your Travel Expenses While Away from Home
    You can deduct travel costs while away from home in the pursuit of business. These costs include your lodging, meals (subject to a 50% limit), dry cleaning and laundry, and other expenses. But the key to deductibility is being “away from home.” What’s a tax home? If you live and work in the same general area, your tax home and personal residence are essentially one and the same. Thus, when you go out of town for a conference or to see a customer or vendor, you can deduct your travel expenses for that trip. If you have a personal residence in one location but work in another location outside your general area and the arrangement isn’t temporary, your tax home is the place of work. This prevents you from deducting the cost of going between your home and place of work. These costs are viewed as commuting costs, which are nondeductible personal expenses. Where a person does not have a permanent place of business, but rather is employed temporarily by various employers at different locations outside the general area called home, the person’s permanent residence is the tax home. Traveling expenses from the residence to those temporary places of employment may be deductible. A temporary assignment in a single location is one that is realistically expected to last (and does in fact last) for one year or less. If a person accepts employment either permanently or for an indefinite time away from the place of his/her usual abode, the person’s tax home shifts to the location of the new principal place of business. Determining the principal place of business is based on a review of the location where the taxpayer spends more time, engages in greater business activity, and derives a greater proportion of his/her income. Independent contractor and various work locations What if you are an independent contractor who works for more than one company at more than one location outside of the general area of your residence? Whether you can deduct travel expenses depends on the situation. In one case, a taxpayer was a “concierge CFO” who traveled from his home in Atlanta to the company that engaged him in Pennsauken, NJ. He worked 4 days a week there and returned to Atlanta for the balance of each week. Because his contract with the company was for 3 years, this work there wasn’t temporary so his tax home… Read more »
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