Free Enterprise

Email Internet Policy: Why Your Small Business Needs One

2009-11-23T16:50:44Z

As more and more small businesses are growing, so are the number of small businesses using computers and workplace emails. If you are one of the small businesses that are providing their employees with computers and work emails, be aware that you should have an explicit email internet policy with your employees available.

There are several important reasons for this. The first is that employees may claim an expectation of privacy with their emails if you don't explicitly say that you may be monitoring their emails from work issued computers. The Wall Street Journal reports that courts are increasingly ruling that if companies have not explicitly told employees that they are monitoring employee emails, then they don't have the legal right to do it. And the scary part? That has happened even when the email in question was sent from a workplace email account, not a personal email address.

Other reasons for having an email internet policy in place are: workers using email to potentially sexually harass other employees, revealing trade secrets, and even sending racist or sexist messages. All of these range from being embarassing for your small business to compromising your small business' safety and liability.

So what do you do if you don't have an email internet policy in place? Here are some things that you should include in your policy:

Personal Use of Email

Explain whether employees can use email for personal messages. If you place any restrictions on personal messages describe those rules explicitly to your employees.

Monitoring Practices

Reserve the right to monitor your employee's email messages at any time in your policy. This will shoot down any privacy claims that your employee will have should you have the unfortunate luck to head to court with that employee over an email issue. Explain to employees how you plan to monitor their emails. For example, if you are doing a keyword search for certain words, let them know ahead of time.

Workplace Rules Extend to Cyberspace

Any rules that you have in place for the workplace should extend to your email internet policy. Let employees know that. Rules such as zero tolerance towards harassment, discrimination, violence, solicitation, and theft of trade secrets all apply to work emails.

Email Deletion

Let employees know that there will be a regular maintenance of workplace emails. When you delete emails in order to allow for proper storage, let employees know so that they can save important emails from being accidentally deleted.

For more information, please visit our Related Resources links below.

Related Resources:

Dos and Don'ts: Workplace Internet and E-Mail (Findlaw)
Monitoring Employee Communications (Findlaw)
Email Privacy (Findlaw)
Email Security Policy: Why You Need One for Your Employees (Findlaw)

Treasury Dept. Holds Forum For Small Business

2009-11-20T22:30:23Z

The Treasury Dept. held a forum on Thursday to address how the economy has affected small business. Specifically, the forum addressed how to help small businesses weather the bad economy. ABC News reports that an Obama administration focused on how to increase small business access to financing.

In fact, the press release about the forum from the Treasury Dept. details what Treasury Secretary Timothy Geithner wanted to convey, stating: "Small businesses, in particular, are still facing a very challenging credit environment." This is very true with small business lenders like CIT Group and Advanta filing for bankruptcy in recent news. Geithner wanted to give small business owners some hope about how to get financing.

However, there are special interest groups like The American Small Business League who are skeptical. In their own press release they warned that one of the key issues plaguing small businesseswas not on the agenda: "While many subjects will be covered, the American Small Business League (ASBL) predicts the one subject not discussed will be the diversion of federal small business contracts to corporate giants." This seems to be something that is thwarting small businesses from getting some financial help from the government.

In fact, President Obama himself is quoted by the American Small Business League as saying: "It is time to end the diversion of federal small business contracts to corporate giants."

Geithner did not specifically address this issue in his press release: "First, we need to provide direct help to small businesses...And we've done that by implementing higher guarantees and lower fees for Small Business Administration loans, greatly increasing SBA lending, which Karen will talk more about in a moment." While Geithner does address the issue of SBA lending, he did not directly address the concern brought up by the American Small Business League of corporate diversion of grants and funds earmarked for small businesses going to big business.

According the ABC News, this forum was a chance for President Obama to do some outreach on job creation prior to the White House's Forum on job growth and economic improvements on December 3. Hopefully that outreach will hone in on what is really important to small business owners.

Related Resources:

Parsing Geithner's speech to small business (Reuters' Entrepreneurial Blog)
Business Banking and Securities Links (Findlaw)
Financing Basics (Findlaw)
Ten Things to Think About: Financing Resources (Findlaw)

Goldman Sachs and Warren Buffett Help Small Businesses

2009-11-19T17:02:18Z

Goldman Sachs and Warren Buffett are working together in order help small businesses gain access to capital. The partnership also provides small business owners with college scholarships. Goldman Sachs will provide the monetary resources. Warren Buffett is not planning to use any of his own money towards the program. He plans on mentoring small business owners.

ABC News reports that the company will contribute $200 million dollars to a project called 10,000 Small Businesses which will help small business owners get a higher education through grants.

An additional $300 million dollars will be given to small businesses though a blend of lending and charitable support. Goldman Sachs executives will also mentor small business owners with advice, technical help, and through networking.

Warren Buffett will serve as a co-chair for an advisory council along with Goldman Sachs CEO Lloyd Blankfein, and Harvard Business School Professor Michael Porter.

Mr. Buffett highlighted how important small businesses are to the country's overall economic well being. ABC News quoted his statement which read, "Our recovery is dependent on hard working small business owners across America who will create the jobs that America needs. I'm proud to be a part of this innovative program which provides greater access to know-how and capital -- two ingredients critical to success." Mr. Buffett plans on giving advice to small business owners.

There are some critics who claim that this is Goldman's ploy to deflect criticism about its recently questionable practices. One of the reasons for this criticism has been CEO Lloyd Blankfein's recent statement during a conference in New York where he said: "We participated in things that were clearly wrong and have reason to regret. We apologize."

Whatever critics want to say, this is a bright spot in what seems like a bleak economy. If you are interested in the program, their website is here. An email where you can send questions about the program is 10000SmallBusinesses@gs.com.

Related Resources:

Financing Basics (Findlaw)
Sources of Small Business Financing (Findlaw)
The Lowdown on Business Loans (Findlaw)

New Gift Card Rules to Affect Small Businesses

2009-11-17T19:45:31Z

The Federal Reserve Board released a press release that announced that proposed rules to restrict fees and expiration dates would also apply to gift cards. The rules were put in place in order to protect consumers from hidden costs in gift cards. The rules also require that the terms and conditions must be stated on the gift cards.

Will These Rules Affect My Small Business?

As a small business owner, please be aware that these gift card rules may apply to you. The rules are meant to cover retail gift cards which can be used to buy good or services at a single merchant (such as yourself) or an affiliated group of merchants (like your local business association). You are also supposed to keep a close watch of any gift cards that are given out by credit card companies if you happen to accept that credit card company's cards.

So if you are planning to give out gift cards during the holiday season (and in the future) for your small business, just make sure you keep these guidelines in mind.

What Are These New Guidelines?

According to the Federal Reserve Board, these guidelines would prevent dormancy, inactivity or service fees on gift cards except: "(1) there has been at least one year of inactivity on the certificate or card; (2) no more than one such fee is charged per month; and (3) the consumer is given clear and conspicuous disclosures about the fees. Expiration dates for funds underlying gift cards must be at least five years after the date of issuance, or five years after the date when funds were last loaded."

How Can I Make Sure My Small Business Is Compliant?

Make sure you read the guidelines listed in the press release. As a small business owner, you should also be aware of the CARD Act.

There is a fact sheet available at the White House website about the Credit Card Accountability, Responsibility and Disclosure Act.

There is a section that refers to gift cards. Make sure that you read and understand the rules in place for gift cards before you issue your own gift cards. It could save you trouble down the line. It also helps protect your customers.

If you have any more questions about gift cards in general, please visit the links in our Related Resources section.

Related Resources:

Banking - Gift Cards (Findlaw)
Summary of The Credit Cardholders' Bill of Rights Act (Findlaw's In House)
Kmart Settles Charges Over Gift Cards (Findlaw's Common Law)

Preventing Defection: Confidentiality and the Non-Compete

2009-11-16T19:50:58Z

The economy has left many small businesses in the dust when it comes to unfair trade practices. Bigger and more powerful businesses have started scalping the talent from smaller businesses. The scary part? Sometimes there is nothing that small business owners can do about it.

CNN reports how one small business owner almost lost it all because her employees were stolen away from her by a larger rival. Ms. Debra Killian details how she lost 10 of her employees to her rival. Not only did her rival allegedly steal her employees, but it also allegedly stole her pending loans which were worth close to a $1 million dollars, her client lists, and her confidential files.

The worst part was that after fighting a lengthy legal battle that lasted four years, she ended up with a losing verdict on all counts.

She told CNN: "It was a complete shock. We lost everything that took 10 years to build in one month, because one company stole it. How is that not illegal?"

How do you make sure that this does not happen to your small business? Get your paperwork in order. For example, make sure you have your employees sign off on well crafted confidentiality agreements and, to the extent that your state allows, non-competition agreements.

Confidentiality Agreements

A confidentiality agreement is a contract (or part of a larger one) in which the employee promises not to share information about how your small business is run, secret processes, plans, formulas, data, or machinery. This type of agreement lasts even after the employee has left your company.

If well crafted, it can be a good way to protect your small business.

Non-Competition Agreements

While you must be careful not to go too far, non-competition agreement can bar an employee from becoming employed by a rival company or a company that conducts the same type of business for a certain period of time. Non-competes can also bar an employee from setting up a company that can possibly compete with your small business or steal away your clients.

Non-competes must be limited as to geographical scope and time. You also need to be aware of how your state treats non-competition agreements. Some states, such as California largely do not enforce them.

Why are these agreements so important to small businesses? Because even a happy small business can quickly come under risk when employees become rivals, particularly in tough times when large competitors may try to lure your talent away. One of the major reasons Debra Killian lost her case was because she did not require her employees to sign either a confidentiality agreement or a non-compete.

To the extent allowed in your state, it's a good idea to protect yourself and your business by making sure you don't make the same mistake. It could cost you.

Related Resources:

Protecting Trade Secrets (FindLaw)
Ten Things to Think About: Employment Contract Provisions (Findlaw)
Sample Confidentiality and Non-Competition Agreement (Findlaw)
Noncompetition Agreement Basics (provided by John A. Klassen, P.A.)

Franchisees Have a Cow Over New Burger King $1 Deal

2009-11-16T17:15:17Z

Burger King's franchisees are up in arms about the new promotion for a dollar burger -- specifically a $1 double cheeseburger. They claim that the company does not have the right to set maximum prices on their menus.

AP reports that the National Franchise Association which represents more than 80% of Burger King's United States franchise owners stated that the deal on the double cheeseburgers actually forces the franchisees to take a 10 cent loss on each burger. The raw cost of the dollar burger is 55 cents but when you add on royalties, overhead costs, and worker wages, it typically costs a franchisee $1.10 to make a double cheeseburger.

Burger King is hoping that the dollar burger deal will entice customers to spend more on other items that would bring in profits; such as fries and soda. However, franchisees are still angry over what they feel is Burger King's disregard to their businesses. Franchisee owner Steve Lewis wrote in statement, "The current management team has disregarded rights that Burger King franchisees have always had." It seems like Burger King wants to boost sales overall at the expense of its franchisees.

Burger King tried to bring in this dollar burger deal before, but it was voted down twice by Burger King franchisees. The franchisees are hoping that courts decide that pricing power lies with franchisees and not with the corporation.

Burger King's spokewoman told AP that the lawsuit is "without merit" especially since an earlier appeals court ruling showed that the company had the right to require that franchisees must participate in its value menu promotions.

Franchisor and Franchisee Relationship

The relationship between a franchisor (Burger King) and its franchisees is one of mutual trust.

The franchisor (Burger King) provides business expertise such as marketing plans, management guidance, financial assistance, site location, and training. The franchisees need to supply their energy like they would in their own small business.

In this case, the franchisees are claiming that the franchisor (Burger King) is going beyond their scope of power over the franchise.

For more information, please check out our Related Resources Links.

Related Resources:

Buying a Franchise: Overview (Findlaw)
Franchise Agreement Questionnaire (Findlaw)
Consumer Guide to Buying a Franchise (Findlaw)
Legal Advice Prior to Buying a Franchise (provided by Mario L. Herman)

Social Media 104: The Perils of Paid Reviews

2009-11-13T21:05:27Z

As we have discussed in previous posts on Free Enterprise, online social media outlets can be a powerful marketing tool for you. They can help you gain word of mouth buzz that you would not ordinarily be able to get. And the best part? It's typically free.

The problem is when small business owners start sending their products out to bloggers or online reviewers, or paying them a fee in order to acheive that word of mouth buzz.

It is important that you are aware of the new guidelines set out by the Federal Trade Commission (FTC) that govern endorsements and testimonials.

The FTC felt compelled to revise their guidelines because social media on the internet has made it harder to distinguish paid advertisements from purely editorial endorsements.

For example, how does a consumer know that a blogger's rave review of a product is really because that particular blogger likes the product? They really can't tell. If the blogger has been paid, then they are committing astroturfing, and violating the new FTC guidelines unless they disclose that fact.

What is astroturfing? It is the practice of artificially creating a positive online buzz about products and services. We did a post previously about astroturfing here.

Previous FTC guidelines were based on traditional paid advertising which is much clearer. Infomercials, advertorials, and paid magazine spreads clearly state that it is paid advertising.

Under the new FTC guidelines, both the endorser and the maker of the product must disclose any "material relationships" they may have with each other. The Common Law Blog goes into detail about the guidelines here.

A "material relationship" could be as simple as giving the endorser your product to try out free of charge. This is called "payment in kind." Now while your small business may be able to give a freebie to your local news station, magazine, or radio station, you will not be able to do that with your favorite blogger.

Who is responsible to adhere to these guidelines? Both the endorser and the maker of the product are responsible. If there is failure to adhere to these new FTC guidelines, the penalty could be a fine to up to $11,000.

So when you are tempted to give a freebie out, or pay someone to write a nice review on a site like Yelp! or tweet glowingly about your product, just know that without disclosure, it simply does not pay.

Related Resources:

Bloggers and Paid Reviews: New FTC Guide to Endorsements (Findlaw's Common Law)
10 Tips to Avoid Fake Reviews (Findlaw's Common Law)
Small Business Social Media 101 (Findlaw's Free Enterprise)
Small Business Social Media 102 (Findlaw's Free Enterprise)
Small Business Social Media 103 (FindLaw's Free Enterprise)

Shoplifters Beware: New Tools Protect Small Businesses

2009-11-13T13:50:05Z

With the recession cutting into the pockets of many small businesses, it hurts even more when you realize that you lose even more because of inventory loss. According to CNN, this loss is 25% more than the losses that small businesses face from shoplifting. Stealing from employers is not that uncommon.

Employees actually stole an estimated $15 billion dollars from retailers last year according to Univ. of FL criminologist Richard Hollinger. The scary part? The closed circuit TV monitoring system never pinpointed the crime occurring.

It seems that many small business owners just don't have the time, patience and resources to sift through all of those hours of footage in order to catch the perpetrators.

Now they have a solution to their problem.

In order to address this inventory loss problem, the firm Agilence has developed a sophisticated software suveillance system that syncs that footage with point of sale data. Once that software identifies typical theft moments, a team of "loss prevention" experts analyze these results.

The good thing about this is that each small business owner can get a customized report which notes likely cases of fraud. The firm also recommends ways to prevent losses from occurring at all. Their recommendations range from employee intervention to improved training.

Some of the trends that Agilence has seen is the pairing of employees with customers in order to commit theft. The employee can simply void a transaction but still allow the customer to leave with unpaid goods. Looking at these trends have helped Agilence pinpoint how small business can make sure that they are not getting ripped off.

With the holiday season coming up, small business retailers tend to add seasonal workers. These seasonal workers may not have had the training or background check that permanent workers get. Investing in something like Agilence's services may be able to give you some peace of mind.

Related Resources:

Minimize Business Risks and Losses Checklist (Findlaw)
Store theft cost to your family: $435 (CNN)
House Judiciary Committee Hears From Federal Law Enforcement on Retail Crime (Reuters)
Shoplifting (provided by John W. Thornton, Attorney at Law)
Classifications of Crimes (provided by Robert Sneed Laher)

Is a Small Bank Better for a Small Business?

2009-11-12T13:50:56Z

News has been pretty dismal on the lending front of small business. With the news of bankruptcy filings of CIT Group and Advanta, it seems like there are little if any options for small business financing.

But the NYT is reporting that smaller local banks are moving in to fill that void. With charming slogans such as "Policies to serve your street, not Wall Street," these banks are aiming to keep your business on Main Street alive.

Perhaps turning to the local bank on your street for your small business may not be such a bad idea. A small bank may be more likely to provide stability in today's more somber economy. The Federal Deposit Insurance Corporation (FDIC) thinks that small banks are the best capitalized in the industry right now. That means they have the adequate cash on hand to absorb loan defaults.

In a time where larger institutions are cutting back on outstanding loan balances and hesitant to give loans to small businesses across the nation, smaller local banks have actually grown. In fact, according to an analysis done by the Independent Community Bankers of America, the small bank sector was the only portion of the finance industry to illustrate a growth in net loans and leases in the second quarter.

This is good news considering that most small business owners have reported that they have had a harder time trying to land a loan for their small business. The National Federation of Independent Business (NFIB) said that a net 14% of small business owners have had a harder time getting a loan.

NFIB said, "With very weak plans to make capital expenditures, add to inventory and expand operations, it would appear that many of those trying to borrow are having cash flow difficulties due to very weak sales."

If you are having a hard time trying to finance your business, perhaps you need to rethink the places that you have been trying to borrow from. Instead of thinking big, think small.

Related Resources:

Sources of Small Business Financing (Findlaw)
Advanta Bankruptcy May Hurt Small Business (Findlaw's Free Enterprise)
CIT Group Bankruptcy Affects Small Businesses (Findlaw's Free Enterprise)
Loan Modifications (provided by Reno Law Firm)

Succession Plans & the Small Family Business

2009-11-11T22:18:22Z

No matter how successful your family business currently is, it is hard to maintain that success over several generations. So many family businesses fade over time due to family feuds, fights about money, financial hard times, and a lack of consistency with business operations.

In fact, Inc. calls this the rule of thirds. Only a third of family businesses make it to the second generation, a third of that makes it to the third generation, and so on.

So how do you give your small family business a chance against the odds? It seems that successful family businesses have a few characteristics that define them: they make or sell things that last, keep manufacturing in the United States, and are able to deal with setbacks. They also stick to the morals and values that the company started with.

Another essential part of keeping up a family business is working out the succession plan.

The Wall Street Journal did a piece about how to approach succession.

Here are some tips for dealing with this sometimes touchy topic:

Discuss The Succession With the Family

While this seems like a no-brainer, you would be surprised at how many small business owners make decisions that affect the family business without consulting others.

Nothing alienates your family more than taking charge without consulting them first. This way you can ensure that you hear everyone's viewpoints. You never know which family member will express interest in the family business unless you talk it out with everyone.

When you talk things out, you can make sure that there is also no ill will in the family because of unspoken sentiments.

Write a Company Mission Statement

Once you write this down, you can get a better idea about what you want your company is and what you dream your family business will eventually become.

It will also give your family a roadmap and guide to follow in the future in case they get lost.

Write Down Your Job Description

What if your son assumes that he will become the successor of your business but you already wanted your little brother to run it?

You can write down a job description that outlines all of the tasks necessary in order to run your family business.

Once you put down all the nitty gritty details on paper, you can let them both see what the job entails. You may be surprised at how quickly people understand if they are up to the task if they see it written on paper.

Another bonus is that you may be able to include both family members by splitting up the tasks or creating new positions in the business.

Consider Options Outside of the Family

Just because mom knows best does not necessarily means she knows business. It may be easier for you to outsource your management talent.

A lot of families want to retain ownership of the business, but may not want to actually run the business. If you get some management help, it may help your business.

You can also seek the advice of consultants. Consultants are typically experts in their field and they may be able to help you maximize your business. Consultants can brought in to help plan a smooth transition during a succession or even help you plan one.

All of these tips are just the starting point for something as intensive as designing succession plans. Check out our related resources section for more information.

Related Resources:

Operating the Business After the Owner Dies (Findlaw)
Estate Planning: Some Special Circumstances (Findlaw)
Brother, Can You Spare a Dime? (Inc.)
Estate Planning FAQ (provided by The Law Offices of Smith & Doran, PC)

Advanta Bankruptcy May Hurt Small Business

2009-11-10T21:20:18Z

Another blow to small businesses came in the form of Advanta's bankruptcy filing this week. This news coupled with CIT's bankruptcy means that getting credit lines and loans that small businesses need will just get harder and harder.

Advanta is a small business credit card lender. They filed for Chapter 11 bankruptcy this past Sunday CNN reports. Its lending arm called Advanta Bank Corp. was not including in this filing.

News of the Advanta bankruptcy is not surprising. It had stopped giving out new loans earlier this year. It has also seen a very sudden rise in defaults on the loans it had already given out to small businesses. Advanta had listed out its assets as valuing $363 million while its debts are $331 million.

Just this past September, Advanta had its defaults rise up to 24%. That is more than double from what it was a year ago.

Advanta has come into scrutiny in the past because it initially offered credit cards with low interest rates and then hikes up the rates over 30%.

According to BusinessWeek, the company had stopped all new credit card lending in May and then settled with FDIC over the interest rate hike practices. The FDIC said that the hikes constituted unfair and deceptive practices. Advanta did not admit or deny this claim during settlement.

Advanta also has to contend with lawsuits. There have been class action lawsuits over these unfair and deceptive practices. There is also a class action lawsuit from Advanta's stockholders. You can get a play by play of each of the lawsuits that Advanta has to contend with here at the Philadelphia Business Journal.

So while the news of the Advanta bankruptcy is hard on small business owners looking for open credit lines, it actually may turn out to be a silver lining instead.

Related Resources:

CIT Group Bankruptcy Affects Small Businesses (Findlaw's Free Enterprise)
Chapter 11 Bankruptcy (Findlaw)
Advanta faces several probes (Philadelphia Business Journal)
Consumer Bankruptcy (provided by Patrick Burns & Associates)
Bankruptcy Alternatives (provided by Law Office of Mark Ankcorn)

Small Business Retirement Plans: Help From IRS

2009-11-10T20:05:07Z

While many small businesses want to hire more employees, many small business owners feel that they can not afford the benefits that come with a new hire.

A press release from Intuit, Inc. states that: "The latest Intuit Payroll survey from Intuit Inc. (Nasdaq:INTU) finds that nearly half of the small business owners surveyed, 44 percent, are planning to hire new employees within the next 12 months. At the same time, many small business owners believe that benefits are key to attracting new hires but are finding them difficult to afford."

Many small business owners say that they are in a bind. In order to attract the talent that they need in order to succeed, they need to offer benefits such as healthcare and retirement benefits.

The tougher of the two is definitely retirement benefits: "Employer-provided retirement plans are even scarcer. Among the businesses surveyed just one-fourth offer retirement benefits. Of those who don't, nearly two-thirds said they don`t have a responsibility to do so while the remainder said that they can`t find an affordable plan."

It turns out that small business owners have a resource to turn to now. The IRS has set up a very useful website to help small business owners set up retirement funds for their employees.

You can get information on the different retirement plan options, maintain plans, and correct common plan errors.

You can check it out here: IRS Retirement Plans Navigator.

Here some benefits for setting up a retirement plan for your employees:

Employer contributions are tax deductible.
Assets in the plan grow tax-free.
Assets grow with compounding interest.
Businesses may receive tax credits and other incentives for starting a plan.
A retirement plan can attract and retain better employees, and consequently reduce new employee training costs.

As you can tell, there are quite a few benefits for small business owners. Make sure to visit the site and plan out what to do with your own employees.

Related Resources:

Retirement Plans and Pensions (Findlaw)
Types of Retirement Plans (Findlaw)
Retirement Plan FAQ (Findlaw)
Employment Law Overview (provided by Hinkle, Jachimowicz, Pointer & Emanuel)

Small Business & the Year End Bonuses

2009-11-10T18:15:10Z

Holiday season is approaching and now is the time that many of you business owners dread: to give or not to give?

I know that it should not be a dreadful decision because holiday season should be about joy and cheer. However, the economy has made it harder to spread joy and cheer around because it means less resources for you to use.

Since holiday gifts means that you have to spend more, it seems that most of you small business owners are coming down to a hard choice of whom to give to.

Small business owners have elected to use their small resources in order to give customer gifts instead of employee bonuses.

According to Atlanta Journal Constitution, 44% of survey respondents said employees would receive year end bonuses. This year? 31%. And how many plan on giving raises? 16%, compared to last year's 30%.

What about holiday gifts short of employee bonuses? 35%, compared to 46% last year.

A lot of small business owners are feeling too pinched to give to their employees. This is sad news because a good number of Americans are employed by small businesses. Half of Americans working in the private sector are employed by companies with 500 or less employees.

The Sacramento Business Journal reported that small business owners are still planning to give holiday gifts to customers. This is most likely because holiday gifts are seen as a useful marketing tool. It helps foster and cement a business relationship.

Some 47% of small businesses plan to give gifts to their customers during the holidays -- which is basically on par with the 52% who said they would last year, according to the American Express OPEN Small Business Holiday Monitor, an annual survey of business owners conducted since 2002.

So what do you do? Here are some tips to help you decide what is best for your small business:

What is your budget?
Does your business rely heavily on customer services? If so, then you may need to show that you are customer friendly by giving that holiday gift.
Can you do a bartering system, points, or give your own products? This may help you gain a more consistent clientele and get rid of excess inventory instead of dipping into your cash resources.
If you stop giving gifts or bonuses, would it seem weird? If you have always given gifts, stopping now would just strike your employees and customers as odd. It can also lead to speculation that your company is not doing well even if it is. A drop in consumer confidence could occur.

Whatever your holiday plans may be, always remember that gifts is just a small part of the joy and cheer. There are countless other ways to do so without breaking the bank and cleaning out your small business.

Related Resouces:

Can I Fully Deduct The Cost Of Gifts To Employees? (Findlaw)
$25 or under gifts that say 'I thought about you' (AP)
Ease holiday stress: Shop around the calendar (FindLaw)
FAQ: Employment Law (provided by Kundra & Associates Tax Attorneys)

Healthcare Reform & Small Business: 3 Bills Explained

2009-11-06T21:09:08Z

As we wrote about in a previous post, small business owners cite healthcare costs as a major hurdle faced by their business.

In a National Small Business Association press release, the President of the organization has stated that "The number of small-business owners who are able to provide health insurance to their employees has dropped from 67 percent in 1995 to 38 percent in 2008. NSBA members voted health care reform their number one priority for 111th Congress--addressing the failures of our health care system simply can not wait yet another year."

Since healthcare reform is such a hot topic for small business owners, here are some key points of each of the proposed bills being discussed in Congress right now.

The key points (which are discussed in Forbes) will help you gain a deeper understanding of what each of the bills holds for you as a small business owner.

The House Democratic bill (Affordable Health Care for America Act)

Who's covered? Around 96% of legal residents under 65. An estimated 83% are covered now. An important thing to note is that a majority if the people left uninsured would be illegal immigrants.
What will it cost? $1.055 triliion over 10 years, according to the Congressional Budget Office. However, as small business owners, please note that the estimated net cost is $894 billion. This number includes penalties paid by individuals and employers who do not comply with new requirements.
How is it paid for? New taxes on single people making over $500,000 and couples making over $1 million a year would provide $460 billion over the next decade.
What does it require of employers? Employers will be required to provide health insurance to their employees or they will have to pay a penalty. This penalty is 8% of the payroll. However, as a small business you may get a break. Companies with payrolls under $500,000 annually will be exempt. Small businesses with ten or fewer employees will get tax credits from the government to help them offer insurance.

The House Republican Bill (Common Sense Health Care Reform and Affordability Act)

Who's covered? The House Republican bill has not been analyzed by the Congressional Budget Office, the official umpire on cost and coverage. The bill aims to make insurance affordable and accessible to all, but it's unclear how many of the nearly 50 million uninsured would be covered.
What will it cost? Not yet publicly known.
How is it paid for? With no new taxes proposed, Republicans cite savings from reducing Medicare and Medicaid fraud, caps on medical liability and a streamlined approval process for generic drugs as helping to fund the initiative.
What does it require of individuals? It has no individual requirement to have insurance.

The Senate Democratic Bill

Who's covered? The bill wants to cover 94% percent of Americans, with specification that illegal immigrants will not receive government benefits.
What will it cost? The goal is $900 billion over 10 years.
How is it paid for? It will be paid by fees on drug makers, medical device manufacturers and insurance companies.
What does it require of employers? Employers will not be required to offer coverage. However, larger companies (ones with 50 or more employees) will have to pay a fee as large as $750 times the entire workforce if the government subsidizes coverage for the workforce.

Now that you know more about these proposed heathcare bills, you can figure out how to plan for your small business in the future.

Related Resources:

Healthcare Reform the Top Small Business Concern (Findlaw's Free Enterprise Blog)
California Small Businesses: Health Care Reform OK (Findlaw's Free Enterprise Blog)
Health Care Reform: Study Sees Benefits for Small Businesses (Findlaw's Free Enterprise Blog)

American Small Business League Calls out Obama

2009-11-05T22:12:49Z

A statement released today by the American Small Business League criticizes the President's first year policies for small business.

The statement details how Obama made key promises for small business, but failed to live up to those promises. The statement does bring up valid points that every small business owner should be aware of.

Here are the key needs listed in the League's press release:

Restore the Small Business Administration's (SBA) Budget and Staffing

Despite promising to bolster the agency, the Obama Administration has failed to refill key positions, or restore the agency's budget. Today, the SBA's staff is at a 30 year low.

Restore the SBA Administrator to a Cabinet Level Position

Despite encouragement from both Republican and Democratic leaders in Congress, President Obama has refused to restore the SBA's Administrator to cabinet level status.

Implement the Congressionally Mandated 5-percent Set-Aside Goal for Women Owned Firms.

To date, the Obama Administration has failed to honor that promise.

End the Diversion of Federal Small Business Contracts to Corporate Giants

Since 2003, more than 15 federal investigations have found that billions in federal small business contracts have been diverted to Fortune 500 firms in the U.S. and some of the biggest firms in Europe and Asia. In February of 2008, President Obama acknowledged the magnitude of the problem by releasing the statement, "It is time to end the diversion of federal small business contracts to corporate giants."

These are all valid points that we have covered in previous Free Enterprise posts. For example, the post SBA Revises Size Standards for Small Businesses details how SBA is allowing larger businesses to qualify for small business incentives. In addition to giving small business contracts to subsidiaries of Fortune 500 giants, increasing the size limits for eligible businesses diverst busniesses eligible for "small business" contracts .

Make sure to look at all the points and see if you agree with the American Small Business League. And also make sure to check out our related resources for more information regarding President Obama's policies towards small business.

Related Resources:

Fewer Small Business Contracts for Big Business? (FindLaw's Fee Enterprise)
Obama Health Care Speech: Small Business Excerpts (Findlaw's Free Enterprise)
Expanding Small Business Roundtable (Findlaw's Free Enterprise)
Obama Proposes New Steps for Small Business Loans (Findlaw's Free Enterprise)