For those small business owners who think they were ignored in the new stimulus bill (American Recovery and Reinvestment Act of 2009), think again. While the debate continues to unravel as to “who gets what and whether it is enough”, one thing is certain: more money is coming in the direction of small businesses through the U.S. Small Business Administration (SBA). Remember, this is the agency responsible for the outreach, licensing, and implementation of, you guessed it, money into the pockets of small businesses. This is done through private licensed lenders who have agreed to join the SBA program. In other words, if your local community bank has a commercial loan department, it might very well have a SBA department which makes these loans. They are called SBA loans because the Federal government will reimburse, to a certain percentage, defaulted loans, thereby giving incentive for the private banks to loan more money. Net effect–more loans will be available for small business concerns. This is a continuing article (20 in all) on the subject: Help. Is anyone out there loaning to small businesses anymore?

Before we talk about how much more money is available to the SBA under the stimulus package, let’s look at the current status of one of the popular SBA loan programs. There is a loan program out there and SBA lenders are actually making loans currently: the Community Express Loan Program. This gives unsecured small business loans between $5,000 and $50,000 with very little paperwork, answers typically in two days, interest rates presently at 7.75%, funding and two weeks, and monies wired directly to your business account. There are still lenders participating in this program, although Congress has failed to make the program permanent and still has a 10% cap on the number of loans.
Enter the Obama stimulus bill. Let us look how it affects this program and small business lending as a whole.

So should we be excited by the stimulus package? Isn’t it all too customary in a new spending bill for a government agency to receive more funds? Not at all as to the SBA. During the Bush Administration tenure, they could easily have renamed the agency the ISBA (Ignore Small Business Association). As they were making “sound bite” statements to the press of how they were helping small business, they were arrogantly trying to dismantle it, or when they were in a better mood, just cutting the budget.

The point is we have a new administration that actually likes small businesses. Remember these are additional monies over and above the SBA’s current budget . As we all know, budgets are determined in approximately March of each year (assuming Congress has the good graces to agree) to be used for the next year. The SBA has already received their budget. This is whipped cream placed on the top of that small business cake.

And we are not talking about token amounts here. Here is how the additional monies are broken down:

1. 375 million for temporary fee reductions or elimination on SBA loans and increased SBA loan guarantees, up to 90% for some loans. Translation: When a borrower gets a SBA loan they pay a SBA loan guarantee fee which goes to Washington and used as a war chest to pay banks if there has been a default. That guarantee fee, depending upon the loan, is currently between 50% and 85%. There is a possibility that some loan programs can now be increased to a whopping 90% guarantee. If a borrower no longer pays these fees, the money has to come from somewhere, and in this case it is taxpayers’ money which is subsidizing those fees.

2. 255 million for a new loan program to help small businesses meet existing debt payments. Translation. You have a loan secured by fixed assets or real estate and want to refinance it, either to lower payments or put more money in your pockets for expansion.

3. 30 million for expanding SBA’s Micro Loan Program, with $6 million to help finance new lending and 24 million for technical assistance grants to Micro lenders. . Translation: Under the Microloan program, the Federal government loans blocks of money to the Microloan lenders who then reloan it, at higher rates, to the deserving communities and small businesses and usually collateral is required.

4. 20 million for streamlining the SBA lending and oversight process with new technology. Translation: The streamlining process will make it faster and more efficient to process loans and oversight is to monitor SBA licensed lenders–make sure they are acting for the benefit of small businesses and complying with the program guidelines.

5. 15 million for expanding SBA’s surety bond guarantee program. Translation: If you are a building contractor and have to take out a performance or payment bond on a project, you need substantial assets to secure the bond. This will help getting your hands on that needed bond and be able to secure the contract.

6. 25 million for staffing as to the new programs.

7. 20 million for the Office of Inspector General. Translation: To inspect and audit the licensed SBA lenders.

Although one could make the argument this new law is “too little too late”, we have to give our current administration a chance to do good things with this fresh money. And don’t forget the mindset of the SBA lender. Although they are not as wildly quixotic as stock market speculators, their purses open and close based upon the mood of the country. We want them to be as comfortable as possible when we walk toward them for money.

Best Buy Line

It is not about the size of your business; no matter what the size is, accounting is one business process that one needs to undertake. Setting up any business and running it successfully is not an easy task and the task becomes all the more difficult if you are not good at dealing with numbers. Managing numbers is tricky and if you are someone who is not very comfortable with that, then the task becomes all the more difficult. However, as a business owner you also know that properly handling all the numbers of rather the accounting work for your firm needs to be handled efficiently. Small business accounting can turn out to be very difficult for you if you do not have the proper resources in place to do the work for you. You can either hire an accountant in-house or outsource the accounting work of your small business to a third party to get the work done efficiently.

Small business accounting can be handled efficiently if you as the owner make sure that every aspect of your business dealings are properly accounted for. For example, you can make sure that you keep the invoice of any financial transaction that is made in the name of your business. Whatever things are purchased, no matter how small or big it is should be properly accounted for.

It is very important that all these things are done correctly if you want to ensure that you take your businesses to the highest levels of success. You always start with a small business and mange it well to gradually earn huge amount of success. To run a business successfully you need to put in lots of effort, so with all the resources available at your disposal you must make sure that this is done efficiently.

Small business accounting must be handled properly and if this is not done it can cause the owner lots of difficulties during the tax paying season. Paying taxes to the government is mandatory and you can do this without delay only if your have the small business accounting of your firm in place. An accountant is a professionally qualified to handle and deal with everything that needs to be taken care of for calculating the taxes. Only a professional will know what things need to be taken care of for calculating the taxes, so it will be better if you let him handle this for you.

There is also certain software available in the market to help in taking care of small business accounting. The accountants can use the software to ease the work that they are doing, they just need to know how to use the software efficiently to manage all the accounts of the business. If the accounts are managed properly one can easily find out if their business is running successfully or is it incurring any loses. Once you have with you a record of all the income and expense incurred for your business, you can decide whether you want to adopt some new strategies for your business or not.

People Mine

Every business faces a certain degree of risk; some of them can be controlled if appropriate action is taken to do so where as some are largely unpredictable and uncontrollable. Even when every aspect of the business is carefully considered and carefully planned and executed, a business could still face closure due to some factor that was beyond its control such as fire, tornado, tsunami, hurricanes, earthquakes, floods etc. When you carefully identify the risks that your business faces and take action accordingly to counter the risk, the business will certainly be successful.

Types of Risk for Small Businesses:

Some of the risks that small businesses face are overhead cost, cost of equipment, expected sales volume, salary cost, taxes, price charged for service or product, competitor’s actions, the local economy, changing trends, risk that the product may become obsolete. Other risks include damages from fire, water, natural calamities, intentionally inflicted damages, loss of data and property due to theft, machine breakdown forcing work to come to a standstill, cash flow problems that may force a business to close.

Every sector has its set of risks and the responsibility of the owner is to identify study and counter these risk factors. Loss of records due to fire or other such risks will make it impossible to determine the financial transaction details such as who has to pay or who has to be paid, making it impossible to bill or collect from customers.

Failure to obtain all necessary licenses and permits may be a risk that could close the business. Employees that may embezzle, liability losses, public liability, liability to employees, business could close temporarily due to ill health of its owner or due to his death, when a key employee who was invaluable is unable to continue etc. are some other risks that may hinder small business from functioning normally. When cash flow forecasts are inaccurate, the business runs the risk of taking bad decisions that could have been prevented such as applying for a large amount of loan that the business cannot really afford. Selecting unqualified personnel as key employees, disgruntled employees can be a risk too, as they can take a business to the cleaners suing the company no matter if they are right or wrong etc. are other types of risks for small businesses.

Insurance:

When you consider insuring your business, your agent would have identified all insurable risks and would have advised you to take certain precautions to counter/prevent them. However, the types of risks for small businesses vary according to the nature of the business, hence the owner should himself, also make an effort to identify the risks and effect good risk management techniques.
Several firms offer their service as well as products that help in running a business easily.

Events King

In small businesses and home-based businesses – owners and employees of small enterprises often have to multi-task to get work done.

The problem is – most entrepreneurs or employees are not experts at everything. Shocking, I know. Many times having a business owner create their own website – is as wise as handing over the company’s accounting to the intern hired last Tuesday. Sure, it could get done, but how well and how efficiently? And how much money and time does that cost the business?

Now comes the reader participation portion of this article. Get a picture in your mind of outsourcing. What comes to mind?

If you are like most Americans – you thought of big corporations moving their customer service, call centers, and tech support overseas. The agents don’t speak fluent English nor do they seem adept in the subjects they are charged with taking care of. I don’t know about you, but as a customer, I am not impressed when I receive sub-par service because it was good fiscally for the shareholders.

The small business outsourcing that I am in favor of, however, takes a decidedly local flavor. With downsizing and experts in their field leaving the corporate world to strike out on their own there are plenty of qualified independent professionals able to pick up the slack in your organization.

I should know – I was one.

Before increasing my network of professionals in business support services and executive business coaching – I was a “solopreneur” myself. Other companies would hire me to do their website design, or graphic design, to write copy, press releases, or plan and host a publicity event. Whatever skills I had were made available to the small business owner that needed a little extra help.

Now I do executive business coaching and help small businesses do what they do best. My business support services company can do the rest. Imagine how relieved your customers and clients will be when they ask for tech support and get connected with someone who understand them, their problem and can actually help!

Freelance copywriters are ready to help you with your target marketing. We can connect you with highly trained assistants that can take care of much of your administrative work without being in your office. Need a blog or website, search engine submission or SEO? We’ve got talented web professionals at-your-service.

As a B2B industry – I see business support services as a welcome and viable option for businesses that just can’t do everything in-house. Whether cost, talent or time is the limitation – outsourcing domestically and locally can be a highly effective solution to your business needs.

Huang Chang Wang

There are a number of profitable small business ideas that you can consider. Many companies looking for investors, for example, advertise themselves in business magazines and newspapers. You can also find a number of profitable small business ideas posted in the internet. It is however important that you always check out with your business bureau to verify the legitimacy of a profitable business idea that has been offered to you.

This will help you avoid the hassles of dealing with illegal companies whose objective is just to steal money from their investors. It is best that you make a research before dealing with a company regardless if a friend or a colleague has referred it to you. Be also cautious of companies enticing you to invest on business ideas that seem too good to be true. Make sure that you seek for a business advice before signing any document to invest in particular business opportunities.

Operating a successful business

It is difficult to have a perfect formula to ensure that your new business ideas will become successful. There are, however, certain factors that you can consider to ensure that the business idea that you have will become a profitable business. Make sure that you seek business advice from experts who can give you helpful inputs when choosing for a profitable industry. It is also helpful that you have the necessary business resources when operating particular business.

Business resources do not just refer to the business cost. It also refers to the skills and interest that you need to have to make you qualified in running profitable companies. Profitable startup businesses have become successful because they are operated and managed by entrepreneurs who are knowledgeable and have natural interest in the industry that they have chosen to do business with.

Anime Park

Contractors and other types of small businesses that require entry into a home or business to complete work may want to consider getting bonded. Bonds are sometimes referred to as surety bonds. A bond guarantees that a customer will be paid if the business does not fulfill its contract. Many small business owners who purchase bonds do so for protection in the event that one of their employees steals from the home or business of a customer. In the event that this does occur the owner of a bonded business will only be covered if the employee who has been charged with theft is convicted.

There are five types of bonds available to small businesses. They are:

• Performance – Work will be performed based on the terms of the contract.

• Bid – If you win the bid, you will do the work.

• Indemnity- Covers loss if you fail to do the work or if you fail to pay other vendors based on the terms of the contract.

• License- Licenses are required by some states for certain types of businesses. You may obtain the license directly from the state.

• Payment- States that you will be responsible for paying the subcontractor and material suppliers.

Getting bonded for small business is not a requirement in all states. Even if it is not a requirement you may still want to consider it as it may give your business an advantage, as many customers will not do business with businesses that are not bonded. In order to determine whether or not you will need to be bonded you may contact the city government of the city in which you wish to do business.

If you decide to get bonded, getting bonded for a small business is not a difficult task. You will need to contact an insurance agent that sells bonds. You may check with friends or neighbors who may be able to recommend an insurance agent who sells bonds. You may check your local yellow pages directory for “surety bonds or you may search the internet.

Many small business owners confuse bonding with insurance. A bond is not an insurance policy and will not cover any property damage or personal injury that may be caused by a worker. It is important to make sure that your small business has the proper insurance coverage for these occurrences.

Getting bonded for small business is relatively inexpensive. The costs vary based on the amount of the chosen indemnity. It is important to keep in mind that most bonding companies will only sell you coverage for an amount that you are able to cover with your current liquid assets. A small business such as a janitorial service may start out with a $5,000 bond. As the business expands the owner may purchase more coverage. Rates for a $5,000 bond may start as low as $150. When getting bonded for a small business, just as with any legal document you must make sure that you have read the document carefully and fully understand before signing.

Promoting Unit

Introduction

Buying or selling a small business can seem bewildering but the process has a logic to it that sharp entrepreneurs can understand and use to help manage the time, direction, and strategy of their business lawyers and other professionals who help them in the process. This article gives you an overview of what you need to work with your professionals intelligently and effectively in buying or selling a small business.

Three Types of Small Business Sale

A small business can be sold by asset sale, stock sale, or merger, with asset sale being the normal vehicle of choice for many small businesses.

Business Sale — Canned versus Customized

Sometimes the sale of a small business is done via a basically canned process through a broker. In that case, a buyer and seller get a homogenized process that may or may not suit their legal needs. The documentation will be “standard” but contract terms will not be customized for the parties. Such documentation will cover minimum terms but little else.

Better by far in all but very small sales is to use customized deal documents prepared and reviewed by qualified business lawyers. Typically, a seller will get legal and accounting advice on how to structure the sale and will then work with a prospective buyer to get the basics of the deal documented in a term sheet or letter of intent. A term sheet, though not legally binding, provides a useful framework for moving forward. The parties may of course skip right to a formal contract instead.

Business Sale — The Purchase Agreement

The formal contract is a purchase agreement. It normally contains covenants or promises (”I will sell to you and you will buy from me x assets or x stock shares,” etc.), warranties and representations (”as seller, I warrant and represent that I have good title to what I am selling you and that there are no liens on it and no lawsuits against it,” etc.), and conditions to closing (”our deal with close only at such time as x, y, and z conditions are met,” as for example getting a landlord’s consent to a lease assignment).

The Escrow Process, Due Diligence, and Confidentiality Agreements

The contract is signed and an escrow normally established as a mechanism by which to get to a closing where the sale will consummate. Procedurally, such an escrow works much like that set up when a home is sold, except that (for example) instead of waiting for the results for a title search the parties may be waiting for a liquor license approval or some other condition pertaining to a business sale.

Due diligence is a critical part of this process, mostly on the part of the buyer. This is the process by which a buyer inspects the books and records of the business being sold and takes other steps to ensure that what is being sold is authentic and worth the value being paid. Lawyers and accountants typically assist with this process.

Detailed due diligence can be done before or after a formal contract signing or it can be done in stages — limited due diligence prior to signing a term sheet with detailed due diligence during the escrow period. Buyer satisfaction with due diligence is often a condition to closing.

Due diligence is not normally allowed until a buyer has signed a confidentiality agreement.

Common Traps and Pitfalls in the Sale of a Small Business

Many traps and pitfalls can arise during a sale. Sometimes a buyer will claim to want to buy a business while in fact scheming to gain access to key information that will be used competitively against the seller. A confidentiality agreement helps here but this may prove cold comfort to a seller stuck with a lawsuit. Be discerning in this area.

A serious seller risk is to take a carry-back loan with inadequate protections. Proper collateral (UCC and otherwise) is usually key to dealing with this in case of default.

Buyers normally face the greater risks. Unscrupulous sellers can play all sorts of tricks to make a deceptive sale. The nature and range of tricks used, or even mistakes inadvertently made, is vast and varied. This is often the major area of focus by attorneys and CPAs in shaping a seller’s representations and warranties and in handling due diligence.

From a buyer standpoint, the structure of the deal can affect liability risks: in a stock sale, a buyer will inherit the entire corporate history, good and bad, along with the purchase; in an asset sale, a buyer can normally limit the inherited liability risk considerably if not altogether.

Most businesses are sold with a premium placed on good will, consisting generally of the going concern value of having a particular customer base, a recognizable name, and so on. Most buyers then will want a non-compete agreement from the seller or, if the seller won’t give it, at least a non-solicitation agreement relating to existing customers.

Watch out especially for distress sales. Unless a distress sale proceeds by UCC foreclosure, or out of bankruptcy, any buyer of a business overwhelmed with debt can potentially inherit all or part of that debt even if the contract specifies that the buyer is not assuming any liabilities. Given the risks, distress sales are typically radioactive for a buyer.

Common Business Tax Issues

Another major issue is tax. A stock sale will have very different tax consequences from an asset sale, some favoring the seller and others the buyer.

For example, if a seller is a C-corp with low basis assets, any sale of its assets for a substantial sum would likely lead to a serious risk of a double-tax. Let us say corporate seller ABC Corp. sells its business for $10 million via asset sale and has a near-zero basis in its assets. This can happen, for example, where a manufacturing business with fully-depreciated assets is sold. Normally, that sale would constitute a taxable capital gain to the corporation. Given that this is a C-corp, however, the cash in the company would normally be taxed again as a dividend when distributed to shareholders.

In the same scenario, if the ABC Corp. shareholders sold 100% of the stock of the corporation to a buyer, then those shareholders would pay tax on a one-time capital gain and nothing more.

Such tax issues can get complex and should be handled with skilled professional help. A good business lawyer can suggest approaches that can mitigate double-tax problems. The point here is not to attempt to address any given situation but rather to illustrate how tax can seriously affect the outcome depending on how a sale is structured.

By the same token, in an asset sale, the purchase price should be allocated among the assets being sold, and this will result in differing income and sales tax treatment, depending on the nature of the assets being sold and on the nature of the allocation. Such allocations should be done with the help of a qualified lawyer or CPA.

Don’t ignore these tax aspects of a business sale — they can sometimes be the most important part of a deal, and they are almost always important to some significant degree. In more sophisticated deals, tax-free deals are also done via reorganizations.

Estimated Transaction Costs

How about transactional costs? These can literally go all over the board. In a typical small business sale, a buyer should use as a rough estimate of total transaction costs a rule of 2% to 5% of the purchase price. This would be money spent on attorneys, accountants, and other professionals, as well as for escrow fees. Seller costs normally are lower, though they can be significant if broker fees are involved or if the deal is complex. In any case, don’t rely solely on any rule-of-thumb approach — use that for initial planning and then consult with your professionals to refine the estimates.

Work with a Qualified Business Attorney

This highlights some key issues connected with a small business sale but does not address their legal implications or strategies for implementing them (see your lawyer for this). It also does not touch upon important issues such as the need to get consents and approvals (landlord, agency, vendor, and spousal, among others), the use of fairness opinions, opinions of counsel, no-shop agreements, hold-back provisions, earn-out provisions, or issues such as UCC bulk sales compliance, indemnification, joint and several liability, and the like. These deals can have many nuances that only a knowledgeable lawyer will pick up.

For your particular deal, get a good business lawyer. It is not wise to scrimp on expense in complex areas where stakes can be high. Whatever is saved today will be spent many times over trying to dig out of a mess if problems occur. Therefore, budget what is needed and do it right.

Images Union

No matter how small a business is, today it is very common that the small business owners have their own website for the business. It is a good chance for the business to grow. Small business website is not necessarily a sophisticated website. A simple professional website will do.

Nevertheless, it is not easy to build a website and it does cost too much time, in addition you have to deal with codes that you might not be familiar with. However do not be skeptical because there is always a solution. There are so many web developers out there that are ready to help you and get their payment in return. There are as well website development tools that can help you although you have to deal with the codes yourself and spend most of your time on it.

Thinking about wasting money to employ others to do that for you might lead you to say No to having your small business website. And thinking about the hardship might as well put you into giving up the idea. With no certainty that having website will actually grow your business, you might only choose the safe way and back to the routine by running your business as usual.

What if there is a big chance to success? One example, if you own a small automotive spare parts store, wouldn’t it be amazing if you can draw a lot of prospects online? Prospects mean customers, customers mean sales, and sales mean profit, they are basic business terms. Even better, one time customers could mean life time customers. Internet has opened the door to unlimited opportunities. Starting an eBay online store will be a good step to begin with. By selling the spare parts online you are growing your chance to success. In this case a small business website can be very essential to ensure more success. With eBay you can build relationship with your prospects, and introduce your website, that may lead to future sale off eBay, which means you do not have to pay eBay for the cost.

That is only one of many possible ways. Small business website for your business is not to be underestimated. Building a website can be tough. But what if there is a tool that can help you save your time, help you avoid headache because of the codes, help you build a professional website? Would that be fabulous?

Giga Flux

What we do to earn a living is a very big part of our lives and therefore it is equally important that we should enjoy what we do and look forward to every morning as we get out of bed. If you are one of those persons who have to force themselves to go to work then you should consider becoming your own boss. I know starting a business can be a very expensive and time consuming affair but there are many small business ideas, which are relatively easy and inexpensive to set up.

We are after all living in the twenty first century and the internet has brought many things within very easy reach of the average individual and there are many small business ideas that can be set up over the internet. Many of these small business ideas require very little capitol and time to set up and then it’s up to the individual to work and make the business as big as they want it to be. You don’t have to be a computer nerd or an internet guru to make these businesses a success because many of these small business ideas can also be set up with very little technical knowledge of computers.

Let me give you a few examples of small business ideas that can be easily set up over the internet. You could start your own web business selling custom jewelry, you could become acquainted with the stock market and trade from home, you could offer a resume writing service, you could repair laptops, you could become a web publisher and build websites to earn revenue, and you could even open a dessert catering business out of your home. There’s no end in sight when it comes to small business ideas that you can set up on the internet.

One of the easiest small business ideas to set up on the internet is affiliate marketing. With this business idea you don’t even have to create your own product because you are simply helping to sell other peoples products and getting paid commission to do so. Google Ad sense is another small business idea that is very easy to set up and the best thing about this business is that, once it is up and running then there’s very little you need to do to maintain it. If there is a small business idea that is as simple and effective as this, then I would like to hear about it as quickly as possible.

It is almost impossible to list here all the small business ideas that you can set up on the internet. All you need is the desire to leave the rat race and do something different. You just need to sit down and brainstorm and you will come up with many small business ideas that you can set on the internet. You need to do your research and decide what you will enjoy doing the most, this is the key to making any business a success because the more you enjoy it the more you will work at it and then may be you could also become one of those people whose life has been changed by the internet.

Do You Follow

You need more self-assurance. The most successful people in business have extreme self-assurance. Feelings of lack self-assurance about your small business will stop opportunities dead in their tracks every time. But, self-assurance is a small business growth accelerator. Having self-assurance is a great way to grow your small business.

I have a great example for you. I was working with one of my clients on a dvd training distribution opportunity in Europe. Basically, a corporate training company in Europe had contacted her about integrating her training materials into their existing courses. My client was intrigued by this idea and brought me on because of my expertise in international distribution planning and management.

In our first few email exchanges the engagement sounded promising. Then, as we discussed more of the details, their lack of self-assurance had shown through. They sprinkled their email replies with comments such as “we’ve never done this before”, “this is a new idea for us” and the like.

I advised my client to discontinue the project due to their lack of self-assurance in their own business and product line. People lacking in self-assurance need to be nurtured and provided an opportunity to learn, grow and prosper. This might be fine for a new junior employee, but problematic in an international distribution partner. In this scenario of different time zones, currencies, laws, and business culture, the basic challenges are already there. Dealing with a partner’s lack of self-assurance would likely result in an ineffective partnership.

Self-assurance is critical in negotiations, sales presentations, and customer service. You need to demonstrate that you know your business, our proud of your business and that even when you might not have the solution, you are confident that you can find one. As you portray greater self-assurance your vendors, your employees, and your customers will all respect you more.

Be confident in your small business. Having self-assurance is a great strategy for growing your small business.

Small Bussiness UN