December 20, 2012

State of Alabama
Press Release: Alabama Department of Commerce

Five Essentials for Small Business in 2013

December 17, 2012


For those of us who followed along last week, we posted the top five essentials for small business in 2013. Today we are posting the complete list, all in one place, for concise viewing.

Small businesses must prepare for what appears to be an extremely difficult economic environment. Since the bursting of the 2008 credit bubble, U.S. consumers and financial institutions were dramatically hurt by bad debt and over levering themselves. These two vital components of the U.S. economy, that drive individual consumption which is approximately two thirds U.S. GDP, have been a drag on the economy over the last four business years. Although consumers and financial institutions have partially repaired their balance sheets, most of the debt burden was shifted to federal, state, and local governments. The size of government has never weighed so heavily on our economy and potentially runs the risk of crowding out the private sector. The Small Business Authority, on a daily basis will report on the five essential things independent business owners will need to consider to position themselves and have successful enterprises. We will report on these items on a daily basis beginning this Monday, December 10th.

  1. Managing Obamacare. Under the PPAHCA, small businesses with 50 or more employees are mandated to buy health insurance for their employees or pay a fine, or tax according to Justice Roberts. In addition, many small businesses will be eligible for tax credits under the PPAHCA, as well as taking under consideration managing full-time and part-time staff to meet or beat the 50 employee threshold. Will small business owners hire advisers and consultants to get them through this knothole? Will they try to read and understand the 2000+ page piece of legislation themselves? Healthcare expenditures are approaching 20% of GDP, thus spiraling healthcare costs is a significant concern for small business owners.
  2. Small businesses will need to consider how to get business loans for growth or refinance. This struggle moves into its fifth year, post the 2008 credit bubble bursting. Not only is new credit unavailable to support growth for small businesses, many small businesses are having a difficult time getting their local community or major money center banks to roll over existing financing.  Why is this so? Well, with the election over we don’t see the banking regulators stepping up the pace of bank seizures and tightening the capital and compliance on existing under capitalized banks. The continuous process of de-levering and shrinking the balance sheets of the banking industry has made rolling over or refinancing existing debt a big struggle for small businesses. Small businesses must do what they can in this loan starved environment by working with existing banking relationships, pay down debt and continue the global process of de-levering themselves as well as the banking industry.
  3. eCommerce solutions for most small businesses are becoming essential for small- to medium-sized businesses. eCommerce payment processing sales during the last few months grew at 15-20 % year over year, while bricks and mortar sales were down. An eCommerce site is essential, not only to take payments but also to allow a business to be found online. Those without a website are at a significant disadvantage. This includes not just big box retailers or major service providers, but also local small businesses and their competitors. The ability to be found and highlighted through  a local internet search is a necessity these days
  4. Cyber Security for Small Business. Small businesses are going to need to make the leap into the cloud and accept the fact that their businesses are at risk each and every day. They are no longer able to ignore the risks inherent in keeping sensitive data in a tower on their hard drive under their desk. Lawyers and medical professionals cannot ignore the risks of keeping their client’s health and financial data sitting on a server in the closet of their office or unbounded local IT provider. For the following reasons businesses must embrace the cloud:
  • It is more cost effective than their current IT configuration.
  • It is more secure. Not perfect, but generally more secure than their current IT configuration.
  • It is more efficient regarding access to data 24/7 off of a tablet or smartphone and remotely.
  • Constant surveillance and security offered by cloud hosts of business applications are better and security guaranties are available and can be offered. In a nut shell and lastly, small businesses need to embrace the cloud in 2013 and should talk to The Small Business Authority to learn how to enhance their business in this fashion.

5.      Cloud Computing for SMART results. Cloud computing allows all of a small business’s critical transactions, as well as economic, ecommerce and web site traffic data to be accessible at anytime, anywhere – with the proper application. Something like the Newtek Advantage is extremely beneficial to small business owners, allowing them to see their real-time business information from any smartphone or tablet. Cloud computing is SMART, because it allows for:

S: Sales Increases – less time dealing with administrative matters means more time selling and servicing customers.

M: More Control, Less Surprises – key business stats and metrics are available in real time; small businesses can make more informed decisions faster and never be out of touch with the most important business data.

A: Accelerated Profits – real-time information means better and more profitable decisions.

R: Real-time information means key business management data is only seconds away, whenever and wherever the business operator is.

T: Technology Enhancements — leads to decreased cost and expense of an IT department — everything is in the Cloud.

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