Struggling to Afford Health-Care Costs?

After years of hard work by NFIB members, a Senate vote has finally been scheduled for Small-Business Health Plans in May. SBHPs level the playing field for small-business owners, and a big push is on to encourage your senators to vote in favor of this important legislation. In the current issue of MyBusiness magazine, we profile two small-business owners who are living through the nightmare of escalating health-care costs—and desperately need relief soon.

In the Spring there will be growth

This morning, the U.S. Labor Department released the latest snapshot of the U.S. labor market and the picture looks good. Employers boosted payrolls by a sizable 211,000 in March in a springtime hiring burst that pushed the unemployment rate down to 4.7 percent. "The American economy has now added jobs for 31 months in a row," President Bush said. As usual, the report is in line with earlier predictions of NFIB chief economist and MyBusiness columnist Bill Dunkelberg. Here's his take on recent economic news from the current issue of the magazine.

Before You Sign a Lease

After almost 17 years in the same building, my mom and dad (who own a small business in Alabama) have decided to move to a new office complex that's under contruction in the town where I grew up. It's been so long since they've negotiated a new lease that I'm sure they'll be extra careful and cautious. In the April/May issue of MyBusiness, the NFIB Legal Foundation's Beth Gaudio lays out key points for small-business owners to consider before signing a lease on commercial space. If you're considering new digs for your office any time in the near future, it's a must-read.

Small-business optimism tumbles

Optimism among small-business owners took an unexpected tumble in March. The NFIB Small-Business Optimism Index lost 3.5 points, falling to 98.0 (1986=100), two points below the 30-year average. While profit trends improved, inventory investment and reported sales trends remained strong (virtually unchanged from February), labor market indicators sagged and capital spending plans faded along with weaker expectations for gains in real sales. Declines in job creation plans and job openings accounted for 30 percent of the drop in the index, weaker real sales expectations 40 percent, and the decline in the outlook for overall business conditions contributed 20 percent of the drop. “Although the first quarter will be very strong, something spooked small-business owners in March about the future course of the economy,” said NFIB Chief Economist and MyBusiness columnist William Dunkelberg. “The decline could indicate that owners think the economy is strong, but they don't expect it to get any better, or the economy is weak and they expect growth will slow substantially. The April survey could provide the answer.”

Retire With Options

With millions of Baby Boomers reaching retirement age, planning for one's financial future is a hot topic these days, prompting a feature in this week's Newsweek. Just this year, a new kind of 401(k) was added to the list of retirement savings options. Small-business owners might consider offering employees the new Roth 401(k), which allows participants to invest with after-tax dollars, which means the tax bill has already been paid on these funds. The new plan isn't for everyone, so see the current issue of MyBusiness for more details.

Preparing for a Disaster

One-hundred years ago tomorrow, the Great San Francisco Earthquake struck, touching off fires that burned for three days and destroyed more than 500 blocks of the city. Damage was estimated at $8.2 billion by today’s standards.
Small-business owners in this century certainly have witnessed their share of disasters in recent years. Yet a recent study by MasterCard found that the majority of small-business owners don’t believe a natural disaster will affect their business in the next 12 months. You know the old Boy Scout adage: Be prepared. Take a few minutes to check out the Small Business Administration’s disaster preparedness site to make sure you're covered.

Stand Up and...Be Seated?

The New York Times' (registration required) Tuesday edition reports a potential uncomfortable option for travelers: Airlines are looking at new standing-room-only seat designs to maximize profits. Mobissimo has the details on its travel blog. Incidentally, the competition between travel search engines Mobissimo.com, SideStep.com and Kayak.com is heating up, resulting in even better bargains for business and leisure travelers. Before you book your next trip, check out the travel short in the February/March issue of MyBusiness and in the Web Extras section.

Are Gas Prices Driving You Crazy?

John Mann’s fuel costs have almost doubled in recent months, and the owner of Buffalo, N.Y.-based 1-2-3 Delivery may have to his raise prices to keep up. With 52 delivery vans and three large trucks, Mann, like so many other small-business owners, has been hit hard at the pump.
If you’re worried about absorbing higher fuel costs in your business this summer, it might be time to think about trading in some of your vehicles for cars that get better gas mileage. CNNMoney.com picks the most fuel-efficient cars in five categories. The article also includes easy ways to pinch a few pennies when you’re picking out a new car, like opting for a smaller V-6 engine over a V-8 and passing up the four-wheel or all-wheel drive option.

SBHPs Now

Health-care initiatives were the focus of President Bush’s speech to members of the American Hospital Association Wednesday. President Bush has long advocated for Small-Business Health Plans, which allow small firms to join together across state line to buy insurance at the same discounts as larger companies.
The Senate is expected to vote on Small-Business Health Plans in early May. Find the current status on the legislation and ways you can help pass SBHPs on the SBHPs Now! Web site

A Woman's Job

The Christian Science Monitor today reports on an emerging trend in Afghanistan: entrepreneurship among women. Good news out of the Middle East is rare these days, and this article offers hope that conditions are improving for everyone in a country ruled by the oppressive Taliban until just a few years ago. The article points to a report from Microfinance Times that found 75 percent of all active microcredit borrowers in Afghanistan are now women, many of whom use their loans to start businesses.
Like their American counterparts, Afghan small-business owners—and women in particular—are leading the way in rebuilding their country’s shaky economy. Reports indicate some 10,000 women have started businesses in that country during the past few years. “Businesspeople are the ambassadors of peace in the world. If we've got women entrepreneurs, other women will feel that business can help them make a better life. This creates an atmosphere to create a factory or an industry, and brings in investors,” says Suraya Parlika, founder of All Afghan Women’s Union.

Small Business Optimism Rebounds in April

After an unexpected slump in March's NFIB Small Business Optimism Index, the long-running survey bounced back up more than two points in May. With a return to a range considered historically optimistic, NFIB researchers indicate they believe the March figures were a "fluke." Among the highlights found in the April numbers: Profit trends and sales gains moved to historically high levels, capital spending was strong, inventories appeared lean and labor-market indicators, especially job creation plans, surged to wipe out March declines. One troubling sign: Inflation, "forecasted by a 9-point spike (seasonally adjusted) in the net percent of firms raising average selling prices."

Close, but no cigar

Just five votes. That’s how close small-business owners were to real health-insurance reform last week. Unfortunately, the Senate acted as roadblock yet again to Small-Business Health Plans, crucial legislation that would help make health insurance more accessible and affordable to small-business owners and their employees.
In a sometime-confusing procedural vote, SBHP supporters fell just five votes short of the 60 votes needed to invoke cloture, which basically would have cut off debate and allowed the bill to move forward to a vote. Because of the Senate schedule, it is unlikely, although not impossible, that this legislation will come back to the Senate floor again this year, according to NFIB’s President Todd Stottlemyer. Read more of his comments on last week’s vote on NFIB.com.
Despite defeat this time, small-business owners won’t go away quietly. November’s midterm elections are the perfect chance to send packing those senators who didn’t support the much-needed reform. NFIB is mobilizing members of its Political Action Team. Go here to learn how you can get involved.

Welcome Relief

A record $2 billion in disaster loan applications have been approved by the Small Business Administration for the hurricane-devastated Gulf Coast region. Another $685 million in conventional business loans have been delivered to small businesses in affected areas.
"Putting money into the hands of businesses in the Gulf Coast communities remains our top priority," said SBA Administrator Hector V. Barreto. "These businesses are the economic foundation of the region's renewal and spirit, and we are going to stay on the job until it’s done."
For more information on the SBA’s disaster assistance programs, click here.

The two-handed economy

Harry Truman is credited with saying he wished for a "one-handed economist" because his economic advisors were always prefacing advice with, "on the one hand...but on the other hand." Apparently, having two hands still comes in "handy" for economists. Today, USA Today includes an article indicating that several statistics point to a sluggish economy in the coming months. However, the story also notes that slow growth may be good as it will discourage the Federal Reserve from continuing its interest-raising pattern. Small business optimism is up, according to NFIB's most recent survey. But on the other hand, a month earlier it was down. Fuel prices are up, but on the other hand, they're moving lower. I guess having two hands is always good for economists: one to hold the glass that is half-full, the other to hold the one that is half-empty.

Land of the Free (Enterprise)

The Land of Opportunity provides a pathway to business ownership for many immigrants, according to a Kauffman Foundation study highlighted in this American City Business Journals article. The study found that immigrants are more likely to be entrepreneurs than native-born Americans, an interesting stat to consider regardless of which side of the fence you fall on in the immigration debate.
An article in the current issue of MyBusiness profiles a business owner born in Vietnam who followed her dream of entrepreneurship when she came to the United States at the age of 17. Today, Luna Howard runs a successful salon on Capitol Hill and was even tapped by the First Family to style hair during Bush's most recent inauguration.

Inflation jitters (and how to cope)

Professor Jeff Cornwall (and Entrepreneurial Mind blogger) notes that jitters regarding inflation are spooking the stock market -- and small business owners. "Many entrepreneurs have never had to do business in an age of inflation. In fact, the last bad inflationary period we had was almost thirty years ago. Since then, careful control of the economy with interest rate policy has helped to keep things in check," he notes. Here is some of his advice for coping with inflation:
· Keep overhead low.
· Build cash reserves to buffer short term price increases that precede higher prices on your part.
· Watch your margins carefully. Worry about growing profits, not sales.
· Don't lock into long-term contracts that have narrow margins with large customers.
· When inflation heats up even a little, be aggressive with frequent small price increases rather than waiting and trying to catch up at some point with one big jump.
· Pay down variable interest loans ASAP. As long as there is inflation, interest rates will keep going up.

Follow the bouncing small business optimism index

After being down in March and back up in April, NFIB's Small-Business Optimism Index slipped again in May, down 1.6 points. This suggests the March decline may not have been a fluke, but the beginning of an oscillation in the outlook that is signaling a peak for economic growth. "It's hard to beat the first-quarter performance, so a 'slowdown' is definitely going to happen," said NFIB Chief Economist William Dunkelberg. "The only question is how far and how fast." Triggering the slide were a reduction in job openings, capital spending plans and an increase in the percent of small-business owners who believe business conditions will be worse in six months than they are now. Current economic activity was strong in May, Dunkelberg said, adding that reports of higher sales volumes rose and the share of owners expecting higher volumes was unchanged. Additionally, few signs of problems arranging financing have been found and inflation news, while not improving, was somewhat muted. Stay tuned.

eBay's CEO Joins Small-Business Owners "Taking It to the Hill"

eBay's CEO Meg Whitman is joining several hundred small-business owners "taking it to the Hill" today, visiting their lawmakers as part of the NFIB Small-Business Summit. What? eBay is a multi-billion dollar international corporation so what's the company's CEO doing hanging out with a bunch of small-business owners? In an early-morning address to the group, Whitman explained that more than 700,000 eBayers are operating either their primary or part-time businesses through eBay. While she admitted that eBay founders and executives were slow to realize it, eBay has become one of the primary e-commerce platforms for small businesses--"It has leveled the playing field of the Internet," she said. Issues like access to affordable health-insurance coverage and tax simplification are concerns that eBay sellers and NFIB members alike are working on in Congress, so Whitman is here representing eBay's small-business sellers, she explained. (See full coverage of Whitman's address at NFIB.com.)Posted by Rex Hammock on June 20, 2006 07:22 AM

Second-Half Economic Outlook: 2006 Will Wrap Up OK

What will the economy look like for the rest of the year, and what will that mean for small business? It's not going to be as bad as many small-business owners expect, according to NFIB Chief Economist Bill Dunkelberg and Wayne Best, senior vice president of business and economic analysis for Visa, who offered their economic forecast at the recent NFIB National Small-Business Summit. Still, small businesses should brace for a slowdown in the coming months.

How many new jobs do small businesses create?

Here's one of those topics that gets debated in policy-wonk circles that's fairly obvious to the rest of us: Most new jobs are created by small businesses. Via USA Today's Jim Hopkins comes a link to a .PDF newsletter from the SBA's Office of Advocacy that highlights the job-creation numbers from the most recent year with data, 2003. Writes Jim: "Employer firms with fewer than 500 employees created 1,990,326 net new jobs, whereas large firms with 500 or more employees shed 994,667 net jobs. In other words, small businesses created nearly two million jobs after you subtract those they eliminated. On the other hand, big companies -- defined as those with 500 or more workers -- cut far more jobs than they created."

Small-Business Optimism Index Continues to Fall

According to June's NFIB Small-Business Optimism Index, "pessimism is on the rise among the nation's small-business owners." In the most recent monthly survey, respondents confirmed their views that a slowdown is coming in the second half of the year. Sales-growth expectations declined dramatically. In addition, weaker job-creation plans, declining inventory purchases and fading expansion hopes peeled 1.8 points off the index, which settled at 96.7 (1986=100) for the month. "Although June's sales, profit gains capital spending were solid as May's, that month wasn't very strong," said NFIB Chief Economist William Dunkelberg. "Taking a realistic view of the easing economy, owners are scaling back plans to spend and hire."

Spinning the deficit

This morning, the White House released new figures projecting a much lower deficit than it had predicted just a few months ago. Doesn't that sound like good news? However, when it comes to deficit statistics, no good news is left unanswered. Indeed, spinning statistics for political purposes is an art: For example, in the AP article, the "positive" spin on today's announcement is this: "When measured against the size of the economy — at 2.3 percent of gross domestic product — the 2006 deficit would be lower than the deficits of 17 of the past 25 years." The negative spin: "The 2006 deficit may be lower, but it represents a $600 billion swing from the surplus projected in 2001. And a deficit of $296 billion is still a large deficit. In nominal terms, it's one of the four largest in history." Half full? Half empty? Apparently, it depends on who's looking. Perhaps we can all agree the deficit is heading in the right direction.

Crunching the Numbers

Last Friday's monthly jobs report from the Labor Department was hardly good news. Analysts expected the new jobs number to be higher. So why are the government numbers so weak when other economic indicators appear positive?
The problem lies in the way we measure it, according to a post today on USA Today's small-business blog. Pointing to comments from TV commentator and blogger Lawrence Kudlow, USA Today asks: "Which of Labor's two employment measures -- the household survey or the payrolls survey -- more accurately measures changes in jobs?"
It's a long-standing debate among those who try to monitor this stuff. Kudlow argues that the smaller household survey captures small-business job creation that the larger payrolls survey misses. But critics take issue with the household survey's methods: Its figures are based off what indviduals report, while the payroll numbers draw from hard data.

"O" No!

Dream of having your product mentioned on Oprah? For some small businesses who lived through a mention on Oprah's Favorite Things, the dream becomes a reality--fast. An article on CNNMoney tracks a few to see what their instant success taught them.
Given just five days notice before its product appeared on the show, Pete Seltzer, CEO of Kashwére, anticipated a challenge. But after a Kashwere robe was mentioned on Oprah's Favorite Things, "for six consecutive weeks we could not get a call out, the phones were hammered and we did thousands and thousands of Internet orders."
MyBusiness tackled a similar topic when we found several businesses who'd spent 15 minutes in the spotlight. Read how fame affected their bottomline.