We recently discussed the original views on small business and the Fiscal Cliff in Fiscal Cliff 2013 and Small Business.
But, after some time, there is still much talk about what is happening, what will happen and how to prepare for it or evolve with the changes.
As a small business owner the deal either has unintended consequences or unannounced consequences. Regardless of which one it is, your small business is facing them head on.
Announced to be a tax on the rich, but may actually impact the small business owner far more than the wealthy. According to Newsmax, "Warren Buffett, who has been a cheerleader for U.S. stocks for quite some time, is dumping shares at an alarming rate." Fellow billionaires John Paulson and George Soros are also bailing out of American stocks.
Setting aside the entire issue of the wealthy moving their income out of the taxable area, tax increases are in effect for incomes of $400,000 for an individual and $450,000 for a couple.
Many small business owners have a LLC (limited liability corporation) which is taxed as an individual rather than as a corporation. The LLC income passes through to the individual. It is extremely probable that many small business owners will be hit with the increased income tax rate.
The 27% cut in Medicare payments to medical professionals has been postponed for a year. This is a temporary reprieve for doctors.
Now is an excellent time to review your personal and employee health insurance plans. Compare recommendations from two or three insurance brokers to be certain you have the best fit for yourself and your employees.
Establish a relationship with a highly recommended medical professional as quickly as possible. Due to the new record keeping requirements, increased patient load and lower fees, some doctors are closing their doors and joining larger establishments. Other doctors have stopped accepting new Medicare patients.
Small Business Challenges and Advantages
2010 Census figures reveal that 223,800 businesses closed between 2008 and 2010; 3.1 million jobs were lost as a result of the closings. With increased tax burdens, a choke hold on short term loans, and a cut back in personnel, more small business closings are anticipated.
The good news is that small business is credited with bringing America out of the Great Depression and we will do it again. Small business owners have advantages over large corporations.
- Fewer layers: Reaction time is much faster for small business owners because they do not have to filter decisions through as many layers of corporate red tape. Idea -- decision -- action.
- Creative thinking: There is less "We've always done it that way" thinking and more idea flexibility. Small business owners are creative, innovative and resilient; it is their money on the line. The difference between entrepreneurial thinking and "it's my job" thinking allows for a different motivation.
Product and Marketing Tweaks
Small business owners can analyze what is working, what is not working, and what to adjust to make it work better.
Without a quality product or service, effective marketing and customer service, failure will result in any economy. In a tough economy, these elements are even more critical.
Product -- Interview your customers, vendors, prospects and competitor's customers.
- What do you like?
- What don't you like?
- What would you like to have that you don't have now?
You know this, but how long has it been since you actually did it?
Marketing -- Which marketing campaigns worked the best for you in the last three years? Why? Was it the offer, the timing, the specific product featured or the media? Was it your printed marketing campaign featured in your social media? Did you select a high quality printing company who could also do the mailing for you increasing your efficiency and reducing delivery time and cost.
Related: Save money on sending your marketing materials with an in-house postage meter.
Customer service -- Shop your customer service; purchase from your own company. Interview your customers, vendors and former customers to learn about their experiences with your service.
Dealing with Consequences
When small business owners go over the fiscal cliff, we grab a parachute on the way down and land on our feet. Here's your checklist:
- Review your insurance
- Refresh your budget
- Renew your product
- Reinvigorate your marketing
- Reassess your customer service
- Reset your attitude to "How can I?"
The only consequence small business owners can afford to accept is success.
Photo credit: entrepreneur.com
Bio: Elaine Love writes for PrintPlace.com, an online printing company which offers services for postcards, business cards, booklets, stickers, posters and other printed marketing materials. Elaine's expertise is in small business, marketing, branding and publishing. Her credentials include Masters Degrees in Communication, 30 years of entrepreneurial awards including "International Innovator of the Year," World Class Speaking Coach, and author of 3 books. Contact Elaine on Google+ at https://plus.google.com/=+ElaineLove.