Standing in front of the crowd at the recent Entrepreneurial Excellence Awards luncheon, I was awed to see so many supporters of the small business community.This support is exactly what we need to help boost the economy as we continue to watch the Dow Jones Industrial Average fluctuate and read bleak business headlines on a daily basis.Small businesses and organizations, such as the Northwest Indiana Small Business Development Center, need our support now more than ever. By backing entrepreneurs, we encourage economic activity, creating an increase in production levels and spurring businesses to add jobs. These new employees will spend their earned wages on goods and services that are produced by these firms, further adding to production levels. This cycle continues, prompting additional economic growth. Likewise, any reduction in small business support will decrease overall economic activity and can shrink the overall economy.But why is it vital to focus on small businesses and not the larger companies? It’s these small companies that continue to adapt and change and grow.Research by the U.S. Small Business Administration’s Office of Advocacy shows that small businesses create most of the nation’s net new jobs. It also revealed that small businesses are 13 times more innovative, and they bring dynamic ideas and fresh products to the marketplace.It is this innovative mindset that landed Terry Daniel and Lou Pringle of Exhaust Productions Inc. in the limelight. The entrepreneurs were honored with the 2008 Small Business Person of the Year Award at this year’s luncheon. When manufacturing started to shift to China, the team decided to switch gears by moving into the performance motorcycle industry and Rush Racing products.By taking the time to recognize companies, such as Exhaust Productions Inc., the Northwest Indiana SBDC is continuing to foster the development of small businesses and spotlight the entrepreneurial spirit. It is our mission to have a positive and measurable impact on the formation and growth of small businesses in the region and state. We have workshops, one-on-one consulting, referrals, training and other essential business tools to help guide small business owners toward success.The entrepreneur is a risk-taker. It takes courage to make the leap, which is why community support and resources, such as the NWI SBDC, can make such a big difference.
The health care reform bill is in the mainstream news while the U.S. elected officials decide about voting on the bill. But there are many small business owners who are worried about how it will affect them. People are saying the $900 billion bill will lower costs, but many small business owners think it will actually cost small businesses more in the long run.If you are a small business owner, here are some points that you may want to think about insofar as the bill’s impact on you and your business if it comes to pass:It is true that a small business owner will be forced to provide health insurance. If passed, legislation will force small businesses with 50 or more employees to provide health insurance. Small businesses will need to pay $2,000 per employee if they do not meet the requirements.Yes, small businesses will pay more in taxes in the end. Why? Because there is a new $6.7 billion per year tax on health insurance plans, which falls on health insurance companies based on their market share. That just means the larger an insurer’s market share, the higher its share of the $6.7 billion it has to pay. So basically, insurance companies will be passing this expense along to their customers by increasing costs per family. This just means that small businesses that this tax will be passed on to, because unions and larger businesses have negotiated a deal that exempts them from having to pay for it.Employees and small businesses will be forced to buy plans that meet standards determined by the government. This just means that for self-employed and small businesses, costs will go up in order to meet these new expensive requirements for coverage.So if you are a small businesses owner, you will need to be prepared. One way to cover these costs and avoid penalties is to do invoice factoring to cover the costs. Factoring is the one solution that will pay in as little as 24 hours.The world’s economic circumstances have made it very tough for small business owners, so these times call for creative solutions. In order to sustain and grow businesses need some cash. And when outstanding invoices stack up, single invoice factoring, also known as spot factoring, is one tactic that many companies know will help them stay in business.Also known as accounts receivable factoring, or spot factoring, this tactic enables companies to get short-term working capital and improve cash flow and grow their businesses. Since most companies don’t get paid immediately for delivered products or services, factoring benefits businesses that do not get paid for 30, 60 or 90 days by advancing up to 90 percent against the company’s invoices.Factoring companies usually look at the creditworthiness of the client’s customers first, and they don’t always expect to buy 100 percent of a company’s receivables, so there are no minimum or maximum sales volume requirements to do the transaction.In the end, factoring could be a means to support the many small businesses that will soon need to pay for increased health care costs thanks to the new legislation.