Category Archives: The Economy

Top 10 Tips for Starting a Small Business

1) Do what you love.

You’re going to devote a lot of time and energy to starting a business and building it into a successful enterprise, so it’s really important that you truly deeply enjoy what you do, whether it be running fishing charters, creating pottery or providing financial advice.

2) Start your business while you’re still employed.

How long can most people live without money? Not long. And it may be a long time before your new business actually makes any profits. Being employed while you’re starting a business means money in your pocket while you’re going through the starting a business process.

3) Don’t do it alone.

You need a support system while you’re starting a business (and afterwards). A family member or friend that you can bounce ideas off and who will listen sympathetically to the latest business start up crisis is invaluable. Even better, find a mentor or, if you qualify, apply for a business start up program such as The Self-Employment Program. When you’re starting a business experienced guidance is the best support system of all.

4) Get clients or customers first.

Don’t wait until you’ve officially started your business to line these up, because your business can’t survive without them. Do the networking. Make the contacts. Sell or even give away your products or services. You can’t start marketing too soon. (See Attracting New Business on a Shoestring Budget and The 7 Best Places to Find Clients for tips.)

5) Write a business plan.

The main reason for doing a business plan first when you’re thinking of starting a business is that it can help you avoid sinking your time and money into starting a business that will not succeed. (See Why You Need a Business Plan for other good reasons.)

Remember, you don’t have to work through a full scale business plan for each new business idea you come up with; my Quick-Start Business Plan, for instance, will let you test the potential of your business idea much more quickly.

6) Do the research.

You’ll do a lot of research writing a business plan, but that’s just a start. When you’re starting a business, you need to become an expert on your industry, products and services if you’re not already. Joining related industry or professional associations before you start your business is a great idea.

7) Get professional help.

On the other hand, just because you’re starting a business, doesn’t mean you have to be an expert on everything. If you’re not an accountant or bookkeeper, hire one (or both).(These Tips for Finding a Good Accountant may be useful.) If you need to write up a contract, and you’re not a lawyer, hire one. You will waste more time and possibly money in the long run trying to do things yourself that you are not qualified to do.

8) Get the money lined up.

Save up if you have to. Approach potential investors and lenders. Figure our your financial fall-back plan. Don’t expect to start a business and then walk into a bank and get money. Traditional lenders don’t like new ideas and don’t like businesses without proven track records.

9) Be professional from the get-go.

Everything about you and the way you do business needs to let people know that you are a professional running a serious business. That means getting all the accoutrements such as professional business cards, a business phone and a business email address, and treating people in a professional, courteous manner.

10) Get the legal and tax issues right the first time.

It’s much more difficult and expensive to unsnarl a mess afterwards. Does your business need to be registered? Will you have to charge GST or PST? Will you have to have Workers’ Compensation Insurance or deal with payroll taxes? How will the form of business you choose affect your income tax situation? Learn what your legal and tax responsibilities are before you start your business and operate accordingly.

Following the advice on starting a business above will make starting a business both a smoother, less stressful process and go a long way towards ensuring the business you start lasts and thrives.

via Top 10 Tips for Starting a Small Business.

Why people still feel the economy stinks – Oct. 22, 2014

U.S. unemployment is down. Consumer confidence is up. Inflation is low.

Things are improving, yet Americans are still worried. The economy is voters’ top concern ahead of the midterm elections next month, ranking ahead of national security, according to a recent Politico poll.

Only 42% of those surveyed by CNN late last month thought the economy was in good shape. While that’s the highest share since January 2008 and an improvement from the 29% who felt this way a year ago, it’s still weak overall.

Let’s take a look at what’s going right: The unemployment rate is below 6% for the first time since 2008. Job openings are back to 2001 levels. Consumer confidence is at its highest point since before the recession, and inflation remains a tame 1.7%.

Related: What do women want in a husband? A job!

Sounds great, but it’s taken the country a long time to get to this point, said Richard Curtin, chief economist of the Thomson Reuters/University of Michigan Survey of Consumers.

The recovery has also been stronger for some than others. Young adults are still having a tough time starting their careers, while older Americans are having difficulty shifting into retirement after their nest eggs were destroyed during the Great Recession.

“It’s taking so long to recover and it’s been so uneven,” he said. “It’s been more than five years since the end of the recession.”

Related: Obama’s midterm message: Believe me, we’re better off

Although the unemployment rate has fallen rapidly in the past two years, it remains at a relatively elevated level, said Justin Wolfers, a senior fellow at the Peterson Institute for International Economics. The average jobless rate in the decade before the Great Recession hit in December 2007 was 4.9%.

Americans also don’t feel any better off. While more people may have jobs, they aren’t bringing home fatter paychecks. Wages and income have remained stagnant for years, making it tough for folks even though inflation is low. Median household income, which stood at $51,939 last year, is back to 1995 levels.

Consumers expect a median income boost of 1.1% over the next year, Curtin said. But that won’t keep up with their inflation expectations of 2.8%.

“American households, on average, are still struggling with their living standards slowly eroding,” he said.

Not everyone, however, is suffering from flat-lining wages … and that’s also why the average American remains worried about the economy. The rich are seeing both their income and wealth rise. The wealthiest 5% of American households held 63% of all wealth in 2013, up from 54% in 1989, according to a recently released Federal Reserve survey.

“Rising inequality is why Main Street doesn’t feel like it’s benefiting from the full fruits of the recovery,” Wolfers said.

via Why people still feel the economy stinks – Oct. 22, 2014.

Asian stocks on edge as HK seethes, U.S. dollar shines | Reuters

The dollar index rose as high as 85.737, its highest since July 2010, in early trade after having posted an 11th straight week of gains last week, extending the longest winning streak since its 1971 uncoupling from gold.

The U.S. Commerce Department on Friday raised its estimate of gross domestic product growth to an annualised 4.6 percent, the fastest pace in 2-1/2 years, and accelerating from the 4.2 percent reported last month.

The data reinforced the perception that the United States is the brightest spot in the global economy, with the Federal Reserve on course to raise interest rates while other major central banks need to enact more stimulus to support growth.

Read more at Asian stocks on edge as HK seethes, U.S. dollar shines | Reuters.

What Small Businesses Need to Do for Obamacare Before Oct. 1 – Businessweek

The health insurance marketplaces created by the Affordable Care Act will open on Oct. 1. Most small employers—those with 50 or fewer full-time employees—are not required to offer health insurance coverage under the Affordable Care Act. Even businesses with more than 50 full-time employees have gotten a one-year reprieve from penalties if they don’t offer insurance. But all companies, regardless of size, are required to notify their employees about the Obamacare marketplaces.

The state and federal insurance exchanges are websites on which individuals and small businesses can shop for health plans. Though the deadline is less than a month away, many small businesses don’t know they have to notify employees, says Keith McMurdy, a benefits partner in the law firm of Fox Rothschild in New York. He has spoken to dozens of small business groups around the country in the past year and says most small business owners are unaware of the requirement or are under the misconception that it doesn’t apply to them because they’re too small to be governed by the health-care reform law’s mandate. McMurdy says it’s not clear how the requirement will be enforced, but penalties for businesses that don’t comply could reach $100 per worker per day.

“An employer with 10 employees typically says, ‘I don’t have to worry about it, because I don’t have to offer insurance.’ A lot of them are going to miss the deadline and be unpleasantly surprised when they do,” he says. The notification requirement applies to any business regulated under the Fair Labor Standards Act, which covers all companies with at least one employee and $500,000 in annual revenue. “There are no exceptions for small employers, which means nearly everybody has to get out this notice to their employees. We have been getting a lot of questions about it from small business owners,” says John Barlament, a lawyer in the employee benefits group at Quarles & Brady in Milwaukee.

The U.S. Department of Labor has posted information about the notification requirement on its website and has provided model notices that can be used both by employers who offer insurance (PDF) and by those who do not offer insurance (PDF).

The one- to three-page model notices can be downloaded, filled out, and printed, either for distribution in the office or for mailing to employees’ homes, McMurdy says. Employees who come on board after Oct. 1 must get the notice within 14 days of their start date with the company. “People ask me what’s the safest way to do this, and I always say, if the government gives you a model, use it. Or make yourself a comparable form, modified the way you need it, and use that. The safest route is to put it in the U.S. mail or follow the instructions for distributing it electronically,” he says. “The employer obligation is met at that point. I don’t see any requirement that you have to get signatures saying your employees have received it or maintain proof of the fact that you gave it out.”

The second and third pages of the model notices are optional, Barlament says. He is encouraging his small business clients to include the upper portion of page 2, which describes the insurance coverage provided by the company, but to leave off the rest of that page and page 3, which he feels could be confusing.

Sending out this notice is another in a long list of compliance issues for business owners around the ACA, McMurdy says, and most that he speaks with resent the extra work. However, he is starting to sense “general acceptance of the misery” and is hearing more employers say they expect to get used to the major provisions of the law when they go into effect next year. “It’s kind of like when COBRA came in and business owners said, ‘This will kill us, this is insane,’ and before long they got used to the idea.”

via What Small Businesses Need to Do for Obamacare Before Oct. 1 – Businessweek#!#!#!.

Social Security – Who gets it and when? A Full Explanation!

sscardFor those born in 1942, full retirement age is 65 and 10 mos.;

in 1943, 66;

gradually rising to 67 for those born in 1960 and later.

If full retirement age is reached:

•          Before 2013. Recipients born in 1937 or earlier receive full benefits at age 65. No limit on earnings, no reduction in benefits for those at full-retirement age.

•          In 2013. Recipients can earn up to $40,080, then lose $1 in benefits for each additional $3 earned. From month of full retirement age on, there is no earnings limit.

•          After 2013. Recipients can earn $15,120 in 2013 before losing $1 in benefits for each $2 earned.

Age 50.  Benefits start for disabled surviving spouse.

Age 60.  Benefits start for nondisabled surviving spouse.

Age 62.  Reduced benefits for employee’s spouse or former spouse (if still alive).

Important: 40 earned credits (generally 10 years of work) will make a person eligible for benefits at a certain age—but not necessarily maximum benefits. Credits are unrelated to the amount of the benefits.

Social Security benefits are based on average earnings of the best 35 years of work—not just the last 10 years, as many think. An adjustment is made to account for changes in average wages since the year the earnings were received. SSA then calculates average monthly adjusted earnings over those 35 years when the worker earned the most money.

Handy new Website. The SSA’s new “my Social Security account” is a personalized online account that replaces the annual paper statement mailed to workers. When employees have questions about their future benefits, send them to the site below.

The new site lets you access your payment history, earnings record and a benefits verification letter. The letter can be used to prove income to secure a loan, mortgage, housing, state or local benefits, or to prove your age for Medicare health insurance coverage, retirement or disability status. The letter can be customized and printed. You can also change your address and sign up for direct deposit.

Anyone 18 or older can sign up at Be ready with data about yourself.

On the same Website, those not yet receiving benefits can access their Social Security statement of earnings, benefits information and estimates of future benefits and link to online services such as applications for retirement disability or Medicare.

Income Inequality Taking Toll on Growth –

WASHINGTON — Income inequality has soared to the highest levels since the Great Depression, and the recession has done little to reverse the trend, with the top 1 percent of earners taking 93 percent of the income gains in the first full year of the recovery.

The yawning gap between the haves and the have-nots — and the political questions that gap has raised about the plight of the middle class — has given rise to anti-Wall Street sentiment and animated the presidential campaign. Now, a growing body of economic research suggests that it might mean lower levels of economic growth and slower job creation in the years ahead, as well.

via Income Inequality May Take Toll on Growth –

The Day – Google stock price plummets after leak | News from southeastern Connecticut

How glad am I this morning that I’m not the R.R. Donnelley employee who released Google’s financials early?

The sell-off of Google’s stock began swiftly and brought the price down almost 9%. This occurred because investors weren’t expecting those disappointing figures after the stock price had reached an all-time high over a continual increase in the previous three months.

Trading was actually suspended for three hours after the race to sell began to “allow investors to digest the information.” After this digestion, apparently, cooler heads prevailed and the stock recovered slightly.

What can we learn here? Bad news—especially bad financial news—must be communicated effectively. At Moore Bookkeeping, our goal is to produce accurate, timely financial information that you can use to operate your business. Give us a call and let us help you avoid getting blindsided.

The Day – Google stock price plummets after leak | News from southeastern Connecticut.

Small Business issues for Obama/Romney Debate

In the first Presidential debate, Barack Obama and Mitt Romney spent a lot of time arguing about which of them would do more to help small business. (The phrase “small business” was repeated 26 times in the debate.) And as the economy still holds center stage in the campaign, the theme of what each will do for America’s almost 28 million small businesses will no doubt be revisited in Tuesday’s second debate.

Despite the seemingly unanimous opinion that Romney won the last debate, the candidates’ definitions of small business, small-business concerns, and how their respective tax plans would affect small business created as much as debate as their performances.

via small business election issues Obama Romney debate.

Candidates Ignored Some Big Economic Issues in Debate – Real Time Economics – WSJ

The first presidential debate had more discussion about Big Bird than the euro zone.

If you listen to last night’s debate, the U.S. economic challenges don’t include housing or the spillover impacts from the euro zone’s debt crisis. Scant attention was paid to the fiscal cliff.

The inattention highlights the fact that no matter who wins the White House, policy changes won’t come soon enough to alter the short-run trajectory of the U.S. economy. Real gross domestic product is likely to grow at an annualized rate centered around 2% — and that’s if the fiscal cliff is avoided.

via Candidates Ignored Some Big Economic Issues in Debate – Real Time Economics – WSJ.