Small Business

Capitol Hill and the general public alike have been caught in a fiery debate about two crucial and divisive topics in the previous month: The long-awaited stimulus check and the proposal to gradually raise the minimum wage to $15/hour. The Raise the Wage Act of 2021 proposes the increase of the federal minimum wage to $15/hour by 2025 through annual increments. The Democrats introduced the bill a month ago, only to drop it after President Biden stated that it would not survive the COVID relief talks with the Republicans. However, the House Education and Labor Committee has added the $15/hour minimum wage provision to Biden’s $1.9 trillion American Rescue plan. Biden has been trying to convince big businesses to help him push this agenda, but public support has been lacking so far. This comes as no surprise, as businesses of all sizes have been very vocal in their opposition to raising the minimum wage. A recently published survey by CNBC provides more insight into the rationale behind small-business resistance to this minimum wage increase. According to the survey, one-third of small-business owners anticipated that a $15/hour minimum wage would lead to layoffs. This goes hand-in-hand with the arguments put forth by the Congressional Budget Office, which claims that this move would lead to a loss of 1.4 million jobs. However, the CBO also asserts that an increased minimum wage would raise 900,000 people out of poverty. Big dollar-store retailers, such as Dollar General and Dollar Tree, also predict a massive hit to their profits if the proposal passes. According to newly published research by Jeffreys, these two companies would have to give out $700 million and $500 million in wages, respectively. Debates about increasing the minimum wage are not new in American political discourse. The last time the minimum wage was increased was in 2009 - from $5.15 to $7.25 an hour. Since then, it has remained the same, while the costs of living and inflation both kept rising for 12 years. As a result, the minimum wage is no longer a living wage, and many Americans are forced to take on multiple jobs to sustain themselves and their families. They would certainly welcome this proposed rise, but whether they will get it remains to be seen.

By Julija A. February 11,2021

You can finally afford shop space in Manhattan. That's the good news from the Real Estate Board of New York's Fall 2020 Manhattan Retail Report, a summary of vacancies and rental prices throughout Manhattan. The bad news is that the COVID-19 pandemic and associated restrictions on retailers and consumers have made it hard for even well-established retail giants to turn a profit in New York. According to REBNY, retailers are demanding discounts on rent for retail space following the departure of Papyrus, GNC, Modell’s Sporting Goods, Metro PCS, Mattress Firm, Duane Reade, and other major retailers across the island. Discounts of up to 25% are available, with prime retail space going for rates that haven’t been seen for decades. And that's just the asking price. REBNY says landlords are currently accepting an average of 20% less than their preferred price. This is a great opportunity for low-overhead businesses that can prosper in spite of the reduced rate of retail traffic caused by the pandemic lockdown. And when the economy recovers, retailers who take the leap of faith now will have more business than they’d ever dreamed of. Let’s not forget about the workers in this industry. New York City’s retail employment rate fell about 27% in April due to the effects of the COVID-19 pandemic, which at the time was spreading through the Big Apple like wildfire. According to the Center for New York City Affairs, 29,000 jobs in the city’s retail industry were lost in 2020. On top of all that, the insecurities, political turmoils, and other emotional or financial stresses of 2020 had a strong impact on many workers’ professional and private lives. So, what are the prospects for those affected by the crisis? Well, if you take a brief stroll down Fifth Avenue, you might be in for a shock. Due to the unprecedented impacts of the COVID-19 crisis, many businesses have had to abandon ship, which means more and more vacancies are showing up. Retail rental prices have fallen to historic lows, leaving nothing but empty stores and more-than-desperate retailers. The market might take years to recover. But let’s look at the situation from a different perspective. If you have a great idea and want to turn it into a startup, or if you already own a small business and are looking to expand, this might be just the right time. Why not open a store and tuck it among the gleaming windows of Fifth Avenue? If you can hang on until the end of the pandemic, you'll be sitting pretty, and you might find yourself helping the world’s biggest economy recover from the crisis.

By Julija A. January 12,2021

Details of a long-awaited COVID economic stimulus package were revealed by congressional leaders on December 20. Congressional leaders say it is intended to deliver much-needed assistance to both households and small businesses.The bipartisan deal came after months of stalled negotiations. The new package is substantially smaller than March’s $3 trillion CARES Act. Its benefits are focused on the unemployed and small companies, with cash grants to taxpayers reduced to $600 compared to March’s $1,200. Congressional leaders characterize it as a financial bridge that will help the economy stay afloat until coronavirus vaccinations make it possible to restore normal life throughout the United States. Small businesses have been hit especially hard by the pandemic and associated lockdown measures. Researchers say that the number of small business owners fell by 3.3 million (22%) from February to April 2020, while May and June saw further drops of 15% and 8%. A LendingTree survey reveals that 74% of small business owners took on debt to stay afloat during the pandemic. Out of the proposed $900 billion in economic aid, $325 billion will be dedicated to helping small businesses stay afloat. This includes $284 billion in loans via the Paycheck Protection program, $20 billion for businesses in low-income communities, and $15 billion for live venues - probably the hardest-hit sector of the economy. The stimulus package also includes direct payments to taxpayers, boosted unemployment benefits, vaccine funding, transportation aid, and assistance to farmers.If everything goes according to plan, the bill will be introduced in the House and Senate on Monday, December 21, and passed the same day. The package comes after what appeared to be a permanent stalemate between Democrats, who pushed for more aid, and Republicans, who favored a smaller, more focused assistance package. This political impasse, coupled with the turmoil left in the wake of the presidential election, threatened to leave Americans and the COVID-stricken economy without any economic assistance from the federal government. The delay has had unrecoverable repercussions for many small businesses. Still, even before the stimulus package accord was announced, many small business owners remained optimistic. According to a survey conducted by Capital One in November and December 2020, 53% of small business owners report that their financial position is the same or better than in the pre-COVID period. Additionally, 67% believe their operations will return to normal during 2021. About 85% of business owners are confident that they will still be operating six months from now, and 60% think the US economy will be favorable for businesses in 20201.

By Damjan Jugovic Spajic December 22,2020

Amazon is starting the Amazon Small Business Academy to help small businesses, startups, and small company owners to enhance their online presence and increase sales through a series of webinars and classes.That's the bottom line of the announcement released by Amazon yesterday. According to the Small Business Administration, small businesses and startups make 99.9% of U.S. businesses. Almost 60 million people work for small companies, which makes this type of business vital for the U.S economy. Amazon's initiative includes a number of online seminars, meetings, and presentations created in order to educate entrepreneurs and help them empower their brands."Amazon Small Business Academy is focused on accelerating small business’ digital capabilities, whether they are a brand new company or one that has been in business for generations,” said Nicholas Denissen, Amazon Vice President of Small Business.The first seminar, held today in Mississippi, presented a special guest, U.S. Senator Roger F. Wicker. Amazon hosted around 100 attendees introducing them to the newest business strategies and methods for growing sales.The next event is planned for December, but the location has not been announced. This will be followed by a series of in 2020 held across the United States.Additionally, Amazon Small Business Academy provides grants for supporting digital business courses that will start in February. The courses will be held by the following colleges: Ohio and North Idaho College in Coeur d’Alene in Idaho; Bunker Hill Community College in Boston; State Center Community College in Fresno; Houston Community College in Houston; and Red Rocks Community College in Lakewood.The Amazon Small Business Academy also provides webinars aimed at helping small business owners develop digital competences and improve marketing skills. These webinars include information on how to increase sales in an Amazon store, and allow users to ask questions live and communicate with experts.Small businesses and startups sell 4,000 items every minute through Amazon stores. According to the latest statistics, 58% of Amazon's online sales are made by third-party sellers — small- and medium-sized companies. In order to help small businesses increase their sales online, Amazon released 150 tools and features in 2019 as part of their $15 billion investment in the success of their selling partners.

By Milja November 02,2019

Small businesses in industries sensitive to changes in the housing market are experiencing sales drops as fewer homes are sold — a result of higher home prices and a shortage of listings. Home prices have risen in 95% of cities, with the highest increase noted in the Mountain States, an area which includes Colorado, Arizona, and Idaho, among others. The city of Lansing, MI, experienced the most dramatic increase: 25.1% in year-to-year gains. Despite a promising rise in July and August, the number of existing-home sales fell in September by %2.2. With the median home price at $272,100, lower mortgage rates aren’t enough to entice buyers. Additionally, fewer people are putting their homes on the market. Many current homeowners purchased or refinanced their homes at a time when mortgage rates were lower than the present ones. Moving today would mean paying higher rates, which is disincentivizing.The drop in home purchases is creating a domino effect and impacting a wide array of small businesses. Most people renovate their homes before putting them on the market, so fewer sales mean less business for contractors, many of whom are small businesses. The decline is expected to continue into the third quarter of 2020. Chris Herbert, the managing director of Harvard University’s Joint Center for Housing Studies, predicts: “Continued weakness in existing home sales and new construction will lead to sluggish remodeling activity next year.”Besides contractors, furniture sales outlets are also feeling the blow, as people are much more likely to purchase furniture when moving into a new home. The Commerce Department reports that sales are down 0.2% in the first nine months of the year, compared to the same period last year. Appliance and electronics retailers aren’t faring any better, with sales down 3.9% for similar reasons. While these figures include retailers of all sizes, small businesses tend to mirror changes observed in their larger counterparts.

By Milja October 29,2019

The owners of small businesses and startups say finding more effective ways to increase workforce productivity is their main concern.That’s the bottom line from a report based on online interviews of 319 small-business owners. According to the study, 54% of them find "improving productivity and efficiency" the greatest challenge they face. The survey was conducted by Oasis, a professional employer organization that provides HR administration, employee benefits, healthcare management, payroll administration, and other services to small-business clients. Oasis is a subsidiary of Paychex.The survey revealed a handful of additional difficulties that small businesses struggle with:- 41% of owners say that attracting quality employees to join the business can be extremely difficult.- 33% are occupied with developing employees to be able to contribute at higher levels.- 33% say that keeping employees focused on what's most important for business can be challenging.“Administering payroll, complying with employment regulations, and offering competitive health benefits are specialized skills that require time and resources. These tasks can be a distraction from the work that needs to get done in acquiring customers and growing the business,” says Melissa Ness, a regional director at Oasis.Furthermore, according to POSQuote, Point of Sale Systems can increase productivity in retail businesses, such systems help manage payroll, sales reports, accounting and many other business functions.Although 87% of small-business owners think time spent on HR and work-related issues is crucial to establishing good workflow, many say they find these employee-related tasks overly time-consuming. Thirty-one percent of company owners say that they lose more than a quarter of their work time to these duties.To save time and resources, more and more small business owners are seeking to outsource these activities: attracting quality employees to join the business, leveraging software for better remote working collaboration, improving productivity and efficiency, and employee retention and engagement.

By Milja October 22,2019

Women entrepreneurs have employed a distinctive set of at least seven business strategies to achieve success in startups.That’s the conclusion of a study of women entrepreneurs conducted by Bank of America and Babson College. The report, published on Oct. 17, 2019, delivers unique insights into the challenges and coping strategies of women at the helm of business. Instead of duplicating studies that document the difficulties women face attracting startup capital, the Babson/BofA report highlights useful techniques for overcoming challenges and transforming them into opportunities. In addition to the well-publicized lack of access to conventional funding, BofA and Babson found that women face challenges that include market misperceptions, network exclusion, and managing expansion. The strategies documented in the report help minimize the effects of all three.Based on interviews with more than 30 female entrepreneurs, the study identifies seven proven strategies successful women have used in launching and growing their businesses:They explore capital alternatives. Although venture capital funding is one of the fastest ways to accelerate business growth, fewer than 3% of women entrepreneurs use this sort of financing. Women choose other funding models not only because they have trouble attracting VC investments, but because other money sources allow them to retain more ownership and control of their businesses. They build for the long term. Growing a company is a marathon, not a sprint, respondents said. The interviewed women explained that they attributed much of their success to looking ahead while making short-term decisions.They develop a sustainable and talented workforce. Women entrepreneurs emphasize the importance of investing in employees. They organize seminars and workshops and try to create a positive working atmosphere that will pay off in the long run.They buy from and fund women-owned businesses. Purchasing products from women-owned companies is one of the best ways to help them grow their business, creating a network of firms that help each other. They mentor and seek mentorship. Mentoring comes in many forms - from organizing events and workshops to chatting during a coffee break. These are all great ways to learn new tricks and deepen your knowledge. They join or create networks. When it comes to promoting women-led businesses, more and more women-organized groups have come onto the scene. Creating networks allows women entrepreneurs to share their experiences and learn about new business trends. They utilize personal insights and experiences. Women have valuable insight into what it’s like to be a female consumer. They use their experience to form what this demographic is looking for in a product or service. These strategies emphasize that women can actually benefit by using unconventional business strategies and transform feminine “soft points” into strength. For example, instead of focusing on big purchases and collaboration with big investors, they are more likely to avoid them and concentrate on steady, incremental growth.

By Milja October 21,2019

You must have heard it a million times - if your business doesn’t show up on the first page of Google search results, you may as well close up shop. Though this may sound harsh to business owners who pay no attention to search engine optimization, the latest Small Business Search Trends Report published by Google yesterday stresses the importance of local SEO.According to the report, there were 350 times more ‘local’ and ‘near me’ searches in 2019 compared to ten years ago. What this means is that in this day and age, focusing on local SEO tremendously impacts your overall success by increasing your business exposure to local customers.This is especially true for small business owners who run eateries or cafes. Google’s Small Business Search Trends Report indicates that restaurants, diners, pharmacies, coffee shops, and pizzerias are the most searched for mom-and-pop businesses.Now more than ever, small entrepreneurs in the business of serving coffee should take heed of local SEO. The report shows that the search interest in “local coffee shops” has reached a record high. Other local businesses seeing a rise in searches this year include flower shops, print shops, and tire shops.Residents of east coast states seem to be particularly fond of performing local searches. West Virginia, New Hampshire, Pennsylvania, Rhode Island, and South Carolina are the top five states where people use Google to find local businesses.How can Google help your small business rank higher?Being aware of the local search trends is the first step to boosting your small business. But what if you lack the digital skills to follow through? In that case, a trip to your local library could be a game-changer.Earlier this year, Google launched an initiative called Grow with Google to help small businesses grow. As a part of this program, $1 million were granted to the American Library Association (ALA) to help libraries across the nation provide communities with digital skills. So far, the collaboration has supported 130 libraries in 18 states with the goal of eventually reaching all 50 states.As part of its long-term efforts to support local economies throughout the U.S., Google.org is now making a $10 million pledge to help low-income, and underrepresented entrepreneurs launch new businesses by providing access to training and capital.“Almost half of all libraries in the U.S. provide assistance to entrepreneurs looking to start a business of their own. That’s why the first grant will benefit the ALA to support entrepreneurship centers at ten libraries and to help libraries across the U.S. develop new offerings for small business owners,” Kim Spalding, head of Google Small Business Ads said in an official announcement yesterday.Google for Small Business is yet another resource business owners have at their disposal. Launched in June, the website offers free personalized plans for small businesses, so they know which Google tools will help them reach more customers and work more efficiently.

By Ivana V. October 04,2019

Small businesses continue to face increased costs as a result of the U.S.-China Trade War. The conflict has been raging for almost a year now, claiming small business casualties with no sign of stopping.The U.S. Secretary of the Treasury, Steven Mnuchin dismissed official reports and stated that U.S. companies aren’t affected by the trade war. Numbers indicate that, while this may be true of large corporations, the effects on small family businesses are being overlooked in this assessment. The current tariff package has resulted in a 37% increase in expenditures. Each tariff cent inevitably trickles down to the end customer, which, in turn, leads to lower sales and a never-ending low-investment cycle.As a general rule, startups and small businesses are more sensitive to expenditure increases. Simply put, larger companies have more leverage when looking for new suppliers, while small businesses are more dependent on stable markets.Certain companies have tried to find a way around tariffs by stockpiling goods. While this is a wise short-term strategy, in the long run it may make small businesses rigid to market changes. As a result, small businesses could lose their main advantage over big players — flexibility.As fiery rhetoric continues from Washington D.C. and Beijing alike, it’s still uncertain how long the trade war will last. Nevertheless, one thing is evident — it is seriously harming American small businesses and startups.

By Milja September 16,2019

Despite macroeconomic turmoil caused by the U.S. - China trade war, small business owners report the highest levels of optimism since the index was first published in Q2 2017. This quarter's index explores veteran-owned businesses and the employment of veterans by small businesses.According to the data from the Q3 MetLife & U.S. Chamber of Commerce Small Business Index, small business owners across the country are reporting high levels of confidence both about their local economies and the national economy. The overall Index score reached 70.7 in the third quarter of 2019, up by 2 points since last quarter.The survey conducted on a sample of 1,000 small business owners shows increased optimism about the local economy. More than half of respondents (56%) say their local economy is in good health, up by 5% since Q2. Views of the national economy remained steady, with 58% of small businesses saying that the U.S. economy as a whole is in good health too. The results are statistically unchanged from the previous quarter (59%).Small retailers are most likely to perceive the national and local economies negatively, which isn't surprising given the number of brick-and-mortar retail stores that have closed this year. Only 53% of retailers label the national economy as good. On the other end of the spectrum are manufacturers. With 63% of small businesses from the manufacturing sector rating the national economy as good, they are the most optimistic."Small businesses are the backbone of the American economy," Tom Sullivan, vice president of small business policy at the U.S. Chamber of Commerce told Yahoo! Finance. "It's important that we provide them with a sense of certainty and work towards finding solutions that enable business growth and create an environment where Main Street businesses can continue to thrive."Quarterly Spotlight on Hiring VeteransBoth veteran-owned (82%) and non-veteran owned small businesses (81%) agree that hiring more veterans would be beneficial for business. However, only 46% of small businesses report they have hired a military veteran. The figure is much lower when it comes to businesses that have intentionally recruited veterans in the past year - just one in 10.Employers view veterans as great workers and attribute highly positive characteristics to them. Most small business owners perceive veterans as disciplined (86%), punctual (77%), and team players (67%). However, almost half (49%) of small businesses with 20 or more employees say it is difficult to find helpful information about hiring or retaining veterans."Veterans are proven learners with a passion for teamwork and a commitment to results," said Joe Shamess, Co-Founder and Owner of veteran-owned Flags of Valor. "Every sailor, soldier, airman, and marine entered military service needing to learn the basic skills of the armed forces and the advanced skills to support dynamic missions. Employing and empowering veterans is what we are all about! It's a win-win for businesses and their communities."Survey results indicate that larger small businesses have a higher tendency for hiring and recruiting veterans. They are also more likely to use resources intended explicitly for hiring veterans like partnering with an organization dedicated to placing veterans in the workforce, sharing job postings with military employment counselors or attending veteran job fairs or recruiting events.The survey results indicate that most (88%) small business owners would like to see more formal workplace programs that would support the re-entrance of veterans into the civilian workforce. Currently, businesses in the American South are the leaders in hiring veterans - 51% have done so. Contrastingly, the Northeast is the region that hires the least veterans. Only 38% of small business owners in that part of the country say they have hired a veteran.

By Ivana V. September 15,2019

According to a recent study, a vast majority of SMBs that use digital tools say these tools help them improve business performance and remain competitive. The research, carried out by Deloitte, confirmes that digitally empowered SMBs achieve better financial results and higher employment growth.Out of a thousand SMBs surveyed, 99% say they use at least one digital tool in their day-to-day operations. However, not all have the same level of sophistication in using technology. Deloitte divided the respondents into four categories according to where they are in their digital journey - basic (23%), intermediate (41%), high (17%), advanced (19%) users.The study found a correlation between business performance and the level of digitalization. Businesses with advanced use of digital tools are five times more likely to reach new international customers than their less digitally advanced counterparts. Considering the fact that small businesses represent 97.6% of all exporting firms in the U.S., promoting the use of digital tools in SMBs is critical for staying competitive in the global economy.Furthermore, tech-savvy businesses are three times more likely to create new products and services and are two times more likely to create jobs than those that don’t rely on technology as much. The study underlines that maintaining the status of the world leader in innovation depends on further digital empowerment of SMBs.Research results also found that sophisticated users of digital tools are three times more likely to experience revenue growth and twice as profitable. So what are the operational areas that benefit from the use of technology the most?According to the study, over 90% of all SMBs use digital tools for communication purposes, over 80% use them for internal management and logistic activities, and more than 40% rely on these tools for sales management. Small business owners cite a wide range of digital tools that help them communicate effectively with their employees and customers. These include business email (75%), company website (68%), social media (53%), and company mobile app (24%).Small businesses rely on software and digital services when it comes to internal management and logistic activities too. Cloud-based software (67%), CRM tools (30%), and intranet (24%) take the lead as the most used tools. Internal software to connect sales with supply-chain operations (21%), enterprise resource planning tools (20%), and corporate social networks (19%) also contribute to processes running smoothly.A final group of tools considered in the report is used to support the sales process. Sales-oriented small businesses use them to facilitate bookings and purchases through online channels, such as the company website (31%) and the use of third party, e-commerce platforms (19%).The effects of digital tools on both individual small businesses and the entire economy are highly positive, while the figures show there is room increasing their use. The fact that 70% of SMBs have plans to increase digital tool use in the future is encouraging.However, 75% of small business owners say they are facing at least one barrier to meeting that goal. The lack of qualified staff who would implement digital tools in the company is the leading challenge, cited by 45% of respondents. Cost and financing (38%) and security concerns (31%) follow as the second and third most common issue.Read the full report here.

By Ivana V. September 14,2019

A high percentage of small businesses plan to add to their workforce over the next 12 months, according to a 2019 survey of 319 U.S. small business owners. Oasis, a company providing outsourced HR solutions carried out the survey.The figure includes businesses that plan on driving growth (16%), those seeking to fill last year’s gaps in the business (25%), and nominal hiring on an as-needed basis (59%). The online survey was carried out between February 11 and 18, 2019. Oasis used a National Web Panel by SSRS, an independent market research company. The respondents were small business owners and managers employing between 10 and 99 workers, in a wide range of industries. Most businesses (80%) featured in the survey were privately owned, and 68% operated from one location. Most reported over $1 million in revenues. Emily Welfeld, the Senior Manager responsible for Staff Sourcing at Oasis, stated that small businesses find the hiring process particularly challenging, especially those looking for “precise skills and cultural fit”. Overspending in both time and resources in search of the right person to hire is a huge risk for many small business owners and managers. So much so, that a clear set of hiring criteria and a constructive, efficient hiring process would make a lot of difference. Being that almost 60% of small businesses hire people on an as-need basis, while they try and manage to work with what they already have, striving for growth is a huge issue. Professional Employer Organizations (PEO) are there to help businesses bridge this gap and hire the best people. Consequently, they can keep working towards more ambitious goals and drive growth without the additional cost of hiring the wrong people. PEOs track applicants, manage the hiring process, and conduct research on the hiring market. These people help businesses find the most important tools they need to grow and thrive - the right people. Having a business plan is important for multiple reasons, but we'll still have to wait and see how this one will pan out. 

By Andrea September 13,2019