January 2010 Archives

President Obama addressed the nation's concerns over the sluggish economy, healthcare, and small business government help last night. As reported by U.S. News & World Report, President Obama promised a new tax credit for small businesses, more money for small business lending, and rallied against big banks for not stepping up their lending to small businesses.

In the speech itself, we can see how many times President Obama actually addresses small business owners. He started by saying that most Americans are angry that Wall Street is being rewarded while Main Street is still struggling: "They don't understand why it seems like bad behavior on Wall Street is rewarded, but hard work on Main Street isn't, or why Washington has been unable or unwilling to solve any of our problems."

The whole concept of free online reviews is great in theory. It could be a way for your small business to build a customer base without expending too much money on marketing. However, it can also lead to unwanted legal problems. Inc. recently wrote about the dangers of the Yelp reviewer. Small business owners can open up a legal can of worms if they try to fight negative online reviews. Here are some of the current legal issues facing small business owners with Yelp and other free online reviews of small businesses.

Bad Reviewers Can Bring Bad Legal News

Inc. wrote about how one small business owner named Diane Goodman got into legal trouble. She wrote messages to a negative reviewer which then culminated into a physical altercation. The result? Ms. Goodman was charged with assault and battery. She was also remanded to San Francisco General Hospital for a mental health evaluation.  

While this is an unusual situation, all small business owners can take note of it. Do not try to locate negative reviewers and confront them. If you choose to message them, do not threaten them. Be more proactive by addressing that customer's concerns.

It is common for small business owners to be unaware of current legal issues that may hit them... until they get into legal trouble. The problem is that legal trouble can cost you. It can even cost you your business. As many know and Business Week recently pointed out, court actions can actually demolish small businesses; especially the ones that did not prepare in advance.

Here are some legal issues that just about any small business needs to watch out for:

We have written about how bleak the economy looks for finance and small business. While there are definitely some dark clouds hovering over small business loan opportunities, there are some bright spots in terms of small business grants. Small business grants afford you the opportunity to grow your business with funding that you don't have to pay back. It is typically given by the federal government, state governments, and by private corporations.

So what exactly do you need to do in order to make sure that your small business can get a grant? Keep reading for places to look for grants and for tips on how to land a grant that could help your small business.

Where do you go if you are looking for new loans for small business? Whatever you do, don't hit up the big banks looking for cash. CNN reports that the country's largest banks have cut back on new loans for small business by $1 billion dollars in November 2009. According to CNN, the banks that received the most in bailouts have cut their small business loan balances by $12.5 billion dollars since April 2009.

In fact, just about all that big banks have been offering to small businesses is credit cards. More credit cards are being offered because they are more profitable for banks -- allowing them to charge (and hike) variable interest rates and charge penalties such as late fees. Some include the possibility of interest rates skyrocketing up to 30% -- needless to say much more than they could charge for a traditional small business loan.

Scott Brown's Senate win in Massachusetts has cast confusion onto the prospects of the health care legislation we've been hearing about for months. One question that will likely remain is whether any eventual legislation will include a construction employer mandate.

It is widely known that the Senate version of the health care reform bill requires employers with 50 or more workers to provide them with coverage. But a lesser-known construction employer mandate in the bill would require construction companies with just five or more employees and a payroll of $250,000 to do the same (Denver Daily News).

The last-minute amendment by Senate Majority Leader Harry Reid, D-Nevada, has irked many small construction companies already hurting from the steep housing decline.

Roughly 53,000 jobs were axed last December in the construction industry alone, according to statistics from the Bureau of Labor Statistics (BLS). That's not insignificant, considering that a total of 85,000 non-farm jobs were lost during that period.

You may think that after ending a business, paying off creditors, and shuttering your windows, that you are finally free from any obligations that stem from the business. However, there are some issues you still need to think about. Lawsuits after a business dissolution are one of them. Here are some tips to handle any that may come your way. Please keep in mind that these are just tips. If you have an actual legal question, please consult an attorney.

Get An Attorney

If you are hit with a lawsuit, make sure that you get an attorney that you can trust and you know will be reliable. 

Get ready for more workplace oversight with respect to federal labor laws, as a half-trillion-dollar spending bill making its way through Congress will give regulatory agencies more resources to follow up on complaints and pursue cases.

It's important to remember that labor and employment laws mean very little in the absence of enforcement.

The $447 billion Consolidated Appropriations Act (H.R. 3288) determines who gets how much federal money, as discussed by the Daily Journal of commerce. The 2010 bill allocates $13.3 billion to the Dept. of Labor (including $1.6 billion for worker safety initiatives), $367 million to the Equal Employment Opportunity Commission and $238.4 to the National Labor Relations Board.

Most small businesses, even those that have managed to do relatively well in these trying times, just can't get much respect from banks and other lenders. Although most US employers are considered small businesses, the small business loan is considered a very risky category from the lenders' perspective.

Local credit unions often are viewed as neighborhood-friendly partners, better able to assess the health of the barber shop down the street than national behemoths like Bank of America. The only problem is the arguably low cap on how much they can loan to small businesses.

But if Sen. Charles E. Schumer's proposed bill gets traction, as reported by the Rochester Democrat and Chronicle, credit unions will be able to make small business loans in amounts equal to 25 percent of their total assets, double the current cap of 12.5 percent.

Claims for employment discrimination filed with the Equal Employment Opportunity Commission (EEOC) in 2009 declined slightly from the previous year, but still were at the second-highest level in the agency's nearly 45-year history, as reported by the AP. The year in which the most claims were filed was 2008.

The total number of disability discrimination claims received by the EEOC last year was 93,000. As with most years, discrimination claims based on race (36 percent), sex and retaliation were the most prevalent.

Reuters reports that the number of small and mid-sized businesses who are suffering from a loan delinquency rose in the past six months in the midst of the current business loan credit crisis. According to a survey done by PayNet,  small and medium-sized U.S. businesses seeking to finance in the form of business loan credit showed signs of trouble in November as loans more than six months past due rose for the 22nd consecutive month.

PayNet also found out that the loan delinquency will eventually be a cost that is going to be carried on to the lender. If the cost gets carried to the lender, then that leads to more of a squeeze on business loan credit in general.

If you are one of those small business owners who are having a hard time making payments on your small business loan, you do have options.

With the economy suffering a recession, one of the bright spots for the small business employer is that when they are hiring a new employee, they can have their pick of the crop. There are more and more qualified candidates in the available labor pool. Here is a quick legal hiring guide for the small business employer to keep in mind while they are hiring fresh new faces for their small business.

Whittle Down Resume Stacks The Right Way

While the small business employer may be tempted to just arbitrarily throw out resumes, Business Week cautions that it may break the law. A small business employer can not discriminate against a protected class of applicants such as race, age or gender.

At a time when virtually everyone is squeezed financially, at least a little, even the most astute bill-collecting policy sometimes falls short. If credit checks, seemingly fail-safe billing terms, clear communication and a soft approach to collections doesn't work, then it's time for tougher collection techniques.

No matter how much your business customer is struggling (they may share a sob story or two), it shouldn't also become your burden. The following "get tough" collection techniques should be used if all else fails: 

It has often been said in economic circles that a rising tide lifts all boats. The same could be said of a falling tide (in this case, a severe recession in the absence of easy credit), which can maroon even the most ship-shape of operations, since businesses are more interdependent than they may realize in good times.

Most businesses are finding it increasingly difficult to collect overdue balances from their customers, which causes otherwise balanced books to dip into the red.

No method of account collections is fail safe and using the services of a collection agency should be the last option, but a variety of strategic moves can improve the chances of keeping the wind in your sails: