Small Business Management Issues of 2016
Small business owners had to think about many issues last year—including some that could impact the cost of running their businesses.
Despite their concerns, a recent survey says that about 73% of small business owners feel successful, and just over half (52%) are optimistic that the economy will improve in 2016. This is according to The Hartford’s 2015 Small Business Success Study.
The Hartford’s study found that small business owners identified several issues that are challenging their businesses. Here’s a discussion of those issues and some ideas to help owners successfully deal with these issues this year.
Minimum Wage Increases. With cities like LA approving a $15 minimum wage and discussions of a national pay hike, minimum wage increases are a big concern for many small business owners, according to the study. Aside from local wage increases, this issue is impacted the most by the type of industry the business is in, as many industries, such as technology see most employees already paid above the minimum wage. However, in non-unionized types of businesses like restaurants and some retailers, owners frequently have limited profit margins and pay less than the suggested minimum wage hikes.
Taxes. Roughly 29% of small business owners put taxes as a top concern. One way that small business owners can make certain that they don’t overpay taxes is a pre-year-end tax review with their accountants. Owners can review whether certain business expenditures can be treated as expenses to reduce their tax liabilities. Further, business owners can look at estimated tax payments to be sure they’re in line with their business performance.
Healthcare Costs. Over a third of small business owners said they are concerned about healthcare reform and the Affordable Care Act (ACA). Beginning this year, the ACA requires that business owners with 50 to 99 full-time employees start offering healthcare coverage or by subject to a penalty. Along with this is the continuing high cost of healthcare.One option is to pass the cost of a wage hike on to customers, or possibly offset higher wages with gains from reduced employee turnover, increased productivity, and greater consumer purchasing power.
Data Breaches and Cyber Fraud. Small business owners said that the potential costs of cyber fraud and data breaches were a significant concern for about 15% of small business owners, according to The Hartford’s study. Nonetheless, every small business owner must be aware of security and take steps to protect their businesses from attack. A popular idea is to move data processing to the cloud, which protects it from physical harm. It can also offer more robust protection from cyber threats in that cloud hosting providers usually provide greater security against data breaches than an individual small business can set up on their own.
Mobile Payment Technology. This was another concern, as indications are than interest in mobile payments in 2016 will continue to increase to represent 50% of the total U.S. digital commerce revenue by 2017. Many owners concentrated on the October 1, 2015 deadline to accept EMV cards (Europay, MasterCard and Visa, which created the standard) equipped with computer chips that increase security against fraud. Only half of small business owners knew about the deadline, the study reported. Small business owners can be liable for losses caused by credit card fraud if they don’t accept the new EMV cards.
Small Business Management Issues of 2016
Even with these concerns, small business owners as a whole have a positive outlook for this year with an improved economy and renewed optimism. Owning and operating a business is all about recognizing opportunities and being ready to take advantage of opportunities when they present themselves.
Andrew Rogerson is an expert of small businesses in Sacramento. He understands these issues and can help you with managing a business. He can also assist you with selling or buying a business, buying a franchise, or a related service like valuing a business.
If you would like more information about selling a business, buying a business or buying a franchise, please visit my webpage Services and choose from the drop down menu the information you would like.
For more immediate help, you are welcome to send an email to Andrew Rogerson or give me a call on 916 570-2674.
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