3 Things You Should Know About Small Business: April 19
NEW YORK (MainStreet) - What's happening in small business today?
1. House to vote on the small-business tax cut. The Republican-led House of Representatives is widely expected to pass on Thursday a temporary tax cut measure intended to get small businesses hiring again. The bill, introduced by House Majority Leader Eric Cantor would allow businesses with fewer than 500 employees in the last two fiscal years would be allowed to deduct up to 20% of their profit in 2012. However, Republican and Democrat diverging fiscal priorities are likely to stop this measure before it gets to the White House.
Even with a $46 billion price tag that would be added to the U.S. budget deficit, Republicans say the measure is necessary and will "boost the economy by freeing up cash that companies could use to hire workers, give raises or invest in equipment," according to BusinessWeek .
However, Democrats are critical of the proposal. They say the measure would benefit businesses regardless of how profitable they are
At least one economist says the measure wouldn't make much difference in hiring and is more about election-year political gestures than real progress.
The Associated Press on Wednesday reported that the White House would likely veto the bill anyway calling it an "unproductive giveaway to many of the country's most profitable companies."
2. Entrepreneur says success was a surprise. Cocoa Dolce owner Beth Tully admits that she is surprised by her chocolate company's success. Tully left her sales career seven years ago to make chocolates, according to The Wichita Eagle.
Tully says when she and her husband first launched the business they didn't have any grandiose plans. But now with 31 employees and a bigger storefront with more foot traffic, the owners of Cocoa Dolce are rethinking their original plans and setting their sights on growth.
Cocoa Dolce is one of 10 small businesses in the Wichita community that are finalists for the 2012 Small Business Awards presented by the Wichita Metro Chamber of Commerce.
3. Inflation a big threat to small business. For small business owners, inflation is a big threat to profit and expansion plans, according to the Huffington Post.
Restaurants are being hurt by the rising cost of food - an 8% increase in eggs, for instance, is "eating away" at restaurants and bakeries, HuffPo says. The rise in cotton is hurting clothing manufacturers and retailers. And of course gasoline and jet fuel is crimping profit at any business that relies on sales calls. But small businesses are loathe to pass the higher costs on to customers. Many are instead choosing to absorb more costs.
These days "customers are demanding to pay less, not more. As a result, small businesses are often left with no options," HuffPo says.
But that doesn't mean they're running their businesses as normal. Some are adjusting their operations by incorporating more online training and meetings via webinars, instead of flying to see clients, changing menu items to include less expensive meats or fish. Many businesses are holding back on hiring and asking employees to take on more responsibilities, the article says.
-- Written by Laurie Kulikowski in New York.
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