Business Journal 20121207

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Financial advice for the new year, Inside

December 2012

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BUSINESS JOURNAL

DECEMBER 2012

Small businesses have interesting year ahead

he next year will be an interesting one for small businesses, many of whom still are trying to gain traction in an economy that, in many ways, is trying to find traction of its own.

Unemployment is down, though overall employment isn’t at a level that can sustain economic growth.

The housing industry seems to have finally bottomed out, with recent figures – construction, home sales, etc. – indicating it’s on a rebound.

The automobile industry also seems to have picked up again. While the 17 million sales from five and six years ago are still far off, they are within reach once more.

Without SuperStorm Sandy, retail sales would have been much better in November than what was recorded. The Black Friday weekend brought in record crowds and dollars.

In addition, GDP growth in the third quarter was higher

than expected.

All this leads us to think we can see the light at the end of the tunnel.

But all the DENNIS good news has a caveat: we’re SEID quickly approaching the fiscal cliff.

As of this writing, Congress has yet to settle its differences to reach a compromise on tax cuts – or tax hikes, if you prefer to look at them that way – and domestic program cuts.

If you’ve followed the financial markets the past few weeks, you know investors are watching closely the talks as well.

Most experts agree that falling off the cliff will result in another economic slowdown, another recession.

We haven’t fully recovered

With a myriad of details still unexplained, small business owners aren’t sure if they’re better off paying the $2,000-per-worker penalty for not providing health care. from the last one, and another one would be disastrous. The light at the end of the tunnel would be a freight train with its lights on.

Besides trying to regain business lost during the last recession, small businesses face another huge worry: health care coverage.

On Jan. 1, 2014, many small business owners will be required to provide health insurance for their employees under the new health care law.

While many small businesses already provide insurance, they struggle with premiums. Many pass the costs along to their employees, who must contribute to their coverage.

With a myriad of details still unexplained, small business owners aren’t sure if they’re better off paying the $2,000per-worker penalty for not providing health care.

Some businesses have said they’ll cut the hours of their full-time workers, others say they’ll pass the costs on to customers, or a combination of both.

Says the Associated Press: “The health care law generally requires that companies with 50 or more full-time workers provide health insurance for their staffers. If they don’t provide any insurance, they’ll have to pay the $2,000 penalty for each worker on their payroll. If they buy insurance, but

it doesn’t meet the government’s tests for affordable coverage, they’ll have to pay $3,000 for each worker whose coverage isn’t deemed affordable. If that seems confusing, that’s just the beginning.

There’s a labyrinth of other details that include plans that can be “grandfathered” in and a maze of other fine points that small business owners are trying to decipher.”

Potentially higher taxes, a looming fiscal cliff and mandatory health insurance – small businesses do have a lot to think about in the next year.

Best of luck to them all.

Contact DENNIS SEID at (662) 6781578 or dennis.seid@journalinc.com.

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DECEMBER 2012

BUSINESS JOURNAL

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