The Year in Small Business – 2010
In this special year-end recap, we take a look back at the top stories and trends that affected small business in 2010. We do the legwork of finding the best in small business news and links. You have more time to do what you love.
Recession Ends! Recession Ends!
Well, sort of. The recession that has beat down businesses and consumers alike since the end of 2007 was officially declared over in September by the National Bureau of Economic Research. According to the nonprofit group, the U.S economy exited recession in June — of 2009. So is this really last year’s news? Hardly. It just highlights the lag time between theory and reality: Raise your hand if your business has fond memories of the latter half of 2009. It’s not like 2010 was a banner year, either. Many small businesses were still licking their recessionary wounds, but there’s growing optimism about the year ahead. The recession may have technically ended in 2009, but 2010 was the year when small business caught its breath and geared up for renewed growth.
Obama Signs Small Business Jobs Act
In September President Obama signed into law a multi-billion-dollar package of tax breaks, incentives, and lending programs for small businesses as part of the federal government’s broader economic recovery efforts. Among its features is a $30 billion fund designed to strengthen lending by community banks and other smaller lenders — details of how the fund will work were just announced last week. The act also doubled the maximum amount of the SBA’s two largest loan programs, and put in place a number of incentives for capital spending.
Shop Local Movement Gets Big Backers
The “shop local” movement, intended to encourage consumers to spend their shopping dollars at smaller, independent businesses instead of big-box stores and other chains, gained steam this year — and some rather large supporters, too. There was perhaps no better example than American Express and its inaugural Small Business Saturday initiative, a national marketing campaign to encourage shoppers to buy locally on the Saturday following Thanksgiving. The newest holiday shopping kickoff event had some major money behind it from AmEx and its partners, including statement credits for consumers and free advertising for businesses on Facebook.
"1099 Rule" Still Looms Large
It was a particularly busy year of political activity: Midterm elections, major legislation impacting taxes, health care, banking, and other areas, and — wait for it — the unofficial start of the 2012 presidential campaign. But one seemingly minor bit of policy with major impact on small business is set to carry on into 2011 — and perhaps beyond. The so-called 1099 rule, a Bush-era tax provision that will require businesses to report most payments in excess of $600 beginning in 2012, was enacted into law this year as part of the government's health care reform. Before the ink was dry on President Obama’s signature, efforts to repeal the rule issued forth from both sides of the aisle. Neither proposal got the votes — the $19 billion matter of lost tax revenue stands in the way — which means small businesses enter the new year with the potential paperwork boondoggle still hovering on the not-so-distant horizon.
Local Advertising Becomes Big Business
Deep-pocketed players such as Google and Visa launched new local advertising services this year, expanding the options available to small businesses hoping to use online and mobile marketing to attract customers in their communities. Services like Google Boost and Visa’s new iPhone app joined location-based marketing sites such as Foursquare, Gowalla, Yelp, and a host of others. Social shopping grew leaps and bounds as well, offering another localized channel for businesses: Consumers have purchased more than 21.5 million deals to date on couponing site Groupon, for example. As the competition for your marketing budget heats up, expect to see increasingly sophisticated services and flexible pricing to suit a wide range of businesses and local markets. You’re apparently chomping at the bit, too: A recent study by the SMB Group found that 42% of businesses with less than 25 employees have mobile marketing and advertising in their future plans.
Health Care Reform Affects Small Biz Now and Later
Health care was headline news for much of 2010, and while certain features of the Affordable Care Act don’t kick in for several years, some small businesses saw an immediate impact. Beginning with the 2010 tax year, eligible businesses can deduct up to 35 percent of their health insurance premiums. Though it’s a myth that the reform bill will require all employers to sponsor health insurance, businesses with more than 50 employees must pay penalties starting in 2014 if they choose not to offer coverage. (Those with fewer than 50 are exempt.) The law also calls for the creation of insurance “exchanges,” or marketplaces intended to offer individuals and small employers the opportunity to purchase affordable coverage.
Social Media Goes Mainstream
The Next Big Thing is always around the corner, but safe to say that social media has shed any semblance of fad status — not just with the teen texting crowd, but as a serious business tool. Facebook claims more than 500 million accounts worldwide. 24 hours of video are uploaded to YouTube every minute. Twitter’s 175 million users type 95 million tweets per day. And those are just a few of the biggest stars — there are scores of other social sites to serve a variety of interests and audiences. Low costs and wide reach have made social media a critical channel for small business marketing, advertising, and customer service, among other areas.
Best wishes for a prosperous and profitable 2011 from everyone at the Intuit Small Business Blog!
Kevin Casey is a business writer for Intuit and is passionate about solving small business problems.