The economic crisis has affected everyone, and even giant mega-corporations see that the little guy is struggling. As a change in the Super Bowl advertising paradigm, some companies directed their focus to small business.

From MillerCoors to Four Small Businesses

Take, for instance, the MillerCoors Co. Their Miller High Life product is a popular Super Bowl advertising subject. In 2009, Miller High Life sported a simple 1-second ad during the game. This year, however, instead of promoting their own product in 30-second spots, they purchased advertising time and donated it all to four small businesses located around the country!

Of course, Miller High Life will get mentioned, but to offer the biggest advertising event to a virtually unknown small business who otherwise couldn’t afford it is a big nod for the little guy. The four businesses are a corner barbershop in Escondido, CA, a music shop in Phoenix, a candy shop in New Orleans, and a baseball card and collector shop in Chicago. The owners of these businesses state on the MillerHighLife.com website that that commercials will be “life changing.”

Pepsi Donating Super Bowl Funds to Small Businesses

Another big Super Bowl regular is Pepsi. However, instead of seeing their ads during the game this year, they are donating their Super Bowl budget toward small businesses by offering grants from $5K to $250K. Their Pepsi Refresh Project is their way of helping the economy and is aimed at helping small business and new business ideas get off the ground. To be awarded a grant, people need to nominate a small business, and the ones with the most votes get the monetary nod.

The Super Bowl debuted plenty of new and exciting commercials, but this was the year for small business to get a small share of the Super Bowl mania.

President Obama spent two-thirds of his speech on economic recovery, with a top focus on small business and job creation. With this kind of concentrated effort, small businesses can hope for greater help from the U.S. government.

Obama’s New Proposals for Small Businesses

The list on the small business improvement agenda includes a proposal to eliminate capital gains taxes for small business investment, tax incentives for hiring new employees, and redirecting $30 billion of Wall Street bailout money to small-town banks and small businesses.

These proposals are indeed encouraging for small business. In fact, Obama stated, “We should start where most new jobs do—in small businesses, companies that begin when an entrepreneur takes a chance on a dream, or a worker decides its time she became her own boss.” If what the President says is true and his proposals are approved, small businesses should get a big shot in the arm through government aid.

Turning Proposals into Policy

However, if you visit Obama’s speeches prior to his election in 2008, you will find that his speeches have carried much the same tone. Even in 2008, Obama stated that government should provide tax-breaks to small business and encourage investment. With his last full year in office spent focused on health care and overall economic stimulus, we should hope that President Obama’s words will soon become policy and law.

If these proposals do become policy, small businesses might expect a tax credit up to $1 million for hiring more employees, additional money to be loaned to small businesses through government guarantees, relaxed export laws to help small business grow overseas, and additional tax relief for small businesses for expanding and investing in capital.

2010 will be a year of change for small business. With economic indicators looking brighter and positive words emanating from the White House, if small business owners can weather the storm through 2010, they will likely see additional prosperous years in the future.

Starting a business can be compared to buying stock from the stock market. But rather than looking at historical profit trends and future potential that is in the charge of others, you are in full control of your business and its profit potential. By increasing sales, making operations more efficient, and developing the right procedures, you can increase the value of your business and make it an attractive investment for others.

Factors that Influence the Timing of the Sale

When is the right time to sell? If your exit plan involves selling your business, then you have various influences that can affect the value of your business, such as:

• The profit and growth potential you have created
• Economic factors that could limit or increase the value of your business
• The number of potential buyers in a market

Remember, you can only control the first point. All other economic and market demand factors are out of your control. Thus, you must determine whether your exit plan is ready to execute or whether to wait.

Considering the Market Conditions

For instance, say you started a business in 2003 with an exit plan to sell in 5 years. However, based on a poor economic climate in 2008, your exit plan may not be at its full potential because you cannot sell for your full asking price. You have the option of selling at a lower price and not reaping your small business’s full value or waiting until economic factors are once again in a positive light.

Remember this: when preparation meets opportunity, this is the right time to sell. Whether you have an exit plan or an interested party approaches you to buy your business, you must be prepared with a plan to sell if the time is right for you.

Of course, one important element of keeping a positive cash flow is collecting on your invoices. One method that many businesses have found to maintain cash flow is through invoice factoring.

What is Invoice Factoring?

Invoicing works much like credit. When you issue an invoice to a business or other customer, you give them a certain amount of time to pay the amount due in full. This can be anywhere from 1 day to 90 days, although typically invoice dates are 30 days from the date of the invoice.

During that time, you do not receive any cash, although your business activities must continue. And while most businesses pay within 30 days, others are chronically late. How can you keep cash in your business while you wait for invoice payments?

Invoice factoring is when a third-party business pays you a portion of an invoice balance, then makes the collection efforts on the invoice. The factoring company then pays you the balance of the invoice, less their fee.

Pros of Invoice Factoring

Invoice factoring has many advantages, such as:

• Keeps cash in your business the moment an invoice is created
• Can help inject a portion of cash at needed times
• Saves time from collecting on outstanding invoices
• Low fees – most invoice factoring groups charge reasonable fees for their services
• Not a loan – invoice factoring groups pay you the arranged up-front percentage, which is up to 90% guaranteed. If the company does not collect on an invoice, they do not owe you the balance, nor are you required to pay the advance back.

Cons of Invoice Factoring

While there can be good benefits of invoice factoring, there are also negatives. Here are a few you might want to consider:

• You do not receive full invoice amounts. – Although you get cash upfront for your invoices, the fees charged by factoring companies reduces your total revenue amount.

• Poor customer service by the factoring company. – Many businesses are concerned about losing customers and damaging relationships due to factoring collections. However, most invoice factoring lenders will work with you to assure that their efforts match the needs of your business.

If you are interested in this type of cash flow help, research potential factoring companies, and find the right facility that can help your business meet its financial needs.

Employee Mileage Reimbursement

As an employee, the IRS does not allow you to deduct mileage for your commute to and from work. However, if you use your own automobile for business purposes, such as attending business meetings, you can deduct mileage as set by the IRS. The current deduction amount is $0.55 per mile for 2009.

However, there is a catch to personal deduction of employee mileage if your employer reimburses you for your mileage expenses. If your employer reimburses you less than $0.55 per mile, you may deduct the difference up to that amount. If your employer reimburses your mileage above the $0.55 per mile, good news! You may pocket the overage without having to report it on your personal taxes.

Standard Mileage for Business Use

If you, as a small business owner, use your personal vehicle for business use, you can also deduct the standard mileage rate for all business purposes. Whether you drive to client meetings, go to the bank to make deposits, or visit the office store for supplies, each mile can be deducted.

In addition, you can add parking fees (not tickets), fares, and tolls to the total deduction amount.

However, you may only use the mileage deduction if you use less than five vehicles during the year, and if you have not used a depreciation deduction (explained below) on the same vehicle in a previous year.

Actual-Cost Deduction Method

You may find that the Actual-Cost method can save you even more on your taxes. Using Actual-Cost, you can deduct depreciation of the vehicle and other actual expenses, such as oil changes and other maintenance costs, fuel, insurance, registration, and license fees. You must keep detailed records of your trips, including odometer readings and all receipts. Your actual business deduction is the percentage of use your vehicle for business purposes during the year.

If you use a “heavy” vehicle with a 6,000 gross-vehicle-weight rating (GVWR) for more than 50% of your business use, you can save even more. Larger vehicles are allowed a larger depreciation deduction as follows:

Year 1: 20.00%
Year 2: 32.00%
Year 3: 19.20%
Year 4: 11.52%
Year 5: 11.52%

Also, with the Section 179 Deduction allowance passed with the American Recovery and Reinvestment Act of 2009, you can deduct up to the full depreciation amount in the same year if the vehicle was placed in use as of 2008 or later.

Vehicle deductions can mean big tax savings for your personal taxes. Be sure you take the maximum deduction allowed by the IRS.

Interestingly, what captures our attention is the drop in the number of Cold Stone Creamery franchises. In 2008, Cold Stone had a peak of 1,394 stores, but in one year, saw a drop down to 1,221 in 2009. From the Cold Stone Creamery in Santa Ana, California to the location in Fenton, Michigan, these delicious stores have shuttered their doors. Why has this popular brand of ice cream dwindled?

The Ravages of the Economy

By and large, the most common factor is the economy. Cold Stone Creamery offers delicious frozen products and “the ultimate ice cream experience,” but it does so at a price. For over 20 years, Cold Stone has offered creative and unique ice cream products using only the highest quality ingredients and a “signature process.” What customers enjoy is a great-tasting product that is priced at expendable income levels.

With the economy slump beginning in 2007, many people have simply stopped paying for luxury items such as the Cold Stone process ice cream. Ice cream can be bought much cheaper in the grocery store or at other locations.

High Overhead

In addition, many of the new Cold Stone locations opened at the height of the real estate boom with overinflated rents. When the market imploded and rents dropped to more reasonable levels, many new franchise owners were stuck in a long-term lease that they simply could not afford.

Heated Competition

Another reason Cold Stone numbers are dwindling could also be increased competition. Dairy Queen has been a long-term staple that offers reasonable priced ice cream products similar to the Cold Stone process. Why would consumers pay more for Cold Stone when they can go down the street and to Dairy Queen for a cheaper and similar product, or find a cheaper and healthier frozen yogurt alternative such as Pinkberry?

It is true that consumers still like their ice cream, and many consumers are loyal to their brands, especially when it comes to Cold Stone. However, Cold Stone will need to see better management of locations and competition to see them become a favored franchise once again.

Mixing Business with Personal Credit Reports

Small business owners are finding that their business credit card activity is being reported on their personal credit reports. Particularly, credit card behemoth, Capital One, is the major culprit.

Capital One has confirmed that their practice is indeed to report all business card activity on personal credit accounts, although this is not the industry standard. Other credit card issuers such as JP Morgan Chase and American Express confirm that they do not report business card activity unless the account is in default.

The other question many small business owners have is whether this practice is legal. Yes, it is. When you provide your personal credit card number on a business card application, you give the issuer permission to check your credit and report business credit to your personal history.

How Your Corporate Finances Impact Your Personal Credit

How does business credit activity affect your personal credit? Even if you manage your business cards well by paying on time and keeping below the credit limit, your personal credit can look overextended. If you wanted to apply for a loan, but a lender found a high level of corporate debt without the personal income to cover it, you could be denied a loan. In addition, your personal credit score could drop with the additional activity.

Therefore, as a small business owner, you must remember that your company’s financial activity could show up on your credit. If you wish to avoid this, then step one is to stay away from credit cards issued by Capital One. Step two is to manage your business cards with care to avoid any late payments being published to your credit report.

Growing Expenses for 2010

According to the Business Inflation Guide (BIG) published by More Th>n Business, a small business resource located in the UK, commodity prices rose in the 3rd quarter of 2009 and are expected to continue rising into July of 2010. The BIG is a helpful guide that measures 20 of the most frequent expense items for small businesses.

Costs that are on the rise include fuel and vehicle costs, raw materials, capital equipment, telecommunication, and electricity. However, some costs are seeing declines, such as labor, insurance, rent, as well as large decreases in natural gas costs.

What does the BIG report mean for small businesses? For the most part, it means that small business owners need to carefully manage their cash flow and keep a close eye on operating expenses.

The Industries Most Impacted by Rising Costs

The statistics show that manufacturing businesses are likely to experience higher expenses than service businesses. Particularly, small manufacturers or industrial firms should watch for higher prices from material suppliers. Perhaps these business owners might look for optional suppliers or negotiate with current suppliers.

Operating costs should be managed carefully as well. Business owners need to limit costs for professional services, such as legal, accounting, and financial services. Utilities will likely see hikes on the balance sheet as well. Business owners and managers could set policies to reduce electricity and telecommunication usage. All types of small businesses that use vehicles will need to keep a close tab on fuel and leasing costs.

Although the BIG report is researched and published in Great Britain, there are still lessons to be learned for American small businesses. The economy is once again on a path to steady growth. Although expenses for certain operating and material costs may be rising, it’s good news to be spending money to make money in 2010.

However, what if your business absolutely needs a specific type of software that just cannot be found on the shelf of Office Depot?

There is good news for small business owners who wish to purchase software packages without the high cost of administration, and it comes in the form of cloud computing, also known as Software as a Service (SaaS).

What is Cloud Computing?

If you have an email account with popular hosts like Yahoo! or Gmail, you are already familiar with cloud computing. Your email account is accessed via an internet connection and a browser to the Yahoo! or Gmail server. You simply bring up the website, enter your password information, and voila! Your account and all email services are there for you.

Although an email account is a simple example, cloud software delivery operates on the same premise. You simply use an internet connection to access the software from the developer’s own server. All your computing is completed through the internet. There is nothing for you to manage at your own business, which means no extra computer servers or extra IT personnel.

How Can Your Business Benefit from Cloud Computing?

There are many benefits from using remote software packages, but the main benefit that most businesses see is cost savings. The money you can save on not having to buy the software, install it, and administer it is substantial. In addition, here are just a few other benefits:

• Easy Data Transfer – You can easily transfer your existing data with the help of a SaaS provider.

• Improve Your Productivity – There will be no more downtime while IT “fixes” the server. Your SaaS account is available at all times from most any computer. You can even work from home.

• High Level of Security – Cloud computing providers establish a high level of security for their servers, providing you and your customers with peace of mind that information will not get stolen or hacked.

If you are in need of quality software applications but do not have the resources to administer it, consider cloud computing. It could save you money and time and provide your small business with the high-quality software it needs.

The SBE’s Take on the Small Business Environment

Who is the SBE Council?  The SBE Council is a non-partisan, non-profit small business advocacy group whose mission is to protect small businesses and promote entrepreneurship.  Part of their mission is to educate lawmakers and elected officials, as well as the public, to advance policies and laws that make entrepreneurship easier.

The SBE Council report states that the economic climate has not been kind to entrepreneurs over the last two years.  In addition, federal and state policies have not been entrepreneur-friendly either.  For instance, the SBE Council noted that 11 states raised their personal income tax rates in an effort to patch budget shortfalls, while 10 states raised the capital gains tax rate on individuals.  Since most small business owners pay an individual tax rate on business income, these are certainly features that hinder the progress of small business success.

How the States Were Judged

The SBE Council judged how states promote entrepreneurship based on a comprehensive list of criteria.  They looked at a broad range of industries and types of small business.  In addition, states were judged on how friendly their policies and decisions were toward small businesses.

The ten best states were, in order:

1. South Dakota
2. Nevada
3. Texas
4. Wyoming
5. Washington
6. Florida
7. South Carolina
8. Colorado
9. Alabama
10. Virginia

In contrast, the 10 worst states for small business policy were:

1. Hawaii
2. Minnesota
3. Massachusetts
4. Rhode Island
5. Maine
6. Vermont
7. New York
8. California
9. New Jersey
10. District of Columbia

High startup costs, high taxes, and high regulation make it much more difficult for an entrepreneur to make a business a success.  Check where your state falls.  If you find you’re not in the top ten, talk to your local lawmakers about changing policies that would help small businesses thrive.