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Beware of ransomware: Small businesses can take these simple steps to protect themselves

(This post originally appeared on Philly.com)

Ever heard of GandCrab, Ryuk, BitPaymer, SamSam, or Matrix?

They are all different forms of ransomware, a type of computer virus that for the last few years has wreaked havoc on businesses and organizations — big and small — around the world and is not going away anytime soon. It’s likely that your business has bumped into this problem. If not, you probably will.

There are plenty of other types of viruses and malware that can affect your business. But ransomware is particularly concerning because it’s a moneymaker for the entrepreneurial computer hacker. Just this last week, for example, a Georgia county paid more than $400,000 to get rid of a ransomware virus. Over the last few years, costly attacks have hit such big organizations as Merck, FedEx, Britain’s National Health Service, San Diego’s ports, and a Connecticut school district. And those are the just some of the cases reported. Read More…

If you are waiting on a big tax refund, then you aren’t doing it right

(This post originally appeared on Philly.com)

Will your tax refund be lower this year? Good for you!

“It totally feels like a scam,” John Prugh of Ewing Township, N.J. told the Washington Post. “I did still get a small refund, but compared to what I was expecting from previous years, it was shock.”

John should probably talk to his accountant before getting so irate.

It is true that a recent IRS report showed “very early in the season” that average refunds are down so far about 8 percent versus the average refund issued this time last year. Many are taking the numbers and using them as another knock on President Donald Trump and the Republican Party’s signature 2017 tax reform package. Others are saying that it is too early in the season and that due to the January federal shutdown fewer tax returns have been filed and processed by the IRS so far this year.

The fact is that the amount of the refund actually has nothing to do with what we ultimately owe the government. In my opinion, we’re not going to know the true effects of the 2017 legislation and how it affected our 2018 taxes until all the returns are filed. And we won’t know how the those tax cuts will affect business spending and investment until we have a few years of this new, lower tax environment under our belts.

“We have said people will be surprised, but how that comes out in the aggregate is to be seen,” Kathy Pickering, executive director of H&R Block’s Tax Institute, said in USA Today. “Don’t put too much into these initial numbers from the IRS, because the volume is down and it may be hard to parse out the tax-reform impact from the shutdown impact.”

Regardless, a lower tax refund is still good news. Why?

Because you shouldn’t be getting any tax refund at all. You shouldn’t owe the government, either. Any competent accountant will tell you that, in the best of circumstances, the taxes a small-business owner pays during the year from withholdings and estimated payments should equal the taxes that are owed. In other words, it should be a wash.

Why would you want a big refund, anyway? It just means you overpaid the government and it is giving you back the money interest free. Couldn’t you have found a better use for your money last year? Of course you could.

If you’re in the habit of waiting until your tax return is filed to find out whether you owe money or money is owed to you, then you need to change that habit. If you’re a small-business owner drawing a salary (or a typical individual taxpayer) you should be revisiting your Form W-4 and making sure it properly reflects your tax filing status (i.e. married, head of household, etc.), whether you have dependents or if, because of other sources of income, you decide to withhold an additional amount.

Tinkering is fine – go ahead and adjust your W-4 based on your withholding on your last couple of paychecks and then adjust it again. It may slightly annoy your human resources person, but then again that person isn’t stuck with your tax bill next year, right?

As a small-business owner, you’re likely having taxes withheld on your salary, plus you’re paying estimated taxes quarterly. Generally, and unless your tax bill is less than $1,000, you’ll have to pay in at least 90 percent of the tax you estimate you owe for the current year, or 100 percent of the tax shown on the return for the prior year, whichever is smaller.

It’s important to know that your estimated taxes aren’t a fixed amount, either. They can be changed each quarter, if you want. It all depends on how your business is doing. If you’re having a not-so-great year, then pay in less next quarter. Do the opposite if things are going better than predicted.

All of this requires some help, and for this my smartest clients turn to their accountants. They get year-to-date financials done each quarter, meet with their accountant regularly, forecast what they believe will happen for the rest of the year, and then adjust their taxes accordingly. This way, you’re maximizing your cash flow and not giving away too much (or too little) to the government.

So, did you get a big refund this year? That’s a shame.

Is the Facebook, Google ‘duopoly’ bad for small business?

(This post originally appeared on Philly.com)

If you think that Facebook and Google pretty much control the Internet, you’re right — at least when it comes to advertising.

And that can be bad news to some smaller firms, particularly ones that run afoul of Google and Facebook’s oftentimes draconian advertising rules that restrict the promotion of potentially controversial merchandise and services such as unregulated drugs, certain “adult” products, pay-day loans, and weapons.

“The monopoly Google holds in the search market can literally put a death sentence on your small business, if your company or the industry you are in is blocked from placing paid search ads,” says Joe Butch, a digital-marketing manager at Recovery Centers of America. Last year, Google had suspended advertising by the King of Prussia-based network of addiction centers, blaming certain treatment providers that were doing what Google deemed false advertising. “Without any sort of government regulations, Google is deciding who can and cannot continue on their platform, and Google’s decisions are final in most situations.”

That issue is on the minds of many small-business owners and publishers this week after the release of the State of Digital Media report by Polar, a technology firm that helps publishers market branded content. The report predicts that not only would online advertising make up more than half of all the advertising dollars spent by 2022 but also that both Facebook and Google combined will control 80 percent of that spending.

In 2018, advertisers spent $169 billion with the two companies — which included fast-growing platforms such as Instagram (owned by Facebook) and YouTube and Google Maps (both owned by Google) as compared to the $29 billion received by Amazon, Microsoft, Twitter, Oath and Snap combined.

“Google and Facebook have a forceful hold on today’s digital-advertising industry, meaning brands can’t walk away from them,” John Nardone, the CEO of ad management and analytics technology company Flashtalking, recently wrote in Forbes. “There is an urgent need to start building a more open ecosystem where brands have greater choice and more control.”

The two companies’ dominance is being felt mostly in the world of publishing, where their stranglehold on third-party content is siphoning direct ad revenue away from many online content providers, the effect of which is being partly attributed to the recent layoffs reported by Vice Media, Buzzfeed and the Huffington Post.

But it’s not just publishers that are affected by the Google/Facebook duopoly. As the two companies’ hold on the online advertising market grows, small businesses that advertise there are also facing fewer choices — and potentially rising costs. But is this such a bad thing?

“It depends on what you’re selling,” Rick Simmons, a Philadelphia-based marketing expert and owner of Simmons Online Solutions, told me. “It is less about the duopoly than it is determining the where – who exactly are your prospects and what do you know about them so you can be in front of them.”

Simmons is right. When I launched my online training business last year, my marketing choices were obvious. Using specific keywords, I relied on Google AdWords combined with both banner and display ads to get my site placed high in my target audience’s search results. I also tinkered with some Facebook ads because of the flexibility in narrowing down my audience and targeting messages directly to the users that I thought would most be interested in my products. The combination of both drove thousands of prospective subscribers to my site over the course of just a few months. Of course, getting those visitors to sign up has been another challenge. But that’s on me.

“One thing that both Google and Facebook have in common is boatloads of data,” said Pat Walsh, who runs the Walsh Group, a digital marketing firm based in Warrington, Pa. “Google Ads use the person’s geography, browsing history, and, most important, the search terms to create relevant advertisements that your prospect will likely click on. Facebook Ads equip themselves with an incredible amount of demographic data that Facebook compiles such as age, sex, income, interests, etc. So those beauty products can be to “women over 40”, in a household earning over “$90,000,” and have an interest in “fashion” and live within “25 miles” of your “zip code.” Walsh recommends starting with a small budget – maybe $500 a month – and building from there.

There are still plenty of marketing choices other than Google and Facebook for a small business, such as advertising in local publications, email campaigns, billboards, cable television, and even direct mail and telemarketing. But the fact of the matter is that most small businesses — pizza shops, auto mechanics, landscaping services, and clothing stores — want to be found online, even if they’re not selling their products or providing their services online. So it’s back to Google and Facebook, right?

Not entirely. There are other options besides the Google-Facebook duopoly. Other platforms with millions of users — such as Snap, Twitter and Yahoo — remain independent. Also, with the growth of its Echo and Kindle devices, many industry watchers are predicting that Amazon may turn into a major player that will take market share away from Google and Facebook. “Its strong handle on consumer purchase behavior sets it apart from Google and Facebook in the digital ad market, which has made the company an attractive option for advertisers,” Monica Peart, senior director of forecasting for eMarketer, said in a recent report.

Whichever advertising platform is chosen, I’ve learned that you can’t do it alone. Employing a marketing professional has become necessary mainly because online advertising requires its own form of expertise and a commitment of time that most small business owners such as myself just don’t have.

 

What small businesses can do while waiting for SBA loans to be approved after the shutdown

(This post originally appeared on Philly.com)

For five weeks, thousands of small-business owners were forced to wait on much needed financing because the process for approving their Small Business Administration-backed loan applications was interrupted during the federal government’s partial shutdown.

Now that the government has reopened for business, many are expecting to see a quick resumption in loan processing. If that’s you, don’t get your hopes up.

Unfortunately, many experts estimate that the SBA will need weeks, if not months, to clear the backlog from the shutdown. Then there’s the looming threat of another shutdown if there’s no spending deal by Feb. 15, less than three weeks away. All of this means that the small-business owners, especially those needing working capital or equipment financing, need to have a backup plan.

The good news? There are options. Read More…

Is New Jersey’s $15 minimum wage good or bad for small businesses?

(This post originally appeared on Philly.com)

The hourly minimum wage that New Jersey employers pay will be going up by a dollar a year starting in 2020 until it reaches $15 per hour in 2024. That’s a fact. But it’s not anything new.

Even though Democrats in Congress are pushing to increase the federal minimum wage from its current $7.25 to $15 per hour, most believe a significant change is unlikely in the near term. Because of this, many states and localities have been taking it upon themselves to increase their own minimum wages, and places like New Jersey, California, Massachusetts, New York and the District of Columbia have gone as far as raising hourly pay to as much as $15 over the next few years.

Pennsylvania’s minimum wage remains at the national level while Delaware will increase minimum hourly pay to $9.25 later this year. Read More…

Will banks be cautious in 2019? Small businesses thinking of getting loans may want to act now

(This post originally appeared on Philly.com)

If you want more evidence of how strong the economy is, then here’s proof: there were no bank failures in 2018, according to the Federal Deposit Insurance Corporation, or FDIC. That’s a first since 2006, and only the third time since FDIC’s founding in 1933.

“The Great Recession/housing bust/financial crisis related failures are behind us,” writes economist and blogger Bill McBride of Calculated Risk.

It’s not just the strong economy that’s being credited. Recent tax reform and legislation introduced after the 2009 recession have helped to improve the safety of the banking system while still leaving room for the industry to grow.

Even with the stock market volatility, banks continue to be in a strong financial position. “Frankly, recent market movements have not given us any reason to be concerned,” Federal Deposit Insurance Corporation Chairman Jelena McWilliams told Reuters earlier this month. “Actually, [banks] are superbly well capitalized at this point in time.” Read More…

The one simple thing small businesses can do, to not lose out to big firms in fight for talent

(This post originally appeared on Philly.com)

Most economists agree that last Friday’s job numbers were very, very strong. Unemployment remains at a historic low and businesses across the country and in this area added hundreds of thousands of new workers in December alone.

The reports were great economic news for just about everyone… except for those of us that employ more than half of the U.S. workforce: small businesses. In fact, two studies released this past week revealed a different, more concerning job picture among these firms. Read More…