Believe it or not, the federal government is making it easier for contractors to conduct business online. There are several tools that allow contractors to submit information to the government over the web. Here’s an overview of some helpful tools:

FBO.gov – FedBizOpps is the single government point-of-entry (GPE) for federal contracting opportunities over $25,000. This is a one-stop virtual marketplace to post, search, retrieve and monitor opportunities solicited by the federal contracting community. This is free and no registration is required.

GSA Services – One-stop resource for all businesses with GSA contracts. Includes links to contracting assistance resources, training programs, small business assistance, and vendor support. Also check out the GSA Vendor Support Center.

Pay.gov – Pay.gov is a secure government-wide collection portal, developed to meet the U.S. Treasury’s commitment to process collections electronically using internet technologies. It offers a suite of online services that Federal agencies can use to meet their responsibilities towards the public. Pay.gov can be used to make secure electronic payments to Federal Government Agencies. Payments can be made directly from your bank account or by credit/debit card.

Business.gov – Learn how to become a federal contractor, find business opportunities, and the rules and regulations that federal contractors need to follow.

More Posts on Getting Government Contracts

How Small Businesses Can Get Government Contracts Part I: Getting Started

How Small Businesses Can Get Government Contracts Part II: Getting Government Business

Tap into the Biggest Spender :: Doing Business with the Federal Government

Finding Work in Your Own Back Yard: Doing Business with State and Local Government

After reading a recent article in the NY Times regarding staying healthy in a poor economy and all the talk that generally surrounds us on food, cost of living, gym memberships, etc., I thought it was good timing to bring up the popular topic of health benefits. I mean, the candidates are debating our astronomical cost of healthcare so let’s briefly touch on what government resources can help.

Whether you are a small or home business owner or an employee of a small business, Health Savings Accounts (HSAs) are an important part of the portfolio of health care options that are available.

Background for Small Business Owners

HSAs were created in Medicare legislation signed into law by President Bush on December 8, 2003. HSA plans are inexpensive health insurance plans that don’t pay for deductibles but will generally cover you after that. HSA plans are available to help you pay for the expenses your plan does not cover. Small business owners should check with their insurance carriers to tell you in writing whether your policy is HSA-eligible. There is a checklist for small business owners available from the SBA to give you more information.

HSAs – What are they?

A Health Savings Account (HSA) is a tax preferred account owned by an individual used to pay for current and future medical expenses. They are funded by tax deductible individual contributions and employers can also contribute to employees’ HSAs. Here’s an Online Briefing on HSAs that provides self-paced training.

Qualifying for HSAs

To be eligible and qualify for an HSA, you must meet the following requirements:

• You need to be covered by an HSA eligible health plan with a deductible of at least $1,100 for individual coverage or $2,200 family coverage for 2008, and $1,150 and $2,300 for 2009.
• You cannot have any other health coverage, except what is permitted under Other Health Coverage
• You cannot be enrolled in Medicare
• You cannot be claimed as a dependent on someone else’s tax return

For additional information IRS Publication 969 details qualifications and more for health savings accounts and other tax-favored health plans. Also check out this fact sheet.

Resources

HSA Finder – Independent information source for Health Savings Accounts

US Dept of Treasury

HSA Insider – Q&A on HSAs

Business.gov – Workplace Health information

I wanted to blog about a great new tool that was launched by the SBA’s Business Gateway Program to help small business owners find government loan, grant and venture capital programs. So many business owners are looking for financial resources and assistance that new tools are being developed all the time. This is the latest and greatest – there’s nothing like it.

This search tool is the first of its kind to provide access to federal and state programs in a single, easy-to-use tool.  This tool provides one website to find financing programs that business owners can apply for. So many business owners are looking for financial information – this tool is really easy to use.

The loans and grants tool is simple. A business owner completes a survey of 15 questions and is presented with a list of loans, grants and venture capital programs.  The questions are simple, including some the following – no complex information required to use this:

• A dropdown with industry selection
• Nonprofit vs. for profit businesses
• Veteran status
• Minority owned businesses
• Location

After answering these questions, a list is generated of available loans and grants, which is being expanded continuously. This list includes the program title, which links the user to the website describing the program; the sponsoring agency; and a brief description of the program. Results are segmented by the type of financial assistance (loan, grant, venture capital).

Another very cool tool from the government is a permits tool called “Permit Me”. You can enter your business type and location and this tool generates a list of licenses and permits that you need in your locality for your specific business. The most common types of businesses are included but if you have a unique requirement, definitely send these folks a note and they will work to add other businesses and new content.

Hiring new employees can be … scary. Someone who seems smart and personable during the interview process may have skeletons too big to fit in the company closet.

Pre-employment background checks are absolutely essential. Sometimes, however, it may be hard to know just how deep you can dig. While it’s perfectly acceptable to perform a Google^TM search, you cannot (in most cases) make prospective employees take a lie-detector test.

For a comprehensive look at the dos and don’ts of pre-employment background checks, go to the SBA’s Business.gov site where you’ll find two important pages: One page that provides a list of resources on employment and labor laws, and one page that provides detailed information on pre-employment background checks.

I’ve mapped out below some of the basic information included on the Business.gov pages, as well as additional places you can turn – such as the FBI and the FTC – for more information on what you can and cannot ask candidates to do, and what you can and cannot do in your hiring process.

Public Information

Every company should perform the basics – call references, check past employment, and do an Internet search. I am continually amazed at how many companies do not do this basic research. It is well worth your time. Don’t skip this, no matter what.

There is also a good amount of public information available (about all of us). For example, bankruptcies and worker’s compensation claims are a matter of public record. Gather all the information you can – there is no harm or foul here. What you do with this information is a separate issue.

Digging Deeper

Beyond public information, there are several things about which you can legally ask the prospective employee. For example, under the Fair Credit Reporting Act (FCRA) you may ask an employee for written permission to access his/her credit report. Once again – what you do with that information is a completely separate issue, but you’re legally allowed to ask. The Federal Trade Commission provides a page on its website with detailed information on credit reports – your rights and your prospective employee’s rights. It’s worth reading.

Does your prospective employee have a criminal record? This is, as you might imagine, a touchy subject. The FBI website provides a page of information dedicated to answering that question, and giving specific advice and instructions on requesting a criminal history record. In fact, the FBI has a complete Freedom Of Information Act (FOIA) website here: http://foia.fbi.gov.

More Research, Less Risk

The reality is, every new employee you hire presents a risk to your organization. Perhaps the prospective employee will turn out to be your best asset; he/she may also turn out to be your greatest liability. There’s a lot of information available to you. Do your research. The deeper you legally dig, the more you can reduce your risk – and sleep better at night.

Good Credit & Loans

The need for financing is a critical and perennial concern for the owners of small businesses. Many government resources, including guides, exist for small businesses. Many of these tools explain how to shop for and obtain credit, how to maintain a good credit rating, how to dispute unfair credit transactions, and how to resolve billing errors. The Federal Reserve provides a good guide.

There are also free government resources for obtaining loans. Here are some types of loans:

• Short-term loans are usually for less than one year. They can provide interim working capital for a business temporarily in need of cash and are repaid in a lump sum when inventory or accounts receivable are converted into cash.
• Intermediate-term loans are often used for a business start-up, the purchase of new equipment, expansion, or an increase in working capital. The maturity dates range from one to three years.
• Long-term loans generally are made for major capital improvements, acquiring fixed assets, or business start-ups. The term of the loan runs for periods of three to five years and is usually based in part on the life of the asset financed. Repayment is usually made in monthly or quarterly installments.
• A line of credit offers you the ability to borrow money repeatedly, up to your credit limit, without having to reapply. A line of credit is particularly important to businesses that experience seasonal fluctuations. The lender generally will perform a review once a year, at which time the borrower is asked to provide updated financial statements.

There’s a great new tool that allows you to search by state for loans available. This tool allows you to input your business type and provides direct links to view their requirements.

Tips for Applying for Credit

Applying for commercial credit can be tedious – a lot of documentation that you need to prepare for including how you will spend the money. The following are several items to include in a business proposal:

• Business description – An overview of your business, products, customers, etc.
• Personal profile – Your resume
• Business plan - Your strategy over the next few years and how you will generate revenue to pay the loan
• Personal finances - A list of your assets/liabilities and credit references

For more detailed information, go to the Federal Reserve Board.

In today’s economy, borrowing money from your local bank isn’t as easy as it used to be. For the small business owner without much collateral, the alternative to a bank loan might be to consider a government-backed loan.

The good news is, there is a loan program from the SBA – called SBA Express – that makes the process of procuring a government loan quick, attractive, and accessible to small business owners looking to start-up or expand quickly.

The SBA Express program offers small businesses the chance to get an SBA-backed loan of up to $350,000 to start-up or expand operations. The “express” piece refers to that fact that your loan can be turned around in 36 hours.

Here’s what you need to know about SBA Express:

• Facts and Figures – SBA Express is available to existing or start-up for-profit businesses. You can borrow up to $350,000 or up to $25,000 in an unsecured loan. The maximum loan term is seven years; interest rates vary but must not exceed SBA maximums.
• Using Your Loan – You can use the loan to expand your business, purchase an existing business or obtain working capital. You can also use the loan to refinance existing business debt that is not already structured with reasonable terms and conditions. These are just general guidelines; the SBA has more specific guidance here.
• Eligibility and Getting Started – To apply for an SBA loan, start by getting a list of SBA lenders in your area. You can do this by contacting your local SBA District Office.

Other Options for Small Businesses

If you don’t need the level of financing offered by SBA Express, you may want to consider SBA Microloans. With a microloan you can borrow up to $35,000. The average loan, however, is a lot lower and can sometimes be in the hundreds of dollars, making this loan ideal for home-based businesses looking to set-up or expand.

If you’re still having trouble pinpointing the right loan for your business, consider using the new SBA Business Gateway program’s grants and loans tool or explore other loan options offered by the U.S. government.

It’s All in the Planning

Like the old saying goes, “poor planning equals poor performance”, and it’s the same with loans. If you really want to succeed in securing the right loan for your business, you must have a rock solid business plan.

You can find lots of planning resources here to help you document your businesses missions and goals and, of course, explain how you are going to get there.

If you’ve considered doing business with state and local government, but haven’t taken the plunge yet, now might be the right time. Despite a gloomy economic forecast in other sectors, analysts still forecast that the local government market will remain strong through 2009.

While the U.S. federal government remains the largest buyer in the world, state and local governments also make up a large percentage of their respective marketplaces, often employing more people and buying more products and services than any other entity.

If you operate a small business and want to take advantage of this lucrative and relatively recession-free marketplace, here are some pointers that can help you connect with state and local government opportunities:

Know Your Market and How it Operates

Market research can help you identify opportunities for your product or service and help build an understanding of the actual process of doing business with the government. Start with researching some specifics:

• Know Your Market – The state and local government market is fragmented and diverse. Research current funding, procurement and government plans. What contracts have been awarded in the past? What is the agency’s budgetary cycle and procurement code? Find this information on a state-by-state basis via this central portal.
• Know the Process – Take time to know and understand state budgetary processes and calendars. Network and plan on introducing your product or service three to nine months before the state drafts its upcoming fiscal year budget. Then be patient. It can take up to six months after funds are appropriated before an RFP hits the street!

More market research tips and tools that are specific to small businesses can be found here.

Get Connected to Small Business Resources

To help you take advantage of contracting opportunities, state governments offer a wide variety of avenues through which small businesses can compete for government contracts. You can find a list of state procurement agencies, and information on how to register as a contractor and bid on opportunities here.

The Small Business Administration (SBA) also offers a wealth of information on how your business can get ahead in local government contracting.

If you are a woman-owned or minority-owned small business, visit the SBA 8(a) minority-owned and woman-owned business website. By obtaining an 8(a) certification, your company will have a more solid disadvantaged business standing.

Market Your Company Aggressively

Once you have established that your company meets a state’s contractual and bidder’s list requirements, start identifying ways to build your profile and attracting prospects.

Marketing to the government is quite different than marketing to businesses or consumers and requires a dedicated approach.

Attend government conferences, join government associations, and develop messaging and collateral that “speaks to government” (how is your product going to help the agency serve its mission and its constituents?). Lastly look for repeatable successes – what opportunities can you replicate from state-to-state?

For more general marketing tips and advice checkout these online resources.

More Posts on Getting Government Contracts

How Small Businesses Can Get Government Contracts Part I: Getting Started

How Small Businesses Can Get Government Contracts Part II: Getting Government Business

Tap into the Biggest Spender :: Doing Business with the Federal Government

If your business is growing and you need to supplement your core capabilities and services with extra personnel, there are many benefits to hiring an independent contractor.

Bringing on a self-employed contractor, instead of adding to direct employee headcount, can save a small business owner as much as 30 percent (per worker) in additional payroll taxes and benefits. It also introduces flexibility in hiring and firing, and can reduce strains on office space, training budgets, and more.

It all sounds fairly straightforward. However, in legal terms, the line between an independent contractor and an employee is not always clear. Your workers are not independent contractors because you say they are – and there can be costly tax implications if you get it wrong.

Before you engage an independent contractor make sure you are clear on the nature of your relationship and familiarize yourself with the government criteria used to judge the status of that worker.

Below are three steps you need to take to ensure regulatory compliance when hiring an independent contractor.

1. Understand the Significance of Worker Classification

Misclassifying workers is a common business slip-up. Take, for example, this scenario described in a great article by Minda Zetlin on Inc.com about common and costly mistakes that businesses make when it comes to classifying contractors

In the article, Zetlin poses a seemingly clear cut question:

“Which of these workers qualifies as an independent contractor?

a)      A newspaper carrier paid for each copy delivered

b)      A knife salesman who works on commission, rents his own office, and pays his own staff

c)       A consultant who works part time for a marketing firm”

I must admit, my immediate response was “all of the above” and, indeed, each of the workers described was labeled as a contractor by the company he or she worked for. However, only the third example is a true contractor. The first two examples are, in fact, legal company employees, as determined in court rulings.

It is critical that you, the employer, correctly determine whether the individuals providing services are employees or independent contractors. Generally, you must withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay unemployment tax on wages paid to an employee. You do not generally have to withhold or pay any taxes on payments to independent contractors. Getting it wrong can be costly resulting in penalties and back-tax payments for the business owner.

2. Know the Regulatory Criteria Used to Judge Worker Status

Here is a basic definition from the IRS of what classifies a person as a contractor as opposed to an employee:

• Independent Contractor – The general rule is that an individual is an independent contractor if you, the person for whom the services are performed, have the right to control or direct only the result of the work and not the means and methods of accomplishing the result. Essentially independent contractors are considered to be in business for themselves. They take care of their own tax obligations and benefits.
• Employee – Anyone who performs services for you is your employee if you can control what will be done and how it will be done. This is so even when you give the employee freedom of action. What matters is that you have the right to control the details of how the services are performed.

If you are not clear whether a particular worker is an employee or an independent contractor, you should file Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding with the IRS. They will review the facts and circumstances for you and make an official determination of the worker’s status.

The Small Business Administration also has more information that can help you determine the difference between an employee and a contractor.

3. Understand and Maintain Your Tax Obligations with Regards to Contractors

If you determine that you are using an independent contractor, you will need to file some paperwork with the IRS and pay the associated taxes. This means maintaining W-9 forms, contractor’s business licenses and certification of insurance, as well as filing a 1099-MISC form to report payments.

Other Resources

For more, check out helpful information from the government’s Hiring Independent Contractors resource page on Business.gov.

The question “should I incorporate my small business?” is a consideration that can weigh heavy on the mind of many a budding entrepreneur or established small business owner.

Whether you are the sole employee of your enterprise or you have several employees, incorporation can bring legal and tax protection for you as its owner, but can also bring tax burden, additional cost and paperwork. So it’s important to understand the implications of the business structure you choose for you business.

Outlined below are some of the benefits and disadvantages of incorporating your business as well as links to available government resources that can help you decide which business structure is right for you.

Benefits of Incorporation

Here are some of the benefits you can realize if you decide to incorporate your business:

• Personal liability protection – An incorporated company is an entirely separate entity from you and your personal assets. It affords protection from any personal liability for your business debts and obligations. For example, if someone sues your company they can only go after your company’s assets, not your own.
• Tax benefits - If you incorporate you may gain tax benefits, although only under certain circumstances. This is one area to discuss with an accountant, as the marginal tax rates for corporations with taxable incomes in some cases can be higher than those for an individual in the same scale. Read more about the tax implications of incorporating on Scott Allen’s Entrepreneurs’ blog here or get tax information from the government here.
• Corporate identity – Incorporating can give a great sense of credibility to your business.
• Raising capital - You can raise capital more easily through the sale of stock and securities if your business is incorporated.
• Unlimited life - Your corporation can have an indefinite life and outlive you. Do note that LLCs have a limited duration. Get more information on business structure differences from the SBA.

Disadvantages of Incorporation

Some of the disadvantages of incorporation, particularly for the small business owner, include:

• Paperwork – You’ll need to file two tax returns (one for you one for your business) and maintain detailed business records and formalities.
• Cost – The fees associated with initial incorporation and ongoing maintenance can put a strain on the small business owner. LLCs, however, can be a more economic alternative to full blown incorporation.
• Liability may not be as limited as you think – The main advantage of incorporating, limited liability, may be challenged by personal guarantees and/or credit agreements. When a corporation has insufficient assets to secure a loan, banks often insist on personal guarantees from the business owner. This can result in you being personally liable if your corporation can’t meet its repayment obligations.

How to Incorporate

If after careful planning and consideration you have chosen to incorporate your company, you will need to pursue the process directly with your state. In fact, you are required by law to register your business with the state whether you choose to be a corporation, non-profit, LLC, or a partnership.

Typically, if you only operate in one state, you should incorporate in that state. If you operate in multiple states, you should determine which state is the friendliest to corporations and incorporate in that state.

Find out how to incorporate in your chosen state by following the state-by-state links here.

Other Resources

Save the expense of calling your accountant and take advantage of the freely available expertise of a network of government and other small business experts over the Web, the phone or in person:

• Get help and advice from small business development experts.
• Understand the tax implications of incorporation or other business structure options.

Few of us ever test our powers of deduction, except when filling out an income tax form,” or so the joke goes.

Now may not be the time when small business owners give the 2008 tax season too much thought. But a little tax preparation now – in the midst of the holiday season – can pay dividends down the line.

Consider some basic strategies for taking control of your taxes now, before they take control of you:

1. Get Your Ducks in a Row

Take control, get organized, and gather all the necessary records and documents that help support the numbers filed on your tax return. Records include W-2s, 1099s, expense receipts, bank statements, etc.

2. Look into Available Tax Preparation Resources

While there are many tax preparation software options available on the market, as a small business owner you may want to consider using a professional tax advisor or accountant. Not only can these professionals keep your stress levels low, they can help you navigate the ever-changing landscape of small business tax deductions.

As a rule of thumb, professional help becomes a must if you have accrued significant capital from stocks or the sale of assets, or have income from several sources (e.g. consulting, other business interests, etc.) and/or overseas markets.

Be sure to shop around for the right professional – preferably someone with experience in your field of business and within your budget – and don’t forget to get recommendations from friends, co-workers, or clients.

3. Stay Abreast of Tax Requirements

You don’t need to be an expert, but life is a lot easier if you are aware of the basic tax laws that apply to your business. Even if you don’t handle your own preparation and filing, it helps to have a better idea of what to expect as a small business owner.

An easy way to start staying on top of your records is to maintain a tax calendar throughout the year. The IRS can help with this and has put together a Small Business Tax Calendar that lists everything you need to know about staying on top of tax deadlines and requirements throughout the year. It can also be imported into Microsoft Outlook.

If you need more general help, this online portal brings together SBA and IRS tax guidance and resources specifically for small businesses.

The U.S. Government also provides online tax training, workshops and more to help small business owners get a better handle on their business taxes.

Lest early talk of taxes dampen your holiday season, I found a quote by Nancie J. Carmody that puts it all in context (well, somewhat):  “I am thankful for the taxes I pay because it means that I’m employed.”