Will the Internet sales tax affect your business?

If the U.S. House approves the Marketplace Fairness Act, which requires Internet retailers to collect sales taxes on online purchases, the “big winners” would be major retailers and local brick-and-mortar stores, as Jayne O’Donnell and Hadley Malcolm write in USA TODAY. The bill is being considered in the House; the U.S. Senate approved it on Monday.

Yet there is no consensus on how small business feels about the legislation. Brad Tuttle writes in TIME magazine that small businesses are among the bill’s strongest supporters, despite eBay’s saying the mandate would place an unfair burden on small businesses.

For years, Tuttle notes, online sellers have had an advantage due to what brick-and-mortar retailers have called “the internet sales tax loophole.” That advantage is because online retailers are only required to charge sales tax if the vendor has a physical presence in the state the customer lives in.

“Consumers are supposed to pay the appropriate sales tax when they file their annual federal and state income taxes, but almost no one does,” Tuttle writes. Brick-and-mortar stores, however, have to add sales tax whenever customers make purchases.

The Marketplace Fairness Act would allow states to require out-of-state vendors to collect all of the same sales taxes that physical stores already collect in the customer’s home state. As it is written, the Act would exempt retailers with less than $1 million in annual revenues; but eBay wants the exemption to be changed to “less than $10 million” in revenue. Ebay’s CEO John Donahoe says less-than-$10 million is one of the benchmarks Obamacare uses to define a small business, Tuttle writes.

However, Steven Power writes in HuffPost Small Business that because (as he believes) the future of selling is online, the whole matter of taxing online retail purchases needs to be examined in more depth.

Large companies like Amazon, Walmart, and Target can afford to charge sales tax, he writes. Walmart and Target, which sell online, also have brick-and-mortar stores, and Amazon, which sells online only, now has warehouses in many locations, which means customers who live in those states have to pay sales tax anyway.

The Marketplace Fairness Act would be “crippling” for small business, Power writes, because “Most small business[es] selling online simply don’t have the time or money to do the paperwork necessary to file tax returns in 45 additional states — and keep in mind that they’d have to do so monthly.” (As USA TODAY points out, there are four states that have no state sales tax, including Delaware, Montana, New Hampshire, and Oregon; and Alaska has no state sales tax but has local sales taxes.) Although a large business like Amazon can afford to hire whole teams of people to work on the sales taxes, an online store that’s run out of a house with only a few employees, if any, can’t afford to make it work, Power writes.

And while an online retailer might have a Gross Merchandise Value (revenue sold through a specific marketplace) of more than $1 million, their actual profit is a lot less, because they still have to give fees to the marketplace they’re using online, such as eBay or Amazon. Power writes that e-commerce is a $226 billion-a-year business in the U.S., and is growing at 30% a year. Small retailers and family-owned businesses, as opposed to huge corporations, are getting “dangerously close” to bringing in $1 million a year, he writes.

Chances are, however, that there are already entrepreneurs working on software platforms that will make it easy for small businesses that sell online to calculate sales tax, no matter what state a person lives in when making a purchase.

Image Source: Quinn Dombrowski.

The stars of Duck Dynasty.

One way to get a lot of publicity for your small business, without having to pay for it, is to have a TV reality show that is all about your company!

As an Associated Press article in The Washington Post points out, cable shows featuring small businesses — such as “Duck Dynasty” on A&E and “Pawn Stars” on the History channel — have turned them into household names and multiplied their revenue many times.

Following are four things to consider if you would like your small business to have its own reality show:

1. Be in Good Standing — or Maybe Not

AP says your business needs to be in good financial shape if you want a show about it, because no production company wants a business that it’s devoting a show to, to suddenly go out of business midway through the shooting schedule.

One exception would be if you have a failing restaurant, in which case maybe you can get one of the restaurant fix-it shows, like “Restaurant Impossible” on the Food Network, to feature yours on one episode. And the bonus would be that the fix-it show turns your failing restaurant around. See also the “Getting Discovered” section below for another example of failing businesses that have a chance at stardom (and turnaround).

2. Families Are a Plus

Producers love family-owned businesses because family dynamics make the storylines more interesting. In fact, reality shows about families (such as the long-lived and successful “Keeping Up With the Kardashians” on the E! Network) often spawn businesses from the publicity alone. Thus, nearly every member of the Kardashian family has launched at least one business on the side, from clothing lines to perfume, and more. A&E’s “Duck Dynasty,” which is about a family-owned duck-call business, is the most watched documentary-style reality series on television, AP writes, according to Nielsen.

3. Getting Discovered

AP writes that Brent Montgomery, the producer of “Pawn Stars,” got the idea for a pawn-shop-based reality show when the limo he was in on the way to a bachelor party passed a pawn shop. Montgomery, who owns the production company Leftfield Pictures, asked his staff to find a family-owned pawn shop for a reality show. As it turned out, Rick Harrison, of Gold & Silver Pawn Shop, had already been pitching the idea of a show to other producers when Leftfield Pictures contacted him. And a show was born.

For example, the website called RealityWanted.com shows a “casting call” ad seeking small businesses in Los Angeles or the New York tri-state area that are in trouble, for a new reality show series that transforms failing businesses.

4. How to Pitch a Producer

You can do an online search for reality TV show producers, then call them to see if they accept pitches. AP writes that the Idea Factory, which has produced shows appearing on Spike and Discovery, accepts pitches on its website (http://tiftv.com).

Idea Factory’s owner, Darryl Silver, said he usually first meets people who pitch shows via webcam chats. He looks for major events the pitchers expect to happen in the next year that could be filmed.

Another route to having your business become the subject of a TV reality show is by videotaping or filming your business yourself, loading the footage onto YouTube, and then sending the link to a production company.

JC Penney CEO Ron Johnson lost his job recently because customers were not happy with the “no-coupons, no discounting ‘fair and square’ pricing” policy he has introduced in early 2012, as Brad Tuttle writes for TIME Business & Money. So now the department store chain is bringing back the coupons and discounts that customers love.

In a new TV commercial (which also appears on the store’s YouTube and Facebook pages), according to an Associated Press article in USA TODAY), JC Penney apologizes for the changes Johnson had made. The voiceover on the commercial says:

“It’s no secret. Recently, JC Penney changed.

Some changes you liked and some you didn’t, but what matters from mistakes is what we learn. We learned a very simple thing, to listen to you.”

The ad invites viewers to “Come back to JC Penney.” Although, as Tuttle points out, the ad makes no mention of coupons, pricing, or sales, the ad actually has a lot to do with those, as it wasn’t long after Johnson has left the company that analysts looked forward to lots of sales to bring back alienated shoppers.

And sales appear to be back big-time, Tuttle notes, with a recent JC Penney brochure listing many dozens of items on sale for Mother’s Day, plus an online-only coupon that offered shoppers 15% off on purchases of $100 or less, and 20% off when they spent more than $100, by May 2.

AP reports that JC Penney fired Johnson earlier this month after he has spent 17 months on the job, and rehired the man who was CEO before him, Mike Ullman. In addition to getting rid of sales, Johnson had brought in new, hip brands, in a marketing strategy designed to attract younger, wealthier shoppers; but that alienated the store’s loyal customers, and sales dropped.

Commercials under Johnson’s revamp were colorful and whimsical, and gave no specific information about products, AP writes. In one such commercial, as a dog jumps through a hula hoop held by a little girl, the text read: “No more jumping through hoops. No coupon clipping. No door busting. Just great prices from the start.”

Tuttle writes that in late March, JC Penney had started “quietly” raising its “everyday” prices so stores could put them on sale to attract more shoppers. He reports that dealnews.com, a bargain-hunting site, found that the prices of certain items, especially designer furniture, have gone up by 60% or more “almost overnight.”

For example, a side table that used to be $150 is now marked $245. As Tuttle notes, shoppers who wait for that table to go on sale, or buy it when a coupon is available, can get it for a lot less than the $245.

As to why stores like sales and coupons, Tuttle writes that when a table always costs $150, there is no incentive for shoppers to buy it immediately; but when a sale is going on, reducing the price from $245 to $150 for a short time, a shopper needs to take advantage of the low price before the sale ends.

By Judy Pokras (Google+)

Image Source: Dov Harrington.

1. Offer an incentive for people to sign up on your email list. By giving something away — such as a recipe if you have a catering business or write cookbooks — you are also giving your potential customers information about what your business is about, says Jessica Swanson, founder of Shoestring Marketing. Swanson says: “If you’re not marketing-savvy, your best bet is to make sure the freebie is of interest to your prospects.” That way, you can get people to buy related items.

2. Have an effective business website. Laura Posey, small business growth expert at Dancing Elephants Achievement Group, encourages business owners to have a strong call-to-action on every page of their website, whether it be items to purchase, information to download, or your phone number so customers can contact you.

3. Consider a joint venture. Look for one or two other companies who are targeting similar customers to yours. That way you can collaborate and share marketing costs, Smith says. And that will also help you reach your niche market.

4. Reach out to your niche market. Small business owners need to be proactive by meeting prospects in person, learning about them, and creating relationships, says Jim Hunter, founder of Foursight Consulting. He suggests you go to where your target market is, such as conferences or networking events. “The only reason to go out and market is to get a return,” he says.

5. Ask customers for referrals. Offer current customers cash, a discount or coupon code, or a gift if they can refer someone to your company. You can let customers know about your referral program via a postcard or other direct mail piece, a flyer when they make an in-person purchase, a link on your website, or on your invoices, Hunter said.

In addition, in a Fast Company article, Faisal Hoque, founder, chairman, and CEO at BTM Corporation and founder of research think-tank BTM Institute, offers five more ways to grow your small business:

6. Understand that timing is everything. If the market is not ready for your idea, you will need the drive and the willingness to sacrifice in order to make your product or service work. That means having the resources to wait for the market to catch up, and accepting the risk of competition, or changing your idea to something more timed to the current market. “You need to anticipate your market and customers’ needs and constantly innovate to stay ahead,” Hoque says. That requires agility, resilience, and having the guts to fail and then adapt and move forward.

7. Establish brand loyalty. Once you know your target audience, your goal should be creating an emotional attachment between customers and your brand. You can accomplish that by providing inspirational brand messages, rather than ones that merely highlight product features. Make sure all of your employees behave in a way that reinforces your brand.

8. Scale your sales. You need to make sure you are getting repeat sales. You will know when you have created a scalable business when your new hires are as productive as you or your sales leaders; when you can consistently increase sources of customer leads; and when the cost of acquiring a new customer is appreciably less than what you can earn from that customer over time. In order for your company to be scalable, you need to make sure that “your customers get the right product in the right place at the right time,” Hoque writes.

9. Don’t be afraid of technology. There have been so many technological developments in recent years, anyone with wireless technology can easily and affordably improve their business.

10. Find ways to deal with stress. Taking care of your physical and mental well-being could include working out, meditating, doing yoga, or other relaxation techniques, because, as Hoque writes, “Nobody wants to do business with a grouchy, bitter, and exhausted owner.”

By Judy Pokras (Google+)

Image Source: sushi zume.

The most recent American Express Small Business Monitor survey found that 96% of small business owners polled were committed to supporting local communities. Of 933 small business owners or managers of companies with fewer than 100 employees, 70% said they donated to local causes, 49% participated in community projects, and 83% shopped at independently owned businesses for non-business-related purchases, according to an American Express OPEN press release.

In addition, 70% of those polled said they purchased and sourced goods and services from other small businesses, according to the OPEN Small Business Monitor, which is released each spring and fall. The current Monitor was conducted over the phone by Echo Research, from February 22 to March 12, 2013, a poll with a margin of error of +/- 3.2%.

As Tim Gallen reports for the Phoenix Business Journal, the survey found that 54% of those polled were optimistic about the future, but they remained cautious about making capital investments, with half of them planning to increase capital investments, the same number as in last fall’s survey. In addition, 59% of small business owners were concerned with cash flow, up from 53% last fall.

“We should all draw inspiration from small businesses that remain steadfast optimists and loyal contributors to local communities and causes despite an economic environment that remains uncertain,” said Susan Sobbott president, American Express OPEN.

Small business hiring plans increased only 2% over last fall, with 31% of small business owners planning to hire in the next six months, Gallen writes. He notes that 35% said they had no need to hire in order to grow their companies, which is 11% more than said that last fall.

“Adversity is nothing new to the vast majority of entrepreneurs, and our research shows that while they have concerns about the near future, they have learned a great deal from recent trials and are better positioned to grow in the long term,” Sobbott said.

But despite the current economy, fully 92% of small business owners said they were happy with their lives, and 76% said their happiness was at least partly due to their being an entrepreneur, the press release says. In addition, 66% of those polled say they would recommend being an entrepreneur to family or friends, which is 10% more than said that in the autumn of 2009.

As business mantras go, 29% of those surveyed say theirs is: “You are only as good as your people,” and those business owners are more likely to reward employees. More than four in 10 (42%) planned to give raises this year, versus 28% of the total of all surveyed. And among those businesses with the “people” mantra, 72% said the productivity of their workforce has improved over the last year, versus 60% of the total survey population.

According to the press release, only 46% of the small businesses polled said they use a social media platform for their business, as compared with 49% last fall. However, 70% said they use social media to attract new customers, and 44% use it to create a dialogue with customers.

By Judy Pokras (Google+)

Image Source: Phillip Pessar.

Coupons are a great way to save money, but when you’re on a date, it might not always be the best time to use them. A survey conducted by Coupon Cabin found that 73% of 2,346 people questioned would stay on the date and go out with the person again if he used a coupon to pay for the meal, as Karen Datko reports for MSN Money.

On the other hand: 12% of those polled said they would not say anything on the date, but would not go out with that person again; 3% said they would verbalize their disapproval; and 1% would simply get up and leave.

Following are 4 reasons not to use coupons on a date, and 3 reasons when you should.

When Not to Use Coupons on a Date

1. On a First Date

It’s not a great idea to pay for your date’s dinner with a coupon on a first date, unless you know your date is okay with the idea. Otherwise, you’re risking offending your date, writes Cameron Huddleston for Kiplinger. She says some people might think: “What sort of cheapskate uses a coupon on a first date?”

Kiplinger quotes Natalie McNeal, author of The Frugalista Files: How One Woman Got Out of Debt Without Giving up the Fabulous Life, as saying you shouldn’t take a date to a restaurant you can’t afford in the first place.

Image credit: Simbach

2. When Using a Coupon Could Backfire

NcNeal says if you try and slip a coupon secretly to the server without your date seeing, your plan might not work, especially if you have budgeted for the meal based on the discount, but your date orders more food or drinks than you planned on.

3. When You Don’t Know What Your Date Is Thinking

Once you get to know your date better, perhaps by the third date, you will have a better sense of that person’s financial temperament. Budgets are $exy guest blogger Andrew Schrage writes that his wife opines, “A first date is ‘when you’re supposed to show me how generous you are.’”

4. When You Could Damage Your Reputation

If your date is offended by your using a coupon to pay for a meal on a date, she can tell her friends and blog about how cheap you are, which is not good for your reputation.

When to Use Coupons on a Date

1. When Dating A Frugal Person

If you know beforehand that your date is frugal, or has respect and admiration for frugality, then there is a good chance you will impress her by using a coupon for your date. This is especially true when the economy has been in a downturn.

2. When You Need to Save Money

If you are not sure whether your date will want to go out with you again, you might not feel comfortable spending a lot of money. To “cut your losses” (as Schrage writes), you might want to use a coupon.

3. As a Test

You can use a coupon for a second date as a test of whether your date is the one for you or not. If she approves of your coupon use, it means she shares your frugal philosophy, and that’s one sign of compatibility. But if she disapproves, you will know that this person is not financially compatible with you, and you can look for someone who is.

A new survey by advocacy group Small Business Majority finds that most small business owners are in favor of raising the federal minimum wage, as Associated Press writes in a Washington Post article.

The owners favor the increase because they believe it will help the economy and make it possible for small companies to hire more employees, AP reports.

According to the poll of 500 small business owners, 67% support boosting the minimum wage above the current rate of $7.25 per hour and adjusting it each year as the cost of living rises, writes Erik Sherman for CBS MoneyWatch. Sherman notes that the results of this survey are at odds with the belief by other advocacy groups that a minimum wage increase would discourage small businesses from hiring and even cause layoffs. Those groups that have opposed a minimum wage increase include the National Federation of Independent Business and the National Small Business Association, AP writes.

In his State of the Union address in February, President Barack Obama proposed that the federal minimum wage be raised to $9 an hour, AP writes, adding that Democrats in Congress introduced a bill in March to raise the minimum to $10.10 an hour, but the House rejected it.

In this new survey, support for a raise in the minimum came from both parties, as 46% of those polled identified themselves as Republicans, 35% as Democrats, and 11% as independents, AP writes. Most businesses that participated in the survey had gross annual revenues of under $500,000, Sherman reports, and nearly half of those polled had personal family incomes of under $100,000 a year. Among those surveyed, 80% were white, and 60% were male.

Sherman writes that the National Federation of Independent Businesses says that large corporations are mostly unaffected by increases to the minimum wage because most jobs that pay that wage are offered by smaller companies that struggle to deal with increases in labor costs. But the survey finds that 85% of businesses already pay their workers more than the minimum wage, he notes.

Two-thirds of those surveyed also agreed with the following statement:

“Increasing the minimum wage will help the economy because the people with the lowest incomes are the most likely to spend any pay increases buying necessities they could not afford before, which will boost sales at businesses.”

The survey was performed March 4-10, nearly a month after Obama proposed a higher minimum, AP writes. Sherman notes that Greenberg Quinlan Rosner Research conducted the survey for Small Business Majority with compensated research panels. The overall margin of error in the poll is plus or minus 4.4%, which means that if the poll were conducted with the same group of potential participants, the results should be within 4.4 percentage points of the current results 95% of the time.

Small Business Majority’s website says there are 6 million small employers in the U.S., with 43 million employees and nearly 22 million self-employed people with one thing in common: “Together, these entrepreneurs and other small business owners create jobs, innovate and grow the economy.”

Image by Small Business Majority.

Article written by Judy Pokras.

Happy employees are productive employees, and small businesses (as well as larger ones) can boost workers’ enthusiasm by offering them extras. Here are some ideas:

1) Catered Lunches

Catered food has been a standard perk in the film industry for a long time, with “craft service” tables providing all kinds of treats for workers to eat. One advantage of catering lunches for workers is that they will be eating on the premises and won’t need to leave. And lunch in the office gives workers a chance to socialize, which creates unity among the staff.

Another advantage is that you can provide workers with tasty, healthier fare than they might find elsewhere. And a healthy employee is a happy one.

2) Nap Room

Some companies have converted a small windowless room into a nap room, with a sofa to sleep on, a blanket, and an alarm clock! Tired employees are not nearly as productive as the well-rested ones. As Suzanne Lucas writes for TIME’s Business & Money, “Sleeping during the day has also been in the news lately as a way to re-energize and re-invigorate workers.”
3) Dog-Friendly Workplace

The company Zoosk allows employees to bring their dogs to work, which helps relieve stress and makes for a friendlier workplace. It’s a policy you might consider. It can also help some employees save money, if the alternative is to pay for doggy daycare or dog-walking services.

4) On-Site Chair Massages

Your company could offer chair massages for employees in the office. You could have a massage therapist visit the premises for a few hours a week, and employees can signup for five or ten minute windows. A -short massage can go a long way toward making an employee feel happy and relaxed.

5) Yoga Classes

Wayfair.com and inPowered offer yoga classes for their employees. It’s another great way to boost energy and relaxation, and thus productivity.

6) Volunteer Day-Off

Your company might want to follow an example set by Angel, which allows its workers to take a paid day off to do volunteer work in the community, which is good for all involved.

7) Flexible Vacations

Rapid7 has no formal vacation policy, according to its Chief People Officer Christina Luconi. Instead, they trust their employees to balance time off with work time. Leaving it up to the employees fosters trust, which makes employees feel valued.

8 ) Gym Membership Reimbursement

Tango pays employees back for the cost of joining a gym. This helps workers stay fit and healthy, and saves the company from investing in an on-premises gym, which it might not have the space for.

9) Flexible Work Hours

If it works for your small business, why not let employees decide which hours they work in the office? If that doesn’t work, you could designate one day of the week, such as Friday, to let workers come in later or leave early. That’s sure to please the employees, and will boost their productivity.

10) Charming Business Cards for All Employees

Whatever your business is about, you can create a spectacular business cards very inexpensively at Vistaprint. Many companies reserve business cards only for client-facing employees, which can make everyone else feel less important. You can get great deals on Vistaprint business cards right here, so there’s no reason every employee shouldn’t have his or her own personalized cards.

11) A Pleasant Workspace

Let your employees help select their desk chairs (for comfort and ergonomics). And leave the options open for unconventional choices, like a standing desk or a stability ball chair, both of which foster fitness and good health.

Sound-canceling headsets can make the job more pleasant for those workers who are on the phone a lot, and when they aren’t distracted by office noise, they can do a more effective job. And a refrigerator stocked with healthy snacks like fresh fruit, nuts, and seeds is a healthier alternative to vending machines stocked with junk food, all for the good of employees’ health and energy.

Article written by Judy Pokras.

Small business owners and entrepreneurs might want to consider relocating to Utah, Alabama, New Hampshire, Idaho or Texas, because those rank as the top five friendliest states for such endeavors, according to an annual survey by Thumbtack.com, as Frank Byrt reports for Accounting Web.

In addition to the most small-business-friendly states, the survey lists the highest-ranking cities as Austin, Texas; Virginia Beach, Virginia; Houston, Texas; Colorado Springs, Colorado; and San Antonio, Texas. In fact, four of the top 10 areas with the highest scores were in Texas, reports Mike Maciag for Governing.com.

Conversely, the five most challenging states for small businesses include Hawaii, Maine, Rhode Island, California, and Illinois; and the most difficult cities are Newark, NJ; Cincinnati, Ohio; Los Angeles, California; San Diego, California; and Sacramento, California.

Thumbtack, in partnership with the Ewing Marion Kauffman Foundation in Kansas City, surveyed nearly 8,000 small businesses throughout the United States, but did not include nine states because there were insufficient numbers of respondents, Maciag writes.

The survey asked small business owners the following questions:

• How difficult or easy do you think it is to start a business in your or state?
• How difficult or easy is it for you to hire a new employee at your business?
• How friendly or unfriendly is your state or local government with regard to business regulations generally?
• How friendly or unfriendly is your state or local government with regard to safety regulations?
• How friendly or unfriendly is your state or local government with regard to employment, labor, and hiring regulations?
• How friendly or unfriendly is your state or local government with regard to tax code and tax-related regulations?
• How friendly or unfriendly is your state or local government with regard to licensing forms, requirements, and fees?
• How friendly or unfriendly is your state or local government with regard to environmental regulations?
• How friendly or unfriendly is your state or local government with regard to zoning or land use regulations?
• Does your state or local government offer helpful training or networking programs for small business owners?

The best predictors of overall scores in the survey were training and networking programs, followed by a state’s economy and licensing requirements, Maciag notes; and professional licensing was 30% more important than tax codes in determining a location’s friendliness to business.

That is because small business owners usually set up shop where they already reside, said Katie McConnell, a senior associate with the National League of Cities’ Center for Research & Innovation, as Maciaq writes.

The majority of businesses surveyed said they did not think their taxes were unfairly high, although the larger the business, the more likely it was to be unhappy with tax rates, Maciaq writes.

More than half of the companies surveyed said they were subject to at least one licensing agency, and many businesses are required to follow mandates set by multiple levels of government, he writes.

Supporting the growth of small businesses is very important because they comprise the “vast majority” of employers in the U.S., Maciaq writes. The study quotes Dane Stangler, director of Research and Policy at the Kauffman Foundation: “It is critical to the economic health of every city and state to create an entrepreneur-friendly environment.” Stangler added that policymakers could best encourage sustainable growth and long-term prosperity by listening to small business owners themselves.

Written by Judy Pokras.

National Small Business Week

The U.S. Small Business Administration will be holding its signature event, National Small Business Week, from June 17 through June 21 this year. Events to help small businesses start, grow, and succeed will take place in Seattle, Dallas, St. Louis, Pittsburgh, and Washington, D.C., as well as in daily online forums, and all events will be live-streamed at www.sba.gov.

This year’s activities will include forums on the small business landscape, business coaching services, matchmaking events, networking opportunities, and award ceremonies, according to an SBA press release. The week will culminate in Washington, where SBA will announce the 2013 National Small Business Person of the Year, selected from candidates from all 50 states and territories.

Attendees will have the opportunity to interact with federal officials, local elected leaders, representatives from national businesses, plus other experts in small business. The online forums will focus on such subjects as exporting, and access to capital.

If you plan on attending, Vistaprint is a great place to get a supply of business cards and other promotional materials to get the word out about your business.

National Small Business Week has been announced every year since 1963 with a proclamation from the President of the United States that recognizes outstanding contributions of America’s entrepreneurs and small business owners. More than half of Americans own or work for small businesses, entities that create about two of every three new jobs in the U.S annually.

In a related matter, an Associated Press (AP) article appearing on Bloomberg’s Businessweek website reports that small-business lending is showing its first gain since 2010, when the government began tracking loans on a quarterly basis. The Federal Deposit Insurance Company’s (FDIC’s) data shows that the total amount of small business loans outstanding at the end of the fourth quarter came to $586 billion, up from $584 in the third quarter. The FDIC is a government agency that oversees financial companies and insures bank deposits.

However, AP notes, the lending environment for small business remains weak, despite the year-end improvement, as 2012′s fourth quarter number was less than 2011′s $598 billion fourth quarter number and 2010′s $626 billion final quarter number.

Peter Coy writes for Bloomberg Businessweek that, according to the ADP National Employment Report, since the U.S. economic recovery began in 2009, big business has increased the number of jobs by 7.5%, whereas small business has only boosted it by 4.9%. The report also found that private payrolls in general increased by only 158,000 in March, which was less than expected, Coy notes.

Mark Zandi, chief economist of Moody’s Analytics, gave Coy three reasons for why big businesses (1,000 employees and more) grew faster than small businesses (fewer than 50 workers) in that period. The first reason was that construction companies, many of which are quite small, were hurt by the housing bust.

Secondly, big companies had more cash on hand to weather the serious credit crunch that lasted beyond the end of the 2007-09 recession. And the third reason was that the larger companies were better able to capture global market share.

However, Coy writes, from February to March, small companies grew slightly faster than large ones. Zandi said that could be because of a global economic slowdown along with easier credit conditions for small businesses in the U.S.

Article written by Judy Pokras