Joyce M. Rosenberg

More wings, please _ signs small biz is improving

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More wings, please _ signs small biz is improvingIn this March 16, 2012 photo, Parker Companies' creative director, William Note, looks at flowering plants at Parker Gardens in Scotch Plains, N.J. When the financial crisis hit in September 2008, many companies stopped worrying about décor. Lush plants and holiday displays were no longer a priority. Sales fell 30 percent at Parker Cos., a company that does interior landscaping and displays in the Northeast. The improvement in the economy in the last quarter of 2011 and this year has encouraged companies to spruce up. The number of proposals that Parker has written for customers this year is up 60 percent from a year ago. (AP Photo/Mel Evans)(Credit: AP)

Some diners at Hurricane Grill & Wings had been limiting themselves to a small order of the chain’s saucy chicken wings and a glass of tap water. These days, many of those people are upgrading to a bigger order of as many as 15 wings and a soda.

For Hurricane Grill, which sells its wings in more than 30 varieties of sauces, the larger plates and the sodas are a sign that customers are OK about spending a little more when they go out to eat.

The evidence may not be a big economic report like gross domestic product or factory orders in a region, but small businesses have their own indicators that the economy is improving.

NO MORE BROWN-BAGGING IT

People who held onto their jobs during the recession are familiar with the scenarios. The company-sponsored doughnuts disappeared from the Monday morning meeting. Training classes that previously included a catered lunch were traded in for brown-bag sessions.

“Bring your own bagel into the meeting, we’re not going to serve you breakfast,” was the message companies gave employees, says Tom Walter. His company Tasty Catering, based in Elk Grove Village, Ill. provides catering to corporate clients.

When companies did serve food at staff meetings, they found ways to cut costs, Walter says. Strip sandwiches like six-foot heroes were served instead of individual sandwiches. Turkey and brie on artisan breads were replaced by turkey and Swiss on whole wheat.

During the worst of the economic downturn, Tasty Catering was forced to let one full-time employee go. Fortunately, Walter found another job for that staffer elsewhere. He avoided other layoffs of full-timers in late 2008 because his staff offered to cut their hours to 25 per week, from 40, for three months.

Last fall, things began to change. Clients who had stopped feeding employees started ordering again. Companies that had gone downscale began ordering more expensive food.

Four months ago, many clients had whittled down their catering bills to about $10 person. More recently that’s crept up to as much as $13 per person. The most popular dish these days is champagne chicken. In the leaner times, brisket of beef was a hot item. It’s cheaper because it takes less labor to prepare.

“We had the busiest November we’ve ever had,” Walter says. “March looks like it’s going to be the busiest ever.”

The increased spending isn’t just fueled by an improvement in his clients’ businesses, Walter says. Companies are worried about losing their best staffers, “so they’re giving their employees more rewards.”

SPRUCING UP

When the financial crisis hit in September 2008, many companies stopped worrying about décor. Sluggish sales and the threat of layoffs pushed lush lobby plants and holiday displays off the priority list. Sales fell 30 percent at Parker Cos., a Scotch Plains, N.J., company that does interior landscaping and displays in the Northeast.

Parker’s sales remained down through 2011. Hotels and office buildings that never used to think twice about spending $30,000 for a holiday display were now spending $8,000 says William Note, Parker’s creative director. On top of that, law firms and other clients stopped paying to have indoor foliage maintained and replaced, even in high-profile places like reception areas. Planters were empty or had leafless stalks. Or, the plants were barely alive “with dead leaves hanging down from them,” Note says.

In the last quarter of 2011, Note noticed that many companies decided to start sprucing up. The number of proposals that Parker has written for customers this year is up 60 percent from a year ago.

But companies aren’t spending freely. Note says some clients want to replace their plants, but they’re no longer buying flowers for reception desks and other public areas. They’re choosier, asking companies like Parker to bid on projects — something that wasn’t the practice five years ago.

Note is trying to make impressive displays for less money. “I’m trying to be as creative with nothing as I possibly can,” he says.

FIFTEEN WINGS AND A COKE

Customers at Hurricane Grill & Wings are eating and spending more. People who limited themselves to orders of five chicken wings during the recession and its aftermath are now chowing down on 10 or 15. They’re also ordering more appetizers and entrees. Another big change: People who had asked for a glass of water are now ordering sodas. That’s $2.50 on the check instead of nothing.

President Martin O’Dowd says the average check per person at his company’s 45 restaurants in six states has risen 7 percent from a year ago. That means that someone who spent $10 is now spending about $10.70.

O’Dowd says business started dropping off in 2008 and began to pick up in the fourth quarter of last year. The improvement has enabled Hurricane Grill & Wings to hire more workers and increase the hours of current staffers. He’s optimistic that customers will keep spending more. As they do, he expects them to splurging calorie-wise as well — he anticipates more orders of cheesecake and key lime pie.

THREADING AGAIN

For many women — and some men — keeping their eyebrows in perfectly arched shape is a weekly affair.

At least that was the way it was until 2008′s financial crash.

Around that time, Reema Khan, who started her Cerritos, Calif.-based s.h.a.p.e.s Brow Bar salons in 2003, noticed that woman who had come in weekly started visiting less often. Some of her female customers said they would take their grooming into their own hands. She estimates about 30 percent of her male customers continued to come in. Lower traffic made it harder to sell additional services, like facials and henna tattoos. Before the recession, the average bill at s.h.a.p.e.s was $15 to $20. It dropped to $10.

Khan says some customers didn’t want to pay tips, which made for unhappy employees.

Business has picked up this year at the company, which has more than 65 locations in six states. Customers are coming in more often. They’re making appointments for facials and bikini waxes.

Valentine’s Day was a particularly good day.

“We didn’t expect it, but we were crazily busy,” Kahn says.

____

Joyce Rosenberg can be reached at http://twitter.com/JoyceMRosenberg

Start 2012 Off Right In Your Small Business

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NEW YORK (AP) — The arrival of the new year gives small business owners a chance to fix some of the problems that may have dogged them through 2011. Those whose accounting systems were haphazard, or who didn’t have a clear policy about vacations and sick time should take advantage of the fresh start that 2012 offers.

A look at what needs to be done:

ABOUT THOSE BOOKS

If you’re likely to show up at your accountant’s office during tax season with a pile of disorganized receipts, invoices and ledgers for 2011, get yourself some accounting software designed for small business owners. And start using it right away. If you’re not sure which one would be best for you, talk to your accountant or to another business owner whose line of work is similar to yours.

Many small business owners have poorly kept or nonexistent books because they don’t have time to keep track of what they spend and earn. Or they feel intimidated by accounting. The solution is to get some help. Your accountant or another owner can help you find a good bookkeeping service. Or hire an accounting student at a local college. Students are eager for the work.

If you need help learning to use the program, visit . SCORE is an organization that offers free counseling to small business owners. You can search for a counselor who’s savvy about accounting software.

Keeping good books is not just about being organized. It’s also about knowing what’s going on with your business. If you can’t easily look at your receivables and your expenses and know what your cash flow is, then your company can run into financial trouble.

Getting your books in shape for 2012 now won’t take long. And don’t wait till your accountant yells at you in March or April. By then the year will be a quarter or a third over and you’ll have to backtrack to get yourself organized. It will be a waste of your time.

WHAT’S YOUR POLICY?

If you spent time in 2011 trying to mediate disputes over which employee was going to take which holiday or week in the summer off, you need to create a written vacation policy. There are two reasons: It will help your company operate in a fair and orderly fashion, and employees will know what to expect.

Similarly, you might want to think about time off for illness, jury duty and other situations.

A policy should spell out how much time employees get, how many staffers can be off at one time and how conflicts will be resolved. You need to decide if employees get their time off by seniority, or on a first-come, first-served basis. And, how far in advance do they need to ask for time off? How will you handle emergency requests, especially when staffers have already used all their vacation time? And what happens if staffers don’t use all their time? Can they roll it over to the next year?

For sick time, you need to think about how much you want to give staffers. And how do you want to handle situations where someone is out for an extended time?

There are other time off issues. Staffers need to care for a sick child or other relative. And if they’re called for jury duty, are you going to pay them while they’re in court?

A big caveat: Some of these situations may be covered by federal or state laws, like the Family and Medical Leave Act or the Americans with Disabilities Act. You should probably speak with a human resources consultant or a SCORE counselor who has worked in HR to be sure you comply with the laws.

You can learn more about the FMLA at and the ADA at Check your state’s websites to see if there are laws you must follow.

Something to think about is a growing trend in many companies toward what’s called paid time off, or PTO, that doesn’t differentiate among vacation, sick time or personal days. Staffers get a set number of days and all their absences count toward that number. That option will free you from figuring how much of each kind of time off you want to give. But you’ll still need to think about how time off is granted.

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Start 2012 Off Right In Your Small Business

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NEW YORK (AP) — The arrival of the new year gives small business owners a chance to fix some of the problems that may have dogged them through 2011. Those whose accounting systems were haphazard, or who didn’t have a clear policy about vacations and sick time should take advantage of the fresh start that 2012 offers.

A look at what needs to be done:

ABOUT THOSE BOOKS

If you’re likely to show up at your accountant’s office during tax season with a pile of disorganized receipts, invoices and ledgers for 2011, get yourself some accounting software designed for small business owners. And start using it right away. If you’re not sure which one would be best for you, talk to your accountant or to another business owner whose line of work is similar to yours.

Many small business owners have poorly kept or nonexistent books because they don’t have time to keep track of what they spend and earn. Or they feel intimidated by accounting. The solution is to get some help. Your accountant or another owner can help you find a good bookkeeping service. Or hire an accounting student at a local college. Students are eager for the work.

If you need help learning to use the program, visit . SCORE is an organization that offers free counseling to small business owners. You can search for a counselor who’s savvy about accounting software.

Keeping good books is not just about being organized. It’s also about knowing what’s going on with your business. If you can’t easily look at your receivables and your expenses and know what your cash flow is, then your company can run into financial trouble.

Getting your books in shape for 2012 now won’t take long. And don’t wait till your accountant yells at you in March or April. By then the year will be a quarter or a third over and you’ll have to backtrack to get yourself organized. It will be a waste of your time.

WHAT’S YOUR POLICY?

If you spent time in 2011 trying to mediate disputes over which employee was going to take which holiday or week in the summer off, you need to create a written vacation policy. There are two reasons: It will help your company operate in a fair and orderly fashion, and employees will know what to expect.

Similarly, you might want to think about time off for illness, jury duty and other situations.

A policy should spell out how much time employees get, how many staffers can be off at one time and how conflicts will be resolved. You need to decide if employees get their time off by seniority, or on a first-come, first-served basis. And, how far in advance do they need to ask for time off? How will you handle emergency requests, especially when staffers have already used all their vacation time? And what happens if staffers don’t use all their time? Can they roll it over to the next year?

For sick time, you need to think about how much you want to give staffers. And how do you want to handle situations where someone is out for an extended time?

There are other time off issues. Staffers need to care for a sick child or other relative. And if they’re called for jury duty, are you going to pay them while they’re in court?

A big caveat: Some of these situations may be covered by federal or state laws, like the Family and Medical Leave Act or the Americans with Disabilities Act. You should probably speak with a human resources consultant or a SCORE counselor who has worked in HR to be sure you comply with the laws.

You can learn more about the FMLA at and the ADA at Check your state’s websites to see if there are laws you must follow.

Something to think about is a growing trend in many companies toward what’s called paid time off, or PTO, that doesn’t differentiate among vacation, sick time or personal days. Staffers get a set number of days and all their absences count toward that number. That option will free you from figuring how much of each kind of time off you want to give. But you’ll still need to think about how time off is granted.

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Recipients of BP money will have to pay taxes on it

July 17 "Gulf Coast Assistance Day" organized by the IRS, businesses must treat cash like regular income

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Gulf Coast business owners who receive payments from BP for oil spill-related losses may also get an unwanted surprise: The money isn’t all theirs to keep. Many will have to pay taxes on the payouts just as they would with some insurance proceeds.

On Friday, the IRS issued what it called guidance, or tax information, for businesses and individuals affected by the spill. While the government was focusing on victims of the spill, the information applies to any business that has received compensation after a disaster.

Among other things, the IRS said that payments intended to replace a business’ lost income or profits must be reported as part of a company’s gross income. And a self-employed business owner is required to pay self-employment taxes on the money.

The IRS said it would hold what it’s calling Gulf Coast Assistance Day on July 17 to help taxpayers and tax preparers with issues related to the spill. IRS employees will be available in Mobile, Ala.; Panama City and Pensacola Fla.; New Orleans, Houma and Baton Rouge, La.; and Gulfport, Miss. The IRS said times and specific locations would be available soon on its website, http://www.irs.gov.

The IRS site also has information about tax matters related to the oil spill.

BP PLC has agreed to set up a $20 billion claims fund to compensate individuals and businesses who have suffered losses due to the spill, which began after an April explosion and fire sank a BP-operated rig. Among the businesses that have submitted claims are shrimpers, fishing industry suppliers and resort hotels, all of which have seen their income plunge or even disappear because of the spill. BP’s website, http://www.bp.com, has information on filing claims.

A look at the tax issues involving the BP payouts:

LOST INCOME AND PROFITS

The IRS’ guidance on oil spill payouts comes from some basic, decades-old provisions of the tax law.

“There are no new rules, no special treatment” because of the spill, said Ralph Litolff, a certified public accountant and director of business consulting services with Bourgeois Bennett LLC in Metairie, La.

Under the law, any payments that a business or a company owner gets to replace lost income or profits are taxable. Typically, those payments are from business interruption insurance policies or court awards, but the oil spill payments fall into the same category when it comes to how they’re treated by the tax laws. What matters is the purpose of the payout rather than the source of the money.

The theory behind the law is simple. A business or owner would have to pay tax on what they would have earned if a disaster or other event hadn’t stopped them from making money.

“If the ultimate plan of the payment is to replace what would have been income, it’s generally taxable,” Litolff said.

Business owners who are self-employed will also have to pay self-employment taxes on the payout. These include Medicare and Social Security taxes. They may also need to pay estimated tax on the payments, to avoid late payment interest when 2010 returns are due next April.

PROPERTY DAMAGE

The oil spill compensation fund also covers payments for property damage from the spill. But, unlike payments to cover lost income, businesses don’t have to pay taxes on the money they receive for damage to their property. This is also long-standing tax law. The theory is that payments are making injured parties whole again.

Litolff said that compared with disasters like hurricanes, the oil spill has resulted in relatively few cases of business property damage. If fishing boats or docks are covered by oil, BP says it will pay for the cost of cleaning them up. The same goes for any private beachfront property, including property used for business purposes, where oil washes ashore.

Litolff said he has gotten calls from people who own beachfront condos who are seeing their property values fall. At this point, he said, those property owners won’t qualify for payments from BP unless they can prove property damage. And there’s no tax relief, although there might be if the property is sold at a loss.

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