The year 2010 wasn’t an easy one for big business. The businesses that were able to weather the recession did more with less and turned a tough year into an opportunity for growth. In many ways, 2010 was a make-it-or-break-it year.
It was also a big year for small business developments. Small business stood at the center of the nation’s political stage for much of the year, benefiting from the one of technology’s great equalizers, social media — a tool that helped businesses find additional ways to capitalize on the mobile explosion.
Hiring incentives and tax breaks
The spring of 2010 presented many changes for small business owners. In March, the Senate passed the Hire Now Tax Cut Act of 2010, a hiring incentive which exempted employers from payroll tax on unemployed persons they hired in 2010.
Small business owners were also able to benefit from tax legislation stemming from 2009’s federal stimulus spending.
According to the U.S. News & World Report, “the 2010 jobs bill does not affect the returns taxpayers are filing this April. Instead, small-business owners will be trying to cash in on several tax breaks stemming from last year's stimulus bill that can reduce the amount they owe on their 2009 income.”
These credits include the Making Work Pay Tax Credit , which is relevant for more than “20 million businesses in the country, when the owner is the sole employee,” according to U.S. News & World Report. Another stimulus component allows employers to take a tax credit from a portion of expenses for their former employees who are using COBRA for health insurance.
Small Business Saturday
Nov. 27, 2010 presented small business retailers with an opportunity to take advantage of holiday spending through a global effort primarily sponsored by American Express.
Planted firmly between landmark shopping days Black Friday and Cyber Monday, Small Business Saturday was designed to encourage consumer support of small business retailers and stimulate local economic growth.
According to a statement issued by American Express, “1.2 million people joined the movement and helped spread the word by ‘liking’ Small Business Saturday on Facebook.” Politicians also lent a hand—41 elected officials declared the day as Small Business Saturday, according to American Express. The statement also reported that as of early December, “small retailers that accept American Express Cards, including those that sell apparel, bikes, books, electronics and flowers, saw an estimated 27 percent increase in sales on American Express Cards this year compared to the Saturday after Thanksgiving in 2009.”
Geo-based technology social media — also known as location-based social marketing — became all the rage in 2010. The technology allows users to tell friends their location thanks to GPS mapping, and subsequently rewards them for doing so. Lauded as “the next Twitter” by Mashable, Foursquare was the year’s standout, garnering a firestorm of media attention in April when it declined a $100 million-plus offer from Yahoo! to purchase the business.
In early December, Mashable reported that “Foursquare has 5 million users, increasing its user base by a factor of 10 in just nine months.” Not surprisingly, the technology has plenty of competitors, including Google Latitude.
For small business owners, geo-based technology — and its ability to promote customer retention and word-of-mouth buzz in a way that feels like a game — may just be the new wave of brand advocacy. Foursquare describes its benefits to entrepreneurs: “…you can use foursquare to engage your increasingly mobile customers with foursquare "Specials," which are discounts and prizes you can offer your loyal customers when they check in on foursquare at your venue…you will be able to track how your venue is performing over time thanks to our robust set of venue analytics — for free!”
Pricey equipment and transaction processing fees have prevented some business owners from accepting credit cards from customers as a form of payment. Thanks to the payment service Square, which first launched in April and was named one of the “50 Best Inventions of 2010” by Time magazine, those barriers for small business owners may be a thing of the past.
According to the company’s website, squareup.com, users can “accept all major credit cards with Square, including Visa, American Express, Discover and MasterCard. There is no contract, no PCI-compliancy costs, no monthly minimums, no additional fees from the card companies, and no termination penalty.” The service is facilitated by a “Square reader” (provided free to customers), and can be used with “a variety of devices on the Apple iOS and Google Android platforms.”
Advertising and marketing has always presented a conundrum for small business owners.
You know you need it, but how do you know what works? Enter Groupon, an e-mail offer featuring a daily bargain in entertainment, eating out and more.
Although it launched in 2008, Groupon really took off in 2010. In October, the company remained coy about rumors that Yahoo! had offered more than $3 billion to buy the company. In November 2010, discussions with Google to acquire Groupon were made public. Stories of businesses who actually became “overwhelmed” with the response to their Groupon offer ran rampant in 2010.
iPad (and its many business apps)
It’s hard to believe the iPad was only launched in January 2010. While not intended to replace a laptop, its slick interface and wide range of apps has quickly made it the tablet of choice—both for consumers and businesses.
In July 2010, BusinessWeek reported that companies such as SAP, Wells Fargo and Mercedes-Benz had realized the business benefits of iPad use among its employees.
Market researcher Techaisle estimates that about 2 million iPads have been purchased by small businesses for uses ranging from demos and presentations to e-mail and Internet surfing.
There are also plenty of iPad apps that can make the lives of small business owners easier. In its article “Best-Selling Business Apps for the iPad,” BusinessWeek recognized favorites such as PDF Expert, Jump Desktop (for iPad presentations), and iTap RDP, a desktop client that allows entrepreneurs to access their Windows desktop from wherever they may be.
Health care reform
A look back at 2010 would not be complete without mentioning President Barack Obama’s health care reform efforts. The changes have had some small business advocate groups questioning whether the impact of the new regulations may be a detriment to small businesses.
One of the major implications of health care reform that passed in 2010 is “SHOPs” (Small Business Health Options Programs), a program intended to give small businesses better insurance buying power through the use of pooled resources. States are required to comply with the new regulations by 2014. And, beginning in 2014, businesses employing more than 50 people are required to offer health care, or pay penalties.
In March 2010, the National Small Business Association stated that “(this bill) will place significant new pressures on small businesses to both offer and pay for employee health insurance, starting in the earliest stages of reform." The National Federation of Independent Business also released a statement on the issue, calling it “a tax bill wrapped up in health care paper.”
However, independent research has indicated that small business may well gain big tax benefits from the new health care reform. Research by the Commonwealth Fund suggested that small business insurance premiums could be reduced by 8 percent to 11 percent when the new health care regulations take effect.