SAN FRANCISCO, CA — [Jan. 30, 2013] —
Optimism rang in the New Year according to a recent Rocket Lawyer survey of more than 700 small businesses across the country. To maintain the positive momentum, SMBs expect the Obama administration to focus on keeping the economic recovery on track, as government’s top priority.
An impressive 81 percent of small business owners surveyed by Rocket Lawyer expect 2013 to be a better year than 2012. Over half (56 percent) of businesses are doing well as 8 percent said that business is booming and 48 percent said they were growing and meeting expectations. However, less than half of the potential employers will be hiring new workers as 65 percent report that they are not planning to hire in the next six months.
The New Boomers:
The survey found that one specific demographic is thriving economically: millennials (ages 18-30). The majority of millenial small business owners (88 percent) saw growth, and an additional four percent said business was booming. Additionally, 42 percent of millennials are planning to hire in the next six months -- more than any other age group.
Over half of SMBs (53 percent) said the President’s top priority should be the economy. When we asked small business owners about their hopes and concerns, the economy also topped both lists -- 27 percent said an economic recovery was their top hope for the second term and 21 percent said it was their top concern. Additionally, when asked what the President could do for them in his second term, 39 percent said tax breaks and 37 percent said incentives for entrepreneurship. Not surprisingly, an increase in taxes is the top fear of respondents, and almost half of business owners (47 percent) would not be willing to pay higher taxes to reduce the federal budget deficit.
When it came to legal issues, over half (55 percent) of small businesses faced a problem in 2012, slightly up (3 percent) from 2011. The most frequent legal issue faced was contract negotiations (23 percent), followed by the failure to collect payments (14.5 percent) and real estate transactions (12.6 percent). The biggest legal concern remains compliance with government regulations (26.9 percent), slightly down from last year at 33 percent but it still remains a hot button issue.
“It’s astonishing that almost half of small businesses (47 percent) have never consulted with a lawyer. Good legal counsel is essential and can certainly be a competitive advantage for business owners who have to manage both opportunities and potential risks,” said Charley Moore, Founder and Executive Chairman of Rocket Lawyer.” However many SMB are still under the misconception that it legal advice has to be too complex and too expensive. The next quarter, not to mention the next couple of years, could bring significant changes to small businesses, and some will be out of the owner’s control. With the right legal representation, fortifying the legality of your business is something every owner has the power to do.”
Tips for Starting the New Year
1. Keep Good Counsel
More and more people are beginning to understand the value of regularly consulting with an attorney rather than waiting until they need one. A good business attorney can be the difference between success and failure. Consult a lawyer for big legal decisions your company makes. It’s better to pay a little up front than a lot down the road.
2. Get it in Writing
Whether it’s a new employee or a repeat client, never assume anything. Contracts provide both parties with their obligations, rights, and responsibilities and while they don’t guarantee the other party will make good on the agreement it does guarantee that a court will look kindly on you if they don’t.
2. Take Advantage of Tax Tips
Washington D.C. Tax attorney Mark L. Rosenberg explains that the most important thing every small business needs to understand is the fiscal cliff legislation and the differences it made to tax law:
“Small business owners need to listen up as the following changes will certainly affect 2013 tax planning: Most importantly, Bush era tax cuts were preserved for all those with income under $450,000 ($400,000 for individuals) which is really most small business owners. For taxpayers who earn over $300,000 for joint filers ($250,000 for individual filers and $275,000 for heads of household), deductions begin to phase out at income levels above that amount. This means that the effective rate of tax will increase, since deductions will be worth less to those taxpayers.”
In addition, the payroll tax holiday is over, which means that all employers will pay the full 7.65% Social Security/Medicare tax on each employee's earnings. Also the maximum wage cap for payment of Social Security taxes has been raised from $100,100 in 2012 to $113,700 in 2013. These changes will present some new planning opportunities for small business owners and they should check with a tax adviser (an attorney or accountant) on ways of structuring their business to plan properly."
About Rocket Lawyer™
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About the Survey
This survey was conducted by Rocket Lawyer November 29 - Dec 4 2012, among 700+ nationwide small business owners who are Rocket Lawyer members or have used Rocket Lawyer’s services. The margin of error is 3.58 percent.
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