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Raise Prices, Stay the Course or Cut Them: What’s the Trend for 2012?

Written By Alerus Small Business Connect, January 18, 2012

83114832Because many small business owners are feeling the pressure from higher operating expenses, many of them plan to raise their prices in 2012. In fact, a recent survey of small and medium-sized firms by PNC Financial Services found that 35 percent of business owners plan to raise prices, while only 7 percent expect to cut them. Of those intending to raise prices, 80 percent said they were doing so to avoid a “profit squeeze from higher costs.”

While the economy has improved, customers – by and large – have been watching their pocketbooks, and they’ll continue to do so. So what’s the right approach for your business, raise prices, stay the course, or cut them? Read on for information and insight that can help you decide, including four rules for pricing products and why you don’t want to be the low-cost leader.

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January Economic Insights

Written By Dr. David T. Flynn, January 9, 2012

The new reality of business means that companies need to be ever-more aware of macro economic events and assess the potential impact these events have on their own day-to-day operations and long-term plans.

Download the PDF: Alerus Monthly Insights: January

Overall assessment: The year ended on a mixed note. On balance, the economy seemed to have improved, though people are also focusing on negative factors such as unemployment and downward revisions to gross domestic product. The lingering questions also center on whether adequate groundwork has been laid to allow economic growth to build and accelerate into the future. Much of the broader media attention is now focused on the lead-up to the Presidential election and differences in economic policy.

Alerus-Economic-Insights_January

Data and the related opinions have been compiled by Alerus Financial’s strategic information partner, Dr. David T. Flynn.

Dr. David T. FlynnDr. David T. Flynn is an Associate Professor of Economics and Director of the Bureau of Business & Economic Research at the College of Business & Public Administration, University of North Dakota. Dr. Flynn has developed forecast models for personal income and employment in North Dakota, and analyzed small business location patterns for the top 200 cities in North Dakota. His commentary on the North Dakota economy has appeared in print and online publications such as BusinessWeek, NewsWeek, American Banker, the Financial Times, the Wall Street Journal, and in newspaper and magazines from the United States, Brazil and Finland. Dr. Flynn is a member of the International Institute of Forecasters, the National Association for Business Economics, and many other professional organizations

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Hurry! Last-Minute Tax Deductions

Written By Alerus Small Business Connect, December 29, 2011

Have you done everything possible to reduce your tax burden? While time is fleeting, there are still a number of things you can do that will enable you to take advantage of tax write-offs. In addition to reviewing these tax calculators, consider these ways to add to your deductions:

  1. Give cash year-end bonuses – Like any compensation, the bonuses you give to employees are tax deductible.tax deductions
  2. Give company stock as a year-end bonus – If you’re willing to share ownership with your employees, you can give company stock as bonuses.
  3. Buy new equipment – Need a new computer? Some heavy machinery? Office furniture?
  4. Buy used equipment – If you’re trying to save money by buying pre-owned items, you can still claim a generous write-off.
  5. Donate cash – Your business can make cash donations to IRS-recognized charities.
  6. Donate inventory – Instead of giving cash, you can use inventory to benefit a charity.
  7. Set up a qualified retirement plan – You can shelter your profits while saving for retirement by adopting a qualified retirement plan, such as a 401(k) or profit-sharing plan.
  8. Pay outstanding bills – Cash-basis businesses can deduct the payment of invoices when they are made.
  9. Order next year’s supplies – Buy now what you expect to use next year.
  10. Renew subscriptions and membership dues. – Before the end of the year, decide which subscriptions and dues in professional and trade associations you’ll want for next year.

Learn more at this CNBC.com article by guest columnist Barbara Weltman but hurry: January 1 is right around the corner!

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Looking Ahead: Business as Usual in 2012?

Written By Alerus Small Business Connect, December 15, 2011

As you prepare to close out one year and begin another, what are the biggest challenges you face as a small business owner? What’s the outlook for 2012? A recent survey by online survey company Zoomerang Online Surveys and Polls and media company GrowBiz Media shows mixed results.

The survey, SMB Business Perspectives, polled 1,000 decision-makers at small and midsize businesses (SMBs). Key survey insights across the topics of the economy, business growth and social media include:

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  • Economy: When considering business performance heading into 2012, 40% of SMBs are optimistic or very optimistic. Of those surveyed, 40% of SMBs agree that small business is the backbone of the economy.
  • Business Growth: Less than a third of SMBs plan to hire more employees in 2012 compared to the previous year.
  • Social Media: Of those surveyed, 40% of the SMBs plan to use social media in 2012, despite a quarter of respondents stating they do not feel comfortable using social media tools.

So how exactly do SMBs plan to build their business in 2012? The top three ways given in the survey are word-of-mouth, repeat business and advertising/marketing. What small business tools will you use to grow your business?

You can get more insight on the trends in an article written by Rieva Lesonsky that first appeared in Small Business Trends. For support in succeeding against the small business challenges of 2012, contact one of our Small Business Experts. We’re here to help!

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Small Business Tax Trends for 2012

Written By Alerus Small Business Connect, December 12, 2011

105940022Are tax debate and discussions (as well as those focused on the federal deficit) likely to decrease in 2012? Most likely not! As we get nearer to the November elections, the topic of taxes will certainly be even more front and center. Until then, here are some notable tax trends for 2012:

  1. Taxes will remain a political football. The wrangling in the Super Committee, which failed to reach a consensus by the November 23, 2011, deadline, demonstrates the ongoing political nature of taxes.
  2. Tax audits are on the rise. According to one KPMG survey, tax audits of businesses have increased. Corporate executives who were surveyed reported a 61 percent increase in federal tax disputes; 37 percent reported an increase in state tax audits.
  3. Uncertainty about health care rules remains. The fate of the Patient Protection and Affordable Care Act of 2010 is uncertain. The U.S. Supreme Court has agreed to hear a case brought by the NFIB and 26 state attorneys general involving the constitutionality of the law.
  4. Some favorable business tax rules will be extended. Numerous tax rules are set to expire at the end of 2011. Likely, many will be extended, at least through 2012.
  5. State and local governments scrounge for new sources of revenue. The federal government is not the only government thirsty for more revenue. Many state and local governments are in dire need and are looking for any way to raise revenue.
  6. Unemployment taxes will go up for some employers. Employers in 20 states will be paying higher federal unemployment (FUTA) taxes. The reason: Their states borrowed from the federal government to pay for unemployment benefits and have not yet repaid the borrowed sums.

And more.

To learn about additional trends and dive into those above, check out an article written by Barbara Weltman that first appeared on Small Business Trends. Most likely the only sure thing about taxes is that they’re not going away. Remember to stay watchful of opportunities that can assist you, and use resources such as the tax calculators within the Tools section of Small Business Connect.

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December Economic Insights

Written By Dr. David T. Flynn, December 7, 2011

The new reality of business means that companies need to be ever-more aware of macro economic events and assess the potential impact these events have on their own day-to-day operations and long-term plans.

Download the PDF: Alerus Monthly Insights: December

Overall assessment: As the calendar year draws to a close, it’s a good time to examine current and pending issues for the economy in the new year. Housing remains the single most significant drag on the U.S. economy right now. The biggest threat to the economy, in terms of risk, remains Europe. Keep in mind the Euro-area does not need to completely disintegrate to cause major problems for the U.S. economy. Even if Europe tips into recession, as a major trading partner, there will be serious consequences for U.S. firms looking to sell overseas — this could pose issues for employment and our overall economic recovery.

Alerus Economic Insights_December

Data and the related opinions have been compiled by Alerus Financial’s strategic information partner, Dr. David T. Flynn.

Dr_-David-T_-Flynn4Dr. David T. Flynn is an Associate Professor of Economics and Director of the Bureau of Business & Economic Research at the College of Business & Public Administration, University of North Dakota. Dr. Flynn has developed forecast models for personal income and employment in North Dakota, and analyzed small business location patterns for the top 200 cities in North Dakota. His commentary on the North Dakota economy has appeared in print and online publications such as BusinessWeek, NewsWeek, American Banker, the Financial Times, the Wall Street Journal, and in newspaper and magazines from the United States, Brazil and Finland. Dr. Flynn is a member of the International Institute of Forecasters, the National Association for Business Economics, and many other professional organizations

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November Economic Insights

Written By Dr. David T. Flynn, November 8, 2011

The new reality of business means that companies need to be ever-more aware of macro economic events and assess the potential impact these events have on their own day-to-day operations and long-term plans.

Download the PDF: Alerus Monthly Insights: November

Overall assessment: It was a somewhat brutal end to the third quarter, as financial markets fell, solutions in Europe remained elusive, and little substantive progress was apparent on the domestic front.  The beginning of the fourth quarter continues to display inconsistency in economic performance, with decent retail sales numbers but poor consumer confidence numbers.  Weak growth continues to be the new normal, and unemployment continues to remain persistently high.  The deficit reduction committee appears to be making little progress, raising the specter of a return to political gamesmanship over spending taxes at the end of this year.

Alerus Economic Insights: November

Data and the related opinions have been compiled by Alerus Financial’s strategic information partner, Dr. David T. Flynn.

Dr. David T. FlynnDr. David T. Flynn is an Associate Professor of Economics and Director of the Bureau of Business & Economic Research at the College of Business & Public Administration, University of North Dakota. Dr. Flynn has developed forecast models for personal income and employment in North Dakota, and analyzed small business location patterns for the top 200 cities in North Dakota. His commentary on the North Dakota economy has appeared in print and online publications such as BusinessWeek, NewsWeek, American Banker, the Financial Times, the Wall Street Journal, and in newspaper and magazines from the United States, Brazil and Finland. Dr. Flynn is a member of the International Institute of Forecasters, the National Association for Business Economics, and many other professional organizations

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October Economic Insights

Written By Dr. David T. Flynn, October 31, 2011

In the new reality of business, it’s more important than ever that your banker be more than “just your banker.” That’s why, at Alerus Financial, we bring you news you can use. This monthly overview on economic indicators contains insightful information for business owners of all sizes. 

Download the PDF: October Economic Insights

Overall assessment: and was a hot topic of discussion with pundits and policymakers. The principal source of concern was the Euro-area, specifically Greece. In times of crisis, it is common for people to search for historical comparisons; the question being asked now is whether Europe is going through their own “Lehman moment.” Much of this discussion is premature, as Lehman was a major financial institution failure and nothing of that sort happened as yet in Europe. If there is a lesson learned from the last month, it is that in the face of a crisis, markets detest uncertainty from policy authorities.

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Data and the related opinions have been compiled by Alerus Financial’s strategic information partner, Dr. David T. Flynn.

Dr. David T. FlynnDr. David T. Flynn is an Associate Professor of Economics and Director of the Bureau of Business & Economic Research at the College of Business & Public Administration, University of North Dakota. Dr. Flynn has developed forecast models for personal income and employment in North Dakota, and analyzed small business location patterns for the top 200 cities in North Dakota. His commentary on the North Dakota economy has appeared in print and online publications such as BusinessWeek, NewsWeek, American Banker, the Financial Times, the Wall Street Journal, and in newspaper and magazines from the United States, Brazil and Finland. Dr. Flynn is a member of the International Institute of Forecasters, the National Association for Business Economics, and many other professional organizations

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September Economic Insights

Written By Dr. David T. Flynn, September 30, 2011

In the new reality of business, it’s more important than ever that your banker be more than “just your banker.” That’s why, at Alerus Financial, we bring you news you can use. This monthly overview on economic indicators contains insightful information for business owners of all sizes. 

Download the PDF: September Economic Insights

Overall assessment: Resolution of debt ceiling issues did little to instill confidence in the economy in August. The Federal Reserve continues to “prime the pump,” but to little effect — consumers and businesses still remain unwilling to borrow, and less willing to spend. Financial markets this last month may have left many hoping for a roller coaster ride as a nice change from the cliff dive stocks engaged in for a time.

While the data this month provide minimal signs of strengthening recovery, some are taking reductions in declines to be a positive sign. This is how far we have come: weaker negative signs are being viewed as an overwhelmingly positive thing. Hopefully that sentiment is correct.

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Data and the related opinions have been compiled by Alerus Financial’s strategic information partner, Dr. David T. Flynn.

Dr. David T. FlynnDr. David T. Flynn is an Associate Professor of Economics and Director of the Bureau of Business & Economic Research at the College of Business & Public Administration, University of North Dakota. Dr. Flynn has developed forecast models for personal income and employment in North Dakota, and analyzed small business location patterns for the top 200 cities in North Dakota. His commentary on the North Dakota economy has appeared in print and online publications such as BusinessWeek, NewsWeek, American Banker, the Financial Times, the Wall Street Journal, and in newspaper and magazines from the United States, Brazil and Finland. Dr. Flynn is a member of the International Institute of Forecasters, the National Association for Business Economics, and many other professional organizations

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August Economic Insights

Written By Dr. David T. Flynn, August 31, 2011

In the new reality of business, it’s more important than ever that your banker be more than “just your banker.” That’s why, at Alerus Financial, we bring you news you can use. This monthly overview on economic indicators contains insightful information for business owners of all sizes. 

Download the PDF: August Economic Insights

Overall assessment: Over the last months, government budgets and debt levels dominated the world of finance. The debate over the debt ceiling and ongoing structural deficits in the United States continued to be a major story with only a short term patch reached. Greece’s finances continued a roller coaster ride with its budget and we now can add Italy to the list of countries facing budget pressures. With higher growth levels elusive in much of the developed world and continued weakness in demand, these issues continue to defy resolution of any kind.

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Data and the related opinions have been compiled by Alerus Financial’s strategic information partner, Dr. David T. Flynn.

Dr. David T. FlynnDr. David T. Flynn is an Associate Professor of Economics and Director of the Bureau of Business & Economic Research at the College of Business & Public Administration, University of North Dakota. Dr. Flynn has developed forecast models for personal income and employment in North Dakota, and analyzed small business location patterns for the top 200 cities in North Dakota. His commentary on the North Dakota economy has appeared in print and online publications such as BusinessWeek, NewsWeek, American Banker, the Financial Times, the Wall Street Journal, and in newspaper and magazines from the United States, Brazil and Finland. Dr. Flynn is a member of the International Institute of Forecasters, the National Association for Business Economics, and many other professional organizations.

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