Small Business Owners, Executives Earn Less

Small Business Owners, Executives Earn Less

Editors Note: Memos is a new weekly feature written by columnist Kelly Spors that will round up news and tidbits about small businesses and entrepreneurs. Ms. Spors also answers reader questions in her weekly Small Talk Q&A.

Survey reveals compensation details

The average small business owner or chief executive brings home an annual salary of $233,600, according to Salary.com's 2006 Small Business Compensation Survey. The survey reports on data from 1,800 U.S. companies across all 50 U.S. states with 500 or fewer employees. It breaks out the salaries for 12 different industries, including marketing, manufacturing, product development and finance. The average salary of a business owner in retail trade, for instance, is $169,500 — 38% less than the national median for all small business owners. The survey found that an executive's compensation tends to increase with a business's size in both employees and annual revenue. Also, executives at publicly held companies earn "significantly more" than those at privately held companies or sole proprietors. According to the survey, small businesses pay less than their larger counterparts, for a variety of reasons. To see the complete survey results, go to http://research.salary.com.

Web makes keeping tabs on competitors easier

Staying abreast of your online competition is vital business strategy these days. But how do you do it effectively? This blog post outlines some interesting ways to keep track of the competition using some helpful Web tools. Some tips mentioned include using RSS feeds and email alerts to monitor competitors' mentions in the news or on blogs. See which Web sites are linking to your competitors' site using a specialized search on Google or another Web tool. Businesses can also find out how competitors rank for various search phrases and keywords at www.googspy.com. While most of these tools are free, the blogger cautions against using them to copy a competitor.

SBA pilot program targets distressed communities

Lenders are getting more incentives from the federal government to offer money to businesses in riskier communities. The Small Business Administration is testing a program it says will encourage lenders and local development organizations to grant more SBA-backed loans to businesses in economically distressed inner-city and rural areas. Dubbed the New Markets Lending Initiative, the pilot program will provide a waiver allowing SBA lenders to ignore federal regulations that usually only let them sell loans to other SBA lenders. Now, SBA lenders will be able to sell up to 90% of SBAExpress and CommunityExpress 7(a) loans valued up to $150,000 to so-called Community Development Entities. To be eligible, the CDEs must extend loans to qualified low-income businesses and receive tax credits under the New Markets Tax Credit program — a tax incentive created by Congress in the 2000 tax relief package. The loans bought by the CDEs will also be SBA-backed. In a news release, the SBA said "this new initiative will provide additional access to loans and technical assistance to both start-up and existing firms" in distressed markets.

Year end brings tax-saving opportunities

The New Year is quickly approaching. Besides just ringing in 2007, small business owners can try to wring more money out of Uncle Sam. Step one: Make sure your financial records are in order and accurate, so you're ready for tax time and can better review your financial situation heading into next year. Tax experts say now is also a time businesses can consider deferring income until next year to reduce their tax bill this year. Instead of invoicing customers in December, for instance, think about holding off until early January so that income is logged next year. If your business needs to acquire new technology or other office equipment, consider buying it now so you can take advantage of a tax deduction. Using a section 179 deduction, you can take a single-year deduction for up to $108,000. Some other advice: don't forget about retirement planning and make any retirement plan contribution you were hoping to make. For more small business tax-planning information, check out the Internal Revenue Service's resource guide for small business at http://www.irs.gov/businesses/small/index.html.

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