You may not be ready for 2018, but it is ready for you! Although many things that could impact your business have stayed the same, there are some changes that you need to start thinking about now. Taxes, the economy and human resource issues are at the top of the list. If you are not already thinking about these topics, now is the time. Here are the top 4 things small business owners should know or do in 2018.
- Taxes -The new tax law changes rates for many small business owners, but the benefits aren’t across the board. For example, some owners will lose out on savings because they’ll end 2018 with income above thresholds set out in the law, or they work in fields like accounting, law or consulting. Many business owners aren’t sure yet how the law will affect them. What we do know is that the Section 179 deduction that small businesses can use to get an immediate break on purchases of equipment ranging from computers to vehicles to manufacturing equipment doubles this year to $1 million. Separate from the tax bill, the IRS has set the standard mileage rate for business use for a car at 54.5 cents per mile, up 1 cent from 2017. The rate is one of two methods for accounting for how much an owner spent on using a car for business; the second is to deduct the actual expenses for the car. Under the actual expense method an owner must calculate the percentage of miles the car is driven for business, and apply that percentage to expenses like lease payments, fuel, maintenance, repairs, insurance and depreciation.
- The Economy– If the economy maintains the upward trend it showed in 2017, owners’ profits and their optimism should grow as well. But that may not translate into more jobs. In multiple surveys last year, owners indicated they’re generally sticking to their conservative hiring patterns. Owners have said a significant revenue increase might persuade them to hire. For many, that could depend on whether consumer spending remains strong. The government’s figures on retail sales consumer spending show Americans were feeling fine about spending as 2017 ended, a sign that business will be good in the new year.
- Minimum Wage– Eighteen states have higher minimum wages as of Dec. 31, 2017, or Jan. 1. Laws were passed boosting the wage floor in 10 of those states: Arizona, California, Colorado, Hawaii, Maine, Michigan, New York, Rhode Island, Vermont and Washington state. Eight states see increases because their minimums are tied to the inflation rate. They are Alaska, Florida, Minnesota, Missouri, Montana, New Jersey, Ohio and South Dakota. Small businesses such as restaurants or food service companies are most likely to now be paying their workers more under the higher minimums. Three-fifths of all workers paid at or below the federal minimum wage of $7.25 an hour are in the leisure and hospitality industries.
- Sexual Harassment – I know, not something you want to talk to your employees about but top headlines in 2017 have put this topic in the spotlight. Human resources experts usually advise business owners to update their employee handbooks early in the year. It’s a task that’s more of a priority at many companies this year following a series of reports of workplace sexual harassment. Every employer should have a policy in their handbook that makes clear that sexual harassment is not welcome and that defines sexual harassment. Business owners can find templates for sexual harassment policies online. Whether they’re creating a policy for the first time or already have one, they should have it reviewed by an HR professional or an attorney with expertise in sexual harassment or employment law. Companies may also want to consider training sessions to educate staffers and managers about harassment — what it is, how to recognize it, how to report it to owners or senior executives.