Riding out the storm on his own
Dave Herman”™s Hawaiian shirt and the tropical photos he surrounds himself with in his New City office helped take the chill off the Halloween weekend snowstorm. A solo practitioner since 2005 with more than 30 years of experience in his field, Herman offered his advice for business owners dealing with the ups and downs of the Great Recession.
How have new federal regulations (Sarbanes-Oxley, Dodd-Frank) affected your company and clients?
“As a small practitioner, my clients are not much affected. The Sarbanes- Oxley Act is geared toward public companies, a response to the Enrons, WorldComs and other public company disasters. In general, the legislation does not apply to privately held companies.
“The mortgage changes in Dodd-Frank, however, have helped some. Among other things, it regulates the mortgage industry more closely and lowers costs to consumers. Conversely, it is difficult to obtain a mortgage these days. The other facets of this law are basically designed to regulate Wall Street and protect investors … but have they? Who can really be sure? The market fluctuates tremendously almost daily; many have lost a significant portion of their retirement accounts.”
Are you seeing more bankruptcies and foreclosures despite the “official” end of the Great Recession?
“I have seen a few bankruptcies and some of my clients have had to fold up business. It is a difficult time for small businesses. Banks have frozen lines of credit and made it more difficult to obtain loan that small businesses relied on. The loss of those loans and lines of credit has taken working capital away. As you drive through Main Street in New City, you can see the amount of vacant storefronts available for rent. The same holds true for other towns. Several of my clients are worried and some anticipate things getting worse before they get better.
“I have also found that people who are in their late 50s who lose their jobs have virtually no chance at getting a similar job. Companies are hiring younger and cheaper labor. This has caused the current craze over home-based businesses to try to generate some type of income. Whoever said this recession is over is crazy; IÂ haven’t seen many signs of it being over.”
What advice do you have for business owners who are trying to stay afloat?
“Hang in there. Get out and network to grow your business. Cut costs as much as possible. Stay on top of your finances. Keep your finger on the pulse of your business ”“ if things change, adapt accordingly.”
What should employers do to prepare for what”™s ahead in 2012?
“Review the current laws for health insurance and depreciation that may affect your business with your CPA. Tax laws are often passed toward the end of the year.
“If you are in a heavy equipment business and need something, buy before the end of the year and take the accelerated depreciation and get a great tax write-off.
“Businesses should look at their health insurance and determine if they should change something to take advantage of any tax credits available through the Patient Protection and Health Care Act.
“Be aware of the maximum unemployment rate that can be charged. Long-term employees are the best. Weigh the cost of firing a long-term employee because they wanted a raise versus whether your adjusted unemployment rate would be more than the raise.
“One last thought: Be careful about who you choose to represent you on Election Day.”