With the April 15th deadline quickly approaching, there are many tax breaks small business owners should know about.

1. First year profitable businesses can depreciate cost of business property and equipment purchased in 2009 up to $250,000
2. First year non-profitable businesses can depreciate 50% of their office related property
3. General business credit limit has been raised for non-profitable businesses
4. Work opportunity tax credit is available to small businesses who have hired employees that fall into “target groups who have consistently faced significant barriers to employment”
5. NOLs carry back allows small businesses to carry back net operating losses for five years instead of the previous two years.

Be sure to contact your accountant and ask about all the tax breaks your small business qualifies for.

The Small Business Administration’s flagship lending program backed twice as many loans in the past three months as it did a year ago during the same time period.

In the second quarter, the lending program processed 16,558 loans, more than doubling the loans offered in the same time period in 2009.  Overall in 2010 the SBA has lent out $3.7 billion.

For those considering starting a business or buying a business for sale, now is the time!

When the recession hit a low point last year many small businesses shed their payroll and didn’t realize they would have to pay unemployment insurance tax.  The tax increases will impact thriving businesses as they expand their payroll because they will have to pay based on their growing wages.

State unemployment insurance taxes are paid throughout the year, as owners pay their other payroll taxes.  States typically have a base unemployment tax, which owners will pay according to the size of their payroll.  But as a company lays off employees, it develops a negative “experience rating” that can boost that tax.

According to a survey conducted by the National Association of State Workforce Agencies numerous states are running out of funds to pay for thier out-of-work populations.  With jobless claims swelling and coffers depleting, at least 35 or the 50 states are hiking unemployment tax rates this year.

“The business that has laid off folks gets hit proportionately higher because while they pay less in total wages, and therefore less in employment taxes, their experience rating will go up and it takes numerous quarters of no layorrs to get that experience rating back down.” says Henry Paula, a tax principal at Reznick Group PC.

With the start of the new decade the lending markets in the US are still extremely tight.  Many franchisers have stepped up their financing assistance to help new franchisees get started.

Franchisers are offering incredible deals, some are even waiving fees completely.  many franchisers are offering unprecendented levels of franchisee assistance.  Some are making loans themselves, while others are discounting franchise fees or leetting new franchisees pay their fees over time, says business-acquisition specialist Ted Leverette of Parter On-Call Network in Florida.

To take advantage of the deals to be sure to choose a franchisers who’s willing to share the risk with you.

Seasoned professionals know this little known fact.  Valuing a business is not completely a science neither is it completely an art.  While there are many known and time tested method of valuing businesses, at the end of the day there are a lot of subjective elements that play a huge part in the valuation process.  Several sophisticated methods can be used to estimate potential business valuations but finally it all come down to what the buyers are willing to pay.

Now let us look at the few methods of business valuation that are out there.  One of the common approaches to valuing a business is the income approach.  Under this approach the valuation is based on future discounted income of the company.  This method relies on the accuracy of cash flow projections and will depend on the market conditions that will prevail.  While a financial investor can feel good about knowing the returns the business will provide, in some industries this can be hard to predict.  How many of us would have predicted the current financial meltdown we are experiencing and its impact on income & cash flows?

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There is no escaping the fact that the economy will always go through a recessionary and growth cycle.  The only fact that changes in every cycle is the timing of when a recession starts, when the economy bottoms out and if the recovery is V shaped U shaped or a W and so on.  The same is true for growth periods, and the facts that change are how long the growth continues until it slows down and falls into a recession.

Now that we have agreed that recessions are unavoidable, let us see how a business owner can handle his or her exit in a recession.  I am sure some readers are thinking, why, should any owner sell a business during a recession, why not simply ride out the recession, wait for the economy to grow again and then sell the business.  Good point, but experience tells me it is not always that simple.  There are a lot of reasons, I can think of, but let me just cite a couple of them.

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Recession is the time of innovation but it is also hard to find funding during these times.  But with a little research on the internet your small business can quality for grants from the city, county, state, and federal governments as well as private foundations and corporations.

1. Figure out if you qualify for any special small business certifications, such as a minority-owned, disadvantaged, woman-owned or veteran-owned business. Federal and state governments sometimes give priority for grants to these types of business owners.
2. Then look at your local government Web sites — for your city, county and state — and find the economic development agency or area equivalent.
3. Next, sign up at grants.gov to receive information about specific kinds of federal grants.

Keep an open mind while doing your research.  Who knows you might be one of the business owners who just might modify their business based on funding opportunities

The current financial conditions facing franchise owners can only be described as extremely difficult.  Recent reports show that SBA loans for franchises are at a record default rates in 2008-2009.  Compared to 2009 the default rates have gone up 43% and have cost the SBA over $93 million last year.

So, what can franchise business owners learn from the above statistics regarding recent SBA loan default rates?  What should a franchisor do in this environment?

It is crucial for franchisors to maintain their current base of operators and expand their base cautiously.  Nothing is more valuable to a franchisor than a demonstrable track record of success as evidenced by their customer base.  A large number of failures and defaults does not inspire confidence in a potential franchise opportunity seeker.  there are several things the franchisor can and should do.  Speak to your customer base regularly and poll them on their market situations.  Provide advise and counseling where appropriate and direct them to financial resources when needed.  When selecting new franchise owners, have a higher standard, for financial and capital requirements, so they can withstand the market forces longer.  Make sure to provide adequate training in operations so they are more successful in operating their business.

Every state in the US is now offering tax cuts and incentives to attract new business, but there are four states that top it all.

South Dakota:  There is no personal or corporate income tax and the sales tax is 4%.  “The favorable tax climate is a draw for penny-pinching startups.”

Texas:  Has no personal or corporate income tax but it does have a gross receipts and franchise tax.  Theses taxes charge businesses 0.5% of revenues if they are in retail and 1% of revenues for non-retail businesses.  To help small business during the recession the state legislature recently raised the revenue exemption level to $1 million, up from $300,000.

Montana: No Sales Tax!  “Despite skipping that revenue stream, the state’s coffers are overflowing: Montana is one of just two states currently in the black, running without a budget deficit. Corporate income and property tariffs are also competitively low. The Tax Foundation ranked Montana as the sixth most business-friendly state when it comes to taxation.”

Tennessee: No personal income tax but it does have a 6.5% corporate income tax.  “Still, as one of just nine states that goes without income taxes on salaries, Tennessee’s “live free!” ethos attracts a fair number of entrepreneurs.”

Google AdWords makes it affordable for Small Business Owners to advertise their business. “No matter what your budget, you can display your ads on Google and our advertising network. But if you don’t do some careful planning, you can easily find yourself spending thousands of dollars with little to show for it.”

Before you start your own Google AdWords campaign, answer the below three questions:

Are you AdWords the right Keywords for your business?

“Brent Hollowell and Jesse Travis, co-founders of a travel accessory retailer in Baltimore called Zen Class, had high hopes when they began using AdWords to promote their Nirvana eat Back Organizer, which slips over an airplane’s seatback tray. While they knew they might get clicks if they paid for words like “travel accessories,” they feared the cost of close to $1.50 a click would be prohibitive because not every visitor would be looking for their product. They decided to be more specific and set up an AdWords campaign using the keywords “airline seat back organizer,” which cost about 5 cents a click.”

Is your budget realistic?

“About a year ago, Georgette Blau, who runs On Location Tours in New York City, set up an AdWords campaign to promote tours that were timed for the release of the “Sex in the City” movie. In doing so, she says she made a mistake: She ran the ad on the Google AdSense network but failed to understand how quickly she could run through the money she had budgeted for her campaign. An ad placed on the Google network can quickly appear on hundreds of Web sites and generate thousands of clicks. While this can be a good thing, it can also run up quite a tab.”

What markets do you want to focus on?

“When Apple irst introduced the iPhone, Matt McCormick, who runs a phone-repair business called Jet City Devices,  saw an opportunity. Knowing that the iPhone’s screen was prone to damage, Mr. McCormick began bidding on keywords like “iphone repairs” and waited for business to flood in. A problem soon became apparent: while his site was swamped with traffic, very few people were actually mailing in their phones to get them repaired. But, after changing his campaign to run only on searches initiated within 50 miles of Chicago and Seattle — cities where he had physical shops where customers could drop their phones off in person — Mr. McCormick says his conversion rate jumped to 10 percent: “If you’re in business in only one or two cities, then Google’s localization feature can save you a ton of money, reduce AdWords competition, and bring great traffic.”