Here’s What Happened in the World of Small Business in July 2021
Here are five things that happened this past month that affect your small business.
1) The G20 backed historic corporate tax reform at the latest summit.
Another step forward for proponents of a global corporate minimum tax: At the first face-to-face G20 meeting since the start of the pandemic, “a landmark proposal to stop multinational companies from shifting profits to low-tax havens was endorsed.” (Source: Yahoo! Finance)
Why this is important for your business:
Companies with international operations would see changes to their taxation under this proposal – but it’s still a long way from being adopted. Stay tuned.
See Relax Tax’s Debt Guide at relaxtax.com/debt
2) The US recession actually lasted only two months.
While difficult times for many individuals and small businesses lasted much longer (and for some are still continuing), “the U.S. recession touched off by the coronavirus lasted only two months, ending with a low point reached in April 2020 after the start of a sharp drop in economic activity in March of that year.” (Source: Reuters)
Why this is important for your business:
While the country had “by no means gotten back to normal operating capacity at that point,” it is helpful to be aware that the recession was the shortest on record. This may feed arguments in favor of the “cash first” approach policymakers took, including the extensive financing for small businesses.
See this related post from Dennis Harabin: Tax Considerations for New Businesses
Expenses a business incurs in the beginning can include equipment purchases, vehicle purchases and use, leasehold improvements, organizational costs and start-up expenses, and each receives a different tax treatment.
3) Restaurant workers are quitting at a record rate.
There are a variety of reasons – including the high-stress culture – but pay is high on the list. “Low wages are the most common reason people cite for leaving food service work. But in one recent survey, more than half of hospitality workers who've quit said no amount of pay would get them to return.” (Source: NPR)
Why this is important for your business:
If you operate in any sectors related to the restaurant industry, you’ve no doubt encountered businesses who are having staffing difficulties. Some may choose to raise wages, while others might wait it out to see if things revert to “normal.”
4) The economy is expected to cool off going forward.
“The U.S. economy’s 2021 growth surge likely peaked in the spring, but a strong expansion is expected to continue into next year,” said economists surveyed by The Wall Street Journal. The bounce back from the recession prompted “red-hot” growth, but that burst is expected to slow. (Source: The Wall Street Journal)
Why this is important for your business:
This isn’t a bad thing. We’re past the peak for economic growth and have moved “into the more moderate phase of expansion.” Job gains, personal savings, and fiscal support are expected to keep the economy growing solidly over the next year.
See this related post from Dennis Harabin: The Importance of Estimating Start-Up Costs Before Launching A New Business
According to one recent study, start-ups created over two million jobs in the United States in 2015 alone. In fact, by 2018, there were 30.2 million such organizations operating in the country — making up a significant part of the economy. But having an idea for a product or service and bringing that vision into reality are often two different things. It's one thing to come up with something innovative — it's another thing entirely to avoid the trials and tribulations that the business side of the equation often brings with it. That's why it's so important to estimate start-up costs before you launch your new business — it can help you avoid as many of these issues as possible.
5) During the pandemic, 1 in 5 business owners were on the brink of closing forever.
A new study by OnePoll found that “One in five small business owners came frighteningly close to shuttering their business for good during the COVID-19 pandemic.” Additionally, 3 in 4 respondents said the past year was the most difficult they’ve ever faced in the life of their business. (Source: Study Finds)
Why this is important for your business:
If you’re one of these business owners, it’s helpful to know you’re not alone.
For any inquiries please give us a call at 551-249-1040.
Do you need more information? You can reach out to Dennis Harabin at Relax Tax today!
Recommended Readings:
- When Is Your Business No Longer a “Startup”?
- Top Marketing tips for getting your business noticed
- What You Need to Know Before Starting Your Own Business
- Tax Tips: You Can Write Off Taxes on Business IT Purchases