New data from payroll companies suggests that small businesses are slowly beginning to add employees, even as the most recent Labor Department report shows the unemployment rate held steady at just under 10 percent. Some economists believe these numbers indicate the recession is bottoming out.

Based on data gathered from Intuit’s online payroll service, companies with less than 20 employees have added jobs since June 2009, said Business Week Additionally, data from SurePayroll shows the average paycheck for workers at businesses with fewer than 100 employees has stabilized, said Business Week.

President Obama has put forth a number of measures intended to get people back to work, including tax incentives for businesses that hire new employees and pushing banks to free up more credit for small businesses.

John Bishop, a labor economist at Cornell University, told Business Week that temporary incentives like tax credits could create more than 2 million jobs in a year.
“It potentially has a huge effect, and small business would be the primary beneficiary of that,” Bishop told Business Week.

Health insurance premiums at Sunshine Sign Co., a small business in Massachusetts that employs about 30 people, will rise 21 percent this year – which translates into about $1,100 per person a year, said an article on Telegram.com. These insurance rate hikes are an affliction facing many small businesses in that state and across the country.

“I guess our question is why are small businesses seeing increases that are twice the rate of medical inflation? We believe the answer is that small businesses are treated as second-class citizens,” Jon B. Hurst, president of the Retailers Association of Massachusetts, said to Telegram.com.

Large companies have more leverage to negotiate lower costs, and rates for smaller groups depend more on factors such as age, community and industry, which can drive up premiums. Insurance plans will often charge small groups a higher base premium, despite providing the same coverage.

Insurers contend that they are raising premiums because doctors, hospitals and other medical providers are charging more. But the Massachusetts Association of Hospitals told the Telegram.com that “insurers can charge small businesses as much as 76 percent more in premiums than they charge their ‘big business’ counterparts,” while adding “billions of dollars to healthcare costs through their billing and claims requirements.”

Massachusetts Gov. Deval Patrick ordered health insurers to file their rates for small groups so the insurance commissioner can review them, said the Telegram.com article. Another piece of legislation would allow small businesses to form groups and purchase insurance together.

The Federal Reserve unexpectedly raised the emergency interest rate — what banks pay to borrow directly from the government — to 0.75% last week.
Reserve Chair Ben Bernanke stressed there are no immediate plans to raise the federal funds rate, the key lending rate that is used as a benchmark for the interest paid on credit cards, home equity loans and many business loans, said CNNMoney.com.

In an effort to spur the economy, the federal funds rate has been near zero since December 2008, but some economists contend that keeping interest rates so low doesn’t help the economy, and in fact, could raise inflation.

Critics say that the low rates contribute to banks not lending to consumers and small businesses. “One of the reasons lending is having such a hard time getting off the ground is that interest rates are so low,” Brian Wesbury, chief economist at First Trust Portfolios, told CNN. “Why would someone lend to a risky small business at 3.5%, especially if you expect rates to go up?”

Bernanke and others believe that raising interest rates could derail recent economic gains, especially in the housing market. Analysts say even a modest rate increase could lift mortgage rates and create another wave of home foreclosures, according to CNN.

New consumer-friendly credit card regulations take effect today, after widespread complaints about unfair industry practices. President Obama signed a bill last May that restricts certain credit card fees, reforms billing practices and requires companies to give customers more notice on changes in interest rates or terms of their accounts. Customers will have the right to cancel their accounts if they don’t agree with the new terms.

USA Today breaks down what the new rules mean for customers.

Interest Rates:

New: Credit card companies can no longer raise interest rates retroactively on existing balances. In addition, if you open a new credit card account, the issuer can’t raise the interest rate for 12 months.

What Hasn’t Changes: The legislation imposes no limits on the rates credit card issuers can charge new customers. Nor does it limit how much card issuers can raise rates on future purchases, said USA Today.

Fees:

New: Credit card companies can no longer to charge a fee when you exceed your credit limit.

What Hasn’t Changes: Companies will still be allowed to charge annual fees, inactivity fees and other types of fees. Many experts agree companies will increase those fees.

Billing Practices:

New: Consumers often have different interest rates for new purchases, transfer balances and cash advances on the same credit card. Companies usually apply full payments to the lowest interest rate. Under the new regulations, they must apply payments over the minimum to the highest interest balances.

Also, customers must receive their bills at least 21 days before payment is due, and payment due dates must be the same every month. Banks can no longer use a customer’s average daily balance over two months to calculate interest, a practice known as “double-cycle billing,” said USA Today.

What Hasn’t Changed: If a customer only makes the minimum payment, the company can still apply that amount to the lowest-interest rate balance.

Disclosures and Notices:

New: Companies must give customers 45 days’ notice before raising interest rates, changing certain fees, such as annual fees or cash advance fees, or making other significant account changes. Card issuers also have to provide customers with more information about their accounts, such as how much you’d have to pay monthly to eliminate your balance in three years.

What Hasn’t Changed: Companies can close your account or lower your credit limit for any reason without giving advance notice.

FaceBook, Twitter, LinkedIn and the new Google Buzz may be the biggest but they’re not the only fish in the sea when it comes to social networking sites, especially for small businesses.

Jonathan Blum of TheStreet.com recommends three free social networking applications for small businesses that are more streamlined than the Web behemoths.

XMarks: Download the application, open a free account, and you can store and share bookmarks about a client or job as a Web page, RSS feed or e-mail that will be available on any computer, allowing you to more easily share information with colleagues.

Jing: A Web collaboration tool specifically for videos and stills. Lets you store video, images or animations on the Jing server, which creates a Web link that can be sent via e-mail, chat or Web page. The bandwidth is not as strong as video sharing tools like Skype but it is simpler to use, says Blum.

Notepub: An alternative to Google documents, Notepub is a document collaboration tool that allows users to create and share simple notes on any computer. While you won’t have access to features like RSS or chat software, Blum says Notepub is a quick, easy way to share documents, images and files.

Do you wander around the aisles of your local supermarket or drugstore in a zombie-like haze, unable to distinguish one product from another, sometimes forgetting why you’re even there? You may be experiencing brand overload, and you’re not alone.

Shoppers are buying less and looking for bargains, so retailers like Wal-Mart are discontinuing stocking some weaker selling brand-name products and replacing them with cheaper store brands, said CNNMoney.com.

As Wal-Mart goes, other stores are sure to follow, and drugstore chains like CVS and Walgreens and the discount chain Target are also trying to simplify their shelves, said CNN. In a recession when shoppers are cutting back, variety can actually hurt sales.

“I think the feeling is that as these companies keep extending their [product] lines, it’s only causing confusion for shoppers and not really driving them to buy more products,” Lora Cecera, a retail expert at the consulting firm Altimeter Group, told CNN. “Do I really need to decide between 15 different types of toothpaste when I go to a store?”

With fewer options, shoppers are more likely to turn to cheaper house brands, boosting sales and loyalty for the retailers’ own product line. A recent survey by Sanford C. Bernstein & Co. found that 77 percent of consumers who downgraded to store brands were satisfied with the product, said CNN. Some analysts say that by cutting brands, Wal-Mart and other retailers are in a position to get better deals from suppliers on pricing and advertising.

More than one-quarter of the businesses on this year’s Franchise 500 list can be started for $50,000 or less.

Entrepreneur Magazine whittled that list down to 10 highly ranked franchises with start-up costs of $20,000 or less.

Experts caution that super-cheap franchises are often home based and don’t offer a strong support network, so investors must be highly motivated in order to turn a significant profit. Here is Entrepreneur’s top 10 list of ultra-low-cost franchises:

Cruise Planners/American Express, the cheapest startup on the list, costs $1,595 for those with industry expertise. Those new to the industry would need to put down about $10,000. Pluses: Businesses can usually be up and running within six weeks, and the American Express name gives you instant credibility.

Jazzercise, which opened more than 930 new franchises in 2009, topped the fitness category. A Jazzercise franchise can cost as little as $2,980 to start up.

Express Tax – lowest starting cost $6,500

Coffee News – lowest starting cost $8,925

Jani-King — lowest starting cost $11,400

United Country Real Estate – lowest starting cost $11,790

Kinderdance Int’l Inc. – lowest starting cost $14,950

American Poolplayers Assn. – lowest starting cost $17,360

Snap-on Tools – lowest starting cost $17,619

Novus Glass – lowest starting cost $18,900

This article was submitted by Katie Kapler, Director of Online Strategy for Biz2Credit. Biz2Credit is a small business marketplace that connects entrepreneurs with financing options and advice to grow their business. Send all questions to katie.kapler@biz2credit.com

Small businesses are the “places where most new jobs begin,” President Obama said in his weekly radio address Saturday, a day after announcing new measures to create jobs.

Obama has proposed tax incentives and credits, expanded government loan programs and aid to community banks that he said will help small businesses hire new employees, reported Bloomberg News.

The president’s plan would eliminate capital gains taxes on small businesses in 2010 and give small businesses a $5,000 tax credit for every new job created. In addition, $30 billion from repaid bank bailout money would be distributed to community banks to spur small business lending, said the Associated Press.

The plan would also temporarily increase the cap on Small Business Administration loans from $350,000 to $1 million and expand the SBA program to help refinance commercial real-estate loans, said the AP. All of the proposals would need to be approved by Congress.

The unemployment rate has finally dipped just below 10 percent, but with the public deeply frustrated by sluggish job growth, the administration is refocusing its efforts on job creation.
“Government can’t create these businesses, but it can give entrepreneurs the support they need to open their doors, expand, or hire more workers,” Obama said in the radio address.

Wal-Mart, the world’s largest retailer, is cutting 11,200 jobs at its Sam’s Club stores, reported Business Week.

The store will eliminate about 10,000 product demonstrator positions, most of them part-time, after hiring an outside marketing company, Shopper Events, to take over demonstration operations, Sam’s Club Chief Executive Officer Brian Cornell said in a memo to employees. The warehouse chain will cut another 1,200 membership recruiting jobs – two in each of the 600 Sam’s Club stores across the country.

The memo, posted on the Wal-Mart web site, said the change is an effort to improve in-store sampling and demonstrations of food and beverages, personal wellness and electronics products.

In a separate announcement on Jan. 11, Wal-Mart said it will close 10 under-performing Sam’s Club stores, eliminating about 1,500 jobs, said Business Week. Overall, Sam’s Club employs about 110,000 people.

Shopper Events, based in Rogers, Ark., said it would hire about the same number of employees that Sam’s Club is letting go, according to Business Week.

Laid-off Sam’s Club employees can apply for the Shopper Events jobs. The company already handles in-store demonstrations for Wal-Mart.

Tax time can be scary for small business owners. If you’re a busy entrepreneur and haven’t kept the best accounting records throughout the year, there’s still time to save yourself some grief and make next year a little easier. Also keep in mind that if you don’t have a good handle on your business’s finances, the more likely it is to fail.

Associated Press business columnist Joyce Rosenberg has these tax tips for small business owners:

* Get organized. Invest in accounting software that will keep you organize. You can input information from all those receipts and invoices into the program and send a file to your accountant at the beginning of the year, saving yourself a whole lot of time and grief.

* Hire a bookkeeper. If you can’t afford to hire a bookkeeper, consider getting an intern, such as a student studying accounting at a local college and have them set up a ledger system. Also consider putting all business expenses on one credit card.

* Read your mail. This sounds obvious, but again some business owners are so busy, sorting through mail can be a chore that gets pushed to the back burner. Not opening important mail from the IRS can lead to penalties and fees down the road.

* Listen to your CPA. Start talking to your accountant now. If you don’t understand what he is saying, ask. Remember, there are no stupid questions, only stupid mistakes.