It’s open enrollment season for health coverage. If you’re self-employed, you can’t afford to ignore it

Open enrollment season can be a time of trepidation for the self-employed.

The stakes are especially high because if you need to buy individual or family coverage, the next few weeks could be your only chance for 2024, barring certain exceptions such as moving to a different state, getting married, divorced or having a child.

“For most people, the nationwide open enrollment period for individual and family coverage is your best shot to review your options and enroll in a new plan,” explained Anthony Lopez, vice president of individual and family and small business plans at eHealth, a private online marketplace for health insurance, in an email.

More from Year-End Planning

Here’s a look at more coverage on what to do finance-wise as the end of the year approaches:

Picking health insurance on your own — without the help of a human resources department — can be daunting. Instead of throwing up your hands in frustration, here are answers to questions self-employed individuals often have about open enrollment. and other options for information

Freelancers, consultants, independent contractors and other self-employed individuals can visit to research and enroll in flexible, high-quality health coverage, either through the federal government or their state, depending on where they live. You can also choose to work directly with an insurance agent or with a private online marketplace to help you wade through options. To be considered self-employed, you can’t have anyone working for you. If you have even one employee, you may be able to use the SHOP Marketplace for small businesses.

The deadlines you need to stay on top of

Most states set a deadline of Dec. 15 for coverage that begins Jan. 1, so don’t delay when it comes to signing up for benefits, said Alexa Irish, co-chief executive of Catch, which helps self-employed individuals choose health-care plans. Also, remember to pay your first month’s premium before your health care is supposed to start or you’ll be out of luck as well. “If you miss those deadlines, there’s no wiggle room,” said Laura Speyer, co-CEO of Catch.

If you are already enrolled in a marketplace plan

Those who were already enrolled in a plan last year can make changes by Dec. 15 for coverage that begins Jan. 1. Doing nothing will mean they are automatically reenrolled in last year’s marketplace plan.

Qualifying for tax credits and other savings

Many people assume they won’t be entitled to savings, but they should still investigate their options, Irish said. Indeed, 91% of total marketplace enrollees received an advance premium tax credit in February 2023, which lowers their monthly health insurance payment, according to data from the Centers for Medicare & Medicaid Services, a federal agency within the U.S. Department of Health and Human Services.

Credits and other eligible savings are available based on an applicant’s income and household size and can be estimated even before they officially apply. It’s advisable to check for savings possibilities every year, Irish said.

What to consider in making coverage decisions

The thought process will be similar to what you went through when picking health insurance offered by an employer. Whether you are signing up for the first time — or deciding whether to renew your existing plan or choose a different one — you’ll want to consider factors such as who in the family needs the coverage and for what purposes, and how different plans compare in terms of coverage options and cost. This analysis needs to take into account copays, prescription drugs you take or may start to take, whether the plan covers your doctors, and out-of-pocket maximums.

If you’re self-employed and aiming to grow your business in the coming year, possibly by hiring employees, it’s good to know you can enroll in a small business plan at any time of the year, Lopez said. “Small business group plans aren’t governed by the same open enrollment rules as individual and family plans. So, you can enroll in an individual plan today, then switch over to a group plan in mid-2024 if you add a couple employees and want to provide them with health benefits,” he said.

How much health insurance costs the self-employed

Cost will vary, depending on the plan you choose, who is covered and what subsidies you’re eligible for. But, as a general guide, the average total monthly premium before tax subsidies in February 2023 was $604.78. The average total premium per month paid by consumers after the tax subsidies was $123.69, according to the Centers for Medicare & Medicaid Services.

Self-employed individuals may also be eligible for a cost-sharing reduction, a discount that lowers the amount paid for deductibles, copayments and coinsurance. You’ll find out what you qualify for when you fill out a marketplace application, but keep in mind, you need to enroll in a “Silver” plan, one of four categories of marketplace plans, to get the cost-sharing reduction.

Wading through policy options, working with an agent

You don’t have to go through the process alone. There are assisters who are trained and certified by marketplaces to help you apply and enroll. If you want more specific help, you can also choose to work with an agent or broker who is trained and certified to sell marketplace health plans in the state they are licensed. Agents can advise you and give you more detailed information about the plans they sell, and since health insurance premiums are regulated by your state’s Department of Insurance, you don’t have to worry about paying more by working with an agent.

A few things to note: Some agents may offer other plans that aren’t available on government exchanges, but that comply with government requirements. However, to take advantage of a premium tax credit and other savings, you must enroll for a plan through a state or federal marketplace, on your own or through an agent.

The risk and reward of high-deductible plans

Marketplaces offer multiple plans to choose from and they will vary in terms of coverage and price. One option that’s becoming more popular, especially with young entrepreneurs, is called a high-deductible health insurance plan. This type of insurance plan comes with higher deductibles in exchange for lower premiums, which could be a good choice for people who are healthy and don’t visit the doctor much. Another benefit of a qualified high-deductible plan is the ability to contribute to a tax-advantaged savings vehicle known as a health savings account, or HSA.

When deciding whether to choose a high-deductible plan, individuals should take into account factors such as how often they visit the doctor, how much they can afford to pay out of pocket, whether their doctors are in network and what the out-of-pocket maximums are. It’s also important to know you have the means to cover a high-cost medical event, should the need arise. If a high-deductible plan makes sense for your circumstances, you can then consider an HSA.

Lopez recommends people don’t delay when it comes to reviewing their coverage options, which may also include dental and vision insurance. “The last week or so of open enrollment can be a busy time for licensed agents too; if you want the best chance of talking to an agent to get your personal questions answered, don’t put it off.”

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Small business confidence is tanking again, especially when it comes to banks and Biden

As President Biden begins to more forcefully build a reelection case citing Bidenomics, Wall Street forecasts and actual GDP data are supportive, as are recent improving sentiment scores from consumers and CEOs. But on Main Street, small business owners remain a difficult group for Biden to win over.

Small business confidence is back at an all-time low, according to the just-released CNBC|SurveyMonkey Small Business Survey for the third quarter. That’s nothing new for Biden, as small business confidence has hung around a low throughout his presidency. In fact, the latest decline in the confidence index to a score of 42 out of 100 matches the all-time low from exactly one year ago.

With a business owner demographic that skews conservative, the twin economic issues of inflation and rising interest rates have compounded the general concerns about a Democratic administration. But at a time when signs are pointing to progress in the fight against inflation and a potential though by no means certain end to Federal Reserve interest rate hikes, the Q3 data presents more specific — and potentially more troubling — concerns for the president.

Even with a resilient economy, with interest rates at a multi-decade high, the number of small business owners who say they can easily access the capital needed to operate their firms continues to decline, now at under half (48%) versus 53% last quarter. This should not come as a surprise, as higher interest rates make banks stricter when it comes to lending requirements, a dynamic that tends to disproportionately punish small businesses, and linger or even intensify the longer a higher rate environment persists. Even for businesses that can secure loans, double-digit percentage rates are a cash flow challenge.

Data released on Monday from small business trade group NFIB reported similar difficulty among business owners attempting to access capital, with over half (58%) who borrowed or tried to borrow reporting high interest rates as their biggest complaint, and 40% of owners saying interest rates were a significant issue in the ability to access capital.

Wall Street banks and Main Street lending

The latest monthly report from alternative lending firm Biz2Credit from earlier this month shows small business loan approval percentages at banks with over $10 billion in assets at 13.3% in July, an approval rate that has been falling steadily and, pre-pandemic, had been as high as 28.3% in February 2020.

Rohit Arora, CEO of Biz2Credit, noted in a release on his firm’s data that as regulators raise capital requirements at some large banks in the years ahead, steps being taken today to prepare include more hesitancy to lend to smaller companies, since these loans can often range from five to seven years in term length.

Beyond recent concerns about the stability of regional banks, rating agencies say that even the largest Wall Street banks are on downgrade watch, not a situation in which banks are likely to be more accommodating to the capital needs of small firms, and in fact, the CNBC|SurveyMonkey data recorded a sharp drop in financial system confidence among business owners who work with large banks.

When it comes to accessing capital, small firms that hold accounts with large banks recorded the largest drop quarter-over-quarter, a 10% decline, from 59% saying it was easy for them to access business capital down to just 49% now. That was a much larger decline than among business owners who bank with a regional bank (down 2% quarter over quarter) and those who work with a community bank (down 4%). The largest group of small businesses (41%) conduct their business with large banks.

SurveyMonkey’s analysis of the data pointed to a gap between business owners who express confidence and a lack of confidence in banks that has widened from just 1 percentage point in Q2 (49% confident, 50% not confident) to 9 points now (45% confident, 54% not confident) this quarter.

“These data are a good reminder that the general economy for small business owners can often be very different from the economy that consumers on one side or large corporations on the other are experiencing,” said Laura Wronski, research science manager at SurveyMonkey.

The CNBC|SurveyMonkey Small Business Survey was conducted among over 2,000 small business owners across the U.S. between August 7-August 14.

While concerns across the economy about the banking crisis have lessened since the last quarter, that is not reflected in the conditions that small businesses are facing.

“Banking concerns have become even more top-of-mind for small business owners now, with their confidence in the U.S. banking system weakening and their ability to access needed capital hampered,” Wronski said.

Biden’s business supporters are increasingly negative

The CNBC|SurveyMonkey quarterly confidence index includes a series of core sentiment indicators related to policy that contributed to the decline back to the all-time low, with more small business owners saying they expect immigration policy and tax policy to be a negative.

That’s notable, according to SurveyMonkey analysis of the results, with these index components that had the largest drag on the overall scores not those tied to hiring or economic conditions, but “two factors that fall squarely within the remit of the president and Congress.”

Business owner expectations for revenue and hiring were largely unchanged, and the percentage that describe economic conditions as “good” changed only slightly, from 40% to 38%. More describe conditions as “middling,” up from 43% to 46% this quarter. But only 15% describe business conditions as “bad.”

“Small business owners seem to be more heavily factoring the political environment into their confidence estimations than the economic environment. The economy has shown promising growth over the last quarter, with fewer concerns about a recession economy-wide now and less immediate threat from a banking crisis,” Wronski said.

In the confidence index scoring, rather than broader survey questions, there was a notable drop for Biden. According to SurveyMonkey, overall approval of the president now matches the same level as Q3 2022 survey, with 31% saying they approve and 68% saying they disapprove of the way Joe Biden is handling his job as president. The small business survey data matches the overall trend in the recent FiveThirtyEight polling average.

But Wronski said, “What’s really surprising is that general confidence among small business owners is falling now for the first time among Biden’s supporters.”

With the overall confidence index back at the all-time low of 42, the gap in confidence index scoring specifically between Biden’s supporters and his detractors is now a record-low 18 points, according to SurveyMonkey (55 versus 37). Among survey respondents who identify as Democrats, the quarterly confidence score declined from 58 to 52, the lowest it has been since Biden became president. Among independents, the decline was from 49 to 42, the lowest it has been among these respondents since the first quarter of 2021. Republican confidence moved the least, declining from a score of 39 to 37.

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How gas station economics will change in the electric vehicle charging future

As electric vehicles proliferate, some gas stations are making expensive overhauls to add EV charging stations.

In most cases, they aren’t scrapping traditional liquid fuel pumps. But select locations, including an RS Automotive in Takoma Park, Md., and a Shell station in Fulham, England, have made a full switch.

Location, cost, power requirements and conversion time are among the multiple considerations that factor into a gas station’s decision to convert all or a portion of their existing infrastructure to allow for EV charging.

“Figuring out how to do this on an active site can be complex and challenging,” said Neha Palmer, chief executive of TeraWatt Infrastructure, which is developing a network of electric vehicle charging centers for fleet operations across California, Arizona, and New Mexico. “How do you sequence the construction when you have vehicles that might want to fuel there?”

Here’s what gas station owners need to know about the EV charging trend and their future.

The EV fast-charging model

Locations like office complexes, hospitals and hotels typically offer a slower charging option, since people generally stay put for hours at a time. Gas stations, however, are investing in Level 3 chargers, which are more powerful and generally charge a car in 20 to 30 minutes.

While slower charging stations are often free to motorists, that’s not generally true for fast charging stations, given ongoing operational expenses such as electricity and extra fees charged by utilities in commercial settings, said Seth Cutler, chief operating officer of EV Connect, whose software tools help companies build charging station networks.

Big oil company franchisers and car dealers are on board

For large oil giants, adding EV chargers is both a defensive and offensive play.

Gas station numbers have been decreasing at a sharp rate in the past three decades and the trend is expected to continue in the coming years, according to Shubhendra Anand, vice president of research and strategy at Market Research Future. In fact, at least a quarter of service stations globally are at risk of closure by 2035 without significant business model tweaks, according to consulting firm BCG.

The Biden administration has a stated goal of having 500,000 electric vehicle chargers nationally where EVs make up at least 50% of new car sales by 2030. By current administration estimates, there are more than three million EVs and more than 130,000 public chargers nationwide.

The European oil majors are among the energy sector leaders in the global EV charging push.

Shell has EV-charging-only mobility hubs in China and the Netherlands, in addition to the Fulham location. The company intends to own more than 70,000 public EV charge points worldwide by 2025, and 200,000 by 2030, according to an email statement from Barbara Stoyko, senior vice president of mobility for Shell Americas.

BP also sees the need for mixed-use hybrid refueling and EV charging stations, according to Sujay Sharma, chief executive of BP’s electric vehicle charging business in the U.S. “Today’s gas stations are well positioned to adopt EV charging due to locations in high-demand areas, in addition to their existing convenience offerings including restrooms, food and beverage,” Sharma stated in an email.

Franchise car dealers are also increasingly getting on board, thanks to pushes from automakers like GM and Ford.

As of late last year, 65% of Ford’s dealers had opted into the EV certification program (a little under 2,000, according to data shared by Ford), as it has started to make the role of car dealers central to the EV transition process.

The National Automobile Dealers Association said in a May release that franchise owners will spend an estimated $5.5 billion on EV infrastructure across OEM brands, with per store costs ranging from $100,000 to over $1 million.

Upfront costs can be jaw-dropping, incentives help

Adding EV charging capabilities is not a one-two decision that owners should take lightly. Indeed, the return on investment could be seven to 10 years on average, according to an estimate provided by Yair Nechmad, co-founder and chief executive of Nayax, a global commerce enablement and payments platform, which offers its services to gas stations.

The hardware and software for fast charging can run between $50,000 for one charger and $500,000 for multiple fast chargers and dispensers, said Michael Hughes, chief revenue officer of ChargePoint Holdings, a technology company that makes EV charging hardware and software to help drivers find local charging stations and amenities. The infrastructure, meanwhile, which includes the cost of breaking ground, running power, permits and contractors, generally costs about twice that, he said.

That makes it advisable to incur all the infrastructure changes upfront, even if a gas station only intends to make a few chargers available at the onset, said Rohan Puri, chief executive of Stable Auto Corporation, which helps make charging stations more profitable for companies that own and operate them. His advice: “Put in as much power as you think you’re going to need in 10 years.”

There are numerous federal, state and utility-based incentives for commercial businesses to purchase and install fast chargers. This includes the U.S. Department of Transportation’s Federal Highway Administration NEVI Formula Program, which provides generous funding to states to strategically deploy EV charging stations.

Gas station owners can search for information on incentive programs they may qualify for.

Location is a key factor, gas station franchise concerns

Even with incentives, there can be barriers to entry, location being a major factor. According to the U.S. Department of Energy, 80 percent of EV charging happens at home, which makes adding EV charging less appealing for in-town gas stations, Hughes said. Local gas stations also don’t generally have amenities to keep people entertained while they are charging their vehicles.

Real estate can also be prohibitive. A traditional gas station may have two islands with four pumps each for liquid fuel; the same utilization rate would require about 40 charging stations, Hughes said.

By contrast, gas stations along major highways between highly traveled destinations can be ideal for electric charging hubs. These locations tend to have multiple amenities, offering people the opportunity to grab a cup of coffee, get a quick bite to eat, stretch their legs or walk the dog while they charge their vehicle, Hughes said.

Convenience stores like Sheetz, Wawa, Royal Farms and Buc-ee’s that double as gas station operators are also starting to add electric chargers at certain locations, said Albert Gore, executive director of The Zero Emission Transportation Association, a federal coalition that advocates for EVs, and who is a former Tesla and SolarCity executive. It can’t be “a place that you’re just going to run in and buy a Snickers,” Gore said.

While there can be a first-mover advantage for gas stations, some owners, like Blake Smith, founder of SQRL Holdings, a gas station and convenience store operator, are taking it slow. His company operates more than 150 convenience store gas station locations and offers electric charging in select locations in Florida. By contrast, the company hasn’t installed any EV charges in Arkansas, where it has more than 60 stations.

“I would never recoup my investment,” he said, adding that a move to all electric charging could be decades away. “We’re not flipping a switch to where gas vehicles are getting off the road and it will be EV-only.”

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Phishing scams targeting small business on social media including Meta are a ‘gold mine’ for criminals

With so much of daily life happening over social media, it’s not surprising that small businesses are relying more and more on Instagram, Facebook and other platforms to spread the word about their business and sell products.

But there is one big catch: small business owners are at a big disadvantage on these platforms when it comes to cybersecurity.

Take it from Pat Bennett, an entrepreneur who sold granola in the Cleveland area and got about half of her sales through Instagram. The business was already under pressure from the rising cost and availability of sweeteners and oats when her business Instagram page, Pat’s Granola, came under attack.

The attack looked innocuous. Bennett received a message on Instagram from a small business owner she knows personally. Using a link, her acquaintance asked Bennett to vote for her in a contest. It was a legitimate contest, and it wasn’t unusual for Bennett to communicate with people on Instagram Messenger. As it turned out, it was an attack that went to everyone in her contact’s address book. Bennett lost control of her Instagram and Facebook accounts and hasn’t regained access, despite using all the channels Meta recommends.

With help, she was able to track the IP addresses to Europe, but that wasn’t enough to avoid a worst-case scenario. Bennett received a letter saying she could regain control of her accounts if she paid close to $10,000. She declined to pay the ransom and had to start all over again.

Pat Bennett, a Cleveland-based entrepreneur who sells granola says about half of her sales are through Instagram, but she became victim to an Instagram Messenger hack that resulted in Bennett to losing control of her Instagram and Facebook accounts, and she hasn’t regained access, despite using all the channels Meta recommends.

Source: Pat Bennett

Bennett’s experience isn’t isolated. As it turns out, small businesses like Pat’s Granola are frequent targets of hacking rings. CNBC quarterly surveys of small business owners in recent years have indicated that many do not rate the risk of cyberattack highly, yet the FBI says that in recent years a wave of hacks has targeted small business. In 2021, the FBI’s Internet Crime Complaint Center received 847,376 complaints regarding cyberattacks and malicious cyber activity with nearly $7 billion in losses, the majority of which targeted small businesses.

Small business owners say social media giants such as Meta have done little to help them address the problem.

A Meta spokesperson declined to offer specific comment in response to small business owner concerns, but pointed to its efforts to protect businesses targeted by malware. The company has security researchers that track and take action against “threat actors” worldwide and has detected and disrupted nearly 10 new malware strains this year. Malware can target victims through email phishing, browser extensions, ads and mobile apps and various social media platforms. The links look innocuous and rely on tricking people into clicking on or downloading something.

Why Main Street is an easy target

With marketing and selling over Instagram and other social platforms being an attractive way for small businesses to reach and expand their customer base, it’s not surprising that criminal organizations have followed.

According to SCORE, a nonprofit partly funded by the U.S. Small Business Administration, nearly half of small business owners cited social media as their preferred digital marketing channel. Compare that to 51% who cited their company website and 33% who prefer online advertising. Moreover, 73% of business owners said they consider social media to be their most successful digital marketing channel, with 66% citing Facebook, 42% citing Alphabet’s YouTube and 41% Instagram.

“Criminals are in the business of stealing, so you’re going to go where you can make money and get away with it. And social media accounts of small businesses are like a gold mine,” said Joseph Steinberg, a cyber security privacy and AI expert, who sees small business social media accounts as “low hanging fruit.”

Bryan Palma, chief executive officer at Trellix, a cybersecurity company that worked with the FBI and Europol to take down Genesis Market, an “eBay” for cybercrime criminals, earlier this year, said he has been seeing a range of cybercriminals targeting platforms such as Instagram, YouTube and Facebook. Some are independent hackers, while others are larger, organized crime groups that target social media accounts with more than 50,000 followers.

Common online scams to watch out for

One common scam, Palma said, is criminals will create a fake Instagram page notifying the user that there’s a problem with their post, and they should “click here, and we’ll help you fix it.” The link redirects users to a fake site asking them to type in their Instagram credentials.

That’s similar to what happened to Cai Dixon, owner of Copy-Kids, which makes video content for kids. Dixon created an active online Facebook group with 300,000 followers and was getting as much as $2,000 a month in performance bonuses. In March, she got a message purporting to be from Meta, asking if she would like a blue badge verification. Because she was already in contact with Meta employees over Messenger, she believed the message and gave her private information.

Turns out, it was a phishing scheme. Almost immediately, Dixon lost control of the account and the Facebook group she had spent years cultivating. The hackers removed Dixon and all the other page moderators and started posting animal cruelty videos, videos of heavy machinery and fake content. When she finally talked to someone on Facebook, “they said the only thing I could do was to tell all my friends to report it hacked and then they could take it down.”

Cai Dixon, owner of Copy-Kids, which makes video content for kids, created an active online Facebook group with 300,000 followers and was getting as much as $2,000 a month in performance bonuses. But in March, a phishing scheme led Dixon to lose control of the account and the Facebook group she had spent years cultivating.

Source: Cai Dixon

These common hacks for small businesses offer little recourse.

“It’s especially damning for a small business, which has a pretty minuscule security budget compared to a General Electric or GM, which are running the best tools,” said Greg Hatcher, founder of White Knight Labs.

Companies with 100 or fewer employees experience 350% more social engineering attacks than larger companies, according to Barracuda, a cloud security company. More than half of social engineering attacks are phishing, and one in five organizations had an account compromised in 2021.

Social media companies are aware of the problem, but fending off attacks on small businesses is time-consuming and expensive. It’s one matter when a large Fortune 500 company that spends millions on advertising or a high-profile individual encounters a hacker. But when it comes to small business owners, there’s less financial incentive.

“It is often better for social media companies from a purely bottom line to ignore small businesses when they have problems,” Steinberg said, adding that small businesses are generally getting the service for free or close to free.

Two-factor authentication and cybersecurity tools

Though the threat seems vast, cybersecurity experts said the most effective defense is fairly basic. Not enough people use the security features that social platforms already offer, like two-factor authentication. Entrepreneurs can also use business password managers, designed for multiple users who may need access to the same accounts.

“Small businesses don’t have to be completely hung out to dry. They can have good cyber hygiene, with a good password policy,” said Hatcher, emphasizing length, ideally 30-40 characters, over complexity as well as two-factor authentication.

Knowing what to look for and being wary of any links or requests for information can also go a long way. For the unfortunate who get hacked and lose access to accounts, the Identity Theft Resource Center is a nonprofit that can help victims figure out the next steps.

For now, the online world is still under-regulated and monitored.

Cyberattacks conducted through tech giants have caught the attention of the federal government’s main cyber agency, the Cybersecurity and Infrastructure Security Agency. In an interview with CNBC’s “Tech Check” in January of this year, CISA director Jen Easterly said, “Technology companies who for decades have been creating products and software that are fundamentally insecure need to start creating products that are secure by design and secure by default with safety features baked in,” she said. But the U.S. government has so far taken a cautious approach with support for small business specifically – a spokeswoman for the U.S. Cybersecurity Infrastructure Agency told CNBC in January that it doesn’t regulate small business software, instead pointing to a blog post with guidance aimed at helping businesses large enough to have a security program manager and an IT lead.

“There are a lot of people spending the majority of their time in the virtual world, but the resources are not as extensive. We still have more resources protecting streets,” Palma said. Some of the big online scams get addressed, but there are many “smaller issues” that are costing people and small businesses real money, but governments and companies aren’t equipped to deal with it. “I think over time, we have to shift that balance,” he said.

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Amazon Prime Day is coming. Here’s how sellers can prepare to boost their sales

Amazon Prime Day isn’t here just yet, but sellers need to act now to drive optimal results for the highly anticipated summer retail sales event.

While no official date has been released by Amazon, it’s been widely reported that the popular two-day event is most likely to return next month. Last year, it took place on July 12 and July 13 (and was announced by Amazon in mid-June.) That makes mid-July, on or around July 11 and July 12, a logical bet.

There’s a lot at stake for sellers. Amazon has more than 200 million paid Prime members globally. Last year, Prime members purchased more than 300 million items worldwide during Prime Day — a record, according to company data. What’s more, sales traffic tends to be higher in the days leading up to and immediately following the two-day event, so it’s more like a week-long sales opportunity for sellers.

Of course, some of the biggest buys go to retail giants, from Apple products to Shark vacuums, which in the past year are among the most popular items purchased. The economy has softened, too, and demand is down in the retail sector. Nevertheless this year is expected to be another big year, with 68% of consumers likely to shop on Prime Day, according to a report from Jungle Scout, which provides software and research to Amazon sellers.

Sellers can start preparing by getting information directly from the horse’s mouth. Amazon offers videos from its Seller University on how to maximize profits on Prime Day. For example, it talks about the importance of concise, relevant titles, product listings with rich details and keywords that are likely to appeal to customers.

Here are some additional actions that Amazon ecommerce platform consultants say sellers should be taking now to proactively prepare:

Stay on top of inventory deadlines and available stock

Amazon recently told sellers to have their inventory for Prime Day at U.S. fulfillment centers by June 15, according to Chris Compean, co-founder and chief executive of Mayan, an inventory and advertising automation technology provider to Amazon sellers. Sellers can also consider fulfilling some of the orders themselves.

If possible, sellers should use data from previous years to determine the ideal amount of inventory. Absent data, a general rule of thumb is to plan to sell at least twice as much as usual during the two days, Compean said. Inventory is challenging to get exactly right in the current economic environment — even the biggest retailers have struggled after the pandemic boom, inflation and 2023 consumer weakening — but generally speaking, sellers should always have 60 to 90 days of product in stock. “As long as you are well-stocked in general, you’ll be okay for Prime Day,” Compean said.

Begin your Prime Day marketing two weeks early

At least two weeks before Prime Day sellers should start building up their visibility, said David Hutchinson, vice president of marketplaces at NP Digital, a digital marketing agency. As part of that initial effort, sellers also need to determine how they are going to compete, whether that’s by dropping prices, offering Lightning Deals — a discount over a short period of time — or coupons on Prime Day, or running these types of promotions, possibly for a few days before and after the two-day event, he said. Lightning Deals, for example, can improve brand awareness and boost sales, but they can also flop. Couponing, meanwhile, can increase sellers’ visibility, but they must have enough inventory to be able to handle the potential sales boost.

Use Instagram, TikTok, YouTube, Facebook — and Amazon-provided URL links

Sellers should promote deals that they’re planning to offer on their various social media sites and their dedicated Amazon Store page.

“You want to prime customers to be ready to look for your brand on Prime Day,” Compean said.

Amazon allows sellers to create URLs to include in their Prime Day social media posts, so be sure to do this. “You want customers to be able to click directly on your Instagram post, go to Amazon and buy the product right then,” said Mike Scheschuk, president of small and medium business at Jungle Scout. “It’s the same with TikTok, YouTube or Facebook, or whichever social media platform you want to post on,” he said.

Using Amazon URLs ensures that your sales analytics will include a sufficient level of detail. “You’re not just tracking you got three hundred clicks as a result of a post. You can actually see what they bought as a result,” Hutchinson said.

Don’t be stingy — offer deals across all products

Some of the best-selling items in the U.S. on Prime Day in previous years have included beauty items, pet products, kitchen essentials, children’s clothing, toys, electric toothbrushes, electronics and outdoor gear and apparel. Of course, small businesses are competing with some of the biggest brands as well for consumer dollars, with Apple products, Shark vacuums, and premium beauty brands also among top Prime Day sellers. Compean recommends sellers offer Prime Day deals on all their products to maximize potential sales.

Don’t forget to advertise before and after Prime Day

Sellers should plan to spend more on advertising in the days ahead and immediately following Prime Day, when traffic tends to be higher. Last year, average ad spend per brand spiked 320% over “typical days” and rose by 11% from Prime Day 2021, according to Jungle Scout’s e-commerce data.

Budgeting can be tricky, especially for sellers that don’t have prior years’ data to compare, said Dan LeBlanc, co-founder and chief executive at Daasity, an e-commerce analytics platform. In this case, sellers should budget enough so that if the ads don’t generate a return, they won’t feel pinched. A general rule of thumb might be twice the amount of a normal day. “You don’t want to throw your whole marketing budget into this week,” he said.

Audit your customer reviews and product listings in advance

Sellers should use the weeks leading up to Prime Day to pay extra attention to reviews and ensure their products are easy to find. This could include using paid keyword research tools that help businesses determine which keywords are trending on Amazon, or were popular on Prime Day last year.

Popular keywords aren’t always obvious, though they do fall into categories that are known to be Prime Day winners. Examples that were popular last year on Prime Day include “gel nail polish,” “baby clothes,” “wall clock” and “router,” according to data from Feedvisor, an intelligence platform for sellers.

Sellers can also test to see which product images resonate most with customers, Scheschuk said. That’s typically done by performing A/B testing to see which content, including product images, resonates most with customers using an Amazon-provided service, he said. Using A/B testing, one group of customers sees one version of the content, while a second group views the other. Sellers can then review which version had the best results and use that going forward.

It isn’t possible to provide precise advice on images — that is what case-specific A/B testing is for — but generally speaking, advice to Amazon sellers suggests that imagery used be clear and either product- or lifestyle-focused. It’s also best to keep the product as identifiable as possible as well — will shoppers immediately be able to tell what’s being advertised when seeing the creative?

Get a small business badge to stand out

Many small businesses haven’t applied for a small business badge, which identifies products from U.S.-based small company brands.

“Many people want to support small businesses,” Hutchinson said. “When all things are equal and there’s a few cents difference, as a consumer, you will likely side with the small business versus a large corporation. It’s another way to stand out on Prime Day.”

The small business badge is free, but there are certain Amazon-imposed restrictions, which sellers can learn more about by visiting Seller Central, Amazon’s management portal for third-party sellers.

Amazon uses the Gartner definition of small business to determine which sellers qualify. That means they must have fewer than 100 employees and less than $50 million in annual revenue. Additionally, a brand needs to register in the Amazon Brand Registry or participate in the company’s Handmade program for artisans, according to eComEngine, which offers software to support Amazon sellers.

Remember this is not Black Friday — stay focused on Amazon

For Prime Day specifically, don’t try to drive traffic to other shopping sites you may be listed on such as Shopify or Walmart because that’s not where the bulk of people are going to be looking for deals. “It’s not Black Friday,” Hutchinson said.

Already start thinking about next year’s deadlines

Amazon offers certain Prime Day promotional benefits to eligible businesses who meet its requirements, LeBlanc said. But the deadlines for these benefits are months in advance. Thinking ahead for next year can help sellers take advantage of these special promotional opportunities, he said.

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The IRS is cracking down on a popular small business tax break that could lead to a costly audit

A cottage industry of specialist firms has sprung up to help business owners claim the Employee Retention Credit (ERC), a governmental tax incentive intended for companies stressed by the pandemic. But businesses need to be careful not to get hoodwinked.

There are strict eligibility requirements for the ERC — one way it can be claimed is for wages paid during pandemic periods when gross receipts declined — and many owners may not really understand the criteria. This means they could inadvertently gloss over the opportunity and lose out on credit of up to $26,000 per employee. Or, they could easily be duped by dodgy providers into improperly seeking money they aren’t entitled to — with a hefty fee attached, of course — and likely ramifications down the road.

The problem is particularly pervasive given how easy it is to file for the credit and dupe small businesses in the process, said Donald N. Hoffman, a partner with Eisner Advisory Group. “Every business owner is getting dozens of emails and mail and being bombarded by television ads,” he said.

To be sure, the IRS warned business owners last October to be on the lookout for third parties promoting improper ERC claims. It renewed that warning in March of this year given what it said in a release “continue to be promoters who aggressively mislead people and businesses into thinking they can claim these credits.”

The IRS went so far as to add fraudulent claims involving the ERC to its annual “Dirty Dozen” list of tax scams.

“The aggressive marketing of these credits is deeply troubling and a major concern,” said IRS Commissioner Danny Werfel in a release. “There are very specific guidelines around these pandemic-era credits; they are not available to just anyone.”

These promotions may rely on inaccurate information about eligibility or how the credit is calculated, the IRS said. What’s more, some of these advertisements are designed to collect a taxpayer’s sensitive information, which is then used for identity theft purposes, the IRS said.

Here are important things owners need to know about the ERC to avoid issues, including in the worst-case scenario, an audit.

Start by understanding the basic ERC claim requirements

Start by knowing the basics so you can understand whether your business may qualify for a credit.

Eligible taxpayers can claim the ERC on an original or amended employment tax return for qualified wages paid between March 13, 2020, and Dec. 31, 2021, according to the IRS. Businesses can be eligible if they sustained a full or partial suspension of operations due to a pandemic-related government-ordered shutdown during applicable time periods. A business can also be eligible if it experienced a decline in gross receipts during the first three quarters of 2021, or a significant decline in gross receipts during 2020. Another way to be eligible is if the company qualified as a “recovery startup business” — a business started during the pandemic — for the third or fourth quarters of 2021.

Businesses can still be eligible for the credit if they received PPP loan forgiveness, which some owners may not realize, said Gina Perrone, a senior tax manager at accounting, tax and advisory firm Sax LLP. When the ERC was first created this was not allowed, but it was later revised. There are however, restrictions on double-dipping, which a tax professional can help ensure doesn’t happen.

Consult a CPA before signing with an ERC specialist

It’s very confusing for small businesses because of the various requirements, so it is advisable to consult with a CPA firm that is familiar with the ERC rules — even if a third party suggests the business automatically qualifies. There are many definitions and particulars that need to be sorted out to ensure that a business is, in fact, eligible.

For instance, the definition of gross receipts for credit purposes is the one used by the Small Business Administration, and it refers to the figure reported on your tax return, Hoffman said.

Certainly, don’t sign an agreement with a third party before consulting with a trusted and reputable financial professional.

Learn to spot the ERC red flags to avoid an audit

Even though a provider may make it sound “super simple,” there are many complicated factors in determining eligibility, said Jenn McCabe, partner at accounting and consulting firm Armanino. Be wary of any firm that uses pressure tactics to encourage businesses to act quickly, she said. These firms sometimes charge hefty upfront fees or a fee that is contingent on the refund amount.

Another red flag is when a third party doesn’t ask for documentation to ensure a business owner qualifies, Perrone said. Businesses don’t have to provide that documentation to the IRS, but they should nonetheless ensure they are entitled to the credit to avoid costly headaches later on. If the business wasn’t really eligible, but received the credit and is later audited, it will owe the money back with penalties and interest, Perrone said. This can occur several years later, and meanwhile, the business has already paid the third party and is unlikely to recover those funds, Perrone said.

To help avoid an audit, “make sure you can substantiate your claim and your eligibility requirements,” Perrone said.

If your business does qualify, next steps with tax return

Once the business ascertains it qualifies, the next step is to file Form 941-X, an amended quarterly payroll tax return, for each quarter for which the business seeks credit. For 2020, businesses have until April 15, 2024 to file; for 2021, they have until April 15, 2025, Perrone said.

Businesses that file for the credit also need to amend their applicable tax returns to account for the additional income based on the year they qualified for the credit. “They cannot just report the income in the year they received the cash,” Hoffman said.

Also know that professional standards prohibit CPAs from charging contingency fees for preparing original or amended returns — a necessary step in receiving the credit.

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Owe the IRS more in tax than expected? These are the next steps for business owners

Some small businesses may have received an unwelcome surprise at tax time.

As the U.S. continues to emerge from the pandemic, certain businesses might be seeing improved revenue and owe more taxes than they have in the past few years. Tax law changes in 2022 are also causing some shocking tax bills in the small business world. Meanwhile, newly self-employed often mistakenly equate gross pay and net pay, without taking taxes into account. “If you’ve been living as if the money that’s in your bank account is your net pay, that can be a rude awakening,” said Andy Phillips, director at The Tax Institute at H&R Block.

If owners haven’t estimated appropriately, or have spent the cash elsewhere, it can create large problems. It can be especially vexing since the first estimate for the current tax year is generally due at the same time as last year’s tax bill, a double-whammy.

But a larger-than-expected income tax bill doesn’t have to sink the ship. Here are ways small businesses can handle unexpectedly high tax bills.

File even if you can’t pay the whole IRS bill.

Some small businesses may not have filed their taxes by April 18 this year because they don’t have the money to pay their bill. They should still file as soon as possible, however, to mitigate the IRS’s “Failure to File” penalty, which applies to taxpayers who have a tax liability and don’t file by the due date. The penalty is a percentage of the taxes you didn’t pay on time.

If seeking an extension, you still have to pay.

Some business owners likely have sought an extension, thinking this will allow them to push off their payments without financial repercussions. “It’s an extension to file, not an extension to pay,” said Kimberly Wilkinson, senior tax manager at Wiss & Company.

Check for local disaster exceptions to filing.

Certain taxpayers may be able to benefit from IRS extensions for filing last year’s taxes and 2023 estimated taxes due to disaster situations in their local area. To learn more, they can visit the section of the IRS’s website specifically dedicated to this topic. “It’s a tremendous relief for those that are impacted,” said Michael Prinzo, managing principal of tax with CliftonLarsonAllen in Greenwood Village, Colorado.

Review payment plan options.

Owners who need more time to pay may qualify for a short-term or long-term payment plan. They can visit the relevant section of the IRS’s website to see what’s available, as well as potential costs and filing options.

Owners should keep in mind the IRS’s “Failure to Pay” penalty based on how long their overdue taxes remain unpaid. Though future penalties may be reduced by setting up a payment plan, it’s advisable to pay off the tax liability as soon as possible to limit the adverse effects of accruing interest.

Don’t dip into payroll tax money.

Sometimes small business owners with employees try to tap money earmarked for payroll taxes to pay their personal taxes. That’s not allowed and could result in a stiff penalty. “It’s incredibly important that small business owners never borrow from their payroll withholdings to pay anything else,” Phillips said.

Consider personal loans, credit even at higher interest rates.

A small business owner who needs cash to pay his or her taxes might consider a bank or credit card loan or some other type of short-term financing, such as tapping an existing line of credit if available. Interest rates may be high for some of these options — in many cases reaching into double-digits on a percentage basis after a year of Federal Reserve rate hikes. But owners have to weigh credit costs against the penalties and interest they’ll accrue from the IRS, according to Anne Zimmerman, president and founder of Zimmerman & Co CPAs and co-chair of Small Business for America’s Future, a national coalition of small business owners and leaders. “Don’t use the IRS as your banker,” Zimmerman said.

Consider filing an amended return.

It behooves small businesses to take a second look at their tax return and consider filing an amended return if they are able to eke out additional deductions.

“Often business owners aren’t taking advantage of all the things they’re entitled to,” Prinzo said. “Make sure there haven’t been any missed planning opportunities.”

For example, there are favorable rules associated with taking accelerated depreciation, often referred to as bonus depreciation, which can help lower the tax burden.

In addition, there may be additional opportunities to deduct expenses, such as software, advertising or certain professional service fees, Phillips said. Small business owners may also be able to deduct home office expenses, if applicable.

For many small business owners, personal tax benefits can also reduce the taxes due. Owners may not have taken into account new life circumstances that could qualify them for a tax benefit or benefits, such as marriage, having children, caregiving for certain individuals or education expenses. “Life changes generally mean tax changes,” Phillips said.

Work with a CPA to plan ahead, and potentially defer taxes.

Planning ahead with a CPA can help ensure owners aren’t blind-sided in the future.

For instance, if an owner sees in the middle of the year he or she is making more money, estimates can be tweaked to minimize some of the impact at income tax time. “The goal is to have your tax paid by the end of the year,” Wilkinson said.

Small businesses could also consider setting up a tax-deferred retirement plan for 2023, which can help with tax savings, said Cary Carbonaro, a certified financial planner with Advisors Capital Management in Winter Garden, Fla. A client recently did this mid-year and eliminated the need for a $300,000 estimated tax payment, Carbonaro said.

Thanks to recent passage of the SECURE 2.0 retirement savings legislation, there could be additional tax benefits for certain business owners who start tax-deferred retirement plans, so that’s also worth investigating, Prinzo said. Secure 2.0 encourages small business owners to create retirement savings plans through starter plan options and tax credits for both administrative costs in setting up a plan and making employee match contributions.

Nevertheless, even if you take all these steps, it’s still important to keep enough cash on hand for the next tax cycle, just in case there’s another surprise.

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