SBDC READIES FOR BUSY FALL SCHEDULE We have lots of offerings for small businesses this Fall, which is just around the corner! We start classes Aug. 2nd, and have a number of different programs and formats for you, including our online courses, computer training labs on Fridays and Saturdays, NxLevel Entrepreneurial Training classes in Show Low and Whiteriver, a Contractor seminar, a Lender's SBA Training clinic, and a Forest ERI Supply Analysis meeting. Lots to choose from - details are included in this issue.

Practically everyone uses a cell phone for business. Many of us use that cell phone badly. Once in a while, it's good to be reminded there are, in fact, rules of etiquette to help you from becoming "that jerk with a cell phone." What are some of the new deadly sins of cell phone use? · Butt dialing. This is the inadvertent dialing that happens when you sit on an active keypad. · Aisle blocking. When it's time to get off the airplane, don't stand in the aisle talking when you should be walking. · Bad phone hygiene. You shouldn't borrow a phone and sent it back with your makeup, bodily secretions, or other personal flotsam attached. · Appropriate headset use. There are times and places when a phone just shouldn't be used, even with a headset. Guys, if the room features a urinal, it's one of those places. There are five more rules, and following one and all will help keep you on the good phone list for a long time to come. For more on the sins of cell phone use: Read the complete list at ComputerWorld http://www.computerworld.com/action/article.do? command=viewArticleBasic&articleId=9025358&intsrc =hm_list

NxLevel Entrepreneurial Training for Small Businesses - to be held in Whiteriver and Show Low. Informational meetings scheduled for Aug. 8th in Whiteriver and Aug. 9th in Show Low. For more information see the links at www.npcsbdc.com. Online Classes for Fall - we have a full series of small business topics, including startup, business plans, marketing, taxes and more! These are done at your computer on your schedule. Consult our web page at www.npcsbdc.com for the latest schedule.

As entrepreneurs leading growth companies, we look for ways of offering perks to our key employees as a way to attract and retain them. In 2006, companies in the U.S., for the first time in many years, ranked employee attraction and retention as the most important issue that they face, even above cost control. Medical Reimbursement Plans The problem is that many employee perks we might consider have tax consequences. A medical reimbursement plan, such as Exec-U-Care, is one of the programs an entrepreneur might consider putting in place when looking to increase executive perks. This plan reimburses employees for medical expenses their medical plan does not reimburse. Expenses such as deductibles, coinsurance amounts, special health equipment, annual physicals, dental care, vision care, etc. could be reimbursed on a tax-free basis to those employees and their dependents. There is a $100,000 limit in reimbursements per calendar year and a $10,000 per occurrence limit per calendar year. The premiums paid for this insurance are often tax deductible by the company as well. The plan can be completely discriminatory and is not subject to the usual highly compensated individual or two percent owner testing that occurs with Section 125 Cafeteria Plans and 401(k) plans. Further, the employees who receive the benefit don't need to worry about deducting the medical expenses on their taxes. If you do not offer this plan, those employees are able to take deductions on their taxes for medical expenses only in excess of 7.5 percent of their income. As an example, an employee earning $200,000 would have to incur $15,000 of medical expenses before deducting additional medical expenses from a personal income tax return. The mechanism that allows employees to benefit from this arrangement is a "transfer of risk" to the insurance company. In other words, there are limits to how much the company could pay out in claims in any given year. The minimum annual charge is $250 per insured employee, and then the company pays 111 percent of the group's total medical reimbursement claims. As a fully insured plan, though, the company has a maximum cost exposure. For example, if you insure five employees under a $100,000 reimbursement plan (there is also a $50,000 plan option), your annual cost for the group cannot exceed $51,250 (or, $36,000 under the $50,000 plan option). In other words, for a maximum exposure of $51,250, of which only $1,250 would be fixed costs, your employees could receive total benefits of $500,000 ($100,000 each up to $10,000 per occurrence). As with any tax-advantaged program, you need to consult with your tax professionals to ensure you and your employees can take advantage of this benefit. Key-Man Insurance and Buy-Sell Instruments At McMahon & Company, we often find that owners of closely held businesses, whether sole- proprietorships or partnership-type entities, do not have key-man insurance or buy-sell instruments in place. In the event an owner or a partner in a company becomes disabled or dies, there is often a question of what to do with the individual's stake in the company. The first question we ask our clients is if the operating agreement or Articles of Incorporation contemplate the departure, disability, or demise of a key person. In the event of an owner, it is important to compensate the owner's family or estate for their share in the business if there are other partners who can continue to run the business. In well-formulated operating agreements, there will often be a methodology for determining the value of that partner's equity. Working with entrepreneurs and business owners, we place the insurance products needed to achieve piece of mind for their families and for the company, knowing any proceeds not needed to buy the deceased owner's equity go into the company's cash accounts free of taxes. As with the Exec-U-Care example above, proper tax structuring is required. In the event of the death of a sole-proprietor, the company will benefit from the influx of cash while looking for someone else to run the business. Here it is important for the business to have a predetermined plan of action in the event of the owner's incapacity or death. The company often suffers economically from the loss of a key employee. The insurance is a way of ensuring that the company does not suffer unduly if a key employee dies. Other perks that often arise in my conversations with clients have to do with deferred compensation, nonqualified retirement plans, and buy-up disability policies. © 2007 Michael McMahon. All rights reserved.

Much is being made of the "senior tsunami." This explosion in population of those aged 55 to 64 (pre- seniors) and 64 and over (seniors) will certainly have broad implications nationally, but how will it affect you and your business? Find out by perusing this Brookings Institute report, which details various size, location, and demographic characteristics of the older American set. Find demographic profiles, city and state rankings, urban vs. suburban statistics, migration patterns and more. The senior tsunami is coming; that much is for sure. Make sure your business is set to capitalize on it where possible, with this report, which you can find online at http://www3.brookings.edu/views/articles/200705frey.p df