Small Business Recovery on the horizon?

Retail sales are improving, but numbers overall are still very weak says MSNBC.com today. U.S. home mortgages are on a four month high says Reuters and Oil is back above $71 a barrel which is a strong sign of a recovery says the Associated Press. With all that said, and that's just in todays news, how can small business owners know when "change" is coming their direction?

Signs of a bullish recovery are abound just about everywhere, but is small business feeling the excitement yet? With the holidays approaching, will retail sales bounce back in time, its almost laughable because the answer is a loud and boisterous "ABSOLUTELY NOT".

The Denver Business Journal says "the economy is improving, but second recession is not likely". Family Dollar Stores show a significant rise in profits says the Wall Street Journal and Business Weekly says "Costco profits fall, but still above expected". The signs that small businesses need to be looking for are just under their own noses.

Unfortunately our economy is a "trickle-down" system and recovery will be seen and felt in your suppliers, wholesalers, and bargain shoppers. Surely we are still in a buyer's market and it will remain so for at least another 12-18 months. Although that may be great for those not necessarily affected by the recession, others will not meet this market with the same optimism.

If you own your own business, look around and you design your customer based structure on what it is your suppliers are able to do. As they are able, design your pricing to permit you to overstock in bulk items and drive that customer base. As those inventories change, review and accommodate accordingly. Move what you can.

Finally, if your business is a service related business, you are in the best shape of all. Services usually don't require much equipment to be purchased by you each month. For example, your lawn business already owns the lawnmower so no need to keep pre-recession prices, you will also need to adjust down to build that relationship with your customer. They will remember you and your efforts later on. They may not be able to afford you right now, but they also cannot afford to purchase a new lawn mower for the garage either.

Protecting Yourself with an LLC.

Forming an LLC (limited liability company) or corporate entity does not mean that your company cannot be sued. But it makes it possible for you to obtain some protection from personal liability if it is.

"The protection -- particularly for one-person businesses -- is not absolute but is better than no protection at all, which is what you will have if you conduct your business as a sole proprietorship," said Richard M. Leisner, an attorney with Trenam Kemker in Tampa, Fla.

To maximize the protection of a corporation or LLC, make sure you keep formal business records, file your withholding and other taxes on time and separate your personal funds from your business bank accounts. Put all the company accounts and financial transactions under the corporate name -- not under your own name.

"Often, business owners think these formalities are not important, but the details are important in order to avoid the risk of a court disregarding the corporation or LLC," Leisner said.

"If that happens, it's just about the same thing as operating as a sole proprietorship."