Negative Publicity Update: Theatre and Baker Rethink Ads
By Jenny Scala
Senate Passes 1099 Repeal Bill, Sends it to Obama
By Brian Gamberini
Due to relentless pressure from small business owners, including many SAF members, the Senate voted Tuesday to repeal the expanded 1099 reporting provisions.
The Senate passed H.R. 4, the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act, by an 87 to 12 vote. (See how your Senator voted here.) The bipartisan bill now goes to President Obama to be signed into law, which is expected soon. The Administration put out an earlier statement that it opposed the offset used to pay for repeal, but did not issue a veto threat.
President Obama has said repeatedly that the expanded 1099 requirements should be repealed, but he has never accepted either the House or Senate version of how to pay for it. The White House issued a statement yesterday calling repeal “the right thing to do.” Although the statement said nothing about the offset, it will be very difficult for the President to veto this bill.
In the past year, members sent hundreds of emails, made phone calls and, most importantly, lobbied for repeal during Congressional Action Days last month. Speaking with a unified voice and joining other small business groups created this success, said Jeanne Ramsay, SAF’s senior director of government relations. “Your voices were critical throughout the debate,” she said. “Congress should have passed repeal sooner but the good news is they listened and finally did the right thing.”
It was almost a year ago (April 29, 2010) when Dan Lungren (R-Calif.-3) introduced a bill in the House to repeal a then little-known paperwork reporting provision in the health care law. SAF immediately began educating legislators about the negative impact on growers, wholesales and retailers. Soon after that, Sen. Mike Johanns (R-Neb.) became the lead sponsor of repeal in the Senate.
“The new provision promised to be a paperwork explosion,” Ramsay said.
Starting Jan. 1, 2012, small business owners would have been required to send an information return to the IRS (and to the vendor or service provider) for purchases of any goods or services that exceed $600 in a calendar year. Under the new law, businesses would have been required to issue the 1099 forms to a host of corporations, including airlines, hotels, restaurants and companies performing services such as lawn care, snow removal and building repairs.
On top of that, the law would have required business owners to issue the forms to office supply stores and to all vendors for flowers, ribbon, vases, wire and foam, for example. The challenge was even greater given the requirement to obtain the tax identification numbers (TINs) from all vendors. The provision added penalties and fines for failing to correctly file the forms on time.
The Congressional Budget Office estimated that the provision, tucked into the health care law, would raise about $19 billion for the Patient Protection and Affordable Care Act by capturing previously unreported, but taxable, income. While the provision does not relate to health care, the idea behind the expansion was that, when third parties report a business’ income to the IRS, compliance increases.
Soon after the expanded 1099 requirements were announced, public outcry was predominately negative, leading to bipartisan support for its repeal. The House passed H.R. 4 in early March by a vote of 314 to 112, with 76 Democrats in support.
Bipartisan Effort in House Attempts to Make Estate Tax History, for Good
By Drew Gruenburg
A bipartisan group of lawmakers introduced a bill March 30 to permanently repeal the estate tax.
In the House, Kevin Brady (R-8-Texas), introduced the “Death Tax Repeal Permanency Act of 2011,” H.R. 1259 with eight cosponsors.
The new bill builds upon legislation passed last December, which reduced the tax rate and increased the exemption level for two years. “The ‘Death Tax Repeal Permanency Act’ aims to finish the job by making it permanent,” said Jeanne Ramsay, SAF’s senior director of government relations.
The law allows for an exemption of $5 million per person and a top rate of 35 percent. SAF supports these modifications, as they would help small business owners devote their resources to running their operations instead of planning for the estate tax.
Unless Congress acts, on Jan.1, 2013, the tax will return to its pre-2001 levels of 55 percent on estates of $1 million or more for individuals and $2 million or more for married couples.
“We are pleased with the action taken by Congress last December,” Ramsay said. “But more work needs to be done to ensure the voice of small business is heard.”
SAF will continue to support permanent estate tax relief and closely monitor ongoing repeal efforts on Capitol Hill.
Update on Colombian Trade Agreement
By Drew Gruenburg
At press time, SAF had learned that the U.S. and Colombia were about to announce that an agreement had been reached on a free-trade deal. This is after several weeks of intensive negotiations centered on labor conditions in Colombia. The agreement was signed five years ago but had never been ratified by Congress. This new development paves the way for Congress to begin a path towards ratification, although no timetable has been set.
Once ratified by Congress, the deal grants duty-free status to all flowers coming into the United States from Colombia. At this juncture, Congress still has not taken any action to extend the Andean Trade Preference and Drug Eradication Act (ATPDEA).
Colombia Government Plans To Stimulate Floriculture
By Katie Hendrick
“We know that well beyond the production and exports, the flower industry over many years has been a model of innovation, ecology and social responsibility,” President Juan Manuel Santos said last Thursday at the general assembly of Asocolflores, the association of Colombian flower exporters.
Santos’ initiatives include educating foreign markets about Colombian flowers, improving shipping and making credit more accessible to farmers. The government did not indicate how much money it will invest.
Additionally, the Ministry of Agriculture, which has already directed nearly $520,000 to growers impacted by an especially harsh rainy season, will continue to help rebuild the industry.
“The initiatives point to a message that I have said but now want to reiterate,” Santos said in making the announcement. “The flower producers have had, have, and will continue to have the support of the national government. It is a sector that we admire for its contribution to formal employment, for their dynamism in foreign trade and because it shows the world the best image of Colombia.”
Since the new administration came to power in August, Asocolflores has “had an outreach plan — including personal visits and presentations — to broach the socioeconomic importance of Colombian floriculture and its influence on 48 municipalities throughout the country,” said Augusto Solano, president of the association. Solano is most encouraged by the government’s eagerness to promote the “Colombia, Land of Flowers” brand name in markets beyond the U.S., where Colombia currently supplies nearly 70 percent of the country’s cut flowers.
Consumer Confidence Shaken, But Many Retailers Still Optimistic About Economy
By Ira Silvergliet
As SAF prepares to distribute its Economic Outlook Survey covering the first quarter of 2011, we review some of the economic events and trends that have occurred in the past few months.
2010 ended on a high note, with factory productivity up, low inflation, shoppers spending and companies hiring. Holiday sales, including those in the floral industry, were up, compared to 2009, spurring feelings of optimism as consumers, business owners and economists looked ahead to 2011. Consumer Confidence rose in January to 60.6 (from 53.3 in December) — its highest level in eight months. A Gallup poll revealed there were twice as many economic optimists than pessimists going into the new year.
But, alas, that optimism has been challenged. By the end of February, oil prices reached near record highs, with political unrest in the Middle East hinting at oil disruptions. March brought a three-tiered disaster to Japan: earthquake, tsunami and nuclear crisis.
Americans didn’t ignore these global factors as they pondered their economic futures. The Conference Board’s Consumer Confidence Index fell in March to 63.4 from a revised 72.0 in February (a three-year high), reversing five straight months of increases. Nine in ten Americans said they already felt the sting of gas prices; Of these, more than half plan to cut back on discretionary driving and almost all plan to reduce other discretionary spending immediately, according to an Ad Age survey.
By late February, Gallup’s Economic Confidence Index showed 44 percent of Americans rated current economic conditions as “poor,” and 65 percent said the economy was “getting worse”. This assessment was the most pessimistic in the past two years. Gallup also found an underlying sense of uncertainty among the public. Its survey found that Americans worry more about the economy than 13 other issues measured, with 71 percent indicating they worry about the economy "a great deal". The economy has been rated the most concerning issue since 2008. (Health care led the list from 2002-2007.) The only issue the public worries about more this year than last was energy.
What else contributed to Americans’ unease? The economy of Greece was on the brink. Home prices remained depressed and foreclosures high, while costs of materials for manufacturers rose.
The Job Market
The year began with an increase in unemployment, as employers released temporary holiday workers. Still, there were signs that hiring was beginning to pick up, and public concern was lessening. Firms indicated they planned to hire at the highest level in 12 years, according to a survey by the National Association for Business Economics. Jobless claims fell to a three-year low at the end of February, the third weekly decline in a month. Small businesses shared in this trend, according to a survey from Paychex Inc., which found that hiring was up for businesses with fewer than 100 employees — the highest it’s been in two years, actually. Job creation, however, declined in late March, reverting to January’s level, after it had been at multi-year highs the previous two weeks.
2010’s holiday sales rose at the fastest rate in six years. In January, spending rose for the seventh straight month, according to the National Retail Federation, which predicted that retail sales would rise 4 percent for 2011. Rhino Reports found combined retail spending was at the peak levels experienced in late 2007 and early 2008.
By February, retail sales had their biggest gains in four months, capping eight months of advances, according to the US Commerce Department. Spending rose steadily through early March before turning south in the third week.
Some economic optimism still remains. According to Small Business Trends, 44 percent of small businesses expect their sales to improve “somewhat” in next 3 months and another 13 percent expect them to improve “significantly”.
Additionally, more than half of American consumers expect to spend the same (40 percent) or more (14 percent) in 2011 than they did in 2010.
Look for industry-specific statistics in an upcoming issue of E-Brief, once results come in from SAF’s Economic Outlook Survey.
More to Like: SAF's Social Media Hub Targets Consumers, Media
By Jenny Scala
SAF is harnessing the expertise of professional florists and offering ways to use flowers in home decorating, entertaining and enhancing relationships on the new site, which launched March 31.
“It’s an engaging destination that will capture the attention and imagination of the media, influential bloggers and consumers,” said SAF Consumer Marketing Committee Chairman Steve Frye, of Baisch & Skinner, Inc. in St. Louis. “Our hope is it will inspire people to make flowers a more regular part of their everyday lives and to consult the expertise of their local florist.”
Social media has fast become the go-to resource for the media. According to analysts at communications firm Cision, the majority of reporters use social media for research, with 89 percent saying they turn to blogs, 65 percent to social networking sites, such as Facebook and 52 percent to micro-blogging services, such as Twitter.
Flower Factor features conversational-style posts from a dozen contributing bloggers, including florists and expert party planners, and serves as a social media hub, linking to SAF’s six online consumer resource centers, including www.nationalfloristdirectory.com, Facebook, Twitter and YouTube.
SAF enlisted the spokeswomen from SAF’s Flower Factor public relations program, member florists and its own marketing team to contribute to the blog.
Dubbed “The Fleurtations,” the spokeswomen include entertaining expert Jeanne Benedict, interior decorator Kelli Ellis, and relationship expert Christine Arylo. They share their philosophies on the importance of flowers and florists.
“Having The Fleurtations speak on the industry’s behalf gives our floral message third-party credibility needed to get the media’s attention,” said Jennifer Sparks, SAF's vice president of marketing.
As a direct result of the 2010 Flower Factor public relations program, The Fleurtations’ floral advice has appeared in more than 1,000 articles nationwide, including Real Simple magazine, Meetings & Conventions magazine, Chicago Tribune, GetMarried.com and BridalGuide.com.
For specific floral design and trends information, the hub turns to member florists. Contributors include:
The site will also host online events, such as a Twitter wedding party and holiday home makeover, designed to grab the attention of influential bloggers.
“It is truly a one-stop place for floral information for media, consumers and floral industry members alike,” Frye said.
SAF’s Flower Factor social media hub is possible thanks to SAF retail dues and voluntary contributions to the SAF Fund for Nationwide Public Relations by wholesalers, suppliers, importers and growers. Since the PR Fund’s inception in 2001, PR Fund programs have generated more than 967 million consumer impressions. Visit www.safnow.org/prfund or call (800) 336-4743 for information on how to support this important industry initiative.
How to Prepare Your Supply Chain for the Unthinkable
Harvard Business Review
Companies are always shocked when low-probability events such as an earthquake or a tsunami disrupt their supply chains — as has happened after the tragic events in Japan two weeks ago — because of two fallacies. One is the mistaken belief that no corporation can prepare for such events; they can't even be predicted. The other is the persistent feeling that supply chains represent a cost. Read more.
Email Optimization: Improve Response with 5 Insights from 10,000 Tests
Email tactics may shift over time, but the psychology of email remains. Email optimization goes beyond best practices and addresses the psychological reasons why some subscribers respond to marketing emails, while others delete them. Find out which factors help your email marketing, which hurt it, and how you can focus your messages to improve results. Read more.
Daily Deals Try to Entice Customers into Buying Blitz
It's been an effective marketing strategy for as long as there have been retailers. But today, analysts say, that theory is driving a sales-crazy marketplace in which retailers, desperate to survive tough times, are finding increasingly creative ways to lure consumers who consider 20 percent off as the new full price. Read more.
How to Deal with the 5 Worst Kinds of Employees
American Express OPEN Small Business Forum
Bad employees. They’re lazy, they have a bad attitude and, if you’re a manager, they probably work for you. No matter how great of a leader you are, you’re bound to come across difficult employees. Here’s how to deal with them. Read more.
Holiday Prep: Post Easter, Passover, APW Web Ads
Holiday arrangements in your window? Marquis signs up-to-date? What are you doing to usher in the holidays for your online customers? Post SAF’s spring holiday web ad banners on your website, Facebook page, blog, etc., now and point them to the items you want to promote. Switch them daily to increase your visibility with search engines.
New ads have just been posted for Easter, Passover and Administrative Professionals' Week. The free ads are available exclusively to SAF members. Download them at www.safnow.org/webads.
On the Horizon
SAF Growth Solutions: A Mini-Conference for Florists
June 22-23, 2011
SAF Palm Springs 2011 - 127th Annual Convention
Sept. 14-17, 2011
Westin Mission Hills Rancho Mirage, Calif.
Forecast Sales and Boost Profits
SAF Member price: $49.95 (Non-members: $149.95)
Order the DVD now!
7701 Las Colinas Ridge, Ste. 800, Irving, TX 75063