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 A good employee is one of a business’ most valuable assets, and loosing such an asset can be costly- especially when you factor in the expenses of hiring and training a new worker to fill a vacant position. But according to recent statistics, many workers across the U.S. want to quit their current jobs in search of greener pastures.

So how can a business owner tell if an employee is gearing up to quit? Here are some telltale signs to watch out for:

1. Unexplained time off. Your seemingly healthy employee who repeatedly uses personal time off might be going to job interviews. This is particularly true of workers who use up a lot of vacation/sick time at the beginning of the year.
2. Sudden change in dress code. An employee who shows up in a suit might be headed to an after-work job interview. Someone who arrives late or takes a long lunch dressed unusually formally could also be interviewing.
3. Increase in private phone calls. If your employee frequently goes into conference rooms to take private calls, he or she might be speaking to recruiters or H.R. people.
4. Too much time at the copy machine and printer. Does your employee seem to have a suspicious amount of clerical work? It’s possible that work involves cover letters and resumes.
5. Secret meetings with co-workers. Your employee who keeps on having private whispered conversations with close colleagues could be sharing details of a job search.
6. Isolation at work. Conversely, an employee who stops joining co-workers for lunch and after-work drinks is showing signs of disengagement from the workplace.
7. Change in attitude. A team player who develops a negative attitude could be thinking of leaving. Watch for frequent complaints and other expressions of dissatisfaction.
8. Change in work performance. An employee who starts performing poorly might have decided to leave the job. Someone who plans to change jobs will not be give great attention to current work assignments.

Often, when employees are considering quitting their job, they leave behind a trail of subtle (and at times blatant) messages pointing to that fact. Knowing how to quickly spot such employees is a vital first step to retaining them.

Check out the next post for some tips on how to keep your valuable employees from leaving.

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Employees who persistently clung to their jobs over the past couple of years are now becoming more inclined to leave their positions as the job market in the US shows clear indication of revival.

According to data published by the Bureau of Labor Statistics, in February, the number of employees voluntarily quitting their jobs exceeded the number being fired for the first time since October 2008.

According to a poll conducted by human-resources consultant Right Management, at the end of 2009, a whopping 60% of workers said they intended to leave their jobs as soon as the market recovered. Although a natural turnover is only to be expected, 60% is a pretty significant volume. Many employees have been biding their time and waiting for happier days in order move forward in their careers. They would have liked to advance their careers earlier but due to the recession, most chose to hang on to their jobs even if they heard of a suitable vacancy.

The next three posts will be focused on the topic of employees: we will offer some telltale signs to look for that suggest your employees are thinking of leaving, provide some tips on how you can hang on to those unhappy workers as well as explain why a small business owner should bother hanging on to current workers in the first place.

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Does your home office look like a cyclone passed through? Finding yourself hunting though heaps of files to locate that elusive document or receipt? Having a hard time remembering what your desk’s surface look’s like?

 

Maintaining an orderly and clean workspace can do wonders to your productivity, job satisfaction, and work-home life balance. It’s not just a matter of taste or personality; it’s a necessity.

Here are a few tips to give your home office a much needed facelift:

1.  Tackle your work area first – File documents that you don’t use on a regular basis and don’t hesitate to dump unneeded print-outs in the recycling bin. Organize the documents you need every day.

Where there are a lot of papers prepare three in-boxes labeled “To Be Done,” “To Be Read,” and “To Be Filed.” Go through all those piles on your desk and sort them into the various categories. If a document doesn’t fall into any one of these categories, out it goes. This task is not meant to occur once a year but rather once a day. Make a point of working through your new “To Be Done” box each morning and do your best not to fall behind.

2. Rearrange your desk – Don’t you just love to remodel? Try a complete makeover of your desk. In keeping with that fresh spring spirit, make it look and feel like it’s completely new. Buy some new accessories for your desk. Place your computer at a 90 degree angle to your desk. If you’re right handed, the phone should be situated on the right side of your desk; if you’re left handed, reverse the process.

3. Set up an office supply drawer – Are you always misplacing office supplies? In order to avoid amassing a bunch of office supplies on your desktop or simply misplacing them, set aside one desk drawer for office supplies only. Throw away dried out pens and broken pencils and treat yourself to some new ones.

4. Take a look at your use of space- Make sure that you are making the best use of the space available for your home office. This means paying attention to your office furniture, such as desks, shelving, and file cabinets. Replace or refurbish old furniture and clean out cluttered areas.

5. Getting enough light and air?- Check your light fixtures and windows to ensure that your work area is well lit. Also, where possible bring in some potted or hanging plants.

6. Spruce Up Your Computer – Your virtual files need a good dusting too. Help lighten up your computer’s load by archiving old client files into an external drive or an online file storage service. Make sure to rid yourself of sensitive client files that you no longer use, such as passwords and other log in information. Delete files that are no longer relevant. While you’re at it, clean out your email in-box. Make order of the chaos by setting up sub folders for messages you want to keep or need to respond to so that your inbox remains fairly clear. Remember to set up routine backups for your computer.

7. Update Your Client Database – Make sure that your client database has only current email and shipping addresses, telephone numbers and other client information you need to keep.

8. Clean your office space – Wipe down your computer and monitor, dust the shelves and make sure to vacuum the carpet.

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The recent economic crisis in the United States left a pall on small businesses all over the country. During the last couple of years, the usual credit lines and business credit cards which kept businesses afloat have seriously diminished

 

 

Common sense would seem to dictate that small business owners would be seeking more SBA loans these days but surprisingly, the opposite is true. According to a recent report, no less than 91% of small business owners stated that they have never applied for a SBA loan. When asked why this was the case, 54% stated that they did not need one; 13% said that they would rather use personal assets, 13% explained that they had taken a loan from another source, 11% admitted that they are unfamiliar with the programs, and 6% claimed it takes too much time.

This being the case, where are these small business owners getting the financing needed to keep their business going? The answer is they’re turning to financing alternatives. Here is a breakdown of the most popular options among small business owners today:

• Taking on a partner – One of the most common ways to increase the asset pool is to allow someone to invest in your company by becoming part owner. The investor brings in much needed cash but also acquires an interest in your business. Partners can be either active or “silent,” but they definitely have a say in the operations. Partnership agreements should always be put in writing to avoid unpleasant hassles down the road.
• Personal asset funding – Some business owners choose to fund their business by tapping into non-savings areas of their personal assets, home mortgages, life insurance policies, certificates of deposit, individual retirement accounts or pension plans. It is advisable to be cautious when mixing your personal assets and your company’s development. However, if funding is performed on the basis of a comprehensive plan for both the business and the personal assets, it can provide much-needed cash. It is important to regard this type of funding as a temporary or intermediate-term remedy rather than a permanent solution.
• Angel investors – By definition, angel investors are individuals who choose to personally invest in a business for a variety of reasons such as the opportunity to use their years of expertise in a given field, access to tax benefits and to shrewd investment opportunities. Angel investors are not as stringent as the average lender but they want to be sure that your company will turn a profit. Before meeting with your angel, research his background, interests, and past investments. Be sure to do your homework – when you meet bring relevant written material such as business plans and projections, and make sure you are able to supply the right answers to tough questions.
• Family members – They say that blood is thicker than water, so turning to a relative for financing is a reasonable step. On the whole, your relatives will probably demand fewer assurances and will be more susceptible to your ideas than professional investors. One way you can repay them is through profit sharing. Try to keep things professional; Draw up a formal agreement so that you will have the terms of the loan in writing. Make sure to always regard these family members as business associates rather than “mom” and “dad.”
• Business Cash Advances – Business cash advances are less of a hassle than a bank loan. Most business loans require collateral, good credit and a long business history, which you may not be able to deliver. In many cases the business cash advance does not require you to be fixed to a repayment schedule. If things are slow, the financer often agrees to accept a smaller payment. Such advances often do not require collateral or a personal guarantee. Nor are you required to deliver require financials or tax returns. So in some cases, this may be the way to go.
• Equipment Lease Funding – Equipment leasing does not infuse your business with cash. However, it does reduce the amount of cash that you need to keep your business afloat. If you are cash starved it might be wise to consider the option of leasing, rather than buying, equipment. By choosing to lease you gain access to many types of equipment from computers and copy machines to fax machines, trucks, and much more. An added plus is that due to the monthly payment structure, you can treat the payments as tax-deductible business expenses.
• Accounts receivables– Accounts receivables financing enables a business to use its outstanding invoices as collateral for funding. The business can choose to either finance its customer invoices or factor them. If you follow the financing route, the business can apply for a short-term loan against its outstanding invoices at 65% to 85% of the invoice’s face value. In this arrangement, the financing company does not own the invoice nor is it responsible for collecting the outstanding debt. If you opt for accounts receivables factoring, the lender is responsible for collecting the outstanding debt from customers. In this situation, lenders usually provide financing reaching 70% to 90% of the total value of all outstanding invoices. Once the customer pays up, the lender must return the remaining balance, minus a small processing fee.

Hiring and training the right employees for a job can be a substantial task, drawing on a significant amount of time and money. But when your business is operating in your own home, this process becomes all the more important. Not only do you need to be even more diligent about who you bring in, but also in how you bring them in. Here is a rundown of what to consider before hiring any employees for your home business:

1. Be clear about your employment needs. Before beginning the process, think about your needs. How many hours of help do you need? Which hours of the day best suit your needs? Is it more practical to hire an independent consultant instead of a regular employee?

2. Calculate how much you can afford to pay your workers. Determine how much you can pay employees, as well as which benefits you can offer. Small businesses can usually be flexible about vacation days and telecommuting. Also, consider whether you will pay your workers directly, or hire an outside firm to manage payroll.

3. Make sure that you are operating in accordance with federal and state laws. This includes employment laws, taxation, health and safety practices, and your local zoning laws.

4. Provide adequate insurance coverage. By law, all businesses are required to provide a business insurance policy covering worker’s compensation and other possible employer liabilities.

5. Evaluate the amount of space available. Make sure your home work space is adequately equipped to handle additional people. Otherwise, boundaries can more easily be crossed and productivity can be lost.

6. Start with your own resources to bring in workers. Once you are ready to hire someone, ask people you know to recommend potential employees. Referrals from colleagues and relatives can usually be trusted. Moreover, these people will also be most familiar with your particular needs.

7. Make sure to thoroughly screen each candidate. It’s worthwhile to pay for a basic background check for criminal activity or other irresponsible behaviors. Furthermore, always check references that potential employees offer.

8. Put some thought into the interview. When you interview potential workers, ask questions specific to the job. Ask candidates how they have dealt with difficult situations at previous jobs. In addition, find out how they feel about working in a home office, in close proximity to your family members.

9. Clarify the rules and expectations of employment. Once you have hired employees, make sure they know what you expect from them. Writing an employee handbook will minimize miscommunication. Make sure to include which rooms in your home they may use.

10. Don’t forget to “train” your family members. Family members also need to have clear boundaries set out for them. Emphasize that they don’t need to host or socialize with employees.

Following these guidelines should help you not only to hire employees, but to keep them as well.

Bad debts and recessions go hand in hand. This kind of debt can take the form of a credit purchase gone sour, or a vendor loan that never gets repaid.

 

There are also bad debt expenses, defined as any expense the company incurs when it is trying to collect on receivables that are long past due.

Most small business owners do not rush into declaring bad debt. Most companies will do their best to work with the customer who is experiencing cash flow problems and come to some payment agreement. However, when all efforts in this direction have failed, the original balance, penalties and interest applied to that balance, and expenses related to the collection efforts (such as court fees) can all be counted as bad debt expense.

However, in many cases all is not lost: Some bad debts can be turned into a tax break.

In some countries, federal tax agencies allow businesses to claim a deduction on any bad debt incurred within a specific tax period. This tax break takes the form of a percentage of the bad debt or else a maximum amount, whichever comes out less. In many cases, the resultant figure may be enough to help ease the company’s overall tax burden.

Before you jump for joy, please note that in the US you are only eligible for a bad-debt deduction if you previously recorded the amount owed to you as income received. So if you didn’t include the uncollected amount in income to begin with, deducting the bad debt is not an option for you.

Nevertheles, you are permitted to deduct your cost for the goods at issue. In your total for “cost of goods sold” on your tax form, include the cost of goods sold for unpaid merchandise. And FYI, you can only deduct the cost of the goods but not the actual retail price you charged the tardy customer.

So just how much will the health care bill that President Obama signed on March 2010 affect small businesses? The answer is: quite a lot.

 

But those affects may not be as economically stimulating as its proponents would have hoped in that it may actually discourage hiring activies among the smallest of businesses in the US- ie those with fewer then 50 employees. This is of significance because these companies make up a whopping 96% of all businesses within the U.S.

Here’s a rundown of the legislation:

On one hand…

• Beginging in 2014, states will have to set up Small Business Health Options Programs(SHOP). These health insurance pools will be established in an effort to alleviate insurance costs, by allowing small businesses to group together to buy health insurance and to get competitive pricing for insurance premiums

But…

• Begining in 2014, businesses with more than 50 employees will be required to either offer healthcare coverage or pay a penalty of $750 a year per full-time employee. This coverage will be required to meet minimum federal standards or else employers will face an additional penalty of $2,000 per employee.
• Companies with fewer than 50 employees are exempt from the required health care coverage mandate.
• Businesses that pay more than 50% of employees’ health benefits, have fewer than 26 employees, and pay average annual wages of less than $50,000 can claim a tax credit of up to 35% of the cost of premiums from the 2010 tax year through the 2013 tax year. The credit will go up to 50% in 2014 and can be used for two consecutive years after that.
• Companies with more than 50 employees will not get any tax credits.

That many small companies will find ways to stay under 50 employees because of the insurance mandate, is a plausible scenerio. They might, for example, break up their operations into separate companies, or hire more part-timers. For these reasons the new federal healthcare law may discourage some small businesses from bringing in additional employees, and thus may end up inadvertantly impeding an economic recovery.

Sources:

http://www.shrm.org/Publications/HRNews/Pages/ExchangesCompetitionChoice.aspx0:00 /3:22MDs go online to cut costs

http://topics.nytimes.com/top/news/health/diseasesconditionsandhealthtopics/health_insurance_and_managed_care/health_care_reform/index.html

http://money.cnn.com/2010/03/22/smallbusiness/small_business_health_reform/

http://www.businesspundit.com/what-health-care-reform-means-for-small-business/

http://www.businessweek.com/smallbiz/content/apr2010/sb20100413_125807_page_2.htm

http://www.politifact.com/truth-o-meter/statements/2010/mar/08/nancy-pelosi/pelosi-claims-health-care-reform-will-create-thous/

http://jan.freedomblogging.com/2010/05/25/does-new-healthcare-law-discourage-hiring/38163/

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As the US economy still labors under a sluggish recovery, countless small business owners across the nation have experienced a sharp decline in their business credit scores. Chalk this up to a combination of poor sales and a growing pool of cash-strapped customers struggling to fulfill their financial obligations.

 

 

Fortunately, there are several steps business owners can take to remove, or at least minimize, the debilitating effects the economic turmoil has had on their credit. Business owners should keep in mind, however, that cleaning up a credit report takes time and work. There are no quick fixes to rebuilding good credit.

That said, here are several steps small business owners can take to clean up their credit record:

• Separate your business credit profile from your personal credit. If you haven’t already done so, make sure your business has its own credit rating and history. Many business owners are unaware of this option, especially if they are running a sole proprietorship, and they finance their businesses with their own credit and assets. This can be a costly mistake, since your personal credit profile will then directly effect your business credit, and visa versa.

 

• Make it a priority to pay all your bills on time. Making payments in a timely manner will have a significant impact on your credit score. While old negative credit entries can blemish your credit score, grater weight is generally placed on more recent financial activity. After seven years most of those detrimental entries will be deleted from your credit history.

 

• Make use of a small amount of your credit. One factor that significantly affects a credit score is the debt-to-available credit ratio. Most money managers and financial experts recommend staying below 30% or a maximum 50% of your credit limit.

 

• Make an effort to pay off as much debt as possible. Don’t hold back on paying your old, outstanding debts, including business and student loans. Widening the gap between your debt and your available credit shows that you are handling your obligations responsibly.

 

• Don’t be tempted to close too many credit card accounts. In an effort to clean up their credit, many make the mistake of immediately closing all their credit accounts after paying them off. But this practice may actually end up hurting your credit record because your debt-to-credit ratio will be affected. It is thus advisable to be deliberate in deciding which accounts to close and which ones to leave open.

 

• Seek out transactions that will improve your credit score. Specifically seek out those arrangements that will rebuild your business’ credit history and reputation. You can find out which businesses report to the major credit agencies D&B, Experian, Equifax and TransUnion, and make it a point to do business with them and to keep your payments on time. The credit reporting agencies, Ex themselves also a number or credit-building services for a fee.

 

• Try to negotiate a lower interest rate on your credit cards. The interest rate you are paying on credit accounts determines the size of your debt and how much you owe when you carry a balance on your credit card. It pays to look into the interest rate on your credit card and to “shop around” in order to get the best deal possible. If you decide to stay with your current credit card company, try to negotiate a better deal for yourself.

 

• Re-evaluate your spending habits. This seemingly innocuous tip is the most important of all: If you really want to clean up your act, change your spending habits. For small businesses, this generally translates into better cash flow management: effective debt collection, monitoring payables and receivables, and good inventory management.

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There are numerous reasons why business owners choose to outsource work to independent contractors. Freelancers are generally cheaper then employees since the employer is free from paying unemployment insurance, worker’s compensation insurance, and payroll taxes as well as a slew of other benefits or perks. Hiring an independent contractor also offers employers a measure of flexibility since employers don’t have to keep contractors on the payroll when business is slow, and there are few regulations regarding their termination.

 

Given all these advantages, business owners might be tempted to give some permanent employees a consultant or freelance status. But beware: business owners who take on many suspicious “freelancers” increase their risk of an audit by the IRS or the state labor department to see if they fudged their employees’ status.

In order to avoid such scrutiny, business owners should be clear about what constitutes an independent contractor versus an employee. According to the IRS, the definition of an independent contractor follows several general guidelines, or “Common Law Rules.”

Generally, the IRS is concerned about the level of control the independent contractor retains. The IRS will specifically examine three areas, behavioral, financial, and relationship, when determining if a particular worker is indeed a freelancer:

• Behavioral: Who determines how the assignments are performed? Who determines the worker’s schedule? At which location does the work occur? Ideally, an independent contractor or consultant should have control over when, where, and how the work is done. If the business owner controls those areas, that worker is an employee, not a consultant.

 

• Financial Control: Does the firm reimburse all of the consultant’s expenses? How is payment determined? Who provides supplies and equipment? A true independent contractor should be self-employed, and own the equipment necessary to perform the work. Usually, not all of a contractor’s expenses are reimbursed. Generally, an independent contractor is paid a flat fee for a job, rather than a fixed hourly or weekly rate. Someone who requires the business’ equipment to perform all his/her work tasks is an employee.

 

• Type of Relationship: Does the worker receive benefits? Will the worker’s relationship with the business continue indefinitely? Does the firm represent the worker to customers as an employee? An independent contractor should be able to work for other clients simultaneously. The independent contractor performs a particular job, and is responsible to complete it. He or she should not be tied to the business as is an employee.

 

In short, business owners can’t assume that just because they don’t pay benefits, the worker is necessarily a consultant. If the work performed is a key aspect of the business, and the worker is exclusive to that business, he or she is an employee.

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