Monthly Archives: April 2016

Impact on small businesses of the Affordable Care Act (ACA)

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The Affordable Care Act, also referred to as Obamacare, is the Obama administration’s tool to address problems within the existing healthcare sector, making affordable healthcare accessible to more Americans through reducing the cost of insurance. But what is the impact of the Affordable Care Acton small businesses? Consideration must be given to lawful requirements and the penalties for not adhering to them, as well as being aware of help available.

Defining a small business

A small business is defined as one that has 50 or less Full Time Equivalent employees. The ACA states that a FTE Employeeworks 30 hours a week. As this is not a standard for full time hours, businesses need to have a formula in place to calculate their full time employees taking into consideration that part time workers need to be included in the total. Adding one employee could tip the scales resulting in a small business changing status. Businesses could then face penalties if healthcare is not provided to employees.

Documentation requirements

The requirements of the Affordable Care Act affect all businesses whether small or large in terms of how health benefits are viewed, provided to employees and reported. Understanding the requirements of the ACA on your business is the most important step towards compliance. Without a clear understanding, you may miss your responsibilities incurring unnecessary fines. Accurate and consistent record keeping, and monitoring of hours worked to ensure employees are classified correctly is essential. Organisations must keep documentation of employee eligibility for healthcare, as well as employee’s awareness of their eligibility. This can be done either through electronic signature receipt or manual distribution of documentation with a signed receipt.

Healthcare Plan Options

As a small business there are options available to offer employees healthcare. The Small Business Health Options Programallows small businesses access to more affordable health plans. Also, businesses with less than 25 FTE employees can apply for tax credits to assist with the cost of providing healthcare for employees. Remember a large business must provide, as a minimum, a Minimum Essential Coverage Plan (MEC) and maximum employee contributions vary in some states.

Benefits of providing healthcare

While small businesses are not liable to fines for not providing healthcare, it is important to consider the benefits of doing so. Providing healthcare can lead to greater employee job satisfaction, increasing staff loyalty, and giving the business a competitive edge for hiring skilled and effective employees.

Who can help?

Businesses can employ a qualified consultant to ensure preparations are made. Advice is also available from the National Federation of Independent Business, Small Business Majority and the IRS.

Small Business Supply Chain Risk Management

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Supply Chain Risk Management is critical for every business, no matter how small.  In fact, small businesses might have more flexibility in dealing with and predicting risks as their operations are usually less complex. A billion-dollar company asking a supplier for a million parts per week might quickly find themselves out of luck should the supplier experience a failure or disruption.  Small businesses can develop alternative strategies and use their nimbleness to their advantage in the event of a supply chain disruption.

Here are a few ways to manage risk in your supply chain.

Use Multiple Suppliers

Often, businesses will solicit bids from several suppliers, inquiring about x number of parts and selecting the one with the lowest price. This can be great for the bottom line. However, a business might be overlooking the risks they are taking when they rely on one supplier for a certain product.

Often it might be a better idea to have most of x product to come from the preferred company and a smaller percent, 10-20%, come from another supplier.  This may increase the costs overall, but it will allow more flexibility when things go wrong.

One option this arrangement presents is if the main supplier has a difficulty such as a warehouse fire, your company has an existing contract with another supplier. This other contract could be temporarily increased or renegotiated to ensure the product continues to flow smoothly. This is a much better approach than frantically calling new suppliers when your existing supplier has a disruption.  In that case, the new suppliers might hesitate to work with a new customer or might give unfavorable terms because they know you are desperate.

Have Contingency Plans

Many companies are only worried about the initial plan and once it is running smoothly they see no need to worry about it again. This can have disastrous consequences when something unexpected happens and the business is not prepared.  Most mistakes happen when the information is limited and time is of the essence.

A more logical approach would be to spend some time thinking about hypothetical contingencies.  The idea is that these will provide a blueprint for figuring out how to react and overcome supply chain interruptions.

For example, your company can go over alternative ways to import products should a natural disaster occur. If you normally ship by boat from manufacturing facilities in China, exploring potential airfreight services would be a useful contingency exercise.  Even establishing a contact with multiple companies can make recovering from a supply chain interruption easier.

Some of the best and biggest companies do this exact thing.  Caterpillar has all sorts of plans in place for handling business interruptions. The company has prescribed courses of action to close plants, reduce production, furlough employees, and save costs across the board.  They have been through many interruptions and learned long ago that planning for the bad times is a smart strategy.

Become Partners with Key Suppliers

A key to supply chain management for any business, especially small ones, is to become a partner with suppliers on key items.

Get to know the supplier.  Ask them what challenges they have experienced in their own supply chain and operations.  This can build your relationship with the supplier and also give you an early warning sign for potential delays or disruptions.  Going beyond your own risk assessment and diving into the exposure of your suppliers will help you prevent problems before they go further up the chain.  Answers to questions, such as the following, will give insight into how your supplier plans for issues. How exposed are your suppliers to earthquakes, tornadoes, and other natural events?  Do they have larger customers, which will get priority in the event of an interruption?  How flexible are they should you need to delay or change your usual order?

How Presidential Politics can affect a Small Business

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The election of a new president can usher in new policies that may change the economic and business environment. As the Democratic and GOP Primaries gather pace, many small business owners will be looking at how candidates’ policies will affect their enterprises and livelihoods. Here’s what to look out for as the Presidential nominations ramp up.

Labor Laws

Labor laws can take various forms. One increasingly prevalent trend across many states is an increase in the minimum wage. Affecting both small and large companies, an increase in the minimum wage can drastically increase overheads. Politically speaking, it has its proponents. But for small businesses, it is rarely welcomed. Other examples include potential introduction of maternity and paternity leave and changes in insurance, which are a burden for employers.


Incoming presidents can push for tax reforms. Small business owners will hope for a reduction in corporate taxes or hoping against any rise in tax rates. Any change in rates could significantly affect a company’s bottom line.

Monetary Policy

The economic levers are controlled by the Federal Reserve, not the President. But that’s not to say the President isn’t without influence – after all the President appoints the Federal Reserve Board members. Quantitative Easing, for example, lowers interest rates which makes borrowing cheaper for everybody, including small businesses. A period of low interest rates is often a good time to invest. Interest rates are also associated with a rise in wealth, which is usually good for any business.

Industry Specific Legislation

Many incoming Presidents are backed by industry lobby groups and advocates. This may mean that certain industries may experience a loosening of regulation, or a tightening. For example, a President sympathetic to the NRA could be seen as a boon for firearms manufacturers and retailers.

Small Business Assistance

Small business assistance is designed to boost small companies through tax breaks, grants, and cheap loans. These can make a big difference to small business owners. Support for such initiatives is often political and Presidents may decide to push for increases or decreases in business assistance.

Foreign Policy

If a small business sells to a particular foreign market, foreign policy can affect access to it, or in some cases block it outright. A company selling to Russia in 2014, would soon see its access to the Russian market blocked by sanctions, initiated by the US government. A President who is particularly hawkish on foreign policy may concern industries that rely on certain foreign markets.

Red Tape

The more rules an industry has to adhere to, the more barriers there are to producing and selling products and services. This can take the form of licencing, certification and heath and safety rules.

The Best Business Books for the Small Entrepreneur

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Being an entrepreneur is tough.  Deciding whether to be one or not can be even tougher and not to mention a scary proposition.

Leaving behind the world of biweekly checks and regular healthcare can be a land of peaks and valleys, failures and triumphs.

We have compiled a list of books that will help you decide if entrepreneurship is for you. Here are our top 5 business books that every entrepreneur should read.

Your Money or Your Life by Vicki Robin and Joe Dominguez

Before you can worry about starting a small business and taking over the world, it is best to have control over your own personal finances.  This can allow you to save up some seed money to start your new enterprise.  Even the frugality skills you learn can help you survive during the lean times that all businesses go through at some point.

Your Money or Your Life helps ordinary people take control of their finances by teaching how to analyze spending and comparing it to what it is important in one’s life.  In doing this, you are able to determine what spending adds value and what doesn’t, so that the extra can be eliminated.  This is unlike any budgeting book you have ever read and will not bore you on its quest to reframe the spending of money in its unique way.

The 4 Hour Work Week by Tim Ferris

Efficiency and time management is something that is useful to everyone but especially to the busy Entrepreneur.  This book shows how much the small tasks add up and distracts us from the larger things in life or business, providing ideas to correct the distractions.

With the advent of the sharing economy, it is now economical to hire a virtual assistant to handle small tasks for a few hours, without having to commit to a full time employee.  This can allow new entrepreneurs with limited capital to outsource some mundane tasks to focus on running their business.

The Richest Man in Babylon by George S. Clason

Set in a time long long ago, the Richest Man in Babylon could not be more applicable to modern life and everyday money management.  Told through parables, short stories that usually have advice underpinning them, this is a classic of the personal finance space.  The book is a great way to give subtle advice to new college grads or adults with poor money management skills without seeming to controlling or overbearing.

This book covers the basics such as saving early, investing, living below your means, and other timeless wisdom in a unique format.  These lessons can be applied to both personal and business finances and thus makes it a great book for entrepreneurs of any age.

How to Win at the Sport of Business by Mark Cuban

Long before Mark Cuban was the fiery, hands on owner of the Dallas Mavericks he was a wildly successful entrepreneur.  How to Win at the Sport of Business compiles all of his blog posts into an edited, easy to read, and coherent text that oozes wisdom and guidance for entrepreneurs and business people of all levels.

A few minutes spent with this book will give you a great sense of the brilliance and hard working attitude that pervades Mark Cuban.  Despite the title, the book is not only about sports or the business of sport; rather it is how Mark Cuban handles his general business and life lessons.  It is a thrilling read.

The $100 Startup by Chris Guillebeau

World traveler and serial entrepreneur Chris Guillebeau has produced an amazing book that combines business, philosophy, social duty, and adventure into one swirling trip. It is a must read for every entrepreneur.

Chris is able to express what so many entrepreneurs can’t; that feeling of being different. The need to strike out on your own and find you own path, even if it means messing up a half dozen times before anything even remotely good happens.

Even more then his own personal experiences and advice, Chris Guillebeau revels us with his study of businesses that have become wildly successful despite a tiny investment of initial startup capital.

These case studies act as inspiration to entrepreneurs everywhere and give you reassurance that you do not need millions to start a company or that your idea might not be as crazy as you think it is.

Small Town Customer Service in a Big City

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Every businessperson knows that customer service is key.  You have heard the cliché about how the customer is always right.

But delivering on that goal and maintaining a professional and friendly customer service environment can be difficult.  Employees may let personal feelings affect their mood at work. Repetitiveness of some jobs can weaken the customer relation side of your business.

What is the busy entrepreneur to do to ensure that their business has great customer service, especially if they are in a Big City?  That little touch of small town personalized service can make a big impression on busy big city customers that are used to dealing with cold corporations.

Here are some tips on how to bring some small town customer service into your big city business.

Take Your Time Hiring

One of the many tips we hear from successful business owners is to not rush through the hiring process.  Experience and qualifications are great in a prospective candidate. However, taking the time to meet with new employees a few times, gaining a deeper understanding of their attitude or outlook can go a long way to developing great customer service.

An employee who is super friendly and outgoing that takes longer to learn the details of a position can be a great asset.  On the other hand, “A-know-it-all “employee may memorize the training manual within a day; but acts too good for the job, will hurt your overall customer service experience.

That type of negative attitude can be hard to change and is difficult to teach unlike the particulars of your business processes.  A big city means that there are plenty of potential candidates for every position, so consider a wide variety of candidates from different backgrounds.  Also, take the time to verify their references and talk to former employers before you bring someone onboard.

Track Any Promises Made

Many businesses can handle the first contact of the customer service experience well.  A complaint phone call is a relatively easy thing to master and most employees will usually have this mastered.

One way to go above and beyond initial customer service is to make sure that your problem resolution is excellent.  This starts with tracking interactions and promises so that they may be fulfilled without forgetting.  For example, if your employees promise a free product to satisfy an upset client, track the progress of freebie to the client.

It doesn’t matter what system how the system is setup; but promising things to temporarily diffuse a situation and have the product not arrive will lead to more aggravation.  This type of let down in a business to customer relationship can generate negative word of mouth publicity.

A proper tracking system ensures that promises do not get lost on the hustle and bustle of everyday business.  Make it a priority to have a person or team double check that all resolutions are filled.  Remember you may lose some money on the transaction; however, outstanding customer service may sustain good relationship with all customers, returning more profits for the long term.

Align Staff Interests with Those of the Business

Consider that customer service traits can be a part of your employees’ motivation in general. These are some ideas to align employees’ motivation with customer service.

Maybe you could offer a customer service award each month with a prize?  Another idea is to have your employees share in the success of the business through partial ownership or profit sharing.  This can be a platform to spring from and help explain to your staff that customer service is a part of a great business. Carrying out such actions can ultimately lead to a bigger check in their pocket.

Regular paychecks can become less motivational over time simply due to the fact they become so regular and ordinary.  Contests, profit sharing, bonuses, even added paid time off could be a great way to motivate your team and deliver excellent customer service to your customers.