- Small Business Retirement Savings Advisor
Interactive question and answer tool that helps self-employed individuals and small business employers determine which type of retirement plan is most appropriate for their businesses.
- Choosing A Retirement Solution for Your Small Business
A pamphlet describing the retirement savings options available to small businesses and comparing the features of each option.
It’s no longer uncommon to witness neighbors, colleagues and partners taking a “work from home” day. In fact, telework practices are considered a highly desirable perk, if not a downright necessity, for today’s increasingly agile and mobile workforce.
As a small business owner the benefits are also significant – cost-savings can be realized in abundance – from reductions in office space, to decreased absenteeism (employees no longer need to take a full day’s leave if they need to stay at home with a sick child). In some states employers can also benefit from tax credits to start or expand telework programs.
An established and functioning telework program is also an absolute lifesaver in the event of a disaster or severe weather event that limits employee mobility. Missed sales can be a significant cause of economic loss to a small business simply because employees can’t get to work to service customers.
If you are ready to consider introducing teleworking into your business practices, here are some considerations, how-to’s, and tax incentives to bear in mind:
Who Should Telework?
It’s unlikely that everyone on your team will be able to telework, so start by identifying types of positions or job types that can be performed at home practically. For example, if an employee needs to perform physical labor or operates specific equipment in the workplace not available to them at home, then that employee is clearly not a good candidate for teleworking.
Understand your employee's needs and assess those needs in light of your knowledge of their work habits. Because (let’s face it) some employees just aren’t cut out for telework, you may wish to restrict teleworking as an option for managers and employees who can work well without constant oversight.
What about performance? Do you want to consider introducing telework as a reward for meeting certain performance goals?
Start with a Trial Period
Before you fully implement the policy, initiate a trial period and track results. Get feedback from managers and other employees as to the benefits and any challenges they are seeing. You can then fine tune and possibly expand the program to best suit everyone's needs.
How’s It Going?
Don’t be afraid to check up on employees. After all, you are putting a significant amount of trust and good faith in their ability to work from home. This doesn’t mean you need to be big brother, but you do need to know that work is still getting done to standard and on time. Set goals and follow through to ensure deliverables are still being met by those who telework.
Set Up Remote Office Tools
You don’t need to set up a company virtual private network (VPN) to help employees stay productive and connected at home. Free audio and video conferencing tools such as Skype or Google Voice can help employees stay connected for free, and online collaboration options such as Google Docs, Box.net and other file-sharing options can help ensure your employees deliver work on time and seamlessly. Many unified communication suites offer online and cloud computing options that also allow you to add Web- and mobile-based email, calendar, and collaboration functionality to your existing email service for a few extra dollars per user/per month.
Telework Tax Incentives for Employers
While your federal tax obligations do not change because your employees telecommute, certain states, including Georgia, Virginia and Oregon offer tax incentives of several thousand dollars per employee, while others offer free assistance to employers to help you start up and manage telework programs. Refer to your state government website for more information.
Tax Savings for Employees
Setting up a home office can provide some tax savings for employees in the form of home office deductions, however your employees need to be aware that the IRS is very strict when it comes to claiming this deduction. Unless you work from home 100 percent of the time, you need to provide evidence that this area of your home is used regularly and exclusively for business. Very specifically, the IRS states in its Business Use of Your Home (PDF) guide that “…if you are an employee and you use a part of your home for business, you may qualify for a deduction for its business use.” However, in addition to standard eligibility requirements, you must:
- Use your home office for the convenience of your employer, and
- You must not rent any part of your home to your employer and use the rented portion to perform services as an employee for that employer.
“If the use of the home office is merely appropriate and helpful…” i.e. it’s your employee’s preference to work from home, not yours, they cannot deduct expenses for the business use.
- Teleworking Basics for Managers– From Telework.gov(a government employee site, but full of useful resources for business managers too).
- An Employer's Guide to Implementing Effective Commuter Choice Programs (produced by the government’s Commuter Choice program).
Getting started as an entrepreneur can be an exciting, and at times scary, thought for young people. First-time business owners face many challenges on the path to becoming successful, such as obtaining credit, complying with regulations, and building a customer base.
In May, we asked business owners in the SBA community for suggestions they wish someone would have given them before starting a business. Here are some of their tips:
Develop a solid business plan
johnhenning suggested having both a business plan and procedures set up before starting or purchasing a business: “systems and processes are important as well as a proven business model.”
wgalkin also stressed the importance of having a good business plan, saying: “The best advice I can give is to develop a detailed business plan. This can be a lot of work, but it serves to clarify and scope out many issues and also allows you to assess the costs.”
Focus on marketing
rcaldwell, the owner of an appliance repair shop in Idaho, suggested having a dedicated marketing strategy to attract customers, rather than buying ads and hoping to lure business: “Do not think that just because you buy yourself a yellow-page ad that the public will come flocking to your business.” Rcaldwell also said that making your advertisements “quick and to the point” will help you effectively communicate a product to your potential customers.
wgalkin recommended accounting for significant marketing costs in the initial phase of a company.
Be strategic about financing
Ralph Alterowitz, the President of a Maryland venture capital consultancy, suggested getting a good sense of your financing needs, then taking the time to plan the best way to raise capital. Mr. Alterowitz shared his thoughts about the importance of having a good financing strategy: “After building a grounds-up budget—determining how much money is needed for staff, facilities, equipment, supplies and materials, testing, development and marketing—the entrepreneur needs to determine the fastest, easiest and least costly way to raise the money needed.”
Distinguish yourself from competitors
pfleet suggested trying to find ways to do business differently than rivals, in order to distinguish the business in a fundamental way.
Prepare in other ways
JRDUNDON had three pieces of advice for young entrepreneurs deciding what to do before they start a venture: carefully choosing what type of entity would be best; learning the tax implications of decisions; and being willing to ask others for help.
Carrotandstick recommended getting information on the success and failure rates of similar businesses in the area before pursuing an idea: “If the last 7 pizza shop startups went bust, find out why before you spend any money on dough.”
“Does My Business Have To Provide Part-Time Employees with Benefits?"
By Tiffani Clements
If you’re looking to hire part-time employees to avoid offering benefits, you might want to read the information outlined in this article. While many employee benefits – such as paid time off - are not mandated by federal law, there are benefits which you are legally responsible for providing any employee working for your business, whether they work full-time or part-time.
Benefits Required By Law
The following are required benefits that employers must extend to part-time employees. For a primer on employment laws and regulations, see SBA.gov’s Labor Law Guide.
- Employment and Labor Laws- Employment laws, such as discriminationand workplace safetyregulations, apply to part-time workers. Additionally, under the Fair Labor Standards Act (FLSA), part-time and full-time employees have equal rights concerning minimum wage, overtime pay, recordkeeping and child labor.
- Unemployment Benefits –You will likely need to comply with unemployment benefit obligations for part-time employees. Contact your state department of laborto understand your local requirements.
- “Fringe Benefits”- The majority of common leave benefits offered by employers are not required by federal law, and are instead offered to employees as part of an overall compensation and benefits package. These leave benefits include retirement plans, holiday/vacation paid time off, jury duty, personal leave, sick leave, and funeral/bereavement leave.
- Taxes -According to IRS.gov, part-time and seasonal employees are subject to the same tax withholding rules that apply to other employees. For details on your tax reporting responsibilities, refer to the IRS.gov regulations on businesses with employees.
- State Labor Laws –Some states have enacted requirements stricter than what the Federal regulations require. Check with your state department of laborto understand if there are additional or different benefit regulations for part-time employees in your area.
5 Tips for Managing a Successful Family Business
If small business is the backbone of the U.S. economy, then family-owned businesses for the most part make up a large portion of the vertebrae! In fact, family-owned businesses account for 90% of all businesses in the U.S. (large and small) and continue to be a powerful force.
However, the day-to-day job of a family business owner can easily be compromised and complicated by relatives who need to be reconciled to working together.
These challenges are very real – emotions can interfere with sound business decisions; unskilled family-members can soon turn into “hangers-on”, and growth can be compromised by relatives who might be reluctant to further invest in your business or take-over when you move on.
If you run a family business, read on for some tips for managing the particularly unique challenges you face.
1. In Business, Business Comes First
First things first, this is business and the success of that business is paramount, regardless of your family politics or ties.
In the workplace, decisions must be objective, not personal; the boss/employee relationship must be accepted by all family members; every job description must be clear and understood; and work life and home life problems should not overlap.
To help you put controls around your business and avoid confusion about roles, be sure to:
- Develop and communicate a clear business plan and mission – so that everyone on the team is singing off the same hymn sheet.
- Establish a clear chain of command and lines of authority for decision making. If a family member does not have a role to play in the decision making hierarchy, make sure they are aware of this and give them structure in their role in the business.
- Communicate clearly and often with family and non-family members. Not only does this help avoid confusion, it also gives you a holistic view across your business and nips any emotion or potential “blame-games” in the bud.
Being able to adhere to these principles sends a very powerful message to all those involved in your business. However, this is often the ideal, and not the norm!
2. Consider Hiring a Non-Family Member to Oversee Operations
If you manage a family-business not only do you need to be a strong manager you need to be thick-skinned and tough enough to make decisions and stick to them.
If other family members report to you, be clear about their lines of authority or consider hiring a non-family member to assume a position of authority so that you are free to work on strategy, future plans and growth, while that person guides day-to-day operations.
3. Dealing with Family Discord
Whether it’s a difference of opinion or a performance issue, dealing with discord or conflict among family members in a business environment is tough.
Families will always bicker, but the challenge is not to let the bickering from interfering with the business and rub-off on non-family employees who might be tempted to use the same emotional appeal to gain position or get their own way – because they’ve seen your family succeed at it.
Especially challenging is trying to remain objective about the situation. Try not to take sides with any particular family member, and make it known that you won’t let disagreements affect your business. This not only stops disruptive family members from using emotions to politick for status – it also sends a clear message to other employees.
If you find yourself stuck with a difficult family employee with whom you can’t reconcile yourself, consider moving them into a new line of work or encourage them to transfer to another branch.
4. Dealing with the Family “Hanger-On”
You know the one – the relative who needs a job badly, but really doesn’t exhibit any true aptitude or useable talent! If you really must hire that person, accept the fact that you will need to cultivate them into a role to avoid them causing problems down the line. Try to provide special training under the mentorship of a non-family member or consider letting that person spend two weeks embedded in different areas of the business so that you can identify skills and interests and see opportunities for where you might permanently place them.
5. Preparing the Next Generation
Many family businesses remain so for years if not decades, but how do you ensure that the next generation continues to grow your business and serve your loyal customers when you come to retire or move-on?
The best time to plan for succession is well in advance! As invested family members, consider these questions:
- What are your family goals for the future?
- What are the plans of the next generation? Who is interested in staying in business and leading the way? Is there more than one aspiring leader-in-the-works? Who is best equipped to lead? What role will the other members play?
- And, of course, what if no one is interested in succeeding your business?
Then develop a plan to groom and mentor the future leader(s) of your business. Set a goal for the transition to begin, take it slowly so that you can still have a part-time hand in your business and provide on-the-job mentoring, without being too much of a micro-manager.
You’ll also need to plan the financial and legal steps of transferring business ownership. SBA offers guidance on the steps you’ll need to following in this guide to Exiting a Business.
For more insight into the challenges of managing a family business, as well as further tips on family-financed businesses and dividing profits, read this management and planning guide from the Small Business Administration on Challenges in Managing a Family Business (PDF).
- Running a Family Business Within the Law – Whether you're working with your spouse, your child, or with the whole family, you should be aware of several regulations that make your business different.
- Staffing Your Business – 4 Flexible Options to Consider as You Start-Up and Grow