Starting your own IT business involves all the normal risks of business ownership—and then some. What happens if you lose important information belonging to your client’s business? Or what if one of your employees or independent contractors steals customer data (or money and property)? Then there’s the risk of natural disasters, not to mention the possibility you could get seriously ill and not be able to finish a big project. IT insurance can cover all of these scenarios, and Techinsurance.com can help you find coverage. Never heard of Cyber Liability insurance? Well, it exists, and could save your business in case of mishaps. Get protected so you can focus on the client without worry. Plus, many companies require their vendors to carry their own IT business insurance.
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Web.com Small Business Toolkit: Techinsurance.com (Business Insurance for IT Professionals)
October 3rd, 2012 :: Maria Valdez HaubrichWage and Hour Lawsuits Are on the Rise. How Can You Protect Your Small Business?
September 27th, 2012 :: Maria Valdez HaubrichBy Maria Valdez Haubrich
Are you following wage and hours laws when it comes to your small business’s employees? If you’re not sure, you’d better make sure. Wage and hour lawsuits are on the rise. LifeInc. recently reported that more wage and hour lawsuits were filed against employers in the first seven months of 2012 than in all of 2011. At that time, 7,064 Fair Labor Standards Act lawsuits had been filed, compared to 7,006 in the entire year of 2011.
The increase in legal actions isn’t necessarily a sign that more companies are breaking the law. The federal government has started more strictly enforcing wage and hour laws, and media attention to wage and hour lawsuits (such as a case earlier this year where Wal-Mart had to pay employees some $5 million in back wages and damages) have brought attention to the issue. Finally, tough economic times may have made some employees or former employees more likely to bring a lawsuit in hopes of making some money.
What steps should you take to ensure you’re on the right side of wage and hour laws?
Pay employees for hours worked. This sounds obvious, but includes:
- Paying for overtime
- Providing adequate rest and meal breaks as prescribed by law
- Counting hours worked from home
Classify employees correctly. Misclassifying employees is the number-one cause of employee lawsuits. This can include misclassifying employees as independent contractors (which means they don’t get access to employee benefits) or misclassifying non-exempt employees as exempt.
Know when the Family and Medical Leave Act applies. The FMLA provides employees with leave for certain medical or family conditions. Failing to abide by this law is another common cause of lawsuits.
With more employees working from home, working on weekends or answering work emails during “off time,” the lines between work and personal life have blurred, adding to the complexity of wage and hour issues. The Department of Labor’s Wage and Hour Division is a good starting point for learning the basics about laws affecting wages and hours, but if you have any uncertainty about an employee’s status, you should always consult an attorney familiar with labor law.
Image by Flickr user srqpix (Creative Commons)
Google+Health Insurance Costs Rise More Slowly—Is That a Good Thing?
September 25th, 2012 :: Karen AxeltonBy Karen Axelton
When I opened my company’s health insurance premium renewal packet recently, I got a pleasant surprise: Although our small business’s premiums increased, it was at a far lower rate than in years past. Turns out we’re not alone: The Kaiser Family Foundation reports that the cost of employer-provided health insurance increased by about 4 percent compared to last year. By comparison, family coverage costs rose by 9 percent between 2010 and 2011.
The average cost to cover a family of four through employer-provided insurance is now about $16,000, according to the 2012 Employer Health Benefits Survey. The cost of individual insurance coverage through an employer increased by a mere 3 percent, to an average cost of $5,615 per policy.
Despite widespread concerns about the Patient Protection and Affordable Care Act’s effect on employer-provided insurance, the survey found that 61 percent of companies offer health benefits to their workers – the same as last year.
Ironically, workers who earned lower wages had higher deductibles and paid more for their insurance than higher-paid employees. Kaiser found that in where at least 35 percent of workers earn $24,000 or less annually, workers paid an average of $1,000 more in premiums (nearly $5,000 out of the employees’ pockets). By comparison, workplaces where at least 35 percent of workers earn $55,000 annually, workers paid an average of $4,000 for their share of premium costs.
The slower rise in costs is good news for your small business’s budget, but will it last? Experts caution it’s not necessarily a result of the PPACA, but could stem from several factors:
- The general slowdown in the economy has curtailed spending all over.
- Many employees are limiting or avoiding doctor visits or non-urgent surgeries because they can’t afford the out-of-pocket costs.
- Employers are better educating employees about the costs of coverage, whether by shifting more of the premium costs to them, increasing copay and prescription drug costs, or providing more information about options for choosing insurance and providers. Given this information, more consumers have been willing to do things like choosing generic over brand-name drugs.
How are you keeping health insurance costs down at your small business?
Image by Flickr user andres rueda (Creative Commons)
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How to Prepare Your Business for Expansion
August 30th, 2012 :: Karen AxeltonBy Karen Axelton
Do you have big plans for your small business? If you’re gearing up to add a location, expand into new markets, add ecommerce to your offerings or start selling internationally, there are some things you need to consider before you grow. Here’s a shortlist of things to think about to make sure you’ve got all the bases covered.
Your company’s structure. If you need to adjust your legal form of business in order to take on more investors, add partners or meet the requirements of the new state/s where you’ll be doing business, now is the time. Consult an attorney to make sure your company dots all the I’s and crosses the t’s before it’s too late.
Your company’s name. The name that has served you up to this point may not work so well if you’re going national, international or in a different direction. Ask friends, family and customers what they think your current name conveys. If it doesn’t convey what you’re trying to accomplish, brainstorm some new ideas and use surveys and focus groups to test how well they work.
Your company’s trademarks. If you’ve changed your name or logo in preparation for the expansion, make sure you protect them with a trademark. Visit the U.S. Patent and Trademark office’s Trademark section to learn more about applying for trademarks and to apply online.
Your operations. If you don’t have an operations manual for your business, now is the time to create one. You’ll want to standardize your operating procedures so they can guide you in your growth and ensure that all facets of your business—every location, employee and sales channel—deliver the same customer experience.
Your employees. Expansion requires employees you can trust to do what you’d do when you can’t be there. If you’re not comfortable with delegating, you’re going to have a problem. Start now to develop a strong bench of key managers who can be “you” when you’re not around.
Your financing. Given today’s tight lending environment, hopefully you’re financing your expansion from within. But whether or not you’re seeking outside capital, it’s smart to develop a business plan that will guide your expansion and put the money you’ll need in black and white. Develop a “Plan B” you can follow if the financing you seek doesn’t come through. In fact, develop Plan C and D, too.
Image by Flickr user Tatters:) (Creative Commons)
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How to Do a Patent Search for Your Invention
August 23rd, 2012 :: Karen AxeltonBy Karen Axelton
Does your small business have a great product idea that could make you millions? If so, the first step in protecting your idea is to do a patent search and see whether someone else has already patented your idea or something similar. Here’s what you need to now to get started.
Begin by figuring out whether your idea is patentable. What is required for this? Visit the U.S. Patent and Trademark Office (USPTO) website for guidelines. Most likely, you will be considering a “utility” patent, which covers a “new, nonobvious and useful” process, machine or product. You can also get a “design” patent for the design or ornamentation of a product.
Do you have a patentable invention? Then you’re ready to begin a patent search. It’s wise to do a preliminary patent search before you start the patent process. That way, if you find out someone already has a patent on your idea, you can avoid the investment of time and money in applying for a patent.
The USPTO website lets you do a preliminary search that covers both patent applications and issued patents. Be sure you also check whether the invention has been patented in a foreign country. You’ll find plenty of resources and links to guide you in the process of searching.
If you don’t find anything at the USPTO site, you’re not done yet. You also need to contact the Patent and Trademark Resource Center. You can find the nearest such center on the USPTO site. Experts at these centers can guide you to patent search resources and even train you in how to do a thorough patent search.
If developing a prototype or designing your invention will be costly, you’ll also want to contact a patent attorney with experience in this area before you invest a lot of money into the effort. You can find registered patent attorneys using a search tool on the USPTO website.
This may seem like a lot of legwork, especially considering that once you file an application for a patent, the USPTO will do its own search. However, by doing a preliminary search, you can save yourself time, effort and hassle in the long run.
Image by Flickr user Clearly Ambiguous (Creative Commons)
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Web.com Review: Small Business Resource: Advise the Advisor: Government Feedback
August 17th, 2012 :: Maria Valdez HaubrichWhen you’re tired of government regulations hurting your small business, who do you tell? You probably complain to your business partner, your spouse or anyone within earshot. Well, now you can tell the people with the power to do something about it. The White House is asking small businesses to let President Obama know what current rules and regulations need fixing, changing, tweaking or abolishing, and they’ve created a website for you to let your views be known. Visit WhiteHouse.gov/advise to weigh in and share your opinions. Just fill out a simple online form to offer your suggestions on how to make government small-business friendly.
Google+Protecting Your Business From a Customer’s Bankruptcy
July 31st, 2012 :: Maria Valdez HaubrichBy Maria Valdez Haubrich
The economy is improving—or is it? In today’s roller-coaster economic environment, the risk that a key customer of your small business might declare bankruptcy is ever-present. How can you protect your business from a key supplier or customer’s misfortune?
Some steps to protect yourself should be taken before you ever take on a new client. If you haven’t already done so, make the following two steps part of your processes for every new customer:
- Credit check: Each new customer should complete a credit application and you should verify their information with a major credit agency. If your customers are other businesses, you should request, and contact, references from several other businesses they’ve done business with. Find out whether the company has any history of late payments or other problems.
- Contract: It’s easy to get so excited about a new customer that you proceed without having a firm contract in place. That’s a big mistake, because without a contract you severely limit your chances of ever getting repaid if the company does declare bankruptcy. For added protection, put a clause in your contract that specifies what will happen if the customer declares bankruptcy or is unable to pay.
Once you are satisfied that the customer meets your credit standards and you have a contract in place, your work isn’t done. Keep abreast of your company’s financial data and accounts receivable so you notice when customers suddenly start to pay more slowly. If you use accounting software such as QuickBooks, it’s easy to track payment histories and see patterns.
If you notice a customer suddenly paying later and later, get on top of the situation. You may need to instigate a discussion to see what the problem is. Perhaps it’s something as simple as a new office manager or accountant who is getting up to speed on the company’s systems, but you need to find out.
If a customer stops paying entirely or if a check bounces, act quickly. Contact the customer and find out what’s going on. If there is a problem with the customer’s finances, it’s important that you not fill any further orders or provide services until they get current on their missed payments. You will also want to put future products or services on a payment-upfront basis. What you want to avoid is a situation where you keep delivering for a customer who can’t pay, thus running up a bigger and bigger unpaid bill.
If worse comes to worst and your customer declares bankruptcy, you’ll receive a notice in the mail. The first step, again, is contacting the customer personally. You may be able to resolve the matter without getting an attorney involved. If you have shipped product that hasn’t been paid for, see if you can get it returned. The United States Bankruptcy Code gives you 20 days after the business has filed for bankruptcy to do this.
What if you can’t get your money back? Then you will need to enlist an attorney. Good record-keeping will help in your cause. Gather all the documents you can about your relationship with the customer, including how much money they owe you, contracts with the company, invoices and any other records that prove what the company owes you.
If you use the preceding steps, however, hopefully it won’t come to that. When it comes to protecting your business from the fallout from customer bankruptcy, an ounce of prevention is worth a pound of cure.
Image by Flickr user steakpinball (Creative Commons)
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Trinet: Online HR Tool: Small Business Resource
July 9th, 2012 :: Maria Valdez HaubrichHiring the right employees is only half the battle. If you’ve ever dealt with the complex web that is employment law and regulations, you know what we mean. Ignore those laws, however, and employee-related lawsuits could be closer than you think. Trinet is an HR outsourcing tool that can help you contain your risks and lesson your costs. Trinet’s online platform streamlines your HR responsibilities and gives you some self-service options like adjusting employee pay, viewing benefits data and creating compensation reports. The online tool can also help with hiring and terminating employees. Employees can also use the system to view their pay stubs, W-2s and more.
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What the JOBS Act’s Crowdfunding Provision Means for Your Small Business
July 5th, 2012 :: Karen AxeltonBy Karen Axelton
Have you used crowdfunding to raise capital for your business, or have you considered it? The JOBS Act signed into law by President Obama on April 5 creates new potential for entrepreneurs to raise money via crowdfunding—but also adds new levels of complexity.
According to crowdsourcing.org, global crowdfunding raised some $1.5 billion in 2011. Prior to the JOBS Act, crowdfunding sites were only able to solicit donations from contributors—not investments. Because these were donations, they were typically small amounts. A crowdfunding provision of the JOBS Act changes that, allowing small business owners to raise investments (up to $1 million per investor) via crowdfunding websites.
As of July 4, you will be able to crowdfund from “accredited investors” (whose net worth, excluding the value of their primary residence, is more than $1 million). But the SEC still has to put final regulations in place as to how entrepreneurs will be allowed to solicit crowdfunding from nonaccredited investors.
The SEC is expected to release these regulations in January 2013. What can you do in the meantime? Use the intervening months to educate yourself about crowdfunding and the various platforms for doing so. One estimate puts the number of active crowdfunding sites at more than 450, and that number is projected to increase by as much as 25 percent by the end of the year.
Some of the benefits of crowdfunding as opposed to seeking financing from angel investors or venture capitalists:
- It allows you to tap into a market of interested, non-professional investors who are also likely to be customers of your product.
- You will be able to raise money from people you know even if they aren’t accredited investors.
- You can raise capital for creating a prototype or market-testing your product before launching it.
- Unlike traditional capital-raising, crowdfunding also creates public awareness of your business, serving as a marketing tool.
Of course, crowdfunding investments is not a simple process, and you will need to enlist legal and accounting help from someone familiar with the process. In the meantime, some existing crowdfunding platforms to check out include SomoLend, Indiegogo, Kickstarter and Peerbacker. You can learn more about crowdsourcing in general at www.crowdsourcing.org.
Image by Flickr user Karen O’D (Creative Commons)
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How Will Small Businesses Handle Health Insurance Reform?
June 26th, 2012 :: Karen AxeltonBy Karen Axelton
The Supreme Court’s decision on the Patient Protection and Affordable Care Act will be announced this week. But regardless what the Court decides about health-care reform, it’s unlikely to have a drastic effect on health insurance coverage currently offered by businesses, according to an International Foundation of Employee Benefit Plans survey reported in LifeHealthPro.
A whopping 85 percent of businesses surveyed say they either definitely will or are very likely to keep offering health insurance coverage in 2014, and almost 10 percent said they are somewhat likely to continue coverage. Just 1 percent definitely will not offer coverage, and 4 percent were somewhat or very unlikely to offer coverage.
The survey polled U.S. employers of all sizes and in about 20 different industries to ask “What are you doing with your plan as a result of health care reform?” So far, many businesses have been in a holding pattern. Although 47.2 percent have analyzed how health care reform could affect their businesses, and 39.1 percent are starting to take steps to deal with reform, 31.3 percent are taking a “wait and see” attitude.
What are they waiting for? Some 80.7 percent are awaiting the Supreme Court decision, 62.4 percent say they want more regulatory guidance and 52.1 percent are waiting to see who wins the 2012 Presidential and Congressional elections.
Based on the analysis they’ve done so far, about 70 percent of respondents say the health care law will lead to higher costs in 201. To curb costs, employers are making some changes, with the most popular being:
- increasing employees’ share of premium costs
- increasing in-network deductibles
- increasing out-of-pocket limits
Health care reform or no, rising health insurance costs have been a reality for businesses for the past several years. Despite the costs, “employers recognize that offering health care coverage is an important benefit that helps retain current employees, attract future talent, and increase employee satisfaction,” said Michael Wilson, International Foundation CEO.
Image by Flickr user Keithburtis (Creative Commons)
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