For Businesses, Healthy Employees Pay Off – Literally

Posted on June 30, 2012 by in Blog

Insurance renewal rates have seen double digits for a while now, making renewal time more anxiety-filled than ever for business owners.  But don’t give up hope yet.  Increasing education on wellness for your employees and how their actions personally impact the upward mobility of their insurance premiums can help slow the rate of increase, not to mention that healthy employees tend to take much fewer sick days.  Considering that employee absence can account for 75% of the total cost of health care for an employer, this is a hard benefit to ignore.

Transparency and education on how much the company spends on employee benefits can increase the appreciation factor among employees.  Providing personal value statements outlining the value for each employee will make the information more tangible and meaningful when providing tools to help them make healthier decisions for themselves and their families.

Also consider changing the design of your benefits plan to make the true cost of services more apparent.  It is an easy decision to duplicate tests and costs when the cost to the employee is a flat $20 co-pay, but if the cost to the employee is 20%, the patient may take more steps to avoid a $1400 lab test if it is not needed.  Managing the rising cost of health care is a group effort focused on education and accountability.

To learn more, visit the sites below:

What Else Should Your CPA Be Doing for You: Financial Planning

Posted on June 28, 2012 by in Blog

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What Else Should Your CPA Be Doing for You: Financial Planning

Why You do the Things You Do

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Behavioral Economics 101 – Why You Do the Things You Do

So, why is it that successful business owners, who have the vision and tenacity to create a thriving enterprise, weather downturns, and adapt to changing market conditions, seem to throw logic out the window when it comes time to plan their exit?  “The top reasons owners give for not taking a proactive approach when it comes to exit planning are: ‘it’s too expensive’, ‘I’m too busy’, ‘better to wait until it gets closer’ or ‘buyers will seek me out’,” says Dr. Michael Klein, a prominent industrial and organizational psychologist who is the author of Trapped in the Family Business: Diagnosis & Treatment and The Psychology of Exit Planning: A Practical Guide.  But are these the true reasons for their procrastination?

What’s really going on is simply normal human behavior. “Behavioral Economics (aka Behavioral Finance) has popularized what psychologists have known for years. That despite how we like to think about ourselves, we are not purely rational beings especially when the subject revolves around a business that you have poured blood, sweat, and tears, not to mention years, into building.”

In reality, Dr. Klein says, “There are factors that come into play that tend to make the entrepreneur less rational than usual when it comes to exiting –they include having to face and acknowledge your own mortality, questioning how to replace yourself when you’ve created it all, and denial (the I’ll-work-until-I’m-90 syndrome).”  The result is not only costly if your goal is to eventually sell your business, but can also be tragic if an unexpected event forces the issue.

Is Your Office a BYOD?

Posted on June 26, 2012 by in Blog

Risk Management for business is not always about buying insurance. The following article from Fox Small Business Center is good food for thought. Protect your data, it could impact the value of your business.

BYOB may be a good policy at the restaurant, but should you be for BYOD at the office? According to business consultants, not so much, unless you are extra careful.

The premise is simple enough, allow your employees to use their personal smartphones, tablets and computers for work, logging the devices onto your business databases. It might seem like a smart way to save money, not having to pay for a work phone or computer for your employees. But along with the money in your pocket comes some extra risks.

Brian McGinley, senior vice president of Data Risk Management for Identity Theft 911, said the trend is growing for both small companies and large corporations due to the need for more productivity and connectivity before and after work.

“We have become entirely reliant on this in terms of immediate access,” McGinley said. “This is a mega-trend from that standpoint. But, it’s important to go in there with your eyes wide open, because without the appropriate tools and planning this can introduce significant vulnerabilities to your business.”

Scott Laliberte, managing director of Protiviti, said BYOD is becoming more popular because it also saves small companies money.

“If you allow people to bring their own device, you don’t have to pay for it and give it to them,” he said.

One of the biggest risks is that all of these different devices have their own operating systems, McGinley said. If hackers go after these specific systems and applications, your data—client contact information, personally identifiable information, email lists and directories—are all at risk. If these things leak, the ramifications for your reputation and bottom line can be major.

“When information is lost or stolen, even with a small data breach, it can cost your company literally hundreds of thousands of dollars to remediate,” he said.

Hackers may also find it easier to introduce malware onto your employees’ device, because it’s so hard to enforce anti-malware security software on their property, Laliberte said. Patching software should also be of concern, because it’s unclear whether or not your workers are downloading the latest upgrades for the programs they are using on these devices.

If you do decide to go the BYOD route, the experts said there are ways to proactively protect your business from potential disasters.

One way to have an across-the-board procedure for your business is to have a control server application layer, or a portal installed on your employees’ devices that they must log into before accessing company data. One example of this is Citrix, Laliberte said, which enforces at the very least, minimum standards for your employees and has security controls and patch levels that must be met.

“The cost to do this depends on the size of the [network] environment,” Laliberte said. “It can cost anywhere from tens of thousands to hundreds of thousands to do. It can be fairly expensive.”

McGinley said company-wide there should be a policy about password protecting and also enabling the ability to remotely wipe out the device if it is lost or stolen. Set up the devices with geolocation technology, so they can hopefully be found if misplaced.

Also have your workers set their device to wipe out after ten incorrect password attempts, he said. Even if you have to sit down and physically watch them activate these security settings, it will be worth it, Laliberte said, because just having a policy isn’t enough.

“If you have a policy but no way to enforce it, it is not in effect,” he said. ”You have no control.”

Times They are A-Changin’ – The Power of Communication

Posted on June 23, 2012 by in Blog

If there is one thing that is consistent across all industries: it’s that change is in the air.  We’ve been in recession for a while, and business has to adjust to survive and thrive.  For some, it started with layoffs or a varying level of sacrifice.  Now companies are repositioning with strategic moves like reorganization, acquisition/divestiture, redesign of employee programs, etc.  They are ramping up for a turn in the market.  Competition for talent is getting tighter.  How will you hold on to your star employees and bring on new employees as you grow?  This is it, baby!  It’s time for a wild ride.

Employees know that something is going on.  They sense it all around them, whether you choose to address it or not.  As a company, you’ve worked hard to “attract and retain top talent”.  And you know what it got you?  Smart employees.  Smart employees can read between the lines.  They are also very imaginative people.  If you do not give them the information they need to have a sense of what the future holds, then they will begin to create reasons for this lack of communication.  The longer they go in the dark, the more they feel untrusted, unimportant, and unvalued.  And you know what?  Your employees have choices.  Eventually they will look more closely at what those choices are.

A revolving door generally does not give a company the umph they need to propel past the competition.  But you have the power to prevent the spinning before it starts.  All you have to do is talk.  You don’t have to have all the answers or divulge every detail.  The corporate communication plan does not have to be fully approved by the board before your mutter your first word to employees.  Have an informal chat, send an email, leave a post-it, send a smoke signal, anything!  Whether you like it or not, as a manager you have a relationship with your employees.   They are people with feelings that look to you to as their advocate, their link to upward communication.  They trust that you will keep them informed.  If you don’t know or can’t talk specifically about what is going on, then say so! Be honest.  As long as you acknowledge that the employees have concerns and establish trust that you will tell them as information is made available, they will stick with you.

Ask yourself if you have taken some time to check-in and take the pulse of your employees.  How would you feel if you did not know what you know?  Here are some tips for open lines of communication with your employees:

  • Check in once a week with your direct reports.  Small talk.  Show that you care about their existence.  Say good morning.  How was your weekend? Any exciting vacation plans? 
  • Look for opportunities to build team rapport.  Go to lunch, get out of the office, even if you have to go Dutch.
  • Look for signs of stress: emails at “off times”, delay in response, decrease in work social interactions, general looks of being preoccupied.  Encourage your team to make time for themselves. “We are very busy, but I don’t want you to burn out.”
  • Have standing quarterly meeting with your team to deliver information and allow for questions to be asked.  Set the stage for open communication.
  • Send updates to your team following standing meetings you have with your boss and peers.
  • If you have team members coming in from out of town, get some face time with them and other members of the team.  Dinner, breakfast, coffee…whatever you need to do to squeeze it in.  Employees are more engaged when you acknowledge they are people with personal lives.

It is always a good idea to have communication plans and consistent messages for large-scale change, but even with that, communication has to start somewhere.  If you want to retain your employees, open your mouth and start talking…

How to Run and Leave Your Business

Posted on June 21, 2012 by in Blog

How to Run Your Business So You Can Leave It in Style – John H. Brown

Outline from introduction and Chapter 1:

You own a profitable and growing business.  It provides a lot of what you desire: income, wealth, an identity, challenge, stimulation, satisfaction, and pride.  By all conventional yard sticks, you are a success.  Well done.  But wait a minute.  Despite these positive signs, your business may be failing you in an unexpected way.  Let’s consider an owner-based definition of success, one that measures success not in how well the business operates under your ownership and not by the benefits it provides, but by the rewards it will bestow when you leave it. 

Because in the end, what you will really want and need from your business is the ability to leave it under the most favorable conditions.  There are few universal truths in business life.  This is one: you will leave your business.  There is only one way you as an owner can do so successfully.  You must create an exit plan as early as possible and stick to that plan as long as you maintain your business. 

“But I do plan”, you say.  True: you plan your day-to-day operations, you create production or service schedules, devise marketing strategies, plot sales efforts, compile projections, generate organization plans, but this is traditional business planning.  It is not the kind of planning that business owners must do for themselves. 

There is a case study that follows a tale of two partners who lived in Denver during the 80s.  They built a very successful business and failed to do any long-term planning focused on succession and exit.  As a result, the business assets were liquidated.  Dozens of employees lost their jobs.  The owners settled with the cash raised from the sale of their tangible assets, an amount far less than the company’s real value.  All of this could have been avoided through proper planning.  The problem was they simply did not know they needed a succession plan.

Developing your exit plan. 

What exactly is an exit plan that will allow you to leave your business in style, and how do you create it.  Certainly there is a most infinite variety of businesses and business owners.  Consequently, each owner’s exact succession plan will vary and almost all contain common elements. 

To give you an idea of where you stand in developing your exit plan, a quiz is provided in chapter 1.  They are questions that require yes/ no answers that will serve as an affirmation of the decisions a business owner has implemented.  

  1. Do you know your primary planning objectives in leaving the business, such as departure date, income needed to achieve financial security, to whom you want to leave the business?
  2. Do you know how much your business is worth?
  3. Do you know how to increase the value of your ownership interest through enhancing the most valuable asset of the company, employees?
  4. Do you know the best way to sell your business to a third party which maximizes your cash, minimizes your tax liability, and reduces your risk?
  5. Do you know how to transfer your business to family members, co-owners or employees by paying the least possible taxes, enjoying maximum financial security?
  6. Have you implemented all necessary steps to ensure that the business continues if you don’t?
  7. Have you provided for your family’s security and continuity if you die or become incapacitated?

If you are like most business owners, you will only be able to answer yes to a few of these questions.  If you are going to successfully exit your business you must be able to say yes to each and every one.

The book written by John Brown explains this process.  The members of Forward Results, LLC utilize the BEI backbone as we establish plans for your succession.

Owner-Based Planning

All businesses do some kind of planning. It may be a simple discussion or a document. Most planning, however, is done at the business level, not at the ownership level. It covers the operational aspect of the business, such as managing work flow, developing a budget or marketing plan, and perhaps organization or administration plans for adding personnel and equipment as the company expands. But this is not what we are discussing in this session. The kind of planning we are discussing is owner-based. It is not based on business need as much as it is on goals your business must achieve before you complete your succession. Generally, these owner-based goals or objectives focus on three broad categories or parts.

  1. To create and preserve the value of the company.
  2. To provide a means to exchange that value for money with the least tax consequences possible.
  3. To meet personal and family needs by providing security and continuity to your business and for your family, either upon your planned departure, or if disaster strikes, on your death or disability.

In summary, the importance of ownership planning, as opposed to conventional business planning, cannot be overemphasized. What is the difference? Ownership planning is concerned with four major areas: planning for yourself as an owner, creating and preserving business value, transferring ownership and control successfully, and ensuring personal and family needs are met.

The sooner you start this process, the sooner you will finish and know that your succession will meet all goals and needs of your future. The members of Forward Results, LLC execute collaborative team work to define and implement processes and procedures to increase business value and guide you through every step of the process.

Free at Last

Posted on June 19, 2012 by in Blog

The Bucket List – Boomers Plan to Stay Active in Retirement

Boomers aim to “seize the day” as revealed by the top-rated retirement activities they plan to pursue in the Retirement Reality Check survey conducted by Allstate Financial.  The survey also noted some interesting facts that include how boomer’s viewed themselves versus their parents and how much happiness they thought retirement would bring.

An incredible 82 percent of boomers were certain their retirement years would be more fun and rewarding than their parents, and 63 percent felt it would be the best years of their lives.

More than half of the respondents said travel would be their first choice of things to do, with plans to take on average four trips per year, a statistic that the U.S. Travel Association confirms is not just wishful thinking but is already happening. 

Top 10 rated retirement activities:

  1. Traveling                
  2. Family and friends
  3. Hobbies
  4. Gardening
  5. Fishing                      
  6. Golfing                      
  7. Volunteering                 
  8. Reading                        
  9. Exercising                   
  10. Home improvement              

Of course all this fun has its cost and respondents estimated they would need at least $40,900 per year to fund their leisure lifestyle. Carpe diem.

Effective Crisis Management Can Impact your Bottom Line

Posted on June 14, 2012 by in Blog

Scientists predict a 70% probability that this year’s hurricane season will be a doozie!  This can impact your bottom line.  When crisis hits, people scatter.  How will you find your employees, communicate with them, and help them address their personal needs so they can get back to work?  Cell towers are down, power is out for weeks.  Your revenue has come to a screeching halt. If you are positioning for a sale or exit, a dramatic impact to your revenue can have lifelong implications. 

While it is not quite possible to avoid a hurricane when living on the coast, there are a lot of things that business owners can plan for and actions to put in place that can minimize the impacts to your business.

Here is a summary of the steps you can take to minimize impacts by planning ahead:

  • Be in the cloud
  • Cross-train employees
  • Create emergency preparedness procedures
  • Establish a succession or business continuity plan
  • Practice, practice, practice