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How To Write A Business Plan

Posted: 14 Jan 2020 08:00 AM PST

  • Business plans, which range from 30 to 50 pages in length, play an important role in the growth of a business.
  • Entrepreneurs may get started writing a business plan by including key elements.
  • If a traditional business plan feels too overwhelming, you may draft a lean business plan.

Writing a business plan, if you haven't done it before, can initially seem like a daunting task. According to the U.S. Small Business Administration (SBA), the recommended length of a business plan should be between 30 to 50 pages.

Do you still feel nervous trying to figure out what you should include in this document? A great rule of thumb is to remember that a business plan plays an important role in the growth of your small business. This document acts as your startup's blueprint. Blueprints tend to be very detailed, but are also open to revisions once the initial paperwork has been drafted. Your business plan helps establish a foundation for the startup. It allows you, and potential investors, to better understand the feasibility of the business and the vision and mission you have for its future.

Whether you're starting a company for the first time or revising an existing document, it's fairly simple to put together a well-written business plan. Let's take a look at the key elements included in a traditional business plan. We'll also examine if your business is better suited for drafting a lean business plan.

Traditional business plans

Traditional business plans are the aforementioned 30 to 50 page documents. These plans usually cover the following elements in-depth.

  • Executive summary
  • Business description, concept and strategy
  • Market analysis
  • Industry analysis
  • Organization and management
  • Financial projections
  • Funding request
  • Appendix

Executive summary

Open your business plan with a table of contents that includes page numbers. This will allow you to better outline and break down, section by section, what the reader can expect to find in the document. From there, you may move into a brief (1 to 2 pages) executive summary about your business. An executive summary should be able to answer the following questions.

  • Who are you?
  • What does your business do?
  • Which industry is the startup in?
  • Where do you conduct business?
  • What's your projected start date?
  • How does the company make money?
  • Why are consumers interested in your offerings?

Additionally, you may include a value proposition statement that details the value your company brings to its market.

Business description, concept and strategy

Sometimes referred to as a company overview, this section takes a closer look at the nature of your business. Consider the overview aspect of this section as you answer the following questions:

  • Where did the idea for your product/service come from?
  • How does your product/service work?
  • What makes this product/service unique in its market?
  • How does this product/service benefit potential and current customers?
  • What strategy will you use to reach your business goals? (This is particularly key to address if your startup is still in its development stages and needs a timeline for its goals.)

Market analysis

By now, your startup has conducted enough research and utilized census data to understand which individuals make up your target market. Use the market analysis portion of a business plan to define your target demographic. Create consumer personas to identify distinguishing characteristics, demographics, and the needs of your target market. Then, outline a strategy for how your business will attract, capture and retain this audience. Think about which media will you use to reach them.

As time progresses, you may find a growing audience in another market, like Gen Z, that may be interested in your offerings. Revise this section, and create new consumer personas as needed to better understand the needs of your existing and future audience.

Industry analysis

Now that you understand who makes up your target market, you should have just as thorough an understanding of your industry's competition. Every business has direct competition, which your startup should know about at a glance. They also have indirect competition, which may pose challenges to your business in the future. Understand what the direct and indirect competition is currently offering to their consumers. What are their price points? How do they serve their customers? Why would consumers choose their offerings over your own? How do they engage with their customer base? You may even utilize social media platforms, like Facebook and Instagram, to better understand how they reach consumers.

Additionally, the SBA recommends creating a competitive analysis of your overall industry. Your startup should be able to create its own strengths and weaknesses assessment. A strength assessment, for example, analyzes your ability to satisfy the customer needs and establish staying power as a brand. The weakness assessment determines how your business maintains its brand loyalty as technology changes and in the event of a downward economic condition.

Organization and management

This section of the business plan outlines the company's organizational structure and ownership. Outline the names of the startup's owners and their percentage of ownership. Detail how they are involved in the company and their background information, including the date they were hired, position title and responsibilities, and resumes. Keep this section updated over time, particularly as you hire more individuals for new roles.

Financial information

There is a great deal of information that needs to be covered in the financial section of a business plan. It is strongly advised that you provide honest details. If you are unsure of how much your business is actually making, the SBA advises conducting a review with a professional accountant.

If you want to attract investors or request funding for your business, you'll need financial projections that show your startup is profitable. These projections may be outlined in tables and charts that detail your company's cash flow. Additional areas to detail include:

  • Profit and loss statement (or projected P&L statement).
  • 12-month income statement.
  • Sales forecast.
  • Expenses budget (usually within a 24-month timespan).
  • Projected balance sheet.
  • Break-even analysis.
  • Balance sheet for at least three fiscal years out into the future.

Why do you need to include all of this information? Many businesses seek to attract investors for a bit of extra capital. Investors will want, and need, to review their current and existing financial data. Doing so ensures that they are investing in a business that can earn a profit and that the business owner themselves has established good credit.

Funding request

This request identifies the exact amount of funding your startup needs from investors to get started. Make sure the request is exact, not a guess or rough estimate. You will also need to outline how the money will be spent and the manner in which it will be spent. Additionally, it's also a good idea to detail how you will approach financial situational plans in the future. What if you decide to sell your business or go public with your company? Investors will need to understand your strategic approach for dealing with these situations.

Appendix

This space is dedicated to all other items your startup may have that do not quite fit anywhere else in the business plan. Just to name a few documents, these may include:

  • Letters of incorporation.
  • Trademark registrations.
  • Industry studies.
  • Partnership agreements.

Lean business plans

Lean business plans are often ideal for entrepreneurs that need to quickly outline their startup's structure. These plans are much shorter than traditional business plans – sometimes no more than a few pages. A lean business plan will cover these aspects of starting a business:

  • Value proposition. A clear statement that describes the value your business brings its respective market.
  • Key partnerships, resources and activities. This details information about your current business partners, and any strategies you're using to gain a competitive advantage and create value with your audience.
  • Customer segments, channels and relationships. This goes back to a traditional market analysis. You should be able to define your target market and audience as well as detail how you will reach and engage with them.
  • Revenue streams. Simply put, this is a list of the streams that your business uses to make money.

There isn't a right or wrong answer to whether you should choose to draft a traditional or lean business plan. You can always start off with a lean business plan and transition to a traditional plan, making edits as necessary.

Regardless of the format, however, remember that your business plan must be structured in a concise and objective manner. As time progresses, you'll be excited to see how many goals you have met, and will keep meeting, in business.

How to Use Mobile Marketing to Increase Online Sales

Posted: 14 Jan 2020 07:00 AM PST

Earlier this year, a catering company out of San Diego asked me to take a look at mobile marketing efforts for its new BBQ restaurant. 

It had relocated its kitchen to an old restaurant. The owners looked at the seating area and thought "why not?" They had been in the restaurant business before. From owning over 20 Little Caesars franchises to award-winning fine dining restaurants, they brought enough experience to run food operations. 

But marketing -- specifically mobile marketing -- was a new feat. 

The results of our discussions revealed the need to build out important business frameworks to ensure mobile marketing success for their restaurant. 

1. Set business goals

We kicked off our meeting, and the first thing they said was "we need an app."

With the rise of popular food delivery companies like Uber Eats and DoorDash, it was easy to get carried away. Especially when you see UberEats making over $3 billion and growing at 108%, you feel like you're left behind as a restaurant owner. 

Easy customer experiences, convenient ordering, and (sort of) free marketing seemed like shiny ways to get customers. But was a mobile app for a restaurant even necessary?

To avoid distractions, we took a step back and I asked them about their sales and marketing goals. 

"What do you hope this new way of reaching customers will achieve for you?"

Here are some of their examples that could help you:

  1. Increase daily sales by 2,500% (remember it was a new restaurant)

  2. Collect 100 customer email addresses a month

  3. Get 20 5-star reviews on Yelp and Google

  4. Increase social media following to 10k

2. Build customer profiles

A restaurant, like other local businesses (think dentists and mechanics), services a small diameter of a region and usually faces a ton of nearby competition. 

Fortunately, such limitations can be leveraged as criteria for geographic, demographic, and psychographic profiles to speak to customers more effectively. You can use these criteria to create ads on social media and search engines.

The reason building customer profiles is important for mobile marketing is simple. You want to ensure the person holding the phone, receiving your ad or link is the person interested in your food at that point in time.

Building a customer profile for your restaurant also helps you determine if you need that app. You have to ask yourself:

  • Would an app make my customer's life easier?

  • Do customers need to check/scan info on the go? (gift cards, rewards)

  • How often will they use the app? Or will they just delete it after the first time?

The search for these answers leads you to better evaluate technology and how it aligns with the services you offer. 

3. Integrating tech and business

So you're looking for the right tech solution? It can be daunting, so I've distilled your solutions:

  1. Mobile responsive website with ordering 

  2. A point of sale system with a rewards app

  3. Custom app with ordering, rewards, and texting

All these options can be made to provide the same benefits. But those benefits should enable your service delivery and improve your customer's experience. As the famous Bill Gates quote on software goes: "The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency." 

For a restaurant, I'd go with the first option enabled by the second. Here's an overly simplistic explanation: 

You buy Clover POS, install an app that integrates it with your WordPress website. Now you have online ordering. You then use the Clover gift card and newsletter apps to entice and capture new customers. Using another Clover app and/or WordPress plugin, you can text coupons and send push notifications to get repeat customers. 

Push notifications are messages your customers receive from you on their phones when they're not visiting your app or site. The notifications create customer engagement by keeping you at the top of mind.

Clover can integrate with online accounting systems like QuickBooks. Set it up to minimize manual processes and redundant tasks. We're looking to this technology to fit your optimized business processes.

4. Set conversion objectives

Mobile marketing created a new industry of opportunities by bridging online marketing efforts with offline marketing activities. Have you ever been to a trade show and seen the host create a hashtag for you to tweet your selfies against their backdrop?

That's how you get offline activities on the internet in real-time. And that's the effect you want to create for your business.

After an IT person sets up your solution, you can engage with customers and have them:

  • Sign up for rewards and coupons

  • Send a gift card to a relative

  • Get a discount for bringing the entire family

  • Follow you on social media

  • Leave a review 

What do these things have in common? They're all conversion objectives and they can all be done face-to-face with a customer because of mobile marketing.

I'd recommend you choose which conversions are best for your restaurant, quantify them so you can measure their performance, and leverage them to create more content.

5. Develop content for mobile

Twenty-five percent of consumers have at least one restaurant app on their phone and the top restaurant apps are for reviews and delivery. Consider the possibilities to create exposure using these apps. 

On Yelp, for instance, aside from keeping your information updated, you can create deals. Engage with customers with things like, "get a discount when you..."

  • Check-in at our restaurant

  • Take a funny selfie with your food

  • Leave a positive review

  • Give us 5 stars (a bump in one star can increase sales by 9%)

Similarly, on social media, you can ask people to:

  • Check in on Facebook

  • Put you in their Instagram story

  • Snapchat pictures of your food to your friends

All of these tactics are considered user-generated content (UGC). Even if some of your customers bring their laptops to do their homework at your restaurant, they're most likely using their phones to do any of the above. Most of the capabilities don't even exist on other types of devices.

6. Factor in costs

Finally, we look at the costs of mobile marketing. Our goal is to increase sales, and the only thing that brings sales is customers. So the most important high-level cost for us to consider is the cost to acquire and retain customers.

But we also have to look at efficiency. Are we managing our expenses of tools to enable customer growth and retention? Consider what else may fit into the following categories of costs.

Technology

  • Point of Sale (POS) system hardware

  • Networking and cabling for the order counter

  • Purchase of POS apps and integration (e.g. QuickBooks)

  • Labor on installs, web design/development, and troubleshooting 

Marketing

  • Online ads

  • Content creators

  • Events (concessions at markets and festivals)

Sales

  • Margins (or order size)

  • Retention (are you losing customers)

7. Drive it home

Now that you've thought through everything, it's time to execute your goals. Start small and with one or two initiatives. This way you can increase your chances of success with little downside. 

For instance, we didn't push social, reviews, coupons, gift cards, and ask for UGC all at the same time. We focused on one at a time, built out a process, and handed that process over to someone to repeat the best practices. 

  • Week 1 and 2, we created a process and calendar for social posts

  • Week 3 and 4, we beefed up our Yelp/Google and asked for reviews

  • Week 4 and 5, we issued physical gift cards and offered digital ones in-house

It's not hard to see why restaurants would want to get on mobile marketing. Over 70% of people worldwide use mobile to access the internet. In that sense, mobile marketing can seem daunting because it's a new and foreign idea to restaurant owners.

I believe it's worth investing the time and energy. Just remember to be measured in your approach.

3 Things I Wish I Knew Before Starting a Business

Posted: 14 Jan 2020 07:00 AM PST

There are three things that changed my life; all things I wish I knew before starting a business. After so many ups and downs, I've finally realized that no matter how hard you try, you can still fail in business. At the same time, if you know the right strategy, and apply the right approach, you will always be successful. Hard work is not always enough. The right direction is. 

Real-life lessons I learned about starting a business

Some say that a thousand-mile journey starts with the first step. I knew that as a teenager trying to make some extra money. I started by selling mix-tapes on Amazon when I realized that starting my own business would be the best way to gain financial freedom one day. But I didn't know how to build that business. As time moved on and I met mentors, I learned these three lessons. 

1. Be your own boss.

Being your own boss is a crucial thing to make some decent money. Working for others is fine, but it won't get you anywhere in your business career. If you constantly work for other people, your bosses, CEOs, managers and people who are higher on the professional ladder, you will constantly struggle with money. Working for a salary – no matter how high it is – will always make you just a worker, not a boss. Quit your job and focus on your own business.

Then you can finally take responsibility for your life. It is a matter of taking a conscious approach to your life and career. No matter how good your salary is in the company, there is always a chance to lose the job or face the financial problems that you cannot handle the right way. For all these reasons, being your own boss is a responsible and brave choice to change your financial situation completely.

2. Trade value for money.

You have probably heard about the term "trade time for money." This is the worst thing you can do in your career. Trading time for money will not only leave you with no time, but it will also leave you with no money. People spend endless hours working for money, and, at the end of the day, they end up broke, because they've been working for low rates. At the same time, living expenses continue to grow.

How can you trade value for money and be financially free at the end of the day? Giving your best to increase your value is the answer. If other businesses in your industry have a similar product, you should go one extra mile and give something more to your customers. Be the best in some areas of your business or deliver some extra service that will increase the value of your product. The money will flow in for sure. Money is constantly connected to value, and it is a fact that can be proven in every single financial segment. The more value you give, the more money you will make. Period.

3. Stay ahead of time.

Huge money makers are constantly ahead of time. They are not adjusting to the present time, but they create the future time. So many entrepreneurs that I spoke about told me the same thing. If you are not able to think in advance, you won't be able to be the first. Or as fabulous Grant Cardone says, "If you're not first, you're last."

That is a constant fact in business as well as in life. If you are not giving your best to create the opportunities, circumstances and chances for yourself, you will constantly wait for someone else to give you the right opportunities and chances. You will be passive, and you will be the product of your time.

On the other hand, if you want to be a leader, you need to stand in the first line. You need to raise your voice about the better price for your product or service, you need to be the first to claim your rights, and you need to speak about your ideas loud enough so that people can actually hear you and follow you. All these characteristics of leaders are the things that we all have to nurture. We live in a world that is fast and cruel, and if we only sit and wait, we will get nowhere. We need to be advocates of our luck, which means fighting for a better future and creating better circumstances in the present moment.

Each journey is unique

My journey started with low income. I was trying to sell some mix-tapes at a good price, but I only got some small amounts of money. When I changed my strategy and improved the business, I was making $3,000 a day. I knew that I had to have the right vision to reach my goals. Selling and buying was the best business for me at the time.

Later on, I developed crucial strategies for making money that bring me a huge money flow today. It was all possible because I believed in my journey and I refused to be an average nine-to-five worker. I started my own business called Disrupt, which completely changed my life.

Now, Disrupt is the leading media solution when it comes to empowering young professionals in starting the right careers and building the right businesses. I change lives on a daily level, and I am happy to see how other people make a similar success I have been making all my life. My goal is to empower people to follow their dreams and to stay on the track of success. I deliver the vision we all need in daily life. It is staying confident on your own journey and delivering the value that cannot be compared to anyone else in the industry. This is how you make success and progress on your life's journey. [Need help making your small business plan? Check out our reviews and best picks for business planning software on Business News Daily.]

Do what you love

If you have your own business, you must love what you do. This is the life lesson I've learned from the best people in the industry.

"The thing about starting a business is that you must fall in love with what you are doing and always put your clients' needs and results first. If you are in it for the money, you will lose every time," says the creator of the 12-week Body Transformation Challenge, Stephen Campolo. He advises on taking an approach that is centered on customers. He shares his fitness knowledge on social media hoping to help as many people as possible. And that is when his life truly changed. 

Many other entrepreneurs, including Tai Lopez, Gerard Adams, John Mallot, Casey Adams, Jason Capital, and many others, speak about the same thing. They all believe that the value you give to your customers is always a representation of your effort, passion and dedication to each customer. People literally feel how valuable your product or service is by simply searching for the practical and useful side of your product or service. If they find something unique that you have implemented in your offerings, they will follow you forever. At the same time, if your customers think that you are there only to profit from them, they will leave you and your brand.

You must be centered on your customers, and that is where real brand-building starts. Your customers are the mirror of your success, so make them look good. Give them something that will change their lives for the better, deliver an extra service they cannot find anywhere else, make them feel awesome while using your product or service. Only by satisfying your customers' needs, your brand will be able to grow. At the same time, your financial statements will grow and that will enable you to improve strategies and invest in even better solutions that will further improve your business.

Give people what you would like to get from someone who cares about you. It is the commitment, passion and over-delivering of value that will change the game. It is your decision to lead the game and be the first. You can reach financial freedom and give people what they need. Itt is a sure way to stay on track and be the one whose voice is heard and understood.

A Primer on Timeclock Apps and Your Business

Posted: 14 Jan 2020 07:00 AM PST

  • Timeclocks have evolved over the years into mobile, tech-friendly iterations that can be accessed anywhere.
  • Businesses of any size can benefit from a good timeclock app, though which one is right for you depends on your enterprise.
  • Accurately tracking how long your employees are on the clock, as well as where they are each day, can save your business thousands of dollars a year.

When the Apple App Store initially launched in 2008, the term "app" hadn't yet made its way into the common vernacular. Applications were something that ran on our personal computers, not our phones.

Today, there are countless apps available for our phones that can be downloaded instantly with a single tap or click. One of the most important business-related apps for any small business owner is the timeclock app.

If you run your own small business, you likely already recognize the importance of a good timeclock app. Being able to set and track your employees' work hours is important no matter how big your company is. These days, however, thanks to our highly connected and cloud-based options, business owners can use modern time-tracking apps to view their employees' locations, respond to time-off requests, and view specialized payroll reports at a moment's notice. A good timeclock app can offer peace of mind by reducing the amount of time spent filling out employee timesheets and providing the tools needed to reduce your business's labor costs.

With so many timeclock solutions available today, in addition to varying features, clock-in styles, and more, it can be difficult to determine which one you want to use.

You may want to know what the best employee timeclock app is out there, but that's a difficult question to answer, considering how varied one company's needs may be compared to another. So whether you need a time-tracking app to track and manage schedules, track remote employees through the use of real-time data or just need an all-round good option for your small business, here are some things to keep in mind when you start your search.

Things to consider when choosing a timeclock app

As with any business-related search, you want to go in knowing exactly what your business needs are. If you only have a dozen employees at a single location, there's no reason why you should splurge for a timeclock app designed for multinational enterprises. A little introspection not only saves you time and money, but can ensure that whatever option you choose will be the best fit.

How closely do you want to track your employees?

For years, clocking in for work meant grabbing your timecard and punching in at a station. While that system worked for a long time, one major flaw existed in the system. Less-scrupulous employees used a tactic dubbed "buddy punching," which entailed having their friends punch them in at the employee timeclock even though they weren't at the office.

Timecard fraud remains a real problem, but there are options in today's web-based timeclock apps that curtail that costly problem, if you want to implement those features.

Depending on which service you choose, your managers can track employees' locations through their smartphones' GPS location functionality. Since nearly every app is mobile-friendly for Android and iOS devices, geolocation functionality can pinpoint where the employee was when they clocked in and out.

Geofencing is another feature that uses GPS tracking to restrict where employees can clock in or out, requiring them to be at your business's physical location in order to do so. A biometric timeclock can require a fingerprint scan or use facial recognition when clocking in or out.

It may seem like a lot of data for managers to collect on employees, but in the case of employee schedules and your company's bottom line, time is literally money.

Do you need a timeclock app that has additional employee scheduling features?

While having a timeclock app is incredibly important, it's not the be-all and end-all in terms of employee scheduling. There is a range of additional functions that can make your and your employees' lives much easier.

Depending on what you need, your managers may benefit from a timeclock wizard, time-off management capabilities or the ability to draw up reports detailing the impact of your employees' schedules on the company's bottom line. With enough data in hand, you can make sure your payroll is exactly what it should be while complying with existing labor laws.

How well does a timeclock app integrate with other programs?

Running a modern business is a lot like spinning plates. There's a lot to consider at any one moment, and if you don't have your attention on multiple things at once, something can go wrong. You can mitigate that issue through the use of various business programs. Since things like QuickBooks and Google Calendar are just as important as a cash register these days, you want to make sure your timecard app is compatible with programs you've already implemented.

There are plenty of time-tracking apps out there that tout their ability to integrate with most of today's popular business software. With the right app, you can have employee schedules automatically imported into a company calendar that can then be sent to employees' email inboxes or texted straight to their phones. Some integrations also allow your online timeclock data to go directly to payroll, further ensuring that you're accurately compensating employees for their time on the job.

Is there a best timeclock app for Android or iOS?

When considering a timeclock app, nearly every company that offers one tries to get their apps on both the Google Play Store and the Apple App Store. Smartphones are among the most ubiquitous pieces of technology today, so it only makes sense that they'd want to have their product on as many devices as possible.

If you come across a timeclock app that only supports one or the other, you should probably skip that one and go to another service that covers both mobile operating systems. Unless you provide a business phone to your employees, you don't want to hamstring your time-tracking capabilities by only supporting one over the other. If you were forced to choose one over the other, however, it's important to note that iOS has 10% of the global smartphone market share, while Android has 84%.

How much does a timeclock app cost?

Good timeclock apps, like most time and attendance programs, comes with a price tag. How much that app (and the associated service)  cost varies between providers and is based on multiple factors.

For example, if the software is hosted in the cloud, you may need to pay for additional online storage. Some companies charge extra based on the number of employees that will use the system or how many locations it will service. If you want to use a wall-mounted timeclock to give yourself additional protections against timecard fraud, that will likely come with an additional cost as well.

According to our research, businesses with 20 employees generally could see their time and attendance programs costs end up anywhere between $20 and $300 per month. Some providers have a monthly minimum cost, especially if they charge on a per-employee basis. There may be additional setup and implementation fees.

Regardless of where your small business is in its evolution or how many employees you currently have on staff, a good timeclock app can be a huge help in making sure you're fairly and accurately compensating employees.

When looking for such an app, remember that the question may not necessarily be "Which is the best?" but rather "Which is the best for my business?"

6 Biggest Internet Security Threats Facing Business

Posted: 14 Jan 2020 06:00 AM PST

The tech-driven nature of the modern world has forced most businesses to flock to IT tools in greater numbers than ever before. While most companies have embraced the IT revolution, relatively few of them have the tech-savviness needed to avoid major data breaches or similar IT scandals. Nevertheless, giving up digital tools for good is simply unaffordable for most businesses, which means that they should be taking active steps to secure themselves from today's biggest internet security threats.

Here's a breakdown of the 6 biggest internet security threats facing business, and what you can do to ensure you won't be caught off-guard by them.

1. Phishing emails are still plentiful

Phishing emails are almost as old as the internet itself, but don't let that fool you into thinking that they're a thing of the past that no longer warrant your concern. As a matter of fact, phishing emails are still plentiful and remain one of the most consistent threats that many businesses face. The reason that phishing emails are so insidious is the first place is because they're actually relatively uncomplicated; it relies not on a technical breakdown in your system to succeed, but rather upon the gullibility and human fallibility of your employees.

Set some time aside to assure that your workforce is up to date on phishing awareness, as somebody pretending to be someone they're not is perhaps the chief cybersecurity threat of the modern era. By pretending to be a legitimate business, brand, or individual, phishers send out seemingly-legitimate emails that are actually quite deceptive and at times full of malware. Until you understand how to train your employees to respond properly to phishing attempts, your business will never be secure from IT threats.

2. Be mindful of browser extensions

Outside of phishing emails, you should also be aware of the myriad of dangers presented by a browser extension. Browser extensions are usually minor and often harmless features added to popular web browsers like Google Chrome or Firefox, but some of them are actually quite harmful. For instance, some browser extensions may be collecting information on their users which they then sell to third parties. This means that your company's critical information could be getting vacuumed up and sold to other people without you or the employees being victimized ever being aware of it in the first place.

An in-depth report from the Washington Post elucidates just how exactly browser extensions can collect information on users. You should ensure that every one of your employees has read this article, before doing a company-wide sweep to determine if harmful browser extensions have been installed on vital company equipment. To be clear, this isn't to say that any and all browser extensions are illegitimate and that your company can't permit any of them, but rather to note that you need to be cautious and constantly updating yourself when it comes to what's been installed on company computers.

If your employees work from home, browser extensions that have been installed on their personal computers could also be jeopardizing important company information that they work with. Remember to always respect worker privacy, but don't be afraid to ask your employees who work from home to do a private sweep of their own browser extensions to ensure their data isn't being vacuumed up without their consent or awareness.

3. Social media oversharing

Social media platforms are more popular than ever before, and it seems that just about everyone is on Facebook, Twitter, or a similar platform these days. While this is great insofar as interconnectivity is concerned, it can actually generate a slew of IT risks that many business owners are totally unaware of. Many people overshare on social media, for instance, and this means far more than posting too many vacation photos or late-night political rants. Sometimes, employees can post sensitive information on social media without being aware of what they're divulging to the public. At times, your competitors may even be monitoring the social media feeds of your high-value employees to determine what's on their mind, what they're working on, or how they could go about incentivizing your workers to leave your company for greener pastures elsewhere.

Be aware of social media oversharing and pay particular attention to photos that are posted online. Sensitive information like written-down passwords or the specific hardware your company relies upon could be made public if somebody takes a picture without checking to see if it's acceptable to post before they share it. Whenever you're discussing internet privacy with employees, it's crucial to understand that they must consider how their personal lives overlap with their professional careers in the midst of the digital age.

4. Personal devices leak data like a sieve

Besides focusing on company computers and the personal browsing habits of your workforce, every business concerned about IT security should also be constantly reminding their workers that personal devices like smartphones leak data like a sieve. Everybody has some sense of awareness that we're being tracked in the modern era; without the close monitoring of users, most technical devices and services which we've come to love and even expect wouldn't necessarily be possible. Few of us truly understand just how seriously our personal devices track us and release our data to the wider world, however.

Despite Apple's promises to guard user privacy, for instance, iPhones still widely share the personal information of their users in less-than-transparent ways. If you issued company phones to your workforce, consider the fact that you may have been inviting data tracking and invasive surveillance techniques into your place of business.

5. Passwords and access issues

This section will consider two separate but closely related issues; password management and employee access are two areas where many businesses suffer from relatively lacking security protocol. Most of us have a myriad of passwords that we need to remember in our everyday lives; whether it's accessing our smartphones, personal computers, or the various digital services that we love, there's a good chance the average person has at least two or three passwords to keep in mind at all times. It's thus imperative to establish that employee password management is one of the most crucial elements of any good IT security strategy, as failing to regularly update your passwords can lead to disastrous outcomes.

Constantly updating your password isn't enough, either; you must also be aware that certain practices relied upon by some users, like writing their passwords down, will inevitably lead to other people seeing those passwords and potentially exploiting them for unauthorized access. The next issue is "access," or whether or not employees can access certain services, data centers, or pieces of hardware that they shouldn't be able to.

Protecting yourself against privileged user abuse isn't easy, as it demands that you take a close look at the people you should be able to trust the most – your workers. Privileged user abuse and other access issues remain very damaging to companies who ignore them, however, so don't think you can brush this under the rug.

6. Links and installations

Finally, always be aware that not all links are legitimate. What you click on matters – installing the wrong application or visiting a webpage mistakenly can spell disaster for even the tech-savviest of companies. Ensure that your workers are making common-sense decisions when it comes to the links they click and things they download, and your business will have solved many IT dilemmas before they even appear.

Are the Benefits of Using a PEO Really Worth It?

Posted: 14 Jan 2020 05:15 AM PST

  • One of the primary reasons many small businesses choose to work with professional employer organizations is to provide high-quality benefits to their employees at a lower cost.
  • PEOs manage many HR-related services, such as payroll processing and payroll taxes, health insurance, workers' compensation insurance, and retirement plans like 401(k)s.
  • The alternative to using a PEO is hiring an in-house HR team. Some small businesses choose this so they can hand-select HR specialists who will understand and act in the best interest of their businesses. 

A professional employer organization (PEO) isn't right for every business, but this HR solution can elevate your employees' experience with your company. Before deciding to turn over the keys of your HR department to an outside service, it is important to understand the pros and cons of using a PEO compared to offering the same services in-house. 

Managing a human resources department, employee onboarding, payroll and benefits can be a lot to handle for many small and midsize businesses, as it requires in-depth knowledge and support that may be difficult to come by. PEOs can relieve some of the stress and take on many HR responsibilities, making it easier to keep your business operating smoothly. However, while there are a lot of benefits to partnering with a PEO company, there can also be some downsides.

Professional employer organization pros and cons

One of the primary reasons many small businesses choose to use PEOs is to provide high-quality benefits to their employees at a lower cost. However, business owners should consider whether partnering with a PEO will be more beneficial in the long run than keeping their human resources in-house. 

While PEOs usually offer comprehensive employee benefits and lower compliance risks, many business owners want to remain in complete control of these benefits and risks. These businesses may choose to keep all their HR services in-house. An in-house HR team can also be a valuable resource for employees who prefer to interact with someone face-to-face when they have HR questions or concerns. 

The common goal between PEOs and in-house human resources is to provide the services and benefits employees need, but which option is more suitable for your business? Below, we compare the pros and cons of using a PEO and offering the same services in-house. [For more information on PEO services, read our review of The Best PEO Service Providers of 2019.] 

What does a PEO do?

A professional employer organization is an outsourcing company that provides human resources for small and midsize businesses through co-employment agreements. These are some ways a PEO simplifies your business's HR duties: 

  • It reduces the number of administrative and HR tasks your business has to handle itself.
  • It helps you adhere to federal regulations, reducing your compliance risk.
  • It offers comprehensive benefits for all employees. 

By partnering with a PEO, small business owners gain more control over their companies because they have more time to lead and focus on driving employee performance, according to Brian Michaud, senior vice president of ADP TotalSource. 

"A PEO offers built-in protections and helps ensure holistic compliance, from payroll to HR (i.e., discrimination and harassment) to insurance," Michaud told business.com. "PEOs allow owners to focus on knowing and executing on their business, rather than needlessly worrying over potential fines and lawsuits that can come unexpectedly." 

 

Editor's note: Looking for the right PEO for your business? Fill out the below questionnaire to have our vendor partners contact you about your needs.

 

What are some PEO benefits?

When choosing a solution to manage your HR processes, it's important to consider the benefits of using a PEO and evaluate whether those benefits are the best fit for your business. Your PEO options will depend on your business's size and goals. PEOs offer many employee HR-related services, such as payroll processing and payroll tax management, health insurance, workers' compensation insurance, and 401(k) and retirement plans. 

Saving money

The annual return on investment associated with cost savings alone is one of the most common factors that small business owners assess when deciding whether to use a PEO, according to the National Association of Professional Employer Organizations. 

NAPEO's research found the estimate of the expected ROI for PEO clients, based on cost savings alone, is 27.2% per year. This estimate is based on the cost savings of businesses that entered into co-employment agreements focused on five areas: 

  • HR personnel costs
  • Health benefits
  • Workers' compensation
  • Unemployment insurance
  • Other PEO services, like payroll and retirement plans 

An ROI of 27.2% means that for every $1,000 spent on PEO services, the average business owner would save roughly $1,272, resulting in a net benefit of $272 for every $1,000 spent. 

Managing workers' compensation

The benefit of using an employer organization is that it takes care of time-consuming tasks like vetting and purchasing workers' comp policies, according to Bryan Bowles, founder and CEO of Transactly. 

"Prior to utilizing a PEO, we had to manually sit through the annual audits, which consumed a significant amount of our accounting staff's time," Bowles said. "In addition to the time savings, we've noticed a significant cost savings as compared to purchasing a policy directly." 

PEOs have experience with workers' comp programs, so they have policies in place for situations you may not have yet encountered at your business. One example of this is return-to-work programs that help employees transition from medical leave back to work through modified, low-risk or light-duty jobs. 

Improving the employee experience

PEOs add value to your business by providing a great employee experience. Since a PEO handles much of the grunt work of human resources, it allows you to focus on your company's culture and employee management. 

Additionally, PEOs may allow you to offer employee benefits that typically wouldn't be affordable for a small business, according to Samantha Reynolds, communications coordinator for Helpside. These include "not only traditional benefits like health, dental and vision insurance, but also conveniences like online access to paycheck stubs, direct deposit and assistance with verifications of employment." 

According to NAPEO, employees of businesses that use PEOs are significantly more likely to report higher scores on key measures related to employee satisfaction and confidence in company management: 

  • Higher levels of employee engagement
  • Higher retention rates
  • Improved trust in their employers
  • More confidence in the business's approach to company growth 

What are some in-house HR benefits?

For some businesses, keeping human resources in-house is the better choice. Managing your own HR department offers you more control over your workplace policies. An in-house HR team is completely dedicated to your business, and you can hand-select HR professionals who understand and act in the best interest of your business. In-house HR can improve the employee experience by providing the following: 

  • Face-to-face interactions
  • Fast execution of technical operations, like policy and compliance changes
  • In-person assistance with recruiting, interviewing and training new employees 

What are some professional employer organization disadvantages?

It's important to conduct extensive research before partnering with a PEO. Business owners need to understand that they will be entering into a co-employment agreement with the PEO, which means relinquishing some control over their businesses. Here are some PEO disadvantages to carefully consider before deciding to use one. 

PEOs don't …

  • Only manage the HR of your company, as they have many other clients. There's no exclusivity, so your business may not receive the personal, in-depth attention it needs.

  • Take on all the risks and responsibilities when issues arise. Since it's a co-employment agreement, you're in it together.

  • Relieve you and your business of standard corporate responsibilities. PEOs are an additional line of management that assists with your HR and administrative tasks. They don't completely replace your responsibilities; they just support you in specific areas. 

Another disadvantage of a PEO is that it owns your loss run and payroll data, according to Jon Brodsky, CEO of Finder. 

"Because the PEO would own the data, we would have had to start from scratch when we were ready to get insurance and benefits on our own, which would have likely meant higher rates for us," Brodsky said. "So, we decided to take the short-term pain of administering our own healthcare and receiving slightly less-than-favorable rates on our insurance in order to have the best long-term potential cost savings for Finder." [Read related article: How to Manage Risks and Maximize Rewards of Co-Employment] 

PEO tax issues

PEOs are responsible for administering payroll and filing payroll tax returns, which can be one of the greatest benefits of partnering with a PEO, according to Tammy Dain, co-founder and CEO of Rabble. 

"Since employees are considered co-employees of both the PEO and your business, the IRS still considers you liable if there are any errors in those filings," Dain said. "Thus, it's incredibly important that you have verified the PEO's practices with regards to taxes. It is completely within your right to audit the payroll tax returns that the PEO has filed on behalf of your employees." 

The IRS currently offers a voluntary certification program for professional employer organizations, which ensures tax liabilities remain entirely with the PEO rather than your business. 

Outsourcing payroll issues

PEO payroll services can free up time for you to focus on your daily business operations and ensure that your payroll is done correctly. However, there can be downsides to outsourcing payroll services if you partner with the wrong provider. 

"If you select an inexperienced payroll vendor, you run the risk of them making costly mistakes with payroll," Dain said. "It'd serve your business well to partner with known leaders in the payroll space, like ADP or Paychex. Particularly if you're an emerging startup, look for a vendor that will create a customizable solution." 

Dain recommends using a PEO solution that offers customization rather than preconfigured service bundles so you pay only for the services you need and not for features that don't fit your business. 

What are some in-house HR disadvantages?

Human resources departments are costly to run, and the additional salaries of an entire department can be a burden to small businesses. If your business has grown at a manageable rate and needs little HR management, hiring and maintaining an in-house HR team may be unnecessary. Here are three disadvantages of in-house HR: 

  1. It's time-consuming. Maintaining HR duties in-house takes up time and manpower that many small businesses simply can't afford.

  2. It may cost more than a PEO over the long term. While standard payroll services or human resources may seem affordable in the beginning, you must account for long-term sustainability. Employing knowledgeable and experienced HR workers to ensure labor law compliance, administer benefits, and draft company policies and procedures can cost business owners more out of pocket than they would like.

  3. It's not easy to find top talent. Finding quality employees may be difficult, especially for small businesses. Top employees usually seek numerous high-quality benefits, such as medical and dental insurance and a 401(k) plan match, that small businesses can't always offer. 

By partnering with a PEO, businesses receive access to a team of experienced HR professionals and a wide range of support that may otherwise be out of reach for small organizations. Alternatively, keeping HR services in-house can raise employee satisfaction by providing face-to-face interactions, which can strengthen the bond between the employee and employer. Consider the size and needs of your business when making the final decision between using a PEO and keeping HR work in-house.
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