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Do You Have a Toxic Employee Wreaking Havoc in Your Business?

Posted: 29 Jan 2020 01:00 PM PST

The workplace is a delicate balance. Your employees each have their personalities and behaviors that contribute to your overall company culture. 

And when you have a toxic employee, that toxicity can seep out and impact their co-workers and your business. 

Best case scenario: A toxic attitude can put a damper on all things business success, including productivity, employee morale and even your employer brand. 

Worst case scenario: An employee's bad attitude can lead to drops in customers, a ruined business reputation, high employee turnover and lost money. 

Maybe you're thinking, "No, this doesn't relate to me. I do my homework when hiring someone." And although that's great (we all need to be doing our due diligence during the hiring process), things can change oh, so quickly. Someone might put on their best face during the interview process but be a completely different person on the job. An employee might not even realize they're being difficult to work with. Or, they may grow comfortable at your business … too comfortable. 

Whatever the situation, dealing with a toxic employee is never easy. But for the sake of your business, you need to address it at some point. So here we go! 

The 7 types of toxic employees

Your employee may fall under one or more than one of the following categories of toxicity. Look for signs that might indicate you have one of these kinds of employees running rampant in your small business.

1. The bulldozer

For business success and growth, you need employees who are willing to come up with and defend their ideas. 

But you don't need bulldozers.

Quite simply, bulldozers bulldoze their way through other peoples' opinions and thoughts to get their way. They may interrupt their co-workers or constantly argue against what others say. Sometimes, bulldozers are loud. Sometimes they correct people using humor. 

Whatever the tactic may be, a bulldozer's toxic traits may seep into your workplace. Keep an eye out for these top bulldozer traits:

  1. Aggressive
  2. "Strong personality"
  3. Always right
  4. Disruptive  

You may have employees who have bulldozer characteristics. If these traits sound familiar, there are several things you can do to help the situation. 

Meet regularly with employees so everyone feels like their ideas are heard. You may set up weekly one-on-ones to check-in and nip problems in the bud. That way, your bulldozers and the people they bulldoze are equally heard. 

You may also consider gently talking to the employee with this type of personality to help them see what they're doing. 

2. The passive-aggressive employee

A passive-aggressive individual is someone who doesn't speak their mind when they're upset. Instead, they indirectly show that they're not happy about something. This can be very toxic for the workplace.

Imagine asking a co-worker to get something done. They're unhappy with the task, but instead of telling you directly they make snippy remarks or procrastinate on doing the task. 

Here are a few quick facts about the passive-aggressive one:

  1. Avoids direct conflict
  2. Bitter or snarky 
  3. Backhanded comments 
  4. Puts off doing things they don't agree with 

Someone who is a passive person may be more inclined to bottle their feelings and avoid taking action. When there's conflict, they may get frustrated and display passive-aggressive behaviors. 

To help deal with this type of toxic characteristic, foster an environment of communication. Encourage your employees to express themselves. Give your workers plenty of opportunities to regularly talk with you (e.g., one-on-ones, suggestion boxes, etc.) to diffuse these types of situations. 

3. The complainer  

Ah, the complainer. You know the person –there's always something wrong. They always have a burr in the saddle. You just want to grab them by the shoulders and say, "Lighten up!" (But that would be highly frowned upon). 

So, instead, you let it go until the negativity builds and builds. But that building negativity has to go somewhere, and often it's into the rest of your team and your company culture.  

Here are some signs that you've got a complainer on your hands:

  1. Negative
  2. "Woe is me"
  3. Never happy
  4. Nothing can go right  

To deal with the complainer, pay attention to their complaints. Maybe they always make negative comments about the same thing. If that's the case, you may be able to talk to them and see if you can help (e.g., offer a flexible work schedule to help an employee who complains about their work-life balance).  

If a complainer just has a negative attitude about anything and everything, you may want to address it with them. Or you can talk to a group of employees about the importance of positivity in the workplace so they don't feel like you're singling them out.

4. The knowledge hoarder 

The desire for job security can be a dangerous thing. Employees who want to secure their jobs may decide to keep processes and business-related knowledge to themselves. 

But successful businesses thrive on the flow of open communication, shared knowledge and collaboration. 

A knowledge hoarder isn't just detrimental to your team's morale –they're a liability to your company's success. What happens if they leave? Where does all that hoarded information go? 

Some undeniable indicators of a knowledge hoarder include:

  1. Anti-team players 
  2. Have independent processes 
  3. Attention-seeking
  4. Insecurities about work 

A workplace can't run when you have at least one person hoarding knowledge and refusing to work on a team. To root out this problem, create a knowledge base and require all employees to share and manage documents (and other things within it). 

Another way you can discourage knowledge-hoarding actions is by rewarding those who don't hoard knowledge. Praise employees or offer bonuses to employees who share information with others or help train new hires. 

5. The prideful one 

Do you have an employee who thinks they know it all? A prideful employee is easy to spot. Like the bulldozer, they are "always right." And if they're wrong, they're slow to admit it. 

I look for employees who are hungry, humble and smart, as described in the book The Ideal Team Player. Not ones who are blase and prideful. Humble. 

Pride can be a dangerous thing. As an entrepreneur, I try to stay humble and set a good example for my co-workers. Likewise, I look for leaders who exemplify humility. 

Here are some prideful employee red flags:

  1. Slow to apologize
  2. Quick to brag
  3. Always right
  4. Unresponsive to criticism 

As I said, I think it's important for leaders to set a good example of humility. Another way you can help humble your prideful co-worker is by lifting up the employees who possess humility. 

6. The gossip   

Your employees likely enjoy talking with their fellow co-workers. Maybe they talk about work or their personal lives. 

Or maybe they're dishing about other employees, your business's status or even you. 

Gossip is often an unfortunate but inevitable part of the workplace. People like to talk. And those talks can often turn personal and pump life into the rumor mill. Gossip can bring resentment, expose personal affairs and cause frustration. 

Here are some signs of a gossiper: 

  1. Always whispering 
  2. Seems uncomfortable around certain people 
  3. Talks about others to you 
  4. Two-faced 

You can't prevent gossip. But again, you can set a good example by not partaking in it. And you can try to be as transparent as possible when it comes to your business so you can beat employees to the punch.

We have a monthly newsletter that gives employees the lowdown on what's happening at my company, Patriot Software. That way, my co-workers know that I'm upfront with them, and they can be upfront with me.  

7. The underperformer 

Your employees' performance probably fluctuates depending on their strengths and weaknesses, mood and what else is going on at work. But if you have a perpetual underperformer, you have a toxic employee. 

And you know what else it means? Your other employees have to pick up the slack. Your employees don't want that. Not to mention, your business can't handle that long term. 

In a nutshell, these are the traits of an underperformer: 

  1. Disengaged with their work
  2. Fails to meet goals
  3. Constantly needs others to pick up the slack  
  4. Makes excuses 

To get the underperformer up to par, you may need to meet with them to find out why they are falling short. You might also decide to put them on a performance improvement plan to encourage a better work ethic. 

Why Everything as a Service Is a Game Changer for Small Businesses

Posted: 29 Jan 2020 07:00 AM PST

With more digital services and applications available to us than ever before, the sharing economy is notably changing consumer expectations around ownership and access to products. More and more, people expect to receive and use products as and when they need them, paying only for how much they use. Brands like Nike and Mercedes-Benz are leading the way on this business shift: Nike Adventure Club lets parents order children's shoes on a quarterly, bimonthly or monthly basis, and Mercedes-Benz Collection provides on-demand access to the firm's vehicle fleet for a monthly fee.

This need for on-demand experiences is also presenting itself in the business world. Now, flexible consumption models enable companies to remain agile while choosing the computing services that work best for them, regardless of their size. As a result, businesses are going the extra mile to ensure their processes are streamlined by circumventing the old bonds of one-size-fits-all contracts.

In today's customer-centric world, businesses need to keep pace and ensure they can also provide sharing economy-like experiences while maintaining a low overhead. To do that, they need to tap into the everything-as-a-service (XaaS) evolution.

What do we mean by everything?

Let's take a step back. With the emergence of Software as a Service, Infrastructure as a Service and Platform as a Service, we've seen businesses across industries opt into services on demand instead of individual products. Data storage services have experienced a similar evolution, with businesses moving through private cloud, multicloud and hybrid cloud services as their needs dictate, increasing scalability.

That transition – from fixed to flexible – is what defines XaaS, and it's a trend that's not slowing down. XaaS is an "anything as a service" model that allows companies and consumers to sign up for products, tools and tech solutions online. And the global XaaS market is expected to flourish – at a compound annual growth rate of 24% between 2019 and 2024.

The benefits of the sharing economy

It's easy math. Any business that offers a B2B product or service and continues to lock customers into extended contracts will, at some point, lose out to a more agile competitor. Like customers, business decision-makers increasingly expect the pay-as-you-go services: They want easy, frictionless access to software and hardware without having to support and maintain it, as well as one-size-fits-all contracts that reflect this demand.

Adopting this approach, be it through their own services or by incorporating outside services to improve internal processes, allows organizations to reduce their operating expenses, work with more predictable costs and minimize the effort they need to put in. 

Businesses are already discovering the benefits of the subscription service model. The strategy provides a wide range of benefits to companies, including giving them the freedom to: 

  • Introduce new solutions faster. Deloitte research has uncovered that 75% of businesses believe XaaS helps them introduce new solutions faster and more easily. 70% also say it helps them use tools that would have been too expensive in the past. This is crucial for small businesses with ambitions to grow and thrive.

  • Better interpret data. The old method of making decisions based on intuition doesn't stand up in the world of XaaS. Businesses now have access to big data tools that enable them to analyze and interpret more data at a much lower cost and make better, more informed decisions. SaaS tools like Mixpanel and Heap allow for event-driven analytics, allowing businesses to intelligently track and predict product and user behavior alike. Intercom marries this idea with customer support, allowing for omnichannel engagement with customers based on their journey online.

  • Streamline finances. Companies that have adopted a greater proportion of XaaS models are more likely to achieve major cost reductions. By not having to go "all in" on software purchases, office space and expensive hardware, businesses have the chance to save on costs by only paying for the features and tools they plan to use. And as regular hardware replacement options mean less depreciation in tangible assets, XaaS also enables businesses to reduce their overhead considerably.

  • Increase productivity. Most XaaS applications were tailor-made for boosting workplace productivity. Slack facilitates rapid communication and file sharing across teams, while LastPass works to streamline password management and security, so you and your team can spend less time wrangling credentials. Similarly, scaling IT infrastructure can be really expensive: It makes a dent in your budget and prevents your employees from doing their jobs. Employing XaaS can minimize the time spent on maintenance and upgrades, chances of server failure and removes the pressure of managing your own servers.

  • Stay competitive. XaaS is now considered non-negotiable: Companies that don't incorporate it may risk trailing behind the competition. As reported by Deloitte, 39% of companies have reported that increased XaaS adoption helps them keep pace with their competitors, while 28% believe their use of flexible consumption models is giving them a sizable lead.

  • Prioritize cybersecurity. 43% of all cyberattacks are aimed at small businesses, but only 14% can defend themselves effectively. In many cases, a targeted cyberattack will put a small or medium-sized company out of business. Through XaaS, businesses can implement more rigorous authentication and password protection protocols, and leverage cloud-based apps to better protect themselves and their customers.

Companies use a wide array of services under this model, ordering everything from their network and help desk services to data analytics and IoT on subscription. Employing XaaS also accelerates the device refresh cycle by up to five months, ensuring employees are always working with the latest, most effective technology.

From ownership to everything

For new businesses, upfront costs like computing infrastructure can be a tall order. XaaS offers small businesses a new way to scale. One way businesses can make the jump to XaaS is by evaluating their computing infrastructure: Programs like Dell's PC as a Service (PCaaS) can empower even the smallest teams to get up and running. A monthly payment program that supplies everything needed to run a business, with flexible upgrades at any time, means that businesses have new hardware, 24/7 support and leading antivirus software at their fingertips. 

Get on board the XaaS evolution

In the same way that people now get their music, clothes and even cars on a pay-for-what-you-use basis, businesses also expect to only pay for the computing products and services that they use. XaaS is changing the business world as we know it. For small and medium businesses, it presents an opportunity to stay competitive and attract new customers through streamlined, convenient offerings.

Empowering the Next Generation of Women Leaders

Posted: 29 Jan 2020 04:30 AM PST

We're celebrating International Women's Day on March 8, and here's an encouraging fact: More than 1,800 women officially launch companies in America every day, adding their voices and talents to the more than 12.3 million women-owned organizations nationwide, according to figures from Fundera. Although women make up just 40% of startup leaders and a mere 6.6% of Fortune 500 CEOs per Fortune's studies, their ranks continue to climb steadily. 

These objective indicators bode well for the future of women who have the drive to head up firms, as well as female teens and college students on the cusp of breaking onto the corporate scene.

Last year, women became a majority of the college-educated labor force, signaling a turning point in gender parity. Yet the indicators also point to a growing need for society to continue empowering and supporting women to break gender barriers, bring services and products to market, receive equal pay, secure financing, and see their visions come to life. 

The rise of the guilt-free mom entrepreneur

I recently attended a summit meeting at which several female CEOs and COOs were asked about being moms while holding important positions. Ironically, no one asked their male counterparts the same questions, which illustrates another reason the world needs to start helping female entrepreneurs understand that they don't have to choose between being a parent and running an organization. 

While I can't say I have a recipe or road map, I do believe no mom entrepreneur should try to do it all. Being able to trust go-to people to pick up kids, run errands or mow the lawn frees women to engage in higher-level stuff. I call this core versus noncore outsourcing. If it's not a core task, consider employing someone else to take it off your plate. 

Just as female entrepreneurs lean on their colleagues and team members, they should equally lean on women's community associations, neighbors, friends and relatives to help them stay balanced. At the same time, they can provide others with support when possible, such as dropping off a meal for a new mom and CEO or watching a friend's puppy while she is out of town securing funding for her startup. 

I'm a member of the local mothers club on Facebook, and it's been a terrific experience personally and professionally. One mother recently asked the community for help in finding a location for a family reunion in San Francisco. Knowing that the holidays are a busy time for restaurants and often requires a minimum spend or contract in place, I asked a colleague on the executive events team at Salesforce for a list of prevetted venues. The mother was so appreciative of the list, and I was happy to utilize a work connection to support a local mom. 

Women leaders can help their personnel learn how to effortlessly harmonize work and personal life by offering perks such as Cleo, a family support tool app. We've rolled out a Cleo benefit successfully to help new and expecting parents on our team navigate the ups and downs, ins and outs, and wonders and joys of parenthood. It's just a little way to keep everyone focused and ensure women don't get left behind because they're not sure how to handle all their responsibilities. 

Supporting the women leaders around you

But it's not just the mom entrepreneurs that we can celebrate and support on International Women's Day. Here are some ways you can help all of the women around you get closer to their business objectives while staying present in their personal lives. 

1. Offer help through community organizations.

Let the women around you know they shouldn't be afraid to reach out for help. Too many women try to "do it all" when they don't need to, not realizing they can tap into so many resources available in their communities.

Our team has engaged with an organization called the Renaissance Entrepreneurship Center based in San Francisco. It's a phenomenal nonprofit that provides women and men from diverse backgrounds with the training they need to start a business on solid footing. Additionally, the center offers education to help members grow their companies pragmatically. Almost all cities have some nonprofit aimed at building smart leaders. Find and engage with yours. 

2. Share your technology recommendations.

Leading a business can be all-consuming, so sharing your personal technology wins – from big ones to tiny time savers – can give an entrepreneur a big leg up. Even if an entrepreneur can't afford employees yet, she can absolutely take advantage of free and low-cost apps and platforms to work more efficiently. From having a robust customer relationship management system to choosing a method to streamline social posts and email drip campaigns, an upfront time investment will pay off.

What's more, technology can help small businesses appear bigger than they really are. We call this the "blowfish effect," because it lets them offer the same level of experience as their larger competitors. The best thing about technology is that entrepreneurs — both women and men — don't have to be whizzes to reap the benefits of what's out there. 

3. Make time for face-to-face interactions.

It's hard to go it alone, so if you want to help your connections, let them pick your brain. Coworking spaces are a great avenue for helping others. Take The Riveter and The Wing, for instance. Both endeavors promote innovative coworking spaces designed specifically for women. From providing mothers' rooms to hosting special networking events, The Riveter removes workspace logistical barriers that sometimes make launching new ideas tougher for women. Making yourself available at these coworking spaces can be a big service to other women. 

To be sure, just working in the same building with access to one another can help female entrepreneurs make good decisions, take calculated risks and meet like-minded professionals.

4. Add yourself to a woman's "board."

The more individuals they know, the higher their chances of building great boards of directors, or getting named to one. California passed Senate Bill 826 requiring every public company in the state to have at least one woman on its board of directors by December 2019 or face a hefty monetary penalty. 

Speaking of boards, I have one for my professional and personal life. Who comprises the latter group? Women, men, guides, mentors, co-workers, employees, bosses … you name it. I met many of my personal board members at our organization's events, activities and initiatives, such as the intimate 12- to 15-person women trailblazers dinners we hold. The overall effect of a meal and networking results in a psychologically safe space where women can open up about their real issues working as leaders at small and medium businesses. 

5. Open access to funding sources.

There's been a lot said about the difficulties that women face in securing funding. Helping women fund their businesses can be one of the most impactful ways to assist them in getting a business off the ground. Our own Salesforce Ventures Impact Fund helps women and underrepresented minorities gain access to startup financing in the areas of workplace development, equality, sustainability and the social sector. Yet we're certainly not the only business or charity designed to funnel money to women with entrepreneurial aspirations. As time goes on, more female venture capitalists are rising through the ranks and motivating other women to dream big. 

Women will continue to rise and change the face of our economic marketplace. In deference to International Women's Day, give a nod to yourself and the other female entrepreneurs in your sphere of influence. We've already changed history, so let's work together and commit to bringing up the next generation of female leaders to accomplish more amazing feats.

How Technical SEO Can Positively Impact Businesses Going Into 2020 and Beyond

Posted: 29 Jan 2020 04:00 AM PST

While a majority of social marketers feel that technical search engine optimization (SEO) is ignorable in the long run, we would like to believe that it is the most essential, yet underrated tool that guarantees business growth, if taken seriously. Most importantly, technical SEO mostly requires professional help, and businesses should consider getting an affordable and credible service provider for taking care of the same.

We understand that every business owner isn't well versed with the technicalities and importance of this form of SEO, and this is why we would clearly segregate the topic with examples, characterizations and valid postulates.

What is technical SEO?

Every business that is looking to make it big in the digital domain must concentrate on getting a functional website for catering to the diverse audience base. Put simply, technical SEO evaluates the website's state of well-being while making sure that the outreach and other technical aspects of its operations are duly attended to.

In simpler words, technical SEO is almost anything that is done to the website which makes it easier for search engines to identify and index. Technical SEO works best when paired with the likes of on-page and off-page search engine optimization techniques. Technical SEO is one skill that makes the website content visible to web crawlers

Why is technical SEO important?

Giving proper attention to technical SEO is necessary for growing organic business traffic. While on-page search engine optimization takes care of the content quality, even the most cohesive piece of information would falter if search engines fail to identify the concerned website. Therefore, technical SEO renders visibility to all the other existing SEO and content marketing efforts that are restricted to the website. 

How will technical SEO help my businesses?

Technical SEO helps businesses in several direct and indirect ways.

Faster website-loading speed

Almost 47% of global users prefer (and even expect) that a good website to load within 2 seconds or less. If your site takes a long time to load, customers will look elsewhere, which eventually kills traffic and overall sales.

Moreover, Google is expected to launch new algorithm changes in 2020, and the existing SEO landscape might change in favor of technical SEO. Moreover, Google still gives priority to mobile-optimized websites. If your website doesn't adhere to this guideline, Google will push the business lower down the rankings.

Keeping duplicate content at bay

There might be a case when a business has already published an informative and empowering blog for the readers, but without technical SEO and the concept of canonical tag added into the mix, it is easy for a competitor to steal the same and get it published. Moreover, without a canonical tag, even Google cannot make out which is the original piece and which one has been unlawfully published. 

That said, if the competitor has a canonical tag added to the website, Google will consider their content to be original and will penalize you for duplicate content. This might include deindexing the pages, besides dropping you from SERPs altogether.

This is where expertise in regard to technical SEO comes into play as it allows businesses to stay immune against these threats. In addition to canonical tags, technical SEO enables businesses to use the 301 redirect, which ensures all the content versions are directed toward a more uniform location. This technical inclusion allows businesses to retain their domain authority besides combating the content issues about duplication. 

Page indexing

For a business to be even relevant in this existing landscape, the website must be indexed by the search engines. This is what technical SEO strives to achieve as it allows the business to list its website or the concerned web pages on Google or any other search engine in that regard. The best thing about this process is that single pages, directories, or even the entire site can be indexed or disallowed depending on the preferences. However, it all boils down to professional expertise in play. 

Creating sitemaps

Every website needs to have a page log by which Google or any other search engine determines its position. This is where technical SEO and XML sitemaps come into the scheme of things as they define the concerned pathways for a search engine to index and identify the concerned website. A decently created sitemap can also speed up the page loading process about the concerned website.

Technical SEO for dummies

If you don't have access to professional help or a large budget, here are some basic things you can do to boost the visibility of your website.

Simple templates

Businesses can incorporate minimalistic website templates for keeping the page loading speeds up to pace with customer requirements. In simpler words, if the entrepreneur isn't sure about how to increase the page-loading speed, the safest avenue is to make room for only the necessary elements and to avoid using additional plugins and widgets.

Optimize images and visuals

Businesses can add high-quality images in JPG formats to ensure they do not interfere with the page-loading speeds. Moreover, only the relevant pictures should be added as a safe and neat technical SEO trick for increasing page speeds.

Limited redirects

A good way to boost page-loading speeds is by minimizing the number of page redirects. However, even in case of a 404 error, if redirecting is essential, it needs to be done precisely to stop the user from ending the session and migrating elsewhere.

Conclusion

Technical SEO is an underrated yet extremely essential and vast topic that needs thorough attention. It will become even more important in 2020 as businesses will be identified by the popularity of their websites and even the amount of organic traffic that is being generated by them.

SPONSORED: Biggest Financial Problems for SMBs and How to Solve Them

Posted: 29 Jan 2020 03:30 AM PST

Running a small business is extremely difficult. From finding new customers to retaining workers to staying compliant with government regulations, there are several challenges small business owners must meet on a regular basis. Compare this long list of challenges with overextended professionals who wear many hats, and you have a recipe for mistakes and miscalculations. One area where you cannot afford to make mistakes is your finances. 

You may not be an accountant or a financial whiz, but it's important to have a good understanding of typical business financial problems and how to solve them. Whether you're a new business owner or a seasoned veteran, it never hurts to review some common problems and better understand the options available to solve them. Certain issues can change with growing and changing trends across small business. 

The following list is five small business financial challenges that will affect companies in 2020. There are also some tested solutions to these problems, should your business face them.

Growing financial trends and why they matter

This is a no-brainer: Financial decisions matter because if your business doesn't have money, it will not exist. Of course, money matters when it comes to small business, but not every business owner prepares to protect their money in the same way. Part of staying on top of your finances is analyzing market trends and developing a good understanding of what threats are out there. 

For example, the freelance gig economy is growing faster than ever. In fact, Mastercard projects the volume of the gig economy to grow by 17.4% CAGR between now and 2023. This will have a deep impact on small business finance, particularly cash flow and tax compliance. Another growing trend that could affect small business finance is the cash-free trend. Sweden is in process of going fully cash-free as a country. In many major U.S. cities, small businesses are switching to POS and other payroll systems where cash isn't accepted: Everything happens via debit and credit card and via contactless systems such as Apple Pay and Google Pay. This means small businesses are less at risk of theft from employees. 

As a small business owner, you must stay on top of financial trends so you can find the right solutions to keep your business afloat.

Top financial problems for SMBs (and how to solve them)

Tax compliance

In 2017, Congress passed a major tax reform that affected small business. Tax law is complicated, and these changes are still taking effect. It's important to have full knowledge of what you're expected to pay. Especially with up to 85% of small businesses overpaying on their federal income taxes each year. Running a business is difficult enough as it is; there's no point in complicating things by overpaying the IRS. 

This, combined with constantly changing labor laws, means that it's nearly impossible to stay up to date with tax compliance on your own. For instance, did you know that the Fair Labor Standards Act has required raising the standard salary level from $455 to $684 a week, to make all employees who earn less than $35,568 annually – or some 1.3 million workers – eligible for overtime pay of at least time-and-a-half? Under California AB5, many independent contractors will need to be reclassified as employees, making them eligible for benefits. In Washington state, eligible employees will be entitled to take up to 18 weeks of paid family and medical leave per year. All these changes are new for 2020. 

Luckily, there are a few solutions out there that provide small business owners with quick, pain-free tools, letting small business owners focus on running their businesses instead of researching things like tax law. 

QuickBooks, for example, provides a payroll solution  that will automatically calculate your monthly and yearly tax obligations. While running payroll is its main function, it has built-in features to help you easily pay your quarterly and yearly taxes. This kind of solution means you don't have to worry about researching tax law. It's organized on a state-by-state basis, and it includes federal requirements as well. This means that QuickBooks Payroll can help you stay organized and up to date on tax compliance and other payroll needs.

Cash flow

Just about any small business owner will tell you cash flow is a challenge. Whether you're taking on higher overhead expenses to create or develop a new product, or you're trying to cut costs where you can, cash flow is an issue. According to Guidant Financial, 33% of small business owners listed cash flow as a major small business challenge. What's even more alarming, however, is U.S. Bank found that 82% of small business failures are due to problems with cash flow. 

Sticking to a budget can be difficult. If you use QuickBooks' online payroll solution, you'll be able to budget better, track your spending and better understand how payroll is impacting your bottom line. You'll also have a more realistic picture of where your money is, where it's headed and how you're funding your business. By staying organized, you can avoid running into problems down the line. QuickBooks is the only solutions provider that can offer SMBs the kind of transparent, organized financial management tools needed to succeed. As a useful bookkeeping tool, QuickBooks' online payroll platform can change the way you run your small business.

Retaining customers

Like cash flow, customer retention can be a major challenge for small business. The weight of this challenge is significant: No returning customers means your business will eventually stagnate, and even potentially fail. Keeping people in your shop or on your online store is essential to building a strong, healthy small business. Harvard Business School  found that increasing customer retention by 5% can result in an increase of up to 95% in profits. More importantly, 82% of companies agree that customer retention is cheaper than customer acquisition. 

By using QuickBooks software, you can stay organized and on top of your income, which can help you in your relationships with customers. 

Building customer loyalty cannot just happen overnight. It's essential to do your best to work at it each day. One way to better retain customers is to focus on helping your customers, not selling to them. Your business should solve a problem for people. Use this mindset to better connect with your customers: You want to help them. This genuine attitude will help you build a better brand and cement customer loyalty.

Raising capital

Much like cash flow and retaining customers, raising capital can be a make-or-break challenge for small businesses. When starting a new business, 77% of small businesses rely on the personal savings of their founders for initial capital needs, according to a Gallup poll. Growing a business often means acquiring capital to enter new markets, purchase new locations or expand an existing business. 

There are high requirements for traditional bank loans that can be long and complicated. While it may be easier to qualify with online lenders, those loans can have extremely high interest rates. You should do your best to raise capital in whatever way you can. By using software like QuickBooks, you can stay organized as you grow your business organically. By accounting for everything and building a financial plan, you can build a better business. 

What's even more interesting, however, is QuickBooks also has a small business lending program. It provides capital options for SMBs with an intuitive online tool. Of course, your specific loan situation will vary based on your business's situation, but it's worth understanding that QuickBooks is a holistic small business solution that can provide financial management tools and funding options, as well as time and attendance software. 

Of course, sometimes growing your company organically can be a long and cumbersome feat. Sometimes you must strike while the iron is hot. That means exploring new capital options, like local accelerator programs and other small business loan options. You may even want to consider the Small Business Administration, which grants more than $30 billion in loans to small businesses each year.

Bottom line

Running a small business is difficult, and you must stay aware of the trending challenges that other business owners are facing. It's not always easy to overcome certain small business challenges, but they can make your business stronger. By investing in the right tools, you set your business up for success. That means looking into software options, like QuickBooks Payroll, and brainstorming more creative solutions, like taking out an SBA loan. Especially when it comes to cash flow and tax compliance, finding the right tools means everything today. 

Running a small business is a balance between creativity, grit and organization. By sticking to it and investing in your business and yourself, you can build a healthy company that lasts for generations.

Learn the Ins and Outs of Paying Small Business Employees

Posted: 29 Jan 2020 03:20 AM PST

  • 93% of American workers are paid using direct deposit. 
  • Stock options are a payment option that isn't restricted to consultants or investors. Through a contract, your company can provide this opportunity to employees and contractors.
  • When deciding how much to pay your employees, research the role and investigate what your competitors offer. 

When you're starting a new business, setting up your office and training staff aren't the only things you should be concerned with. As an employer, it is also your job to decide how much your employees should be paid and how they should be paid. You need to make sure you're paid, too, and you need to implement a payroll process for your business. 

In this guide, we'll walk you through all the important decisions you need to make, the options available to you and how to set up payroll so it's a breeze for your small business. 

Let's get started.

How to pay employees in your small business

Compensating your employees sounds simple enough, but there is more to it than writing a check every two weeks. Let's start with the factors you have to take into account. 

First, you must choose the type of employees you want. Do you want independent contractors or full-time employees? Once you've made that determination, next you can decide the best way to pay that individual.

Wages 

Wages are the salary or amount of compensation you pay employees. It is a fixed regular payment given on a daily or weekly basis, depending on your pay period schedule. According to the Fair Labor Standard Act, the federal law that sets the minimum wage, overtime pay eligibility, record-keeping, and child labor standards for full and part-time workers, you must pay employees the federal or state minimum wage, or whichever is higher.

Commissions

Commissions offer a less fixed rate, because the amount you pay to an employee is determined based on the completion of work, and it can be given in addition to or instead of a salary. Commissions can be based on a percentage of a certain number of orders or sales. Payment of commission isn't required by the FLSA. 

Bonuses 

Who doesn't love extra money? That is essentially what a bonus is. Money awarded to you that is more than your salary or typical amount of specified pay. As an employer, you can distribute bonuses based on performance or randomly. 

Stock options

Stock options aren't just for consultants or investors. Through a contract, your company can provide this opportunity to employees and contractors. Your staff can buy shares of the company's stock at a grant price, which is a specified cost.

Insurance

Sometimes a good insurance package can compensate for a lackluster salary. Employers can help employees pay for their healthcare by giving them money for their insurance. There are two ways to do this: a tax stipend and a tax-free reimbursement arrangement. 

A tax stipend is when employees receive money, regardless of whether they buy health insurance, from their employer. The employer's monthly contributions are added to workers' paychecks. When the year ends, employees must fill out a form that reports the amount of their stipend, which they should classify as income on their personal income tax return.  

A tax-free reimbursement arrangement is when employees are given a fixed amount by their employer to repay themselves for health insurance and medical charges they have incurred. Once employees incur a qualified expense, they're given the money. 

Workers' compensation is also insurance paid by an employer for injured employees. Should an employee be injured on the job, worker's compensation covers the employee's medical treatments. Employers put money into their state and federal workers' compensation funds to cover these costs. You cannot deduct workers' compensation insurance from employees' wages.

How to set pay rates

Deciding what amount you should pay your workers shouldn't be a guessing game. Job roles differ as do the skills of candidates, but by considering certain factors and doing some research, you'll make an educated and fair decision.  

Before you sit down with a prospective employee, write a clear job description that lists the specific skills the candidate should possess and the experience you're looking for. Explain what tasks are relevant to the role. Avoid using generic job titles.  

Charles Read, president and CEO of GetPayroll suggests researching the role in the industry to better understand pay rates. Look at what other companies pay for the position, and research market-rate sites that break down average compensation by location. Check that the data you find is up to date.  

Also, check on your competitors. See what they're giving, not just with pay but the health plans and benefits they offer, too, said Matt Venuto, regional sales manager at ConnectPay. 

When meeting with a candidate, note the amount they're requesting, then compare it to the average salary for the role. Weigh the average pay against your candidate's experience and worth to your company, and consider what's in your budget and how much you can pay them. 

You do this by calculating how much money you believe the employee could bring in for the year. Consider how much time they will save you and the status of their job within your company. Ask yourself, "Am I financially prepared to give my employee a raise in a year or two?" Keep in mind the amount you want to invest in your company, too.

How to calculate compensation

There are several instruments you can use to calculate how much to pay your staff.

A payroll tax calculator helps you compute payroll deductions and withholdings for employees quickly. It also lowers the chance for mistakes while helping you determine how much to remit from their paycheck.  

A paycheck calculator considers federal, state and local taxes to help you calculate your employee's take-home pay per paycheck.  

A total compensation package calculator helps you understand all the benefits you're paying your employee, boiled down to a dollar value. This includes holidays, paid and sick days, bonuses, commissions and profit-sharing distributions.  

Read also recommends using time clocks to calculate honest and accurate pay for your employees.   

"If you don't have them, studies show 10% of your payroll is wasted," Read told business.com. "Buy two or three, because buddy punching and ghost punching are huge problems, which is when employees have someone else clock in for them [buddy punching] or people who aren't on the payroll [but who] are collecting funds."

Payroll methods available to you

How you compensate your staff is just as important as how much you pay them. It's important to know your options as some may be more convenient for your staff than other methods. You must choose the type of employees you want. Do you want an independent contractor a full-time employee?

Paycheck 

Although some believe that paychecks are outdated, many employers still compensate employees with a paycheck. A paycheck is a printed check that is sent weekly, biweekly, monthly or based on the arrangement agreed on by you and your staff. 

Paychecks have gone down in popularity; today, nearly 93% of American workers are paid using direct deposit. Paper checks are very vulnerable to fraud, according to an Association of Finance's Payments Fraud and Control Survey.  

Despite its unpopularity, one benefit of paper paychecks is that you can put a stop on a payment – something you can't do with automated payments like direct deposit. This feature can come in handy if you miscalculate employee hours.

Direct deposit

Direct deposit, or an automated clearing house (ACH) transaction, is the electronic evolution of a paycheck. You can transfer funds from your business bank account to an employee's bank or credit union account. 

In addition to being a green alternative, direct deposit saves your business money. It costs, on average, $3 for a business to print and distribute paper paychecks. According to Nacha, 83% of employees believe that direct deposit is more secure versus printed checks. [Learn more about direct deposit and small businesses.]

Payroll cards

A payroll card is a prepaid card you load your employee's wages onto every pay period. These cards function in the same way as debit cards when it comes to accessing money. Some payroll cards charge you a monthly maintenance fee or for specific transactions. 

Cash

Last, you can pay workers with money out of your pocket. With cash, there's no paper or digital trail like there is with payroll cards, direct deposit and paper checks. However, it's harder to organize your payroll records, and if you're not keeping proper records, you may raise the IRS' suspicion that you aren't deducting the correct amount of taxes.

How to set up a payroll process for your small business

Once you know how you want to pay your employees and how much you want to pay them, you then want to implement a system for processing payroll. Here is what you need to set up that process: 

  • If you don't have an Employer Identification Number (EIN) already, get one. You can apply for an EIN through the IRS. This number allows you to file your business's tax returns and compensate employees. It is also extremely difficult to get a business bank account without an EIN.

  • Make sure your employees have completed their W-4. It will streamline the payroll process significantly.

  • When setting up your pay periods, synchronize them with tax withholdings for the IRS.

  • Have a compensation plan in place for holidays, sick time and vacation.

  • Decide whether payroll will be processed in-house or outsourced to a payroll service.  

  • Consult a certified public accountant or visit IRS.gov to familiarize yourself with deadlines, which documents you should keep and for how long. Make sure you are aware of payroll tax deadlines so you're reporting on time. And stay on top of the tax laws in your state to ensure you're compliant.

How small business owners pay themselves

Last but not least, you have to pay yourself. Make sure you're added to the payroll so you're paid regularly, just like your staff. Also, how much you pay yourself should be based on your business operation needs. Your compensation is influenced by the kind of business you own, the stage of your business and personal expenses. 

You can pay yourself using one of these two methods: by paying yourself a salary or by taking an owner's draw.

Salary

Some business owners pay themselves through a salary, because tax withholdings and benefit payments are deducted from wages automatically. A salary is better suited for S and C corporations. 

S corporations

S corporations are like a sole proprietorship or partnership in that the tax liability belongs to members or shareholders, which is determined by the percentage of ownership. If you perform essential functions for the S-corp, you must pay yourself a salary, and one that is reasonable compared with your duties and what other similar professionals (e.g., bookkeeper, accountant, CEO) are paid. Shareholders in S-corps are subject to taxes (income, Social Security, etc.), the same as they would be as if they worked for a nonshareholder company. 

In addition to a reasonable salary, you can receive a distribution on the profits, which is based on your ownership in the S-corp. Distributions are not subject to withholding, but if you're drawing no or a very low salary and taking large distributions, the IRS is likely to notice and can reclassify distributions as wages, which means you're subject to taxes as well as penalties and interest. 

C corporations

If your business is a C corporation, you can pay yourself a salary and/or a distribution. Like an S-corp, if you are heavily involved in the day-to-day management of the C-corp, you're considered an employee, so you must pay yourself a reasonable salary. Owners can pay themselves a distribution, but you are subject to income taxes on those distributions.  

Draw

A draw is when an owner takes money out of the company for personal use. The IRS views the owners of sole proprietorships and partnerships as self-employed individuals, so they aren't compensated through regular wages. (Any profits from sole proprietorships and partnerships pass through the business and are reported on the business owner's personal tax return.)

A draw is best suited for sole proprietors, partnerships and limited liability companies (LLCs), a business structure where the owners aren't liable for a business's debts or liabilities. [Read related article: How to Choose the Best Legal Structure for Your Business.] 

Sole proprietorships

Sole proprietors are organized through an LLC. All of the business's profit is considered the income of the owner, which is then reported on the owner's personal tax return. A sole proprietor, however, cannot deduct payment from their company as business expenses. They take their payments from earnings through draws. Sole proprietors are taxed on the draws they take. As a sole proprietor, you can allocate a percentage of your income to a savings account set aside for taxes, which reduces the risk (and pain) of surprise tax bills.  

Partner

As a partner, you can take money through a distributive share. If your business is a partnership, the partners can't be paid a salary, but they can receive a share of the profits. Partners are taxed on the full profits in the business, which are divided according to the partnership agreement.
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