Tag: small business

Are You Certain You Own a “Small” Business?

It might make sense to strike “small” as a descriptor for any business.  National Public Radio (NPR) has been running a series on small business which has left me thoroughly confused as to what the definition of small business is.  In her NPR segment “Small Businesses: Big Concerns and High Hopes” (9/24/13), Marilyn Geewax states,

“In reality, small firms overwhelmingly are made up of individuals working alone — they are freelance writers, lawn mowers, consultants and housecleaners. U.S. Census Bureau says 3 out of 4 firms have no payroll, and collectively, they account for only 3.4 percent of all business receipts.  But while most of the nation’s roughly 28 million firms have no workers, about 6 million do hire, fire and pay people. Of those, roughly 5 million really are small, with nine or fewer workers.  That leaves those approximately 1 million firms that hire at least 10 people, but not more than the 500 — keeping them within the Small Business Administration’s usual definition of ‘small’.”

However, according to the Small Business Administration (SBA), a small business is one that is independently owned and operated, is managed for profit and does not dominate over the competition.  The SBA also says that the maximum number of employees in a “small” business can vary from 500 – 1500 depending on the industry.  The SBA’s definitions of “small” are important because they help determine which businesses are eligible to get special loans or loan guarantees. It can also determine who can bid on government contracts that are set aside for small business. The SBA’s work also helps inform other parts of the government that have programs aimed at small firms.

Take, for example, the new health care law. Employers with 50 or more full-time workers have to either provide health insurance or pay a penalty. Even 50 is not a standard measure across the federal government.

So if the government cannot agree on the definition, then why should I get hung up on it?  Good question.

HRInsights

The HR Experts for Small Business

How Has Sandy Affected Your Small Business?

The immediate impact that Hurricane Sandy has had on the Eastern seaboard is, and continues to be, massive. Considering the current toll, what will be the long-term impact? There are so many different ways that this storm will effect us all, but let’s look at the effect it will have on small businesses and how we can help ourselves minimize that damage.

Obviously, if you have a brick and mortar place of business as opposed to an online business, you are more susceptible to the immediate risks that any natural disaster will pose. If there is physical damage to your store and/or inventory, it’s going to cost you to repair and replenish. On the other hand, if you have an business and you can work from home, there is still the issue of being able to deliver goods to affected areas. Business still suffers if you can’t distribute your product.

Those are some pretty obvious ways that a major disaster could effect your business. What about the not-so-obvious examples? People/teams flying into an impacted area are no longer able to fly in. Webinars, seminars and trade shows have been cancelled. Offices are unable to communicate with other offices in different parts of the country/world.

We don’t need to be completely negative, though.  The restoration businesses, the insurance industry, online service businesses and even messengers are all busy right now. Besides the few who are really thriving right now, what are some ways that we can diminish this damage? Amy Rees Anderson, a contributor to Forbes, wrote an article all about what small businesses can do: How a Small Business Can Recover from Hurricane Sandy and Other Natural Disasters.

Obviously many of these links would be helpful for a business owner who has just endured Sandy. From the application for assistance to crisis counseling for employees and their families, there are many programs out there that provide assistance. But what about just trying to return your business culture to “normal” and get your human resources to feel comfortable again? How do you reestablish yourself in the community? Unfortunately neither I, nor HRInsights, has an exact answer. But it a question worth mulling around. It would seem that a return to normal would be a major milestone on this unwanted trek. So if “normal” is possible, how do you get there? Or how do you accelerate that process?

Why Small Businesses Fail

They don’t really care about their Employees

Let’s be honest, small business owners and entrepreneurs, most of them, have little experience managing and leading.  They have ideas, they have a passion, they have conviction.  Small businesses don’t grow and don’t succeed because they don’t inspire and manage employees to share the passion of building something.  There is little to no time spent on the basics of management such as organizing files on employees, setting up objectives, showing how these relate to strategy, compensating on results and vision, hiring properly, legal compliance … and providing the direction that comes with the guidance of experienced HR management.

It’s all lip service.  It may be more fun to work at a small company where responsibilities can be more and the pains of bureaucracy less.  But, large businesses do invest in their employees – training, development, benefits, proper legal management, creating an environment free of sexual harassment and other discrimination.  Big businesses think about having some fun and including employees in idea creation and developing better ways to deliver in their markets.

Small businesses are always running, to the next crisis or the next opportunity … why? Because we think that’s what it takes to succeed.  And we are wrong!  Dead wrong!!  Companies grow because they have employees that care about the success, get guidance and accountability … and they create success by resolving problems on their own, delivering great customer service on their own, implementing a way for the company to save money on their  own.  But, that can’t be assumed, it must be nurtured and MANAGED.

I’ve worked at big businesses that really cared about development of employees and we’ve flourished.  I’ve worked at small companies and we don’t have the time.  That’s nonsense and short-sighted.  Financial ownership rarely understands the importance of this too and can become conflicted with these priorities that don’t appear to impact this quarter’s bottom line.  My advice, get some help, it’s not your expertise and you won’t ever make it a priority on your own time.

Government Help? A Different Twist!

Occupational Safety & Health AdministrationLet’s face it, few small business owners rarely smile when confronted with the acronym OSHA.  The Occupational Safety and Health Administration conjure up scary thoughts for owners thinking unnecessary regulations and oversight into our businesses.  Various state regulation agencies offer similar ill feelings.

But, any successful enterprise does want a safe and healthy work environment where employees flourish.  There is no debate that the merits of a hard working and dedicated staff outweigh the problems with an organization that is unhappy and working against your goals.

There are many free services and benefits that the government offers small business entrepreneurs to help with organizational effectiveness.

  • OSHA provides free on-site consultations to help small and medium sized businesses identify risks in their workplace and give advice on compliance to OSHA standards.  These consultations are not enforcement visits.  In fact, OSHA consultants will not issue citations or report potential violations to enforcement staff.  Learn more here.
  • If your organization operates within the health care or construction industries, OSHA has developed specific modules and guidance that apply to your workplace.  Visit the Compliance Assistance Quick Start for the construction industry and the health care industry.  OSHA also provides a general industry module, which can be found here.
  • OSHA also provides advice and guidelines for organizations working with Hispanic employees.  Here you can find dictionaries, training opportunities, key OSHA publications in Spanish, and Spanish speaking workplace-safety videos.

We just thought it might be a good idea for you to be aware of the potential valuable insights available to you from organizations such as OSHA.  Explore the OSHA small business page for more ideas that may be helpful to your organization.

Ounce of HR prevention worth pound of legal cure

A quote known to all of us, “an ounce of prevention is worth a pound of cure,” manifests itself daily in routine parts of our lives.  In business, there are clearly times when practicing this “rule” can have enormous impacts on eliminating costs.

This is certainly true in the area of managing HR practices.

Good Human Resource practices simply prevent problems with employees and avoid other costs.  How often could better safety awareness procedures in the plant have prevented an accident or proper firing process eliminated a wrongful termination suit or better hiring practices prevented a hiring mistake or …?

Finding ways to manage HR inexpensively, but effectively, will control costs and create a better work environment.  Not following the changing compliance rules and regulations in HR can also cause issues.  The ounce of cure resolving HR issues often results in unnecessary legal costs.  The current national average for an hour of legal counsel is $284.  And legal costs are on the rise.  71% of US law firms increased rates in the poor economy of 2008 with some reaching $1,200 per hour.

How can better prevention practices in HR eliminate these costs, especially in small to medium size businesses where having an HR practitioner on staff can be a luxury or a single person in charge of the function can’t keep up with changing regulations?  There are means to satisfy this need, and inexpensively.  Check out www.hrinsights.com where for an annual membership fee of $485, a business can have access to up to date forms and an ability to check on best HR practices real time with expert advisors.  Potential legal fees saved are worth the cost of prevention.

More often attributable to Benjamin Franklin, the famous quote is traced back to the early 13th Century.  Henry de Bracton was a famous English jurist and author of De Legibus et Consuetudinibus Angliae (On the Laws and Customs of England).  His influences on law are considerable.