Business Information for Entrepreneurs by an Entrepreneur

Avoiding the Pitfalls of Company Credit Cards

As your business grows you may find that you need to trust some of your employees with a company credit card. For some small business owners, it is hard to imagine that their trusted employees would do anything amiss with the card, but it does happen.

When you issue cards to your employees, there are a few steps that you can take to be sure that there is no misunderstanding about the proper use of the card.

Have a Policy

First, you will need to develop a clear policy about how the card is and is not allowed to be used. This will be different for every situation, so you’ll need to put a lot of thought into what types of expenses the employees will be allowed to charge.

Some business owners want the cards to be used strictly for business travel. Charges for office supplies or local business lunches are not allowed. Others want the card to be used solely for entertaining clients.

Whatever expenses you decide to allow, be sure that the employee receives a written copy of the credit card policy prior to being issued a card.

Keep a signed copy of the policy in the employee’s file.

Track Card Usage

Secondly, you will need to track how the card is used. A quick scan of the monthly statement is all it should take to help you be sure that the cards are being used properly.

You can do this yourself, or have your accountant keep an eye on it.

It’s also a good idea to set some type of limits on the card. You may choose a daily or monthly dollar limit. Some choose to also limit the number of transactions per day or per month.

By spelling out a clear credit card policy and keeping your eye on the monthly statement, you will find that issuing business credit cards will make things a little easier for both you and your employees.

Starting a New Business? You Can Never Learn Too Much!

What if you could get advice from someone who had successfully run a business of their own, get online lessons about marketing, increasing sales and mentoring?

Better yet, what if you could get these services at no cost?

Well you can.

There is a wide variety of free resources available to small business owners.

SCORE

SCORE stands for the Service Corps of Retired Executives. This offshoot of the SBA (see below) offers free counseling to small business owners.

You can also attend SCORE meetings available at hundreds of locations around the country.

Small Business Association

In addition to providing small business loan guarantees, the SBA also offers lots of helpful resources, including online training, and help with business plans.

MoreBusiness.com

MoreBusiness is jam packed with resources and tips specifically for small business owners and entrepreneurs.

In addition to business plans, marketing plans, templates and business advice, the site also has an extensive library of helpful articles, and the blog you are reading now.

Getting Valuable Information

With each of the resources listed above, you will find information on preparing yourself to qualify for business credit, how to become a freelancer, sales and marketing and much more.

Because the Internet is becoming the norm for doing business, Internet entrepreneurs will find MoreBusiness.com particularly helpful.

Business Resources for the Entrepreneur

Whether you take advantage of SCORE’s live counseling with a retired executive, or visit on of the other business sites to learn how you can grow your small business, make sure you take advantage of every learning opportunity.

It can mean the difference between having a successful small business or not.

Participating in ‘Take Our Daughters and Sons to Work’ Day

Each year the fourth Thursday in April is designated for ‘Take Our Daughters and Sons to Work’ Day.

Originally, the program was called “Take Your Daughter to Work Day” and was intended to show girls that they could be valued members in a variety of workplaces.

Millions of small businesses take part in this event each year by allowing their employees to bring their children to work for the day.

The children shadow their parents and get a chance to see what they do all day while they are at work.

Doing Good Works

The reason that participating in the event is a good idea for your small business is that it is a simple and inexpensive way to boost morale and show your employees that you care about them and their families.

If you have never hosted this event in the past, then start this coming year. It can be as simple as allowing the children to tag along as their parents work, or you can take it a step further by having special activities for the children and, perhaps, a pizza luncheon for everyone.

The recommended age range is 8-18. You should appoint a workplace coordinator to organize activities, get the head count and act as a point of contact for employees who wish to participate.

Use this event as a way to go all out and show your employees how much you appreciate them. If you need ideas for activities, or more information on the event you can visit www.daughtersandsonstowork.org.

Overtime Pay vs. Comp Time

Overtime can be a costly expense that can cut into your profits. Because overtime often is the result of an unforeseen event, it can be difficult to include the correct amount of overtime into your budget.

Consider the Alternatives

One alternative may be offering comp time instead of overtime pay. First, it’s important to point out that some states do not allow comp time in place of overtime pay, so you’ll need to check the laws in your state.

Comp time is paid time off that the employee can take instead of earning extra pay for working overtime. Obviously, this is not going to work for every business – and some employees are not going to like the idea.

Still, if it will work for you and the laws in your area allow it, you can make it your policy that overtime hours will be paid in comp time.

How to Do It

As with overtime pay, comp time should be given in an amount equal to 1 ½ to 2 times the number of overtime hours worked. For example, if an employee worked 2 hours of overtime, he should receive 3-4 hours of comp time.

You will want to make it clear to employees BEFORE they work overtime that this is your policy. Be sure to have employees sign a copy of the policy. Keep the signed copy in each employees file.

Some businesses handle their overtime by using a combination of overtime pay and comp time. You could, for instance, decide that the first 10 hours of overtime per month will be paid and the remainder will be reimbursed through comp time.

Be sure if you offer comp time that employees are able to take it as long as they give reasonable notice.

You can save thousands of dollars a year by offering comp time. Just be sure that the laws in your area allow it, and that your employees understand your policy.

Getting Your Small Business Involved in the Community

Finding ways for your small business to get involved in the community can help motivate employees and it can be good for business too.

When you and your small business are active participants in the community, the name of your business can become well known, and you will be thought of highly by members of city council as well as by other small business owners in your area.

Time and Money

Community involvement does not necessarily mean making large monetary donations. Instead, donations of time are just as valuable.

Consider sending a team of employees to the next Habitat for Humanities build that takes place in your area. Or, you could select a local charity to sponsor during the holiday season.

When employees come to you with an idea about a specific charity that they would like to help, do your best to find some way for your business to help that charity.

Obviously, you may not be able to help every charity that is brought to you as a suggestion, but if you can act on an employee’s request, that can do wonders to boost morale – and make the employee feel like an important part of the team whose suggestions are taken seriously.

Make Your Time Count

There are lots of ways that you can help your community without spending a lot of money.

• Hold a toy or food drive
• Spend an afternoon with some employees working in an elderly neighbor’s home
• Make monthly or bi-monthly visits to a local nursing home or children’s hospital

There lots of opportunities in every community for such giving. Find ways to become actively involved in YOUR community today.

Figuring Out a Bonus Plan for Your Employees

Many small businesses offer employees a bonus at the end of each year. Some base bonuses on the meeting of specific goals that were set at the beginning of the year.

Other employers offer across-the-board bonuses that are not merit based.

Some experts say that non-merit based bonuses can actually be bad for business, but others disagree.

You’ll need to decide what is best for your business. One thing you need to keep in mind is if you give a bonus every year, employees are going to expect that bonus.

Proceed With Caution

You should make it abundantly clear each time a bonus is given that you are thrilled to be able to do it, but that you don’t know if you’ll be able to do it next year.

This could help soften the blow should a future financial situation prevent you from being able to offer bonuses.

Facilitating merit based bonuses are less tricky than across-the-board bonuses. You simply set goals for each employee.

Employees that meet their goals get the bonus. For some department, such as sales, it’s easy to set goals.

Get Creative

For departments and jobs, such as administrative workers, you may need to be a bit more creative with your goal setting. Consider offering bonuses for those who do not use any sick days or who consistently arrive to work on time.

The amount of across-the-board bonuses can be based on length of service or on the amount of the employees’ current salary. You could, for example, offer a bonus of 10% of the annual salary. Or, you could offer a set amount per year based on the employees’ years of service.

In addition to being a nice way to reward employees for a job well done, you should also talk to your accountant about the possible tax breaks involved.

How to Use Temporary Workers to Grow Your Business

Many small business owners have found that there are benefits to using temporary workers (temps) as opposed to hiring someone full-time.

While temps are a perfect choice for some businesses, others find that it is not a good match.

The Pros

Some of the pros of choosing a temp are that, while the hourly rate is higher than you may pay someone you hire, there are additional costs such as benefits or taxes that you will not have to pay.

Also, you can hire someone only for the days when you need them. When you don’t need anyone for a few days or a few months, you don’t have to go through the process of layoffs or terminations.

If the person isn’t working out, you need only call the temp agency and they will probably send someone else the very next day. You don’t even need to explain your reasons.

Finally, the temp agency does the screening of candidates which will save you a lot of time.

Working with an Agency

Some agencies have a more thorough application process than others, so you’ll want to be sure and ask how much information is gathered before they hire an employee.

On the flip side, temps are not a good choice if a lot of training is needed.

Just as you can decide that you don’t want a certain worker anymore, the temp can decide that he doesn’t want to work at your business anymore. You may have to train 2 or 3 temps a month.

Using a temp is probably not a good idea if the worker will be dealing with sensitive information.

Also, as mentioned above, you will likely pay a higher hourly wage for the temp, but that will likely be balanced out by the savings from not having to pay benefits and taxes.

Find a good temp agency and you’ll probably be sent dependable and competent temps.

It’s a great option for some situations, and can save you the time, trouble and money of hiring another employee.

Personal Business in the Workplace: Where to Draw the Line

Most employees spend some time at work doing personal business such as paying bills or shopping online. But how much is too much, and how do you know when to draw the line?

The Internet has made handling personal tasks at work much easier than it was before.

Some studies have shown that up to 75% of employees admit to using the Internet during work for researching a hobby, shopping, booking personal travel arrangements or looking up sports scores.

Keeping Tabs

Some large companies have added filters to the Internet that limit web access to only the sites that are required for employees to do their jobs. In small businesses such drastic measures are probably not necessary.

You need to decide how much YOU think is too much when it comes to handling personal matters on company time. You may think its fine for an employee to make the occasional personal call, or you may even have a more liberal view.

Once you have determined in your mind what your view is on the matter, you should have a meeting with your employees.

Be Clear on Policy

In the meeting spell out the policy, and have each employee sign a copy to be kept in their files. The reason for this is so that in the event that an employee is taking advantage of far too much time at work to do personal things, you will be able to show him the signed policy to prove that he has been told what the company guidelines are regarding the matter.

There is no need to try and monitor every moment of your employees time. In general, as long as they are getting their work done and don’t seem to be wasting a lot of time, you should not be concerned.

If, however, the employees seem to be wasting their work hours on personal business, you will need to step in.

Employees are going to, occasionally, handle personal matters at work. You just need to be sure that your business is not being neglected – and that you are getting what you pay for in each of your employees’ salaries.

Hiring Older Workers

Many small business owners have found that hiring older workers is a decision that is good for their business.

Experience Counts

Retired workers are often more reliable and competent workers and they bring to your business years of experience. Even if they never worked in your exact field, they have real world experience that can be invaluable to many businesses.

If you do find an older worker who does have experience in your field, you will probably be able to glean valuable knowledge and get some sound advice that you can then apply to your business.

Typically, older workers are much more aware of the value of good customer service. They remember the days when customers were treated with respect.

Also, they are from a generation that did not think it was acceptable to show up to work late, or not show up at all.

Cost Savings

Older workers are less likely to spend work hours surfing the internet, sending text messages and downloading tunes to their MP3 players.

This is not to say that all younger workers are slackers, but older workers tend to be more conscious of how they spend their time at work.

Most of the time older workers will not require health insurance, which will save you the cost of insurance for that worker.

Also, because many are retired, they are a good choice for part-time positions as they are less likely to ask you for more hours every month.

Older workers make great employees. Take a chance on hiring one, and you will most likely find it to be wise decision.

How to Extend Credit – and Not Get Burned

The decision to extend credit to your customers is not easy for small business owners who need to watch every penny. But you may find that there will come a time that refusing to extend credit could hurt your business.

If you secured funding through a bank to start your business then you know that credit is not – and should not – be extended to everyone who asks for it.

Your bank did a thorough credit check on you and/or your business and likely also studied your business model and other information about the business.

In the same way, you need to set up guidelines about deciding to whom you should extend credit. Some companies invoice all of their clients after the fact.

Depending on the type of business that you have, this may work for you.

Have a Reliable System In Place

Most small business owners, however, cannot afford to have a lot of delinquent accounts, so some type of approval system must be in place.

Perhaps you will choose to run a credit report on the person or individual seeking credit. If dealing with a business, perhaps just checking references will do.

Whatever your approval process, have some guidelines in place that will help to weed out the biggest risks.

Follow the Law

You will also need to have procedures in place to be followed when a customer does not pay. There are laws that regulate debt collection, so be sure that your policies are fair to all involved and that they follow all state and federal laws.

The decision to extend credit can result in higher revenue for your business. Just be sure that the people you are trusting are a good risk.