Wednesday, September 25, 2013

Five Business Trends that are not Fads

Continually learning and keeping up with industry trends is essential for any small business owner. As business advisors, it is vital to our job to be aware of the latest trends and keep an eye out for up-and-coming issues that might impact our clients.

A group of business advisors from Washington State were fortunate to join our colleagues throughout the country for the Association of Small Business Development Centers National Conference in Orlando.  There were over 150 different training opportunities and over 1000 attendees nationally and internationally.

These are not new topics by any means, but here are five current trends for small business owners to put on your radar:

1.  Mobile is in. (Top issue in 2012 also)

Have you
Claimed your Place?
More people than ever have smart phones and use them.  Websites need to be optimized and responsive for mobile and other devices.  One of the best ways to have potential customers find your location is to claim your Google Place page.  It's easy, it's free and can not only help people find your physical location, but drive traffic to your website.  Read my previous blog on how to set up your Google Place Page.

2.  Search Engine Optimization is critical...and constantly changing.

Search Engine Optimization (SEO) is positioning your website and web content so it ranks higher in Google searches.  The same still holds true as it did five years ago - if a web company offers you 'top rank in Google' searches, shop around.  Read my previous post, "SEO Tips".  There are a few basic tips that can help your website rank higher in search, and there are also some things to avoid, such as duplicate content. Top tip:  Claim your Place page if you have not.  Bonus Tip:  If you do not have a website, you could be losing business.

Two key takeaways:
  • Google is still the King of Search Engines.  
  • Meta tags and 'hiding' key words in your website do not work anymore.

3.  Social Media is NOT just for selling.  Customer Relationships Still Matter.

Social Media is NOT about
getting sales!
Social media is not going away.  I have been repeating this for years, yet heard it over and over - social media is about developing relationships, NOT about making sales.

Customer relationship management should not be ignored. Chances are, if you aren't fostering relationships with your customers, your competitors are waiting for the opportunity.

Two other noteworthy items to watch: Facebook Business pages and Reviews (more on these in a future blog).

4.  The status of health care may be uncertain, but it should concern small business owners.

Important things to consider as employers and individually:
  • Employers are required to send out notices effective October 1, 2013.  Read more...
  • Just dropping your employees to part-time does not solve the problem; employees are counted as 'full-time equivalents, and according to the ACA, full-time is 30 hours a week.
  • People are just starting to find out now that their current physician's office will no longer take their insurance.  Why should you care?  This could impact you personally, your immediate family (aging parents) and your employees.  
  • Employers that do offer insurance have some additional notification requirements.  You also need to evaluate options - will you provide insurance for the full family?  Or just what is mandated?  How much will the employer/employee be responsible for?  Some employees may be better off if their spouse qualifies for the subsidy and can purchase from the Exchange.

5.  The New Normal.  The Recession officially over, yet it is anything but back to normal.

Two concerning trends that linger, perhaps permanently, are lending and spending.

Small business lending is still a challenge.  One of the biggest issues is lack of capital, in the form of cash and collateral.  Lack of capital is one of the most common reasons that small business loans are turned down. Small business owners should expect to contribute 20-30% CASH towards a loan.

Government-backed SBA loans guarantee 75-85% to a bank, yet the banks will still want to see a significant down payment, in addition to a collateral.  Some good news on the horizon if you will be seeking an SBA 7a loan:  the SBA has announced that as of October 1, 2013 it is waiving loan origination fees for 7a loans under $150,000.  However, this does not relax the requirements for the owner cash contribution; if you will be looking for a loan and do not have any cash to put in, start saving now.

We heart deals!
As you are well aware, spending habits have changed in most parts of the country for the average household.  Whether it is fewer meals out, shopping at consignment stores, or 'staycationing', retail and restaurant spending has not completely bounced back based on my client's input and economic trends.

Retailers:    Customers expect more now than in the past.  It is not enough for a retail store to have Good Customer Service.  Shopping is an 'experience'.

Customers are wise to sales and discounts.  Marc Willson, retail expert of The Willson Company, mentioned that, "It is not good enough to offer a percentage off, such as 25% off; the customer thinks they can get a better deal or wait until it is 50% off" .   He went on to say that instead of $50 as an average sale, $24.95 is the new normal.  Willson suggests tactics like bundling or Buy-one-get-one half off (BOGO), instead of trying to use discounts to attract buyers.

This is impacting restaurant trends as well.  You may have seen this recent article about declining profits at Olive Garden and Red Lobster and how they are struggling to adjust to spending habits.

You will be seeing more blog posts to expand on these timely issues.  I would encourage all business owners to follow your industry trends, regularly meet with your peers or professional associations and remain informed. Staying ahead of the curve can not only help your sales and direct business focus, but protect you from monetary fines for non-compliance, drive creativity and ultimately lower your stress levels by scrambling to keep up.

Tuesday, September 24, 2013

ACA Employer Update: Health care notices to employees due October 1st.

There has been a lot in the news about the Affordable Care Act (ACA), employer responsibilities, the Health Exchange and even more information that is confusing or not available yet.  Generally, employers with fewer than 50 full-time equivalent employees are not required to offer employee health coverage under the ACA.  However, small businesses that have even one employee and over $500,000 annual sales are required to notify your employees of exchange programs and provide notices to all employees.

By October 1, 2013, every employer (with at least one employee and over $500,000 annual sales) must provide each employee* with a "Notice of Exchange", or a notice of the availability of health insurance exchanges. *See explanation of employee in next section.

Notices must be emailed or mailed.
One is for those employers that DO provide their employees a group medical plan.

The other is for those that DO NOT provide a group medical plan.

Visit the Department of Labor website for the full ruling and downloadable Word documents of the above letters if you prefer.

Who do employers have to send it to?  

All employers have to provide this to each employee* on their payroll, regardless of hours, regardless of whether they are even eligible for the group plan.  This includes part-time, temporary or seasonal employees.  Again, anyone on payroll, with the exception of COBRA members or retirees.  New hires should be provided the notice within 14 days of hire.

How are employers required to provide the ACA notice to employees?  

Letters due by October 1st!
Employers will have to either mail it or e-mail it.  If mailing, it can be sent via First Class mail.  If e-mailing, you can only e-mail it to employees who have a work e-mail address and who are expected to use the computer at work as part of their normal work duties (for all others, you'll have to use snail-mail). 

Note: Per the requirement, handing the notices out does NOT meet the requirement. 

What does the notice need to say?

According to FindLaw's Betty Wang, notices should include:

  • notification that the exchange exists;
  • a description of the services provided by the exchange;
  • information on how to contact the exchange to request assistance;
  • the employee’s potential eligibility for subsidized coverage on the exchange if your company’s group health plan doesn’t provide “minimum value,”; and
  • the fact that the employee may lose the employer contribution (if any) toward health insurance coverage if he or she chooses to purchase individual coverage on the exchange. FindLaw Blog (September 10, 2013)

Are there more requirements?

If you offer an employer-sponsored health plan, you are probably already familiar with the Summary and Benefits Coverage (SBC) requirements, which state health plans must:
  • Provide a short, easy-to-understand summary of the key features of every plan — including the coverage options available, the benefits provided, cost-sharing rules, and coverage limitations and exceptions.  Click here for a  blank sample and a completed sample.
  • Attach a glossary of terms commonly associated with health insurance, such as “deductible” and “co-pay.”  Here is a sample SBC Glossary.

In Washington State, the Exchange is located online at the Washington Health Plan Finder. Beware of look-alike websites that are operated by insurance companies; start with the Washington Insurance Commissioner's office or make sure the site states that it is the official ACA-compliant health benefit exchange for the state of Washington. 

Navigating the ACA and DOL websites can be tricky.  The SBA is offering a series of free webinars for employers to learn more and if you need assistance, please do not hesitate to call your insurance agent or SBDC advisor.