17 Things Small Business Owners Need to Know
By Rieva Lesonsky
1—American Workers are Disengaged
RingCentral Glip recently released a workplace study showing one-third of today’s workforce (including C-Suite and management) disengage for at least one hour/day. That’s the equivalent of not starting the work year until Valentine’s Day! Other survey insights:
- Connection matters: A whopping 88% of workers motivated at work feel personally connected to their co-workers—while just 58% of unmotivated workers feel connected
- Bottom-up stress: 52% of millennials say they are unmotivated because their jobs are too stressful, compared to only 16% of 35-44-year-olds and 23% of those over 45
- Perks that work: Millennials say perks like onsite baristas (35%) and free food (51%) actually move the needle more than recognition—countering popular stereotypes
- Comfort = quality: Simply having the option to work remotely increases motivation—on the flip side, 58% of employees who never work remotely feel unmotivated
There’s more in the infographic below.
2—Workers are More Satisfied with Workplace Benefits
On the other hand, another survey—the 2018 Aflac WorkForces Report (AWR)—shows, after American workers’ job satisfaction dipped in 2017, both workers and their employers have renewed feelings of workplace optimism and satisfaction.
“Our study shows more employers are realizing how the benefits package is one of the strongest influences on the overall well-being and job satisfaction of today’s more empowered, benefits-driven employees,” says Matthew Owenby, senior vice president, chief human resources officer at Aflac. “However, the AWR research also shows employers and employees have work to do to promote better educated, more financially sound health care benefits decisions.”
Job satisfaction rebounds: 61% of workers are extremely/very satisfied with their benefits, compared with 46% in 2011. More than half (55%) of employees surveyed would be at least somewhat likely to accept a job with lower compensation but a more robust benefits package. And 65% of American workers are extremely/very satisfied in their jobs, up from 49% in 2011. Additionally, 26% of employees report having left a job or turning down a job offer due to the benefits offered, up from 16% in 2016.
Optimistic employers embrace benefits: Overall, AWR found employers continue to be in an optimistic growth mode, with 57% reporting revenue growth and 36% having maintained revenue in the last 12 months. As a result, 46% expect to hire full-time employees and 34% expect to hire part-time employees in the next 12 months. Recognizing the strong connection between benefits and happy workers, 81% of employers that offer benefits agree their company’s benefits offerings increase employee satisfaction.
Health care hurdles remain: While half of workers have a solid understanding of their total annual cost for health care coverage and care, just 39% fully understand their health insurance policies. But, 93% choose the same benefits each year rather than making changes during open enrollment periods. And 56% spent less than a half hour researching their benefits options during the last open enrollment, including 19% who didn’t do any research at all.
Financial impact can drain: An uninformed choice could affect a worker’s financial well-being in the year ahead, leading possibly to more serious implications like draining a savings account or 401(k) to pay deductibles and other uncovered costs. Despite progress compared to 2017, 58% of workers would not be able to cover unexpected out-of-pocket medical costs of $1,000 or more, and 31% would not be able to cover an unexpected out-of-pocket medical bill greater than $500.
Employers feel their workers’ pain, with just 68% believing their employees have enough options available to help them meet their health care financial obligations, down from 73% last year. With many aware of their financial challenges, 85% of employees see a growing need for voluntary insurance benefits, up from 63% in 2014. In addition to helping workers cover costs that may not be covered by major medical insurance, voluntary insurance can help pay additional dividends. The Aflac study found job satisfaction rises from 65% for the overall population to 69% among employees in organizations where voluntary benefits are offered and 75% when enrolled.
3—Q4 Is the Most Profitable Time of Year
A survey from Kabbage, Inc., a global financial services, technology and data platform serving small businesses, shows one-third of businesses say the 4th-quarter is the most profitable time of the year for them. And that 42% of report their costs will increase as high as 25% in the same time period.
The impact of 4th-quarter profitability varies by industry, with online retailers (74%) and brick-and-mortar retailers (71%) reporting Q4 as their most profitable time of the year, followed by:
- Restaurants, bars and caters (47%)
- Transportation (38%)
- Real estate and property management (33%)
- IT and software (27%)
The same industries see an increase of costs during year-end. Online retailers (65%), brick-and-mortar retailers (60%), real estate businesses (56%), restaurants (50%) and construction companies (44%) cited their costs on average increase 25%, with some citing increases as high as 75%.
Across all industries, small businesses stated the top three reasons for heightened costs are:
- Purchasing more inventory (41%)
- Spending more on employees in the form of holiday gifts and dinner parties (31%)
- Increasing spend on advertising (25%)
“The data shows small business owners have a great opportunity in the last three months of the year to increase profits, but it requires careful cash flow planning,” says Kabbage CFO Scott Rosenberg. “As a former retail industry executive, I’ve seen first-hand how seasonality can turn a good year into a great year and how critical it is to be financially prepared to manage climbing costs to reach higher profits.”
4—Forecasting Holiday Peak-Season Volume? Consider These 3 External Factors
Guest post by Kenny Lim, vice president of customer success, Ingram Micro Commerce and Lifecycle Services
The peak holiday season is upon us. While many consumers have yet to even consider their shopping agenda, the retail and logistics industries have been in full planning mode for months.
Perhaps the most critical component of peak season for the logistics industry is forecasting inventory volume. Forecasting is always important, but during the winter months, getting volume estimates correct becomes even more crucial because of the increase in orders.
Forecasts drive resourcing and labor allocation, shipping procedures and warehouse space allocation. In 2017, Cyber Monday sales hit $6.59 billion— a record-setting number and a 16.8% increase from 2016. Billions of dollars in sales translates to millions of packages that must be shipped, received and sent to the appropriate locations on time.
With the volume and frequency of orders during peak season (plus winter weather and various service modifications related to holidays) this task is more difficult during peak than it is at any other time of year. In addition to this, the following three external factors make forecasting during peak season particularly difficult.
1—Plan to get ahead of tight labor markets: In preparation for higher order volumes, providers are challenged to ramp up labor to pack and ship the millions of orders that flow through fulfillment centers around the holidays. Indeed, the Bureau of Labor Statistics found that the 4th-quarter of 2017, the transportation and warehousing industries added nearly 400,000 workers. The year-end spike in employment is consistent year-over-year.
However, with a low unemployment rate and a static labor participation rate, the number of available seasonal workers is limited. This can make things difficult for forecasters who must anticipate shipping volumes and staffing needs well in advance. Making contingency plans long before peak season starts is a good way to ensure accurate staffing during the holidays—a crucial part of a smoothly run holiday logistics season.
2—Ensure warehouses are optimized for space: When shipments increase, all those packages have to go somewhere. However, warehouses that are close to capacity most of the year don’t suddenly have barren shelves to spare for the upcoming deluge of parcels. Space constraints can be a big obstacle when planning for the holidays.
Many organizations are already changing the way they approach warehousing by using more of the available square footage in their existing facilities. It’s a clear sign that space is at a premium. Meanwhile, vacancy rates are relatively low and rental rates are high, especially in some of the most desirable markets for distribution.
A strong peak planning process can help operations better support high volumes in existing spaces.
3—Work with a carrier that plans for large volume upticks: In 2017, UPS forecasted it would deliver more 750 million packages globally between Thanksgiving and Christmas Eve. That kind of volume amounts to delivering 750 million packages in a 25-day time frame—a steep increase above average daily shipments, and these figures only reflect one carrier’s experience. While logistics providers and carriers try to anticipate unexpected volume spikes, even the most accurate forecasts can see a few million more shipments than planned.
Plan carefully for external factors to improve forecasting, fulfillment
Preparing for peak season means preparing for billions of dollars in inventory to move across your supply chain. Generating accurate forecasts allows operations teams and carriers to collaborate more effectively. Effective cooperation helps reduce delays and prevent additional costs. However, forecasters would be wise to pay careful attention to the three aforementioned obstacles to accurate forecasts. Planning for these factors will help ensure a smooth holiday fulfilling season.
5—How to be Invisible Online
With an estimated 200 billion online devices by 2020 and tightening internet surveillance laws worldwide, virtually every aspect of our digital lives is likely to be documented. Are you ok with that? Retaining privacy is not just a matter of principle, but of safety as well. Last year, $16.8 billion was stolen through cybercrime in the U.S. alone. In addition, 30% of U.S. consumers were notified of a data breach.
Take a look at the step-by-step guide below from CashNetUSA which show you how to reduce your internet footprint and help keep your personal information under wraps.
SMBs are targeted for cyberfraud more often than larger businesses because they typically have fewer security controls in place. But if Fortune 500 retailers like Target and global tech companies such as Facebook can fall victim to cyberbreaches despite their substantial budgets, does the average small business owner even have a chance of protecting proprietary corporate data and customers’ personal and financial information? The short answer, according to AICPA (American Institute of Certified Public Accountants), is “yes”.
Below are a few tips CPAs share with their business clients:
Encrypt before backing up. Even safeguards like two-factor authentication (2FA) are not foolproof. Sending an SMS text as part of 2FA seems secure, but if the carrier account is compromised, the authentication can still be hijacked. If hacked, a small business can still protect its data by using strong encryption. Always make sure data is encrypted—and can only be unlocked by keying in a password—before saving to external devices or backing up to the cloud.
Train and test employees. Understand and teach employees about both internal and external cyber threats. Phishing is an intrusion resulting from an external condition (that is, someone sending your employee an email that is not legitimate), but the response to the receipt of that email is the internal condition impacting the ultimate result (either providing the perpetrator with sensitive data or denying access). Test employees to see if they would fall victim to phishing schemes.
Implement security controls. Technology itself poses a challenge for small businesses because it is always changing and advancing. It is critical for small businesses to have the proper security controls in place, as it is estimated that doing so can prevent roughly 90% of cyber breaches. Stay aware of the latest trends in firewalls and anti-virus protection and be sure to install software updates and patches as soon as they are available. Frequently remind employees to use complex passwords and change them often.
There’s more information available in AICPA’s new fraud report.
7—5 Tips for Young Leaders
Guest post by Kate Gorman, who led a team of 75 employees as Zynga’s youngest Director of Product (she was only 26 years old) and is now CEO of Fort Mason Games.
It can be difficult for young managers [and business owners] who lead large teams to commandeer more authority. Here’s how you can own your team:
1—Run no-fuss meetings: People watch you for cultural cues. If you start meetings late or re-cap for late arrivals, they’ll come late. If you don’t prepare an agenda, they’ll think it’s okay to be unprepared as well. Run your meetings with the type of behavior you expect from your team.
2—Don’t set goals just to set goals: KPIs can motivate employees, but never set them just for the sake of doing so—you’ll incentivize them to reach goals that don’t make sense for your team’s overall success. Track data and metrics that indicate the long term health of your business.
3—Communicate across all team levels: As teams grow, it’s easy to start only communicating with your direct reports. Taking the time to relay information to cross-functional and different level colleges eliminates disconnect and aligns the whole team to same objectives.
4—Pre-sell innovative ideas: Business decisions, even around an amazing idea, don’t happen quickly when a lot of stakeholders are involved. Plant the seeds ahead of time—talk informally with key decisions makers to learn if the idea might work or need polishing before the big meeting.
5—Befriend other company leaders: When your team sees strong relationships with other leaders in the company, they’ll know you’ve got a powerful backing, and they’ll follow suit with their own respect.
8—How to Market Your Mobile Apps
Companies recognize that marketing agencies and social media can extend their mobile apps reach and tell their story, according to a survey from The Manifest, a business news and how-to website.
- 34% of companies use social media to market their app, while nearly 20% of companies concentrate on app store optimization (ASO).
- 24% value ratings and reviews from app users to improve ASO, although experts believe this may not be the most important factor.
- Only 11% think revenue per user is the most important metric. Instead, 34% consider daily active users as the most valuable metric to measure.
- 38% believe 26-50% user return marks a successful retention rate.
- More than 50% of all companies pay for both search and social media ads. Larger companies are more likely to pay for online ads.
- Over 65% say they use either a mobile app marketing agency or a digital marketing agency to optimize their marketing campaigns.
You can read the full report here.
9—Teens Want to Start Businesses
As National Entrepreneurship Month winds to an end, new research from Junior Achievement and Ernst & Young LLP (EY) shows 41% of teens would consider entrepreneurship as a career option, vs. working in a traditional job. More teen girls (61%) have considered starting a business, compared to 54% of boys. But, 6% of teen boys have already started a business, while 4% of girls have done the same.
A similar survey of 500 adult entrepreneurs found that 13% started their first businesses at the age of 18 or younger, though the average age entrepreneurs start their first business is 28. “Fear of Failure” is a prime concern for 67% of teens, who say it might stop them from starting up. Interestingly, that was also a top concern for 65% of the entrepreneurs surveyed, 92% of whom say their businesses have turned a profit. To help guide them through their startup journeys, 36% of entrepreneurs sought advice from current or former colleagues, while 32% percent had an entrepreneurial mentor.
Additional findings from the surveys include:
- 69% of teens say they have a business idea, but are unsure of how to start the process.
- 78% of entrepreneurs say work experience is more helpful than a college degree when it comes to starting a business (only 53% of teens agree).
- 75% of entrepreneurs say “Motivation” is an essential characteristic to have when it comes to being a successful entrepreneur.
The entrepreneurs shared some advice with the teens: “Don’t let anything get in your way;” “Do something you love;” “Be true to yourself;” and “Be afraid of nothing.”
10—Holiday Marketing Ideas
My old friend Marcus Couch shares 40 holiday marketing ideas for small businesses.
11—How Will Your Small Business Show Gratitude This Year?
Alignable.com surveyed its members and found the most popular way (25%) small businesses planned to show their gratitude was sending thank-you notes to special customers. This was followed by giving gifts to “treasured” customers (22%) and giving employees a bonus or gift (19%). Read more about it here.
Lightspeed, a cloud-based point-of-sale system for independent retailers and restaurants, recently launched its Retail Success Index(RSI). The RSI was created to empower independents to delve deeper into the current state of their businesses through measuring their stance among competitors, identifying their strengths, and showing them where their companies can improve. It can also monitor growth ongoing for retailers who re-submit answers every few months. You can access the RSI here.
14—Looking for Tech Deals?
Remember CompUSA? Well, it’s back! The domain was purchased by DealCentral and is currently featuring the “best deals on computer components, laptops, televisions, and anything else tech.”
15—Start an Online Business
Want to start an e-commerce business? Check out this guide from WiseMerchant.
16—Best Credit Cards
Do you know which credit card is best for you? Check out this great resource from UpgradedPoints to find out.
Canon has just introduced a multi-function printer it says is perfect for environmentally-conscious entrepreneurs. Features of the imageCLASS MF264dw Printer ($199.00) include:
- The addition of a new six-line LCD feature offers a more intuitive user experience
- Users can create a Wi-Fi Direct hotspot to establish a direct connection to mobile devices without the need for an external router
- ENERGY STAR® certified and boast an EPEAT® Silver rating
Small business owner stock photo by Jacob Lund/Shutterstock