Best Books for Small Business Owners Series: The Innovator’s Dilemma

As a small business owner, do you consider how exploring new ideas can lead to future success? If making time for continuous learning isn’t at the top of your priorities, you’re not alone. And we want to help. Reading or listening to business books can offer new perspectives and help you understand classic business lessons. So, follow our Monthly Must-Reads series! In this series, we share the best books for small business owners. We’ll save you time by helping you determine whether each book is worth your attention. For each featured book we:

  • Identify exactly which types of business owners will benefit from reading it
  • Summarize the main points
  • Share key take-aways and reader reviews

This month, we cover The Innovator’s Dilemma by Clayton M. Christensen. Check out the end of this article for our past must-reads.

Business Book:

The Innovator’s Dilemma, by Clayton M. Christensen

Focus:

To uncover two innovation types and to understand the purpose of and necessity for each of them.

Main Idea:

When companies disregard opportunities for disruptive innovation, they risk going into the shadows of more inventive start-ups.

Great for Small Business Owners Who:

Develop innovative solutions for niche markets, or have long-standing businesses and want to protect themselves from dissipating.

Synopsis:

The Innovator’s Dilemma identifies and explains two types of innovation: sustaining innovation and disruptive innovation. Sustaining innovation is the ongoing effort of listening to and improving from customer feedback. In this way, it satisfies customer’s current needs. Disruptive innovation helps companies evolve, to meet customers’ needs–often in an underserved market. Examples include the transition from digital to smartphone cameras, GPSs to navigation apps.

Christensen goes on to explain which types of companies typically focus on disruptive innovation and which ones lag behind—and why. He offers strategies for how both long-standing companies and new start-ups can successfully explore and benefit from disruptive innovation.

Key Take-Aways:

Large, well-resourced companies are more likely to ignore disruptive innovation and suffer because of it. They may not even notice niche markets. They might think that these markets aren’t offering enough rewards to compensate for the lack of credibility. These companies should continue their sustainable innovation efforts. They should also start paying attention to how niche markets want to use their products.

For start-ups and small businesses, disruptive innovation offers huge opportunities. They’re often first to market. Targeting small niche markets offers a more forgiving, cooperative and engaged customer base. Disruptive innovators don’t directly compete with larger, better-funded market leaders for customers. This means they have a higher chance of growing surprisingly quickly and unchecked.

Pursuing disruptive innovation can help companies take–or keep–their place as market leaders of the future.

Reviewers Say:

“Clayton Christensen’s The Innovator’s Dilemma…remains one of the most important business leadership books on the market… The pace of technological innovation has increased drastically… [but] the foundational principles remain the same—when companies are doing everything right, they can still lose their position of leadership in the market. Companies are incentivized to act in accordance with what their customers want, and if they are not careful, that mentality can preclude them from taking advantage of disruptive opportunities that their current customers are not yet interested in. Christensen’s warnings should be heeded by leaders and managers at all levels of the organization…. I look forward to reading about how the Innovator’s Dilemma can be addressed in this age of near-constant innovation and rapid technological advancement.”

“I’ve been involved in innovation most of my career, and now wish I’d read this book much earlier. The simple but powerful thesis of the book is backed up by data and case studies from disparate industries. Like many business books it is a bit repetitive at the end… But the ideas and usefulness are five stars.”

Monthly Best Books for Small Business Owners:

August, 2019 – Blitzscaling

September, 2019 – The E-Myth Revisited

October, 2019 – Influence: The Psychology of Persuasion

November, 2019 – Built to Last

December, 2019 – Multipliers

January, 2020 – Start with Why

February, 2020 – The Five Dysfunctions of a Team

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Do You Have the Optimum Liability Insurance Coverage For Your Business?

Is your business one incident away from financial collapse? Guarding against that contingency with the right kind of liability insurance coverage is a practical solution for most business owners. But buying insurance isn’t easy. You can spend too much, or too little.

First, you need to review your own exposures as a business owner. In doing so it helps to understand the difference between the frequency of particular categories of insurance claims, and the typical amount of the loss.

Claim Frequency vs. Claim Cost

Some of the most common claim categories involve the least amount money, and vice versa. Here’s what one industry study reveals about the dynamics around liability insurance coverage. Over a five-year period, the following were the ten most common property and liability claims, and the percentage of policyholders filing such claims:

  1. Burglary and theft: 20%
  2. Water and freezing damage: 15%
  3. Wind and hail damage: 15%
  4. Fire: 10%
  5. Customer slip and fall: 10%
  6. Customer injury and damage: below 5%
  7. Product liability: below 5%
  8. Struck by an object: below 5%
  9. Reputation harm: below 5%
  10. Vehicle accident: below 5%.

The two categories that average the highest claims are reputation harm ($50,000) and vehicle accident ($45,000). And the least costly? Burglary and theft ($8,000).

It’s important to look at industry-wide claims data as a starting point. You need to look at the unique risks you and your business faces when you’re assessing your liability insurance coverage needs. In general, the less expensive the coverage, the more improbable it is that you’ll face a claim. But if you’re hit with a highly improbable claim, it might be enough to put you out of business if you lack insurance protection.

Assessing Liability Insurance Coverage Needs

Assessing your insurance needs involves the gloomy exercise of imagining a lot of worse-case scenarios.

More realistic concerns are injuries to customers, fire, and so on. Workplace injuries to employees are covered by a category of liability insurance, workers compensation. That’s legally required in every state except for private sector employers in Texas.

Some risks that you may face aren’t the first to come to mind. As noted, reputation damage is relatively rare, but very costly. How might it come about? Suppose a disgruntled former employee starts posting negative (and inaccurate) statements about your company in social media and it goes viral. It can hurt your sales and/or talent recruiting efforts. Or what if one employee mistreats a customer, and word of the incident spreads? Or, for the first time ever, a customer is seriously injured by one of your products (due to misuse of the product), and the event is blown out of proportion by the media?

Sometimes reputation risk and your exposure to cyber crime overlap. For example, suppose your customer database is hacked, and you need to warn customers to take extra precautions to limit their risk of identity theft. Such an event could not only leave a sour taste in the mouths of customers, but, when the word gets out, cause prospective customers to be wary of doing business with you.

Specialized Business Insurance Coverage

While specialized liability insurance coverage is available for risks like cyber crime and reputation damage, it is also often covered under the most basic kind of business policy you can get: general liability. If it is, you face the task of determining whether it does so adequately.

General liability insurance covers medical and legal costs associated with bodily injury and damage caused by your business. This includes incidents with customers on your premises, damage to property you rent caused by fire and other natural causes and “advertising injuries”–like running an advertisement violating a copyright.

If you own your own business real estate, you’d generally need commercial property insurance to cover most categories of damage that can occur. A business owner’s insurance geared to small business owners may be available that combines elements of general liability and commercial property insurance.

Employment practices insurance has become relatively common. It covers costs associated with discrimination, sexual harassment and wrongful termination charges.

The Role of Insurance Advisers

All liability insurance coverage available to you can be overwhelming. That’s where professional insurance brokers and consultants enter the picture. A smart broker take the time to recommend a plan of coverage that meets your needs and budget.

They will also generally advise you on steps you can take in a risk management effort to mitigate the hazards that your business faces every day. It may even make you eligible for lower insurance premiums.

Installing appropriate security devices is a basic first step, if you haven’t already done so. Also, to lower the risk of theft or other problems caused by employees, conducting criminal background checks as part of your hiring process, is recommended by liability insurance companies.

As the old saying goes, an ounce of prevention is worth a pound of cure. And when the “cure” you don’t want to face is settling a multi-million dollar claim against your business, the “prevention” of buying liability insurance wisely and instituting a risk management program, it’s a small price to pay.

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Preventative Measures for Small Businesses To Take During COVID-19

With COVID-19 having broad impacts on the global economy, you might be wondering if there are preventative measures for small businesses to take to protect themselves and their customers during these uncertain times.

Indeed there are. Below you’ll find actionable steps that businesses operating in a wide array of industries can take to secure services, put customers at ease, and stay nimble as new information becomes available.

Bolster Inventory

One of the most important preventative measures small businesses can take during these earlier stages of the COVID-19 disruption is to bolster their inventory.

It’s time to examine your current purchasing practices. Pay special attention to your overseas suppliers that may be impacted by export delays. You’ll likely want to increase orders from a typical 30-day supply to a 60- or 90-day supply, especially for your most popular inventory. If you find suppliers challenged to meet your increased quantities, don’t be shy about exploring alternative suppliers. At the very least, you’ll establish new supplier relationships and lay the groundwork for securing operations during current and future market disruptions.

You’ll also want to take steps to bolster your internal inventory for things like office and cleaning supplies. Consider increasing your orders for your daily consumables. Purchases like copier/printer paper, shipping supplies, and in-office consumables like paper towels and toilet paper can all be stored. Whether supply chains get disrupted for these items or not, you’ll use them regardless.

Establish In-Office Protocols

Major consumer-facing businesses have made a proactive practice out of sharing their preventative measures with the public. Whether it’s an airline sharing aircraft disinfectant procedures or your local fitness club letting customers in on their cleaning methods, your customers and employees will appreciate your procedural transparency.

Let the people you rely on most to keep your business running know that you’re taking their health and safety seriously. Here are some tips for safety measures small businesses like yours can take to reassure your team and customers:

  • Office/store cleaning: Consider an email or in-store signage letting customers know your daily and overnight disinfectant procedures. Offer hand sanitizer pumps or wipes if you have shopping baskets or carts. Add additional wipes at checkout/customer service areas. Place paper towels instead of reusable fabric hand towels in all public restrooms.
  • Examine return policies: Explore whether you need to make adjustments to return timelines to accommodate a customer’s desire to limit public exposure. Also, examine how you’ll process returned items and sanitation procedures for returns if necessary.
  • Employee measures: If you haven’t already, now’s a perfect time for an all-hands meeting to discuss COVID-19, its impacts, and safety measures your company is taking. Ensure employees have a plentiful supply of disinfectant products like wipes, soap, and hand sanitizer. Establish a firm sick policy and consider a permanent adjustment to your paid sick leave time.
  • Leverage technology: Consider limiting employee travel (even out and about in town) to avoid unnecessary exposure. Implement digital meeting tools like videoconferencing to continue collaboration during times of limited mobility.

Using the tips above, you can both reassure customers and employees as well as continue business operations responsibly.

Stay Up-To-Date

New information comes out each day about the impacts of COVID-19. One of the most important preventative measures for small businesses is an ongoing commitment to awareness.

Establish a point person or team within your company to stay up-to-date on the latest news. This includes information about new cases, travel recommendations, safety suggestions, and more. The following sites can provide reliable, authoritative information on COVID-19:

Depending on how COVID-19 affects your region, you might consider closing your business for some time to prevent disease transmission. While not an easy decision, it could be a necessary one for safety. Always consider whether a temporary closure of your physical location(s) could benefit public health and make contingency plans for key employees to work remotely during times of potential closure.

With so much news coming out each day about COVID-19, it’s natural to feel a bit flummoxed. However, a bit of planning, a generous amount of communication, and some common-sense safety measures can make your team and customers feel more secure during unsettling times.

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Supply Chain Disruption: Managing Impact from COVID-19

U.S.-based SMBs account for roughly one-third of all imports into the country. Supply chain disruption during the COVID-19 era proves to be a critical threat to operations and profitability.

However, means do exist for businesses to mitigate the impact of these market disruptions. Simultaneously, businesses can create improved supply chain protocols to manage such disruptions.

Below, you’ll find insights from Suuchi Ramesh, founder and CEO at Suuchi Inc. and Albert Goldson, Executive Director at The Cerulean Council. Their tips can help your business navigate the current landscape. They can help you chart a path forward to improve you and your business’ resilience in any market.

Immediate Impacts of COVID-19 on Supply Chain

What can SMBs expect to experience as COVID-19 extends its reach across the globe? “The immediate impact will be robust customer demand for current inventory,” says Goldson. Businesses will stockpile inventory, which means suppliers could experience accelerated inventory sell-through. While the initial cash flow could be considerable, there are impending downsides.

Increased demand will cascade into multiple supply chain disruptions. Businesses might find themselves caught between depleted inventory and extensive replenishment delays due to indefinite lead times from overseas suppliers. Goldson states that companies could experience a cash flow squeeze due to uncertain lead times.

Ramesh anticipates that U.S.-based businesses will turn an eye toward risk and shift to an emphasis on local-for-local supply chains. “With more local control, businesses will have a better way to combat macro-economic variables.” Businesses are beginning to consider the impact COVID-19 might have on different areas of their supply chain. Ramesh advises companies to hedge their risks against disruptions from all suppliers.

“Today, it’s the east, but it really could be anywhere across the globe,” she says.

Four Tips for Managing Supply Chain Disruption

The following tips can help businesses to hedge risks and mitigate cash flow disruptions due to COVID-related delays.

Focus on Digital Systems

A supply chain is only as good as its communication protocols. That’s why Ramesh says businesses should consider investing in digital systems to improve communication in their supply chains.

“For companies who are primarily communicating by email or phone calls, when things like COVID-19 happen, communication comes to a halt,” says Ramesh. “If you have a system that connects your entire supply chain, it provides continued communication when something like this happens.”

Diversify Your Supply Chain

Now’s the time to diversify suppliers and initiate outreach to other potential suppliers. When businesses can develop a base of multiple supplier countries, they can still course-correct when one global supply center is affected. While new suppliers might seem to be a short-term solution, Ramesh considers alternative sourcing to ultimately be a long-term play.

“For brands that are lethargic or just don’t have the resources to think about multiple sourcing partners, it’s natural to procrastinate if there are no immediate risks,” she says. “When you’re forced to search for a short-term alternative, if successful, it can turn into a long-term opportunity.”

Goldson advocates for businesses using this time to establish multiple alternative suppliers.

“Even if you already have a secondary source, establish a third source,” says Goldson. “The world economy is entering a period of high risk and uncertainty, and the more options you have, the better you can weather the storm.”

“Stress Test” New Suppliers

Businesses can identify new suppliers and engage in entry-level transactions. Therefore, it’s critical to ensure new partners can meet demands under extreme conditions. Goldson advises that companies occasionally “stress test” suppliers by giving secondary suppliers a larger than usual order to see if they can handle the demand.

“It’s counter-intuitive, but think of how you test your car’s air-conditioner in the winter to make sure it’s running okay after months of non-use,” he says. These stress tests can help businesses identify maximum orders per supplier and create fulfillment strategies for a wide array of supply chain disruptions.

Focus on Compliance and Sustainability

As you put stress test protocols in place, Ramesh advocates for businesses to find a newfound focus on compliance and sustainability. “A disaster like COVID-19 is one thing, but you want to ensure that if any type of similar issue has impacted a partner, they have the procedures, resources, and steps in place to combat the issue and a digital system to record it all,” she says.

Have open and frank conversations with suppliers about current market disruptions. Ask them how their businesses are making adjustments to prevent future slowdowns on their end. Communicating about compliance and sustainable business practices across varied market conditions will ultimately strengthen the relationship between customer and supplier for the long term.

You now have four tips to help you shore-up supply chain disruption in the wake of COVID-19.

By diversifying your supply chain and investing in better communication across the board, you’ll be prepared to withstand market variances both now and in the future.

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What is a PEO? And How to Choose the Right One for Your Business

You probably started your business because you enjoyed the work. Maybe you opened your ideal restaurant or started an electrical contracting business. That part was fun, but other responsibilities surfaced. Now, you have to deal with employees’ human resource issues, find ways to offer benefits and make sure all payroll taxes were filed and paid. Fortunately, small business owners don’t have to cope with these responsibilities by themselves. Professional employer organizations can lift those chores off of the owners’ shoulders. This helps business owners focus more on managerial tasks and growing their businesses. Now, what is a PEO, exactly?

What is a PEO?

A professional employer organization and a business enter into a shared relationship known as “co-employment.” Co-employment means that the PEO is the employer on record. They provide human resource support and handle payroll functions – while you, as the owner, keep the authority and responsibility. You’ll still manage your employees’ day-to-day activities.

Through the co-employment model, PEOs:

  • Are responsible for paying wages, managing employee compensation claims and overseeing other wage-related requirements
  • Assist with regulatory paperwork and compliance issues
  • Manage human resource issues and risk management functions
  • Provide employee benefits. Benefits include- but aren’t limited to – health insurance, unemployment insurance, Section 125 plans and other voluntary insurance products.

What are the Client’s Responsibilities?

The business owner is responsible for:

  • Managing employees’ daily activities
  • Maintaining a safe work environment
  • Keeping track of hours worked and reporting these figure to the PEO
  • Making sure payroll funds are paid in advance to the PEO

Advantages of a PEO

PEOs can take time-consuming HR tasks and responsibilities off your plate. A PEO:

  • Handles all human resource activities so you can focus on managing and growing your business
  • Provides competitive benefits and health insurance. A PEO has the purchasing power to negotiate better health insurance rates and more affordable benefits, such as a 401(k)plan, dental and vision coverage. Using the lower-cost benefits from a PEO enables small- and medium-size companies to compete with and attract employees from larger companies.
  • Stays up-to-date on regulations. As a business owner, you don’t have the time to read the latest regulations. A PEO does this for your and makes sure that you remain compliant.
  • Provides attorneys and HR professionals to handle employee-related issues. PEOs give advice on proper employee termination and disciplinary procedures.

Disadvantages of a PEO

Method of pricing

Sometimes, it can be difficult to determine how much you’re really paying. Many PEOs price their programs as a percentage of wage payroll, but this figure can vary monthly. So, sometimes it’s hard to figure out how much you’re actually paying. The other pricing method is the per-employee-per-month. This approach has add-ons for setup fees, administrative fees and costs for running some payroll reports.

Inflexible health plans

PEOs partner with certain insurance companies, and you don’t have a choice. If you like UnitedHealthCare, but the PEO promotes Aetna, you have to accept Aetna.

Customer service

PEOs handle large numbers of clients and employee issues. Customer service responses can sometimes seem rushed and indifferent.

How to Choose a PEO

Choosing the best PEO for your company requires doing your homework. Here’s a list of questions to help you get started.

  • Assess your company’s needs. What do you need help with -Payroll processing, HR issues, employee benefits? Define what you need before approaching a PEO.
  • Is the PEO a member of the National Association of Professional Employer Organizations? Membership in the industry’s trade organization indicates professionalism and respect.
  • Does the PEO have experience in your industry? You want a PEO that understands the daily lives of your employees and the risks they take on their jobs. How many employees do they represent in your industry?
  • Conduct a background check; ask for references to check; get first-hand feedback directly from the PEO’s clients.
  • Are the financial statements independently audited by a CPA? You want assurance that the PEO is legitimate.
  • Are their risk management practices certified by the Certification Institute?
  • Have their ethical practices been accredited by the Employer Services Assurances Corporation? ESAC audits PEOs annually to make certain each PEO has at least a $1 million surety bond.
  • Does the PEO have certification from the IRS? Check for accreditation such as the Certification Program for Professional Employer Organizations from the Internal Revenue Service.
  • Review the fine print in the contract. What guarantees does it provide? How can you terminate the contract if the relationship goes bad?

 

According to NAPEO, the U.S. has over 900 PEOs. While you have plenty of choices and setting up a co-employment agreement with a professional employer organization will relieve you of a ton of administrative tasks, you must thoroughly investigate each PEO candidate before signing on the dotted line. You don’t want any surprises.

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Best Books for Small Business Owners Series: The Five Dysfunctions of a Team

Continuous learning is essential to business and career success. As a small business owner, do you make time to continue developing yourself, considering new ideas and how you might apply them to your business? This is likely a challenge. But, one way to fit learning into your schedule is by reading or listening to great business books; and we’d like to help. With our Monthly Must-Reads series, we share the best books for small business owners.

Not only do we find books helpful for small business owners, but we also aim to save you time. For each book, we share who will benefit from reading it, the book’s key take-aways, and even reader reviews, so you can quickly determine whether it’s worth your valuable time.

This month, we’ll cover The Five Dysfunctions of a Team by Patrick Lencioni. For a list of past Monthly Must-Reads, like January’s Start with Why, check out the bottom of this article.

Business Book:

The Five Dysfunctions of a Team, by Patrick Lencioni

Focus:

How leaders can uncover and address issues that prevent their teams from collaborating and performing successfully.

Main Idea:

Fostering and leading a strong team takes more than a charismatic leader. It takes a leader who’s willing to do the hard work of uncovering and working through conflict, and a team that’s able to honestly identify and work through any issues that stand in the way of success.

Great for Small Business Owners Who:

Struggle with leadership, specifically creating cohesive, trusting teams

Synopsis:

InThe Five Dysfunctions of a Team, Lencioni takes readers through a novel-style fable illustrating five common issues keeping teams from functioning at their highest potential. In his story, Kathryn is a fictional CEO hired to lead a team of rockstar executive leaders, who excel in their individual roles, but have trouble working together. The reader follows along as she guides the characters to overcome their political and interpersonal drama, all while discussing and addressing each type of dysfunction they exhibit.

After concluding the story, Lencioni outlines the concepts of each dysfunction with an pyramid illustration. He dives into each type of dysfunction, explaining how to recognize and address them. At the end, Lencioni offers a quiz that you and members of your team can take to understand your strengths and weaknesses within the pyramid.

Key Take-Aways:

Managing and working as a team not only takes discipline and communication, but also courage to overcome obstacles that can seem personal. The five dysfunctions teams often experience are:

  1. Absence of trust
  2. Fear of conflict
  3. Lack of commitment
  4. Avoidance of accountability
  5. Inattention to results

Reviewers Say:

“Lencioni shares simple truths about teams that should be more intuitively obvious to everyone. Yet, these things are very easy to grasp while being very difficult to actually practice … without practice. This book focuses on what prevents a good team from forming and describes what’s needed. His companion book [Overcoming the Five Dysfunctions of a Team: A Field Guide for Leaders, Managers, and Facilitators] focuses on the implementation of these ideas but does not stand alone. If you only get one, get this one. The biggest problem I see is that both books are framed about C-level and top-level executive teams. Very few mid-managers would have the leverage and ability to implement all of these principles at lower levels of the organization. It’s definitely possible in some cases, but it would significantly more challenging. His principles are universally true, but his coaching is directed at executives.”

“A must-have in any manager’s toolkit. I have loved this book for awhile and regularly give it on loan. A perfect way to understand the people aspect of team and support managers through what is a common situation. Very cleverly written and full of tools to help get dysfunctional teams moving in a shared direction. Also good for some self-analysis as everyone will identify their own character.”

Monthly Must-Read Business Books:

August, 2019 – Blitzscaling

September, 2019 – The E-Myth Revisited

October, 2019 – Influence: The Psychology of Persuasion

November, 2019 – Built to Last

December, 2019 – Multipliers

January, 2020 – Start with Why

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Is Business Travel Insurance a Must-Have?

When someone travels for business, anything could happen. This idea serves as the basis for business travel insurance. Misplaced luggage; a cancelled flight; getting sick from food or drink. All of these are very possible realities, which is why business travel insurance is so important. Rarely is choosing not to travel for business an option. Whether it’s an industry-specific conference, trade show, a “get to know you” excursion to a favored supplier, face-time with a valued international customer, or as is the case with some seasoned business travelers, fitting one of your favorite vacation destinations into business agenda, national and international travel is simply part of the deal.

Whether it’s your first or fifteenth time traveling for business, supporting yourself during your travels by adding protection is sure to make you feel at ease. And, whatever the situation, it’s a good idea to explore business travel insurance, as a way to protect yourself and your belongings. Here’s a quick look at the pros and cons of this type of insurance, and the various policies that are out there.

The benefits of travel insurance for business

The biggest advantage to purchasing this insurance is likely the peace of mind it brings. As Business World Travel notes, it’s nice knowing that “even if something terrible happens during your trip, there will be a way to make it okay and that peace of mind is priceless.” The top priority is “to keep your mind on your trip without worrying about everything else that may happen.”

Business travel insurance helps protect you from the following:

  • Sudden cancellation of a planned trip
  • Personal and business items lost-in-transit
  • Getting sick or hurt during travel
  • Not being able to get to a competent medical facility
  • In the event of kidnap, ransom and extortion

All of these situations are possible during travel. It’s at least worth considering the purchase of some protection against them.

The downside of business travel insurance

Due to the wide range of unforeseen possible problems, business travel insurance isn’t cheap. Business Travel World estimates that it “can cost between 4%-12% of your total trip cost.” So, you should carefully weigh the pros and cons before making a decision. Make sure you read the policy’s fine print, too. Cancellations occur for a variety of reasons. This may be surprising, especially if you’ve only glanced over the document you’ve signed, rather than study it thoroughly.

As Allianz Global Assistance notes, the point of travel insurance is safeguarding travelers “against sudden and unforeseen events–not threats that are already on the horizon when the insurance is purchased.” So, for example, if you’re traveling to a region where there was a big storm, or has one on the way, “your plan won’t provide coverage for claims related to that event.”

Business travel insurance can be complex and detailed. Having the right type of coverage might be beneficial. With any given policy, however, it’s important to closely examine what’s offered and what isn’t.

Types of coverage

Speaking of coverage, here’s a quick look at the types of insurance you can buy:

  • Baggage delay coverage
  • Baggage coverage for lost, damaged, or stolen items
  • Travel delay coverage
  • Travel medical and dental coverage
  • Emergency medical evacuation/repatriation coverage
  • Trip cancellation insurance
  • Kidnap and ransom insurance

Yet another option is corporate travel insurance. According to Insubuy, an online insurance marketplace, “an employer can purchase corporate travel insurance, which allows a set number of days to be banked for all traveling employees.” This arrangement eases concerns if a company’s employees often travel for business. It’s “usually cheaper than individual travel insurance and may provide the same price for all employees, irrespective of age.”

Every business is different. Particular needs for insurance coverage varies. Unfortunately, bad things can happen during business travel. It’s worth considering business travel insurance prior to making a costly–but hopefully productive–journey inside the U.S. or around the globe. If something bad occurs, you’ll be glad you took precautions to protect yourself.

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5 Key Reasons to Forecast Your Cash Flow

Projecting your cash flow can help you plan for the future, avoid unexpected shortfalls and even qualify for a small business loan.

Many overextended small business owners are weary of cash flow analysis. “Analysis” of any kind sounds difficult, and who has the time or energy to make future projections? More importantly, why bother to forecast your cash flow?

Consider that poor cash flow is the number one reason small businesses fail. An alarming 82% of companies fail due to cash flow issues. Convinced you don’t need to worry because your business is profitable? Think again. Profitable companies fail all the time for the simple reason that they run out of cash.

Beyond keeping your doors open, forecasting your cash flow can take the guesswork out of where you’re going. Having a good idea of your direction can help you make smarter business decisions. A little planning goes a long way, and it doesn’t have to be difficult.

These days, intuitive online tools can do the hard work for you, automatically generating cash flow projections based on your past transactions and financial history. No spreadsheets required.

There are myriad benefits to forecasting your cash flow, from avoiding dips into the negative to planning for growth. Consider these five ways that cash flow projections can improve your business.

Avoid Shortfalls

Unexpected shortfalls can be crippling, and it may take months (if not longer) to recover. Negative cash flow can creep up on you if you don’t consistently track the cash coming in and going out. Fortunately, shortfalls are often avoidable with a bit of foresight.

Projecting your cash flow will help you identify — and plan for — market swings, seasonal fluctuations and other business patterns that can lead to unpredictable cash flow. Forecasting can even help you visualize cash flow trends with the help of automatically generated charts and graphs.

Optimize the Timing of Accounts Payable and Receivable

On a more granular level, many avoidable cash flow issues are often a simple matter of timing. Significant lag time between invoicing your customers, or shipping out products, and getting paid can cause unnecessary strain on your cash flow.

Cash flow projections that are based on your financial history can help you anticipate when you’ll be paid by customers. This allows you to stagger or otherwise adjust outgoing payments to your vendors accordingly. In turn, this can keep you from dipping into the red.  And keeps you out of the uncomfortable position of not being able to pay your suppliers, or worse, your employees.

Prove You Can Pay Back the Loan You Requested

 When you apply for a small business loan, lenders will scrutinize your cash flow history in an attempt to answer one primary question: Can this borrower pay back the loan they’re requesting?

Asking for a loan of any amount without showing your plan for paying it back is a good way to land in the rejection pile. This is especially true if your current cash flow won’t clearly cover all of your regular operating expenses — plus your loan payment.

If you find yourself in this situation, cash flow projections can help strengthen your case by showing the lender exactly how you plan to use their funds to get to a place where you can easily make loan payments. This type of forecasting allows you to hand over a road map that can instill a lender with the confidence they need to approve your loan.

Anticipate the Impact of Upcoming Changes

Does your business plan to purchase new equipment? Launch a new product? Cash flow projections allow you to gain a complete picture of the ripple effect that these types of changes will have on your cash flow.

When your finances are synced up with FINSYNC, cash flow projections are automatically generated based on future invoices, bills due and payroll. You can then create “what if” scenarios, such as buying new equipment. Forecasting shows you how the cost will affect your bottom line.  It can also show the potential increase of revenue generated by the new machine.

Plan for Future Growth

In the same manner, cash flow projections can help you plan for future growth and expansion. Whether you’re expanding your team with new employees and need to factor in increased payroll costs, or ramping up production to keep up with increased sales, future projections help you see exactly where you’re going — and how you’ll get there.

Forecasting is also an excellent goal-setting tool to help you plan out the financial steps your business needs to take to achieve targets. There’s power in cash flow projections and the insight they can provide your business. Fortunately, this competitive advantage comes with little effort when you leave the analysis to today’s sophisticated online tools.

 

Guest post by FINSYNC


Best Books for Small Business Owners: Start with Why

January Monthly Must-Reads: Best Books for Small Business Owners

It’s easier to say you’ll make time to learn new things that really doing it, especially when you own and operate your own business. But research has shown that continuous learning is essential to business and career success. So, how do you make time in your busy schedule to think about new ideas and how you might apply them at work? Read—or listen—to great business books. With our pick of the best books for small business owners, you’re sure to find the inspiration you need to succeed.

To help you choose the best business books for your situation, we’ve created our Monthly Must-Reads Series. This series highlights helpful books for small business owners and also save you time. How? For each featured book, we share the main focus, key take-aways, and even reader reviews, so you can quickly determine whether the book is worth your valuable time. We hope this makes it easier for you to keep up with current innovation, management and workforce trends.

To kick off 2020, we’re sharing Start with Why by Simon Sinek. For a list of past Monthly Must-Reads, like December’s Multipliers: How the Best Leaders Make Everyone Smarter, check out the bottom of this article.

Business Book:

Start with Why: How Great Leaders Inspire Everyone to Take Action, by Simon Sinek

Focus:

Identifying how the most influential leaders think about, act on, and communicate their why.

Main Idea:

Understanding the underlying purpose–the why— behind an idea, product or service inspires people to make positive changes in their lives.

Great for Small Business Owners Who:

Want to innovate and inspire by discovering their true mission and operating from it.

Synopsis:

Simon Sinek’s 2009 TED talk, How Great Leaders Inspire Action, is the third most-viewed TED talk of all time. In it, he urges all leaders to start asking, “Why?”

“Why do I get out of bed in the morning?”

“Why does my company exist?”

“And why should anyone care?”

And he named his book with that in mind. Start with Why delves deeper into his central idea, offering real world examples that illustrate what happens when companies successfully communicate their why.

Key Take-Aways:

  • Too many companies start with, focus on, and talk about their what: the product or service they sell.
  • When companies understand their why’ (i.e. their mission and the values that support it; the reason they’re in business), they can better identify appropriate audiences and more effectively market to them, creating a loyal customer base in the process.
  • A company’s why should also influence its culture, its hiring decisions, and its teambuilding strategies. Employees, not just customers, should understand and buy into your company’s why.
  • When you organize everything from your operations to your marketing efforts keeping your why in mind, you build a loyal customer base and an engaged, motivated team.

Reviewers Say:

“[Wow.] I cannot rate this book highly enough to take a different, positive approach to life and work. Like others, I have watched Sinek’s TED Talk on this, and questioned whether the book would add anything more, and, boy, yes it did. Imagine the TED Talk expanded to two hours, with more depth, intrigue and examples. What I like most about the book compared to the TED Talk is that it delves more in to how Starting With Why can influence home life, not just work. [It definitely makes you think], and I’m even finding myself taking a different approach around my team at work. I agree, a lot of the examples are repeated (a lot) throughout the book, in particular Apple. I’m not against Apple and found it useful how the different topics are explained using the same companies as examples. It helps provide the fuller picture. However, let me assure any potential readers that there are also plenty of new examples given too.”

“The author’s TED talk is one of the most-viewed ever; and it’s really quite good. In fact, it’s so good that you don’t need to read this book! He takes a very, very simple concept and expands, and expands, and repeats, and seemingly never edits, and then repeats, and expands, and — well, you get the idea. The whole thing could’ve been done in 50 pages or less. Example: Yes, there’s a difference between WHAT one does in business and WHY one does it. And sometimes they diverge. He calls this the “Split” and has a graphic and whole chapter on it. Really?? Not needed.”

Monthly Must-Read Business Books:

August, 2019 – Blitzscaling

September, 2019 – The E-Myth Revisited

October, 2019 – Influence: The Psychology of Persuasion

November, 2019 – Built to Last

December, 2019 – Multipliers

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7 Small Business Trends 2020 May Bring

A New Year can bring new opportunities as well as new trends. As a small business owner, making the most of the small business trends in 2020 can help you to avoid potential pitfalls. From technology to customer demands, the marketplace is changing and it’s important to change with it.

Here are seven 2020 small business trends to prepare for to have your best year yet.

1. Increased Personalization

We all want to feel valued. And for your customers, that means personalized service. In fact, 80 percent of consumers are more likely to make a purchase when personalization is part of a service.

Technology can help you personalize customer experience on your website. More e-commerce sites tailor web-page displays to match a customer’s browsing or purchasing history. For example, when you visit Amazon you’ll find the home page populated with products similar to those you’ve purchased or viewed. Businesses that personalize messaging to customers can see a 16 percent increase in outcomes.

In addition to using personalizing tools for your web presence, you can personalize your customers’ experiences by implementing loyalty programs that reward them for their purchases. Make sure to train your employees to use the information they collect to enhance interactions. You can also personalize your email campaigns by using the subscriber’s name to send special gifts or discounts on their birthday or anniversary.

2. Customer Reviews

Social media allows customers to voice their opinion. As a result, customer reviews are becoming more important to other shoppers. In addition to product features, consumers want to know about other shoppers’ experiences. Offering a way for customers to leave feedback is increasingly important. Ninety percent of consumers read reviews before visiting a business. And 92 percent of people may not complete their purchase if there aren’t any reviews available.

The great news is: Adding reviews to your website is often as easy as selecting the option with your website provider. You should also encourage reviews by creating Yelp and Google business accounts. Regularly ask customers to leave a review. And if you do get a negative or even neutral review, respond professionally and try to remedy the situation. A study by Harvard Business Review found that when small businesses respond to reviews–both good and bad–their ratings increased.

3. Voice Searches

Whether it’s through a smart phone or smart speaker, smart assistants like Alexa and Siri are becoming increasingly popular. They’re changing how consumers search for products. Gartner predicts that almost a third of web browsing will be voice activated by 2020.

To show up in searches, small business owners must reconsider the phrases and product descriptions they use on websites. Instead of focusing on keyword optimization, you’ll now have to consider voice optimization. This is because your customers won’t search in keywords, they’ll use complete sentences.

When creating product descriptions and tags, imagine the questions a customer would ask to find you. Unlike text searches that are often short and sweet, voice queries are longer and action oriented. For example, a customer may enter keywords into a computer such as “Tailor in New York.” But, they may ask a voice assistant, “Where can I get pants hemmed in New York?” Make sure to optimize your keywords to reflect how people talk.

4. Social Media Stories

Stories—short temporary video content—were first introduced by Snapchat. However, now you can find them on Facebook and Instagram, too. It’s a new way for businesses to connect with customers in a casual–but authentic–way. If you haven’t gotten on this trend now, make plans to try it in 2020. Social media stories are growing 15 times faster than the news feed.

Live streaming is another way to connect with customers in real time. The key is to get creative and get the attention of the social media users, especially as more businesses start using them. Because they’re nimble, small businesses have an advantage.

5. Demand for Sustainability

More people are concerned with reducing their ecological footprint. They’re demanding that the companies they patronize help them in their efforts. More companies are looking for ways to reduce waste, choose sustainable materials and limit energy consumption.

Going green must be done with authenticity. A recent study found that consumers are paying attention to how companies position themselves. They’re looking for transparency. If a customer feels their values align with your brand’s, they’re more apt to engage with the company. But if the values don’t align, 42 percent will walk away. 21 percent won’t give the company a second chance.

If sustainability is one of your underlying missions, share it with customers. Also, educate your staff so they can answer questions about your standards in their communication with customers.

6. Flexible Work Arrangements

In addition to customer experience small business trends in 2020, employees are asking for flexible work arrangements. More than half of employees want more control over their personal and professional lives. If you and your business can afford to have your team work remotely, consider offering more opportunities. Technology helps employees check in via project management and instant messaging platforms–video conferencing, too.

Gig work is also growing, with 36 percent of workers in the United States going freelance, according to Gallup. It offers workers ultimate flexibility. Also, it gives small businesses a way to reduce their talent budget. Consider using gig workers for your small business with seasonal opportunities or occasional jobs.

7. Focus on Purpose

Finally, while a paycheck is important, employees also want to find meaning. This comes from understanding how their job makes a difference in the lives of customers as well as the world. Employees can also find meaning when they are able to volunteer on company time as part of a team.

By creating an engaging, educational and exciting company culture, you’ll positively impact the success of your small business. Employees who find meaning at work express higher levels of job satisfaction. This is linked to greater productivity and higher retention rates.

Looking Ahead to Small Business Trends in 2020

The marketplace is always changing. The New Year is the perfect time for small businesses to pause and take steps to take to improve their companies. By understanding potential and current trends, you can make the best decisions moving ahead. If you can make the most of upcoming opportunities, you can set yourself up for success in the coming years.

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Best Books for Small Business Owners – Multipliers

While it’s essential to business and career success, continuous learning is easier said than done, especially for small business owners who wear many hats. That’s why we’ve created the Monthly Must-Reads series with our selection of best books for small business owners. We not only share the best books for small business owners, but also aim to save you time by helping you quickly determine whether each business book is worth your valuable time.

Keep up with current innovation, management and workforce trends by reading the right business books for your situation. With each featured book, we share the main focus, key take-aways, and even reader reviews. For December’s best books for small business owners, we’re sharing Multipliers by Liz Wiseman. For a list of past Monthly Must-Reads, like October’s Influence: The Psychology of Persuasion, check out the bottom of this article.

Business Book:

Multipliers, by Liz Wiseman

Focus:

It helps you understand how to bring out the best possible performance in your employees.

Main Idea:

There are two types of leaders: Diminishers and Multipliers. Multipliers inspire their employees to willingly reach for and achieve outcomes that they may never have thought possible.

Great for Small Business Owners Who:

Want to get exciting results from lean teams with few resources.

Synopsis:

Wiseman presents real-life anecdotes that illustrate two distinct leadership styles by analyzing data from more than 150 leaders: Diminishers and Multipliers. She then identifies each one’s habits of thought. She explains that Multipliers enjoy a higher rate of success and more impressive results by making everyone around them more productive, engaged and creative.

Wiseman empowers her readers to learn how to lead like Multipliers by contrasting Multipliers and Diminishers in the following ways:

  • Talent Magnets vs. Empire Builders
  • Liberators vs. Tyrants
  • Challengers vs. Know-It-Alls
  • Debate Makers vs. Decision Makers
  • Investors vs. Micromanagers

After digesting this guidance toward becoming a Multiplier, readers are invited to take a self-assessment via Wiseman’s website to identify where they lie on the scale from Diminisher to Multiplier.

Key Take-Aways:

  • Multipliers create more intelligence around them while diminishers’ leadership habits often stifle their team’s creativity and problem-solving skills.
  • Multipliers:
    • Attract talented people because they become known for empowering team members and using them at their highest potential
    • Foster safe places for people to share, collaborate and unlock their best ideas
    • Outline challenging opportunities that inspire their people to stretch themselves
    • After you hear all points of view, make decisions based on stimulating, healthy debates.
    • Invest in their people, empowering them to take ownership of their roles and outcomes

Reviewers Say:

“Seeing as I’ve read [Multipliers] three times, I can’t believe I haven’t written a review yet. No exaggeration, this book can be a life-changer both at work and in your personal life. I admit that the first time I read it I thought, ‘Ok, this is so clear as to be obvious; I’ve seen these types of people for years at work.’ But, so what? I never thought it through, and Liz [Wiseman] has done the research, so my anecdotal evidence is supplanted by the real thing. Chapter by chapter, the concepts were illuminated with great examples and stories. This is no flavor of the month. These are concepts that can be used easily at work. And if applied, they work. I can attest to that.”

“We’ve all heard—and said—that less is more. Sometimes it’s true. But in most cases it’s still the reality that more is more, and is usually the preferred ROI of resources, whether those resources are of time, money, manpower, brain-trust, whatever. Best of all is getting more from less, and that is what Liz Wiseman’s fine book teaches us to do. Using a wide-range of varying case studies and examples from the world over, Wiseman itemizes the symptoms of a variety of leadership illnesses that sicken a corporate culture and disable its employees. You may well find yourself hiding in these pages somewhere; I know I did. Fortunately, after helping us see where we are minimizing rather than maximizing the human resources at our disposal, Wiseman clearly articulates the prescription(s) to fix the problem(s). It has the added advantage of being an engaging, thoughtful and well-written treatment.”

Monthly Must-Read Business Books:

August – Blitzscaling

September – The E-Myth Revisited

October – Influence: This Psychology of Persuasion

November – Built to Last

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Signs that Business Expansion is on the Horizon

When it comes to business expansion, business owners face a daunting challenge. Is now the right time to expand your enterprise? If not now, when? What type of expansion makes the most sense–new customer acquisition, upgrading or launching a new product line or opening a second retail location? The choices may feel overwhelming at first. But it doesn’t have to be – if you watch for signs that expansion really is the wisest move in the months ahead.

As Forbes notes, while “no single factor can dictate success or failure in business expansion,” intuition plays a key role, “knowing precisely which signs to focus on and follow in planning your business’s growth.” Here are widely acknowledged key factors that indicate successful business expansion could be on the horizon.

High demand

An increased demand for your products or services indicates the need for a new growth strategy. (Of course, by “need,” we mean an ongoing demand from customers, not a one-time or seasonal spike in sales.) A new, more effective marketing strategy could generate such demand. As is often the case, an increased cadre of repeat customers know what you have and want more of it.

Favorable trends

It’s not enough to focus only on what’s happening within your own organization. Successful business owners closely monitor industry-related forecasts and trends in order to gauge potential challenges and opportunities that might lie ahead. In fact, the more often you engage in this market analysis, the more knowledgeable you become at detecting small or significant shifts within the industry that can favorably impact your business.

Keep an eye on the big picture. Watch for signs of slowdown in the national economy or, conversely, indicators that consumption might soon be on the rise. Armed with this information, you can embark on a growth plan based on a solid foundation.

Healthy cash flow

As every business owner knows, cash flow is the lifeblood of any enterprise. While entrepreneurs may struggle at first to master this key element, businesses that enjoy success in the marketplace often find themselves with sufficient funds to explore new avenues of growth.

So while “cash can be consumed by any number of incremental expenses,” notes Inc., when you’re “confident that you can cover additional outlays and can weather any number of storms … then your prospects for growth look awfully good.”

Strong workforce

Business owners continuously grapple with the challenge of recruiting and retaining quality talent. But if you’re fortunate enough to have a strong workforce in place, the moment could be right for expansion.

Take time to identify your current top performers. Look for ways to encourage their development. Maybe add training and development sessions. Through more access to technology and other resources, your employees will become more effective in their jobs.

Clearly communicate your company’s mission and objectives. This way, each of your skilled employees will understand where they fit in the bigger picture.

Hungry for a Challenge

When you first start out, every aspect of the business represents a challenge. The owner of a successful business might feel like they need a new challenge. What was once exciting has become a daily grind. If you “are actually bored, your business has probably reached a plateau and it is time for you to grow it,” says the UPS Store.

As noted, successful business expansion relies upon a number of factors. But if your business is presently doing well–and all indications show that consumer demand will remain consistently high–don’t put off making plans for growth. No business can afford to “run in place.” Opportunities for expansion don’t come along every day, so it’s critical to recognize positive signs and take action as soon as possible. A bright future lies ahead!

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