There are several types of tax deductions that small business owners can use to save money. Unfortunately, many people are unaware of these deductions and typically end up paying more. As a small business owner, are you aware of all the tax deductions you can use to lower your taxable income and save money? Here are some tax deductions you might not be aware exist:
Startup Costs:Typically, new businesses incur large costs before they are even able to fully operate. These costs are referred to as start-up costs. You are eligible to deduct up to $5,0000 of your start-up costs in the year your business begins. These costs vary by business type and industry. However, some common expenses to consider are insurance, equipment, permits, and employee training.
Car and Truck Expenses:Do you use a vehicle such as a van, truck, or car for your business? You are able to deduct the operating costs of that vehicle. You must, however, be able to prove that the vehicle was used for business purposes. In order to be able to provide evidence in case needed, be sure you keep a dated record of how many miles you drove for business purposes.
Home office:If you run your business out of a proper home office, you could be eligible for a home office tax deduction. In order to qualify for this deduction. part of your home must be used exclusively for business. Your home office must be used on a regular basis, using it only a few times a month disqualifies you from this deduction. It is also common to have the IRS visit your home to investigate whether the use tests are met. In addition, you may be eligible to deduct expenses such as utilities, rent, or property taxes, but there are some requirements you must meet. For the latest most up-to-date information we suggest visiting the IRS website.
Marketing:The IRS allows you to deduct several types of expenses related to sales and marketing. Money spent on advertising, email marketing, public relations, and printed marketing material qualifies for a tax deduction. These expenses are related to helping you bring in new customers and retain existing customers. On the other hand, there are certain marketing expenses you are unable to deduct, such as, expenses associated with research and development activities, cars with advertisements, or advertising on websites used by or for a political party. Tax rules undergo constant change. This tax season, check the IRS guidelines for small business tax deductions before you file your taxes for the latest information and you might even save more. Need assistance filing your taxes? FINSYNC connects you with the right accountant for your business. We match based on proximity, industry, and experience. Get matched for free, it only takes 5 minutes to get started.
The latest trends in Digital Marketing show that social media platforms are quickly evolving into online marketplaces. Moving beyond the realms of creativity and connectivity, they offer a vast customer base for businesses. While there are multiple social media platforms across the internet, each platform comes with its own set of advantages and disadvantages. Moreover, there are differences in content types, formats, and audiences. For businesses seeking to get started with social media, choosing a single platform that best aligns with your product or service is a great first step. Then comes the formulation of an effective social media strategy. Let’s explore some social media trends that businesses can leverage in 2021.
From e-Commerce to Social CommerceAccording to experts, more than 50% of sales across 14 major sectors are happening through social media. In a way, there is a thin line between e-commerce platforms such as Shopify or Woocommerce integrated with WordPress and social media. Platforms such as Facebook and Instagram are offering separate business profiles for dedicated campaigns and direct sales.* The integration of payment gateways and fintech applications are making the process much easier. *Instagram is owned by Facebook and Facebook Ads Manager must be used to advertise on Instagram.
Create Follower Communities:A loyal social media follower group is just as powerful as a team of sales executives. Proper interactions and responsiveness are crucial in creating a robust customer retention management system within the platform. Make your followers brand ambassadors of your product/service. The user-generated content such as testimonials, feedback, etc. can help more than you think in your business expansion. Consumers increasingly respond to relatable stories over rote advertising copy.
Influencers and CollaborationsThe power of social media lies in its multiplier effect. Likes, shares, and comments from your network can reach any corner of the world, especially if your content goes viral. At times it requires a push from someone with massive social media influence to spread the word. Influencer marketing is a buzz word in the digital marketing arena. One way to promote your business is by paid collaborations and reviews with influencers across different social media channels. There are even influencer marketplaces where you can read about what industries they promote and how successful they are.
Effective AnalyticsReal-time analytics is one of the best rewards of digital marketing. The fact that you are a small business should not drive you away from dealing with analytics. All platforms offer graphical analytics tools that even someone without a statistics background can understand.. Leveraging this data allows you to optimize your strategy and content over time. This will make your marketing campaigns successful by reaching out to a larger, more targeted customer base.
Leveraging New PlatformsWith the reduction in average internet bandwidth cost, video platforms are becoming increasingly popular. In content marketing, short videos are grabbing users’ attention faster than other mediums. This clearly explains the rising popularity of mediums such as TikTok. Many companies are already leveraging TikTok influencers for promoting business through short-format videos. These videos can cover product descriptions, reviews, or creative ad campaigns. Small businesses often struggle with low marketing budgets. However, the new social media trends suggest that it can be a very effective low-cost marketing alternative. As you get familiar and grow success with your first platform, you can add others that are relevant for your business. No matter what platform(s) you choose, remember to optimize your profile:
- Use crisp, clear, well-lit photos.
- Spell check your written content and be sure you are using terminology your intended audience can understand.
- Avoid a “ghost town” by posting frequently.
- Respond to comments, likes, etc. quickly to let your audience know you care.
Setting goals for your business helps identify opportunities for success. Achieving success without having a plan in place first is much harder. With 2021 right around the corner, a good first step for your business to achieve is to begin setting clear and realistic goals.
Get Started Setting GoalsThe process of setting goals begins with determining what you want to accomplish in a time period. Business goals should be objectives tied to the vision for your business. It may sound cliche, but writing down your goals on pen and paper makes it more likely for you to achieve them. According to an article by Inc., you are 42% more likely to achieve your goals if you write them down. In case you feel stuck about where to get started, these are some easy goals you can set for your small business:
- Reduce your unnecessary expenses
- Increase your website traffic
- Hire your next employee
- Improve your social media presence
- Introduce a new product or service
Don’t Lose Track of Your ProgressKeeping track of progress allows you to monitor whether you’re on the right track or need to make adjustments. With many different ways to track your progress towards your goals, let’s discuss some of the methods you can use to start tracking your progress:
- Planning and organizing. Develop a plan on how you will accomplish your goals. It can be as simple as setting dates to check back on your progress or listing out the steps you need to take.
- Set objectives. This can be especially important if you have employees. Fully understanding expectations increases the likelihood of embracing tracking goals.
- Create milestones. Think of this as breaking your larger goals into smaller pieces. This will help you assess how far you’ve come and figure out the next steps in achieving your larger goals.
- Celebrate the small wins. Doing so will help you avoid getting burned out. We live in such a fast-paced world, we always begin focusing on the next big thing. Taking the time to celebrate small achievements helps you appreciate the process towards the right path. In addition, this helps build more confidence. helps you acknowledge
Build Good HabitsAccomplishing your goals is a direct relation to the habits you form. Building good habits helps you reach your goals more effectively and efficiently. For example, you can begin with improving your time management or setting a work routine. Think of these habits as incremental steps to reaching your goals. Taking the time to look at your organization from a broader perspective will give you greater confidence to reach the next level in your business. Keep in mind you will need to rethink and refocus your business goals as you make progress and your situation changes.
2020 has been a year full of adjustments and changes. It has altered the way the world and businesses operate. It’s important to stay educated on the top business trends and developments that are sure to stick around for 2021. Here are some trends to account for in 2021.
Remote Work is Here to StaySeveral companies have already begun to take the flexible working arrangement seriously. It’s clear that for some industries, businesses do not fall apart when people work remotely. There are some amazing advantages to giving employees the freedom of working remote, such as:
- Business savings on things such as office space, utility costs, equipment, or office supplies
- No time spent commuting and reduced transport related expenses for employees
- Increased productivity. FlexJob’s annual survey found that 65% of respondents are more productive when working remotely
- Higher employee retention. In fact, companies that allow remote work have a 25% lower employee turnover than those that don’t
Increased Focus on Customer ExperienceCustomer experience has become a top priority for all business types, and in 2021, it will become even more important but with greater emphasis on digital experience. When it comes to customer loyalty, product pricing is no longer the driving factor. Customers remain loyal to companies due to the experience they receive. 86% of buyers across several categories are willing to pay more in exchange for a better customer experience. The customer experience journey begins the moment the customer engages with your business. This can be in several forms such as through websites, ads, social media, or referrals. You may be asking yourself: “How can I improve the overall experience?” Here are a few tips to help you get started.
- Offer superior customer service. One of the simplest ways to get started is by offering real-time support
- Keep engaging with customers across different lifecycle stages
- Create loyalty programs
- Keep branding consistent
- Acknowledge customer reviews
Digital TransformationDue to the pandemic this year, several companies were forced to digitize their services and operations. This will continue to be the case in 2021. Having an online presence of some sort is expected by customers. Making sure your website is responsive is crucial. This means that your website has been designed to respond based on the technology and type of device the visitor is using (it’s just as functional on a smartphone as it is on a computer). Over the past few years, more and more people are using their mobile devices to access the internet and Android is the #1 operating system globally. Businesses must operate with a digital mentality to keep up with competition.
Go CashlessCarrying cash is becoming rarer these days. There has been a rise in digital payment options. Digital payment options such as Apple Pay, Paypal, Cash App, or Venmo are starting to be more widely accepted by many small businesses. Although going cashless isn’t the right choice for every type of business, there are quite a few benefits to consider. For example:
- More security
- Faster checkout
- Reduced operating expenses
- Less accounting errors
Starting your business off on the right path can help you save on unnecessary costs and time. Just like in personal matters, there are always unexpected obstacles, but that does not mean you are destined to fail. If you are looking to start a business now or in the near future, we encourage you to read over these common mistakes to avoid.
Not Having a WebsiteHaving a website enables you to reach a wider range of audiences. In fact, 85% of people research a business or service on the internet prior to making a purchase or decision. One of the most common reasons why entrepreneurs refuse to create a website is they believe they are not “tech-savvy enough.” Surprisingly, you don’t need to be tech-savvy to create a website for your startup. You could choose a drag-n-drop website builder like SquareSpace or Wix and take a DIY approach. There are also many development companies or even freelancers that help with the process, making it a seamless process for you. One of our favorite resources for freelance web development is Fiverr. Fiverr offers reasonable pricing for freelance web services and 24/7 access to support. Websites are an effective way of introducing your customers to your product/services. By having a website you’ll be able to save time by redirecting your customers to visit your website for important information. You’ll be able to provide valuable information in various formats: blog posts, videos, photos, or testimonials. The best part is that websites are available 24/7; your customers are able to reach you at any time.
Waiting Too Long or Hiring Too SoonHiring employees is a critical step in a growing company. Some of the most common indicators that your company is ready for an employee include:
- Needing additional skill sets
- Having to turn down work
- Customers starting to complain about quality or timeliness
- What is your company’s growth forecast? All entrepreneurs need some sort of budget/business plan. Having revenue and growth projections will be vital when determining what you can afford to do or what is needed to get your business where you want it to be.
- Is the work steady enough to support an employee? It’s important to not make drastic decisions just because you may be feeling overwhelmed or stressed out. First figure out what exactly will the employee be doing, and how will they be bringing in additional revenue to the business.
- Can you afford to hire an employee at this time? There are many cost factors to consider before making the decision of hiring someone such as wages, training, software licenses, payroll costs, insurance, among several other overhead costs.
- Which type of employee would be best for your current situation? As mentioned above, hiring an employee comes with additional costs. Keep in mind you have options based on your budget and required time commitment: freelancer/contractor, part-time, or full time.
Not Listening to What Your Customers Are SayingPaying attention to what your customers are saying helps you improve your business and avoid situations that do not work well. In today’s world, customers have higher expectations than ever before. In a study conducted by PWC, customers said they are willing to pay more for a service or product in exchange for a better customer experience. One of the easiest ways to become more customer service-oriented is to open and formalize listening channels. Customers enjoy answers to their questions in real-time. Some options to consider for communicating with your customers are:
- Live chat
- Help desks
- Social media
For most of us, 2020 will be one of the most memorable years on record. Loss of childcare, working from home, avoiding public places and events, and limiting travel are just some of the personal disruptions that occurred. And on the business side, the whole way we do business changed dramatically. That said, measuring financial performance against past years is still a good idea, but perhaps not as indicative of future performance as it might have been prior to the pandemic. Let’s consider some alternatives:
New/Adjusted Services PerformanceFor many industries, business as usual was impossible in 2020 so existing services suffered greatly (or even disappeared). Did your business try some new ideas? Consider spending some time looking at your traction:
MarketingDid you figure out a way to get the word out beyond word of mouth or networking? Give yourself a pat on the back. Some marketing performance indicators to better understand whether a new initiative has potential: email reads, webpage visits, clicks, form submissions, inquiries, or social media likes and shares. You want to figure out if your new idea has interest from the people you believe to be your target market.
SalesBeyond general interest, are people willing and able to buy what you’re selling. Are you starting to build a sales funnel? Congratulations. Prospects, opportunities, and the holy grail, closed business/new customers are great indicators. Don’t overlook the importance of “closed lost” or missed opportunities either. These folks can be a phenomenal source of feedback to help you refine your new offering and how you sell it.
Digital TransformationShifting from in-person to online interactions was already well underway prior to Covid-19. Just look at Amazon’s market cap if you need proof. In the banking world, ‘digital transformation’ has been a buzz word for years, and many businesses benefited from acceleration of online transactions when it came to PPP financing and forgiveness. Nonetheless, the pandemic has certainly accelerated that shift to a way of doing business that is more friendly to Gen Xers and Millennials, where transactions may happen on a phone, and the product may be transferred in a shipping container or carry-out bag in the case of restaurants. For all businesses, in-person meetings are a lot less frequent, even doctors. Zoom, Google Meet, and other video conferencing tools have replaced office visits and new, virtual reality-based meetings are even being implemented at some firms. Check out Spatial if you want to learn more. The question for you: are you “transforming” your business? How is that going? If you’ve made adjustments to how you interact with your clients and employees, now might be a great time to send out a survey. Some questions to ask:
- Could our new way of doing things be better?
- Are we maintaining our culture?
- Are we maintaining our standards?
- Have adjusted sufficiently to prioritize growth over survival again?
Gig EconomyThe combination of an unemployment rate that spiked dramatically in April and a workforce moving from the office to work-from-home has accelerated the adoption of the Gig Economy. While you may not actually use Uber or Lyft, you’re certainly aware that there are viable alternatives to taxis operated by freelancers you can hire via apps. Beyond driving, you can hire freelancers online to accomplish tasks like manning a chat service, graphic design, data management, website development and more. Online marketplaces have grown drastically. Fiverr has become more than 5 times more valuable this year. Upwork has nearly tripled in value. Here at FINSYNC, our Services Network, specialized in accounting services, has grown dramatically. Questions to ask yourself:
- Are you leveraging Gig Economy workers to enhance your operations and control costs?
- Might your company benefits from being available through one of the many Gig Economy marketplaces?
Learn four strategies that can help you retain your customers, and even onboard new ones, during disruptive times. By FINSYNC COVID-19 has turned the world upside down for small business owners. You, like many others, have probably had to deal with cutting costs, laying off employees, and securing funding for your business. And while crisis management is important, it’s equally important to think ahead and focus on retaining your customers. The major changes in the market have altered the purchasing habits of your customers, and you need to adapt fast. We’ve put together four customer retention strategies that will help you retain your customers. To help you persevere in the new economic climate.
Increase Your Online PresenceYour customers are probably spending more time at home than ever, which also means more time online. This provides a great opportunity to create additional interest around your products or services, which can be achieved in multiple ways. First, you should stay connected with your customers in a more casual way through Facebook and Instagram. Think outside the box and experiment. You can stream anything related to your business, from a Q&A to a launch party or a product tutorial. This type of content can help customers stay engaged with your small business while also providing some much-needed entertainment. Social media platforms can also help create a sales channel to replace the one you may have lost in the physical world. You can add links to your products or services directly in the videos and photos you post to make it easier for customers to make a purchase.
Rethink Your Content Marketing StrategyContent marketing is all about creating sales leads by publishing valuable content for your target audience. Regardless of where they are in their buying journey. However, the coronavirus has drastically changed the needs of your customers as well as their buying journey. This means that you also need to adjust the content you’re publishing. For example, if you run a small consulting company within the legal or personal finance space, your customers are probably looking for information about unemployment benefits, employee rights, and budgets, rather than investment advice and help with real estate documents. This gives you an opportunity to build a thought leadership position, both with your existing clients and prospects.
Enable Easy PaymentsTo ensure payment continuity, small businesses should focus on offering as many online payment options as possible. These days, cash payments can easily be replaced with credit card payments. Not only does using a credit card make it easier for customers to pay you from the comfort of their homes, it may also be a preferred payment method for those whose financial situation has changed. Payment platforms like FINSYNC make it easy to accept a variety of payment types, including ACH and credit cards (even if you don’t have an existing merchant account). You can also convert paper checks into online payments by acquiring a lockbox. This way you won’t have to deposit the checks in person, and you can still do business with customers who can’t pay any other way.
Communicate Frequently With Your ClientsPrioritize keeping your customers in the loop about how COVID-19 is affecting your business. This is different than any social media content you may post, and will likely be a more serious and straightforward communication. Perhaps your small business can start a newsletter. Or maybe you add a new landing page to your website where clients can go to be updated on the most important information. But if your products and services are especially useful during the COVID-19 situation, you can take it a step further. How about hosting a webinar where you demonstrate how your products and services can be helpful? Or follow up with customers by phone or email to see how they’re handling the situation? It’s also a good idea to put extra effort into customer service, such as video instructions, how-to pages, detailed FAQs, etc. There’s a balance to be struck between necessary and redundant information. If you succeed, you may kill two birds with one stone; you can retain customers right now, but you may also gain new ones once the crisis is over. After all, word of mouth is powerful, and we all know that happy clients are some of the best salespeople a small business can have.
Maintain a Customer-Centric ViewNow more than ever, it’s important to focus on your customers. Recognize that the purchasing journey — from why customers buy your product to how they pay for it — has changed and you need to adapt accordingly. To retain customers, and even gain new ones, make sure that your small business is providing valuable information during this time of uncertainty. Go back to the core of your business and ask yourself what kind of problems your customers are dealing with right now. Focus on how your products or service can make this period easier for your clients. And, of course, make it easier for them to pay for those services with online payment options. Your customers and your business are likely to face tough times. How you handle the current disruption can define whether you’re able to retain and grow your customer base.
Learn how FINSYNC helps start-ups simplify payments, payroll and cash flow — and get access to start-up capital and small business insurance. By FINSYNC Being a small business owner is both exciting and stressful. Your to-do list is never complete, and chances are the majority of items on that list are non-revenue bearing tasks. FINSYNC can help you run your business more efficiently with intuitive tools. Meanwhile, save you time and allow you to focus on getting your start-up off the ground. The FINSYNC ecosystem consists of three main pillars: software, service database, and start-up funding. No matter what stage your start-up is in, your business can take advantage of some or all of these pillars. Here’s how:
Scale as You GrowIt’s easy to scale your business with FINSYNC’s platform. If you’re a start-up, you can begin with a basic subscription to handle all of your payments. The platform can be up and running within 24 hours with ACH, check processing and charge card processing. As your business grows and you hire more people. Then, you can add features like payroll, cash flow management, and accounting. Connecting your bank accounts and handling all of your payments through FINSYNC will give you a real-time projection of the health of your start-up. This is crucial for any business. Therefore, the more FINSYNC features you use, the more accurate your cash flow projections will be. Another small business start-up resource that FINSYNC offers is free, easy-to-access support. If you have questions or need help with a feature, you can reach out by chat or phone, or access a comprehensive support library online.
Take Advantage of the Gig EconomyThere are two ways you can leverage the gig economy through FINSYNC. First, is by having your independent contractors track time directly in FINSYNC. This way, you can have a better overview of their expense, and you can pay them as a part of your main payroll. Secondly, you can get access to the expertise of financial professionals like bookkeepers and accountants through FINSYNC’s services network. Your start-up will be matched with an experienced financial professional who is well-versed in your specific industry. No need to waste valuable time on the recruiting and hiring process, or invest in a full-time employee. This on-demand network of vetted financial professionals can support you at every stage of your start-up’s growth.
FINSYNC Partners With AcceleratorsFINSYNC works with several accelerator programs that offer excellent support for start-ups. In addition to mentoring business owners that take part in many of these programs, FINSYNC offers participants a discount for its all-in-one accounting platform. Check the perks program at your accelerator or contact FINSYNC Support to find out what start-up discounts are available. Some of the accelerators FINSYNC works with include:
- Techstars - a seed accelerator from Boulder. The highly competitive program has helped over 1,600 start-ups since 2006.
- Boomtown - provides seed funding, business resources, company-building curriculum, mentorship, and community. They run 12-week accelerator programs in Boulder and Atlanta.
- The Farm - an Atlanta accelerator sponsored by Comcast NBCUniversal that offers event space, a prototyping lab and coworking facilities.
- Atlanta Technology Village - offers mentorship, working space, and pre-accelerator programs for start-ups.
- ATDC - Georgia Tech’s technology business incubator offers coaching, community, and capital for start-ups.
Streamline Your Processes and Save TimeFINSYNC’s consolidated system can help start-ups save time and work more efficiently so you can focus on growing your business. Having all of your back-office functions on a single platform makes running a start-up easier for solopreneurs and small business owners alike. There is no need to integrate with additional applications or remember multiple passwords. The consolidated system also makes it easier to manage your workflows. With FINSYNC, your accountant, bookkeeper, or even a lender can log in and get access to real-time information about your business. This significantly limits time spent faxing, copying, and sending files over email. More importantly, it enables your team to make better decisions and move faster.
Get Financing Through FINSYNCThe third pillar of the FINSYNC platform is financing. If your business is looking for start-up capital, take advantage of FINSYNC’s network of lenders. There are several benefits of taking this route instead of the more traditional one. First, the application process couldn’t be easier. You fill out one application in a matter of minutes that gets submitted to several lenders. Second, and perhaps most importantly, your application will only be submitted to lenders who operate within your risk profile. This means that the lenders are more suited for the development stage and the needs of your business. Often requiring less time in business than traditional lenders. In addition to revenue, lenders typically look at how well you manage your cash flow. With FINSYNC, all of these metrics can be easily documented. Increasing your chances of getting approved for funding.
Shop for Small Business Insurance Through FINSYNCIs your start-up shopping for small business insurance? FINSYNC’s insurance network can help make this process a lot less painful and time consuming by connecting you with a business insurance broker that best suits your start-up’s needs. Similar to FINSYNC’s lending network, you simply fill out one quick application to get connected with a broker that will help you shop around for the best rates on general liability, workers compensation or cyber insurance.
A Simple and Intuitive Way to Run Your BusinessFINSYNC makes it easier to manage your payments, employees, and contractors. In addition, the platform can also provide you with real-time cash flow projections. As a result, It's easier to make informed business decisions. Whether you use the platform to automate time-consuming back-office tasks, connect with a vetted bookkeeper or secure funding for your start-up, FINSYNC can help streamline your business operations so you can focus on getting your new business up and running. Ready to accelerate the growth of your small business? Meanwhile, Start with a free, week-long trial of FINSYNC to see how the platform can transform your start-up.
Hiring new employees is a considerable undertaking for small businesses. Growing companies also have the option of tapping top professional talent by bringing in contractors. By FINSYNC How do you know when it’s time to hire a new employee? As a small business owner, you’re used to wearing many hats, and doing whatever needs to get done at any time. Still, even you have to sleep sometimes. If you’re having to turn down clients, preparing to launch a new product or location, or have a specific set of tasks that require a different set of skills than you have, it may be time to bring in some help. Hiring is one of the biggest challenges for small businesses; in one survey, half of small business owners ranked it at the top of their list of difficulties. From recruiting and hiring the right candidate to setting up payroll and retaining employees, hiring is a huge time and financial commitment. Fortunately, contractors offer another option to help growing businesses scale and complete critical tasks.
Recruiting TalentStart by writing a job description — you’ll want to consider what skills, requirements, and experience are needed for the job, as well as which soft skills and preferred qualifications would make for the ideal candidate. Be sure to include information about your company, the day to day responsibilities of the job, your contact information. Also request documentation you want candidates to submit, such as a resume, cover letter, or portfolio. Take your time to really think about this — a well-written job description will help you identify well-matched candidates and attract highly qualified candidates to your listing. Consider including compensation and benefits information to make your job listing more competitive. Once you’ve perfected the job description, it’s time to place an ad. Paid online job boards such as Glassdoor, Career Builder, and Monster.com are a great place to start. Ask around! Social media is a great place to get the word out, especially LinkedIn. LinkedIn has a paid job board and allows you to see how you may be connected to a particular prospect. If they have a robust profile, this can both signal their professional readiness. It can give you additional insight into their character, working style, and fit for the job. Don’t stop with LinkedIn, though. Post on other social media and get in touch with your network; often family, friends, and business associates will know someone who is just right for the job.
The Hiring ProcessOrganize the resumes you’ve received by yes, no, and maybe. Some ways to narrow it down include matching the qualifications that you absolutely need, checking for major errors or sloppiness, and reviewing for soft skills that will fit your company culture. Once you’ve narrowed down the applications to the candidates who you want to interview, plan out your interview questions and establish an interview process. Be sure to avoid questions about a candidate’s age, race, national origin, or religion, due to U.S. Equal Employment Opportunity Commission (EEOC) regulations. The best questions allow you to learn more about how the interviewee might function in a given role, how they think, and how they solve problems. For example, in a customer-facing role, you might ask someone to describe how they handled a difficult interaction with a customer in the past. You can also ask about past experiences where a candidate felt proud, challenged themselves, or assisted others, as well as why they’re interested in your company specifically and how they see themselves completing their first 90 days. Finish up by asking if the prospective employee has any questions for you and establishing next steps for the hiring process. When you’ve chosen the candidate who’s the best fit for your business needs, decide on the compensation that makes sense for the role. Then extend an offer letter. Each state will have different requirements for what must be contained in your offer letter. Be sure to check out your state’s department of labor website. Feel free to call your candidate over the phone and let them know they’ve been hired. You may do this before extending the formal offer letter. It’s a great moment for both of you to share!
Setting Up PayrollIf this is your business’s first time hiring employees, you’ll need an Employer Identification Number (EIN). This is like your company’s Social Security Number. If you have a bank account in your business’s name (which you should, in order to build business credit), you will already have an EIN. In addition to an EIN, which is a federal tax ID, you’ll need a state or local tax ID. Whether you need a state or local tax ID will depend on your state’s individual regulations; check your state’s government website for more information. All employees will need to fill out and return a W-4 form. Decide on your pay schedule, leave and vacation policies, and which benefits you will offer. Some benefits, such as social security, workers compensation, and new parent leave are required by law. Others, such as disability leave and unemployment insurance, vary by state. There are also some optional benefits that you may opt to offer to employees. For example, health insurance and retirement plans. Have a plan to administer payroll. Learning all of the complex filing requirements and keeping money moving is probably not something you have time to learn and then keep current on an ongoing basis. Where you can add value on payroll is being sure your team’s hours are correct and reimbursement requests are getting paid. FINSYNC’s cloud-based payroll software can help you automate your payroll along with many other time-consuming back-office tasks, such as invoicing.
Employee RetentionExperts estimate that it costs upwards of twice an employee’s salary to find and train a replacement. Employee retention starts with hiring the right person in the first place, so interview carefully. Consider the compensation and benefits you’re offering as well. Even if your small business doesn’t have the budget to rival major corporations, you can do your best to be competitive in your field. Create a positive work environment. Listen to employees’ expressed needs and whatever they choose to share about their day-to-day lives. Encouraging open communication, with ownership and between employees, makes employees more comfortable expressing ideas, needs, and concerns when they arise. Meaningful praise and recognition from management does wonders for employee morale. Clear expectations and aligned goals help employees feel that their work is valued and valuable. It gives them a clear measure to work against. Find ways to be flexible based on employee needs. This is where the importance of listening comes in. Considerations such as telecommuting, flexible work hours, a condensed work week, and back-up child care can make all the difference to busy professionals.
Working with ContractorsThe process of recruiting, hiring, and retaining new employees can become a job in and of itself. Especially for a small business owner with so many demands on your time. It can take an average of 36 days for a company to fill a job opening, and the hiring process overall costs companies an average of $4,425 per employee, and as much as $14,936 for an executive. Not only is the process itself expensive in terms of money and time, getting it wrong can be costly as well — each bad hire costs businesses an estimated $17,000. Between the required benefits and taxes companies must pay for full time employees, and the additional benefits that you may choose to offer to attract top level talent, hiring costs continue to pile up. According to the US Department of Labor, benefits alone account for more than 31.4% of the average full-time employee’s total compensation. For many small businesses, contractors are a less expensive option. The hiring process is truncated, turnover is less of a risk to the business. There’s also no need to pay additional taxes and benefits on top of the contractor’s compensation. Contractors are also ideal for projects that don’t require a full-time employee. With contractor talent, you can scale your team up and down according to business needs, temporary needs or projects.
Find qualified contractors without the hassle of screening and hiring with FINSYNC’s virtual assistance network.FINSYNC partners with independent professionals in the fields of Bookkeeping and Accounting, Financial Analysis, Corporate Strategy, and Human Capital Management. Fill out a quick questionnaire, and get matched with a vetted professional that fits your business’s needs, projects, industry, and budget. Growing businesses need support, but hiring a full-time employee isn’t always the most time or cost-effective option. For many small businesses, contractors help to close that gap. They provide high-quality professional services without the challenges of hiring full-time employees. For ad hoc projects, seasonal needs, professional services, and even ongoing work. Contractors are often the best of both worlds, allowing small businesses to tap top professional talent to scale their workforce up and down as needed. Whether your small business is looking to build its team with full-time employees or augment your workforce on an as-needed basis, recruiting and hiring the best fit for your business is the first step to success.
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