Business.com

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• How to Futureproof Your Niche Business During the COVID-19 Crisis
• What Is Agile Project Management in Business?
• What Are the Benefits of a Section 125 Plan?

How to Futureproof Your Niche Business During the COVID-19 Crisis Posted: 23 Dec 2020 10:34 AM PST As economies worldwide continue to adapt to the effects of the COVID-19 epidemic, businesses have been slowly coming to terms with a new normal, one that has seen many of them close shop or operate under severely compromised circumstances. For some entrepreneurs, however, it's not been all doom and gloom. The crisis has either given birth to new niche businesses or promoted existing businesses that offer specialized products or services, giving entrepreneurs opportunities to thrive during and after the crisis. Niche businesses that help people maintain social distancing and interact remotely, for instance, have been busier than ever, with strong indications that these businesses will still be relevant in a new, post-COVID-19 world. This silver lining, however, isn't a trend written in stone. In addition to the confusion and uncertainty businesses face, crises like the COVID-19 epidemic have a way of disrupting business processes long after the downturn passes. Thus, forward-looking businesses, especially those within niche markets, should combine plans for weathering the current storm with even stronger plans to maintain future growth, resilience, and profitability. Strategies for future success Let's explore four fundamental strategies you can use to build a firm, growth-oriented path to future success for your niche business amid the crisis: 1. Evaluate and strengthen your niche marketing strategy The current crisis has presented many niche businesses with real opportunities for growth. As such, it's still essential to prime your marketing strategy to engage with the right audience – that's in the face of uncertainty that continues to cloud the business world. You may decrease or completely do away with marketing during the crisis. But, long-term studies show that businesses that invest in marketing remain resilient. That's because they stand better chances of success when the tide turns. Start by taking stock of your existing marketing resources. Take a critical look at your marketing assets, which include: Digital and print ads Consumer data Blog posts Press releases Photos and videos Email campaigns Infographics Cover every other piece of marketing resource that you've developed and used up to this point. Using analytics, determine which ones have worked during the crisis. You can repurpose or discard everything else that doesn't make the cut. That gives you in-depth visibility into how effective your engagement tactics are. You'll also learn how to better interact with your audience. Once you've evaluated where you stand with your strategy, look at ways to strategically connect with your audience during and after the worst effects of the crisis are over. Infusing elements of authentic storytelling and empathy into your marketing strategy right now can give your niche brand a better chance of engaging with customers who will be ready to get on with life again after the crisis. Another upside to fortifying your niche marketing strategy is the long-term value it holds. Since your specialized business caters to a specific segment of a broad market, your business can establish itself long after the acute effects of the epidemic subside. 2. Pivoting: scary but necessary Pivoting is perhaps one of the scariest and most misunderstood concepts for business owners. Once entrepreneurs invest their hearts and souls into a project, and it takes off, it's hard to override that. However, like John Lennon once said, "Life is what happens to you when you're busy making other plans." If you don't intentionally ponder over pivoting, life will force you to it. By then, it may be too late. For example, Kodak is well known for losing significant market share because of its leadership's aversion to pivoting. They saw the signs. They even invented the first digital camera but still lost out. Why? It's one thing to notice the changes you need to make and another to execute these changes. It calls for bravery, as you'll likely need to endure short-term losses to realize long-term gains. Right now, Kodak is pivoting to drug manufacturing. Another industry that is ripe for pivots is the tobacco industry. For decades, consumers used tobacco by smoking it. However, health concerns over time pushed some producers to consider new avenues. Cigarette manufacturers now need to keenly study how to pivot and adopt vaping to continue making progress. In the same vein, your niche business needs to look at how the COVID-19 pandemic has upended operations and market dynamics. Do you need to adopt new tools? Has a new business model emerged that you have to adapt to? These are just some of the questions to ask as you prepare to pivot for the future. 3. Don't let technology blindside you The last two decades have seen a significant shift in technology. Innovation has been almost lightning fast; as a result, many businesses have  scrambled to adapt. Tack on the effect of the COVID-19 pandemic, where employees have to work from home, sales and marketing has moved online, and you see the crucial technology has become for business. The best way to think about technology when it comes to your firm is that it's a layer over every aspect of your niche business. You either shape the influence it has on each area or let it cripple you. An illuminating example's the Disney corporation. It's been a mainstay of American business and culture since Walt Disney created the earliest animation strips. The formula was simple: Craft animations and distribute them through third parties while plugging in other revenue streams. That worked fine until technology began threatening the DVD business before ultimately eating it, giving birth to streaming. The company introduced Disney+, its streaming service, which quickly racked up at least 50 million subscribers. Since the pandemic hit, Disney's investment in technology has helped it weather the rough seas as production has slowed down. The firm is still earning revenue by directly serving users with its content while they quarantine. Despite delays in releasing more movies and having to close its parks, the money's still flowing in. As you navigate the pandemic, you need to identify the technology impacting your niche. Find ways to keep incorporating that technology post-pandemic. Additionally, make it a requirement to stay on the bleeding edge of technology. As you courageously experiment with emerging innovations and allow room for error, you'll find you uncover and adopt new technology much faster. 4. Keep the funding tap running The COVID-19 crisis has disrupted many of the old channels that businesses used to source funding. Venture capitalists, banking institutions, angel investors, and other traditional investors and lenders have shelved new funding plans. For businesses in niche markets that already struggle to close funding deals, the slowdown in business financing during this period makes it significantly harder to keep the doors open. While most conventional funding sources temporarily dry up, there are still a few ways that niche businesses can secure funding even after the crisis. If looking for a long-term investor to partner with through the crisis is a solution, look for investors likely to have a professional or personal interest in your product or service offerings. Platforms like Crunchbase can help you find investors who are invested in businesses that closely resemble yours and are good places to start to connect with like-minded investors.  Another great source of funding is the U.S. Small Business Administration loans. Though these were typically reserved for businesses that couldn't access traditional loans, low-interest SBA loans have provided lifelines for many niche businesses during the crisis and could help your business maintain financial integrity long after the pandemic is passed. Other funding options to look at include 410(k) loans for business owners with retirement assets, debt refinancing for short-term loans, and a home equity line of credit (HELOC) that can be very useful for business owners with homes. There's life beyond the pandemic, so prepare for it 2020 will go down as the year many businesses went under. For niche businesses, in particular, 2020 offers a chance to not only survive but grow. But that can only happen when you look at the current COVID-19 pandemic through a long-term lens. As you navigate the crisis, take the time to ask yourself what your niche will look like post-pandemic. Develop strategies to carry your business, not only through the recovery, but in getting ready to face the next crisis.

What Is Agile Project Management in Business? Posted: 23 Dec 2020 05:26 AM PST When working on a project, you can take a variety of approaches to complete it. It is always best to set a course of action from the start. Project managers often turn to specific models when sketching out their plans for completion. Traditional project management models focus on five steps: initiation, planning, execution, monitoring and completion. Agile project management is another approach. With the agile project management model, there are often far more than five steps, but this doesn't necessarily mean the project will take longer. In fact, your team could complete the project sooner. That's part of the reason why agile project management is becoming common in many industries. What is agile project management (APM)? Agile project management is an iterative approach to project management. In the agile method, you complete small steps, known as "iterations," to finish a project. A product of some sort typically follows an iteration, with clients immediately able to give their feedback on these products. As such, in the agile process, you move away from working on large projects for long periods without outside involvement. The goal is to focus on a series of smaller tasks that more deftly meet your long-term goals as well as your clients'. What is the difference between project management and agile project management? Whereas the traditional project management and product development process follows a linear path, agile methodology is nonlinear and thus allows for deviance from an ordered set of steps. APM comprises short tasks that facilitate quicker routes to product development and more frequent, thorough feedback from clients. In turn, teamwork and collaboration become easier, since more feedback on more products is available. [Read related article: Pros and Cons of 7 Project Management Styles] Who uses agile management? Agile management is most common in software development and IT. That's because the iterations of an agile software development project result in client feedback along the way, so software developers can adjust small lines of code as a project develops instead of conducting a massive overhaul upon completion. As any developer knows, changes to one line of code can set off a ripple effect of additional changes – a sort of chaos sequence that agile project management helps to avoid. Of course, agile management isn't solely a software strategy. It's becoming common in several industries prone to uncertainty, such as marketing, automotive manufacturing and even the military. All these industries stand to benefit from a key advantage of the iterative approach: building a solution in real time instead of working toward an inflexible, predefined outcome. What are the four core values of agile project management? When implementing APM practices into your company's operations, start by transforming its four core values into the basis of all your workflows. These are the core values, as outlined in the Agile Manifesto: Individuals and interactions over processes and tools Working software over comprehensive documentation Customer collaboration over contract negotiation Responding to change over following a plan Although the second core value mentions software, you can theoretically apply the logic of working parts over thorough documentation to any long-term project. Learning another key component of the Agile Manifesto – its 12 principles – may help you see how. What are the 12 principles of agile? These are the 12 principles of agile project management from the Agile Manifesto. (Keep in mind that you can replace the word "software" with whatever product your company sells.) "Our highest priority is to satisfy the customer through early and continuous delivery of valuable software." Some clients may become uneasy when they don't see any finished products or other clear updates after extended periods of work. The early and continuous delivery described in the Agile Manifesto circumvents this issue. "Welcome changing requirements, even late in development. Agile processes harness change for the customer's competitive advantage." This way, you work not toward a rigid idea of a solution, but an ever-adapting product that addresses the pain point identified long before the solution was fully clear. "Deliver working software frequently, from a couple of weeks to a couple of months, with a preference for the shorter timescale." With each deliverable you provide to a client, you lessen the chances that you'll need to make massive changes to one part of a project that will have a ripple effect on other parts. You also increase your transparency and ability to collaborate, thus keeping your clients happier. "Business people and developers must work together daily throughout the project." This principle reminds project teams that those who prioritize business may have different views and needs from those who focus on product research and development. As such, it can be easy to drift away from shared goals without daily collaboration. "Build projects around motivated individuals. Give them the environment and support they need, and trust them to get the job done." Creating a space in which team members have the tools and supervisor support to move through iterations is key to efficiently guiding a project from loose idea to firm final product. "The most efficient and effective method of conveying information to and within a development team is face-to-face conversation." No, you shouldn't entirely forgo email, phone, and digital communication, but real-time conversations may be best for identifying challenges and brainstorming feasible solutions. They're also best for explaining progress and next steps to clients. "Working software is the primary measure of progress." Showing results and products is the easiest way to demonstrate that you're addressing the needs you've identified, even if your way of doing so looks different than initially expected. "Agile processes promote sustainable development. The sponsors, developers, and users should be able to maintain a constant pace indefinitely." Establishing consistent workflows in which team members know how much work they should expect to put into a project is part and parcel of agile project management. With these workflows in place, team members won't become overwhelmed and will be able to properly move a project forward. "Continuous attention to technical excellence and good design enhances agility." Agile project management is iterative, not long-term. As such, team members may find it easier to consistently focus on quality, not quantity. This means fewer mistakes to fix later and thus higher agility in completing projects. "Simplicity – the art of maximizing the amount of work not done – is essential." Agile project management seeks to maximize efficiency and limit the number of massive changes that need to be made after a project is supposed to be finished. "The best architectures, requirements, and designs emerge from self-organizing teams." Your team should decide for itself how to best divide work and meet the client's needs. "At regular intervals, the team reflects on how to become more effective, then tunes and adjusts its behavior accordingly." The iterative process, while partially intended to avoid massive last-moment changes, can never be perfect. That's why teams should regularly review their processes and figure out how to improve on them moving forward. What is the agile project management process? There are two primary models for the agile project management process: Scrum and Kanban. While there are differences between the two, their approaches comprise roughly the same six primary steps: 1. Project plans Just as in traditional project management, you should at least set some basic frameworks – problems to be solved, possible solutions – before getting started. If you're using Scrum methodology, the Scrum master will lead the team in mapping this path. 2. Project maps The map planned in the previous step should comprise each deliverable to be worked toward during an iteration. In both the Scrum and Kanban methods, these steps should be defined, but only in Scrum should a firm timeline be set. In Kanban, you can instead use a Kanban board to manage your team's workload. Other project management tools will likely come in handy for mapping as well. 3. Deliverable dates In this step, you can turn to your Scrum board to establish firm timelines for completing each iteration, or you can use your Kanban board to get a rough sense of how long each task might take. A Gantt chart, which provides a visual representation of a project schedule, may also prove helpful. 4. Division of labor With your path and deadlines in place, assign work to each member of your team. Simplicity is essential, so you should evenly distribute the workload among your entire team. Visual workflow representations may help you achieve this goal. 5. Regular updates To achieve the final of the 12 agile principles, commit to daily meetings in which team members state what they've achieved and what's next for them. Keep these meetings brief in accordance with the simplicity principle, but not so short that team members have no valuable information. 6. Client interaction In the final stage of agile project management, the client joins. You unveil your iteration's deliverable to the client and determine how to implement any requested changes. You will also discuss workflow improvements and achievements to determine how you can improve your process on the next go-round. [Read related article: How a Project Management Tool Changed Our Team Culture] Benefits of agile project management These are some of the benefits of transitioning your company to agile project management: Less uncertainty. Agile project management originated in the software industry because developers often identify a need and then gradually figure out how the solution will look. The iterations and regular feedback of APM allow development teams to efficiently reshape their products to better suit the identified need. This results in a final product that requires fewer changes than it might have with traditional project management approaches. Higher-quality products. With improvements and client feedback at every step of the way (instead of it all coming at the end), your products will be better suited to address the problems you initially identified. Stronger collaboration. The six steps outlined in the agile management process make for improved, more frequent collaboration between not just your team members, but your company and its clients too. Fewer wasted resources. The simplicity principle of agile project management manifests as fewer employee hours spent working on a project, and your employees' time is among your most important resources. So is money – and with more consistent client feedback, you'll encounter fewer instances of spending more money to fix mistakes you could have avoided in the first place.  At the end of the day, agile project management benefits everyone involved, both in and outside your company. [Looking for a tool to help you organize your project workflows? Browse our reviews of the best online project management software.]

What Are the Benefits of a Section 125 Plan? Posted: 23 Dec 2020 04:15 AM PST Offering an appealing compensation plan is a great way to attract and retain employees, but a quality compensation plan includes not just a high salary but also an attractive benefits package. While there are lots of benefits you can include, one that is often overlooked is a Section 125 plan, also known as a cafeteria plan. Before you put together your benefits package, it is best to have a clear understanding of what these plans are, why they might benefit your company and how you can start one. What is a Section 125 plan (cafeteria plan)? A Section 125 plan allows employees to convert their taxable benefits, such as their salary, into nontaxable benefits. Employees enrolled in Section 125 plans have their employer reserve part of their pretax cash earnings that they can then use to cover the costs of qualified benefits. A common example of a Section 125 plan is a flexible spending account (FSA), in which employees set aside pretax dollars from their paycheck to be used for qualifying medical expenses. The benefit of setting this money aside is that employees can save up to 30% on local, state and federal taxes. As with most benefits, there is no obligation to participate in a Section 125 plan. Some employees may choose to decline the option in favor of standard cash wages. However, for many employees, setting aside money before taxes are taken out is a preferable option. How does a Section 125 plan work? In a Section 125 plan, an employer sets aside a portion of an employee's pretax wages to cover the costs of the plan's qualified benefits. As such, the employee never receives this money as part of their standard wages, so federal income tax is not taken on these earnings. Employers benefit from setting aside wages for Section 125 use as well, since employer Federal Insurance Contributions Act (FICA) and Federal Unemployment Tax Act (FUTA) taxes are not taken on these funds. Although taxes are not levied on these wages, you must still report them on your employees' W-2 forms. For example, if you set aside $1,000 of an employee's salary toward a Section 125 benefit during a plan year, you must report that amount on Box 10 of the employee's Form W-2. No matter the benefits you offer in your cafeteria plan, you are responsible for managing it. However, you can seek assistance from accountants and other tax experts. Who can open a Section 125 plan? All types of employers can open a Section 125 plan, including C corporations, S corporations, partnerships, limited liability companies and sole proprietors. Government entities can also offer these types of benefits to employees. You should also know who on your team qualifies for cafeteria plan coverage. Typically, all employees who spent at least 1,000 hours working for your company in the previous calendar year qualify for your current plan year. That said, you can exclude two employee groups from your coverage: employees under 21 and those who have worked for your company for less than a year. What does a Section 125 plan cover? No matter which benefits you choose to include in your plan, you must specify in writing what your Section 125 plan encompasses, how employees can qualify for these programs and how employees can choose the benefits that are right for them. According to Section 125 of the Internal Revenue Code, cafeteria plans can cover the following qualified benefits: Accident and health benefits. Exclusions are Archer medical savings accounts and long-term-care insurance. This supplemental health coverage policy deals with employee medical expenses for transportation to hospitals and income lost from not working during injury recovery periods. Dependent care assistance plans (DCAPs). This benefit helps cover the cost of care for qualifying dependents. The IRS defines qualifying dependents as all children 12 and under who live with the employee. People 13 or older also qualify if their physical or mental disabilities require the employee's supervision and the person is regularly present in the employee's household for at least eight hours per day. Adoption assistance. An adoption assistance plan partially or fully covers employee expenses for child adoption. These plans typically include paid or unpaid leave for employees who have recently adopted children. Information and referral services may also be covered. Group-term life insurance. Group-term insurance is the term for the standard employer-based health insurance model, but in the case of cafeteria plans, this model is used for life insurance, not healthcare. As an employer, you will take out a policy and sign a contract with a life insurance provider. You can then offer life insurance plans as benefits to your employees through your cafeteria plan. Health savings accounts (HSAs), including those that cover long-term-care services. Through HSAs, your employees can cover their qualified medical expenses using the pretax dollars you set aside in your Section 125 plan. These expenses include insurance deductibles, co-insurance, co-payments and more, though usually not insurance premiums. Note that only employees who have high-deductible health plans can contribute to HSAs. Adoption assistance benefits, HSAs and DCAPs are traditionally offered as FSAs that reimburse employees for their qualified benefit expenses. FSAs typically include annual maximums and stipulate that funds don't carry over from one plan year to the next. Additionally, one exception exists regarding HSA coverage through cafeteria plans. This exception applies if your company offers health reimbursement arrangements (HRAs) through which your company covers your employees' qualified medical expenses or insurance premiums. If this is the case and your employee has obtained insurance outside federal or state health insurance marketplaces or exchanges, the employee can use their cafeteria plan set-asides to cover non-HRA medical expenses and insurance premiums. This is the only case in which cafeteria plans can include HRAs. Section 125 plan pros and cons Here are some of the benefits of Section 125 plans: Employees pay less in taxes. Because the money you funnel from employees' salaries toward their Section 125 plans isn't taxed as normal income, they'll pay less in taxes. Employees have more money for out-of-pocket expenses. If you put $5,000 aside for an employee's Section 125 plan, that's a tax-free $5,000 they can use to cover qualified benefits. If you paid them this money as wages, they'd lose some of this money – often a percentage in the double digits – to taxes. This means they'd have less cash to spend on the out-of-pocket expenses that cafeteria plans cover. Employers pay less in taxes, too. Your company doesn't have to pay FICA or FUTA taxes on employee wages set aside for Section 125 purposes. That means more money in your bank – an average of $115 per Section 125 plan participant, according to Investopedia. Here are some of the drawbacks of Section 125 plans: There are setup fees. There is a cost for setting up these plans. In the short term, you might worry that cafeteria plans' setup fees are too high to justify starting a plan. If your company's cash flow is on the lower side, perhaps this fee will indeed place too large a burden on your operations. However, in the long run, Section 125 employer tax savings can save you enough money to balance out your setup fees. Funds expire. Employees who opt in to a Section 125 plan must use the money they've invested during the plan year; any unused money does not roll over to the next plan year. This introduces some risk to Section 125 plans: If money that could have been part of a paycheck goes unused as part of the Section 125 plan, the employee may be worse off financially than without their Section 125 plan. Section 125 funds are reimbursed, not used directly. As explained earlier, Section 125 qualified benefits often take the shape of flexible spending arrangements. As such, employees must pay for their qualified benefits and then await reimbursement from their cafeteria plans. For some employees, this structure may result in challenges in acquiring the services they desire in the first place. How to start a Section 125 plan Starting a Section 125 plan requires three fairly simple steps: Complete the required plan documentation. Notify employees that you are offering cafeteria plans. To meet your documentation needs, hire a third party to administer your Section 125 plan, process employee reimbursements and keep your company abreast of proposed regulations. Once you begin offering Section 125 plans, you must conduct nondiscrimination testing. Your company's Section 125 plan must pass these three nondiscrimination tests: Eligibility to participate. If your third-party Section 125 company finds that your plan makes it easier for your company's highest-paid employees to participate, you must revise your plan. Benefits and contribution. Similarly, the benefits and contributions you offer in your Section 125 plan must equally favor employees of all compensations. Concentration. The value of nontaxable benefits provided to your key employees – whom your third party can help you identify – must be at most 25% of the value of all employees' nontaxable benefits. If your company lapses on meeting these requirements, employees whom your Section 125 structure favors may lose favorable tax treatment. However, participants whom your plan does not favor will not lose tax benefits. Even when your Section 125 plan is accidentally discriminatory, it includes remedies for the disadvantaged parties.

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