Business.com

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• How Much Life Insurance Do You Need as a Small Business Owner?
• Websites for Small Business: How to Get Noticed in 1 Hour a Day
• Understanding and Utilizing Total Compensation Packages
• The Benefits Stay Interviews Can Bring to Your Company

How Much Life Insurance Do You Need as a Small Business Owner? Posted: 04 Feb 2021 01:59 PM PST Life insurance needs are unique to everyone. This is particularly true if you're a small business owner who is keen on protecting both your business and personal interests after you pass away. However, calculating your exact life insurance needs is not easy. An unexpected death can negatively affect the financial certainty of your small business and family if you don't prepare for it. With the right life insurance coverage, you can make sure that your financial obligations are taken care of. Before we talk about how much life insurance you need, let's go over some important points. Life insurance for your family If you have family members or others who depend on you, term life insurance is the simplest insurance option. You choose the amount you want your beneficiaries to receive when you die (the death benefit) and the period you'd like to be covered for (the term). For instance, you can pick a death benefit of $700,000 for a term of 25 years. Should you die at any point in the next 25 years, your beneficiaries will receive the full $700,000 amount to cover their expenses. Should you survive the term, you lose out on the death benefit. You can still renew your policy, but keep in mind that premiums are more expensive the older you get. This means you will pay a higher monthly premium when renewing your term policy. Term insurance to pay off business liabilities Your death might not mark the end of your business. Perhaps you'd like for your family or business partners to carry on the company without experiencing financial distress. You can designate part of your death benefit for this purpose. There is often a transition period after your death. This allows the business to have enough capital to pay off its liabilities, such as loans (personally guaranteed by you), wages, suppliers, and rent. This way, operations can continue in the short term while the business figures out ways to generate the same level of income you were bringing in. Life insurance to buy out a business partner who passed away When you die, the business owes your estate your share of the operation. If there was a buyout (buy/sell) agreement in place, the surviving partners have the right to purchase your share from your estate. While buy/sell agreements don't need a funding element to be valid, many businesses use life insurance – usually term insurance. This ensures the remaining partners have enough money (or part of it) to buy out your beneficiaries. Permanent life insurance is another option. With this type of insurance, premiums are paid throughout the policyholder's life. There is also an investment component to it, because the premiums earn interest over time. Upon the death of the policyholder, the beneficiaries will receive the death benefits as well as the interest. If a business partner were to leave the company before their death, the death benefit will be lost, but the interest can still be claimed. Permanent life insurance can also be used to fund a buy/sell agreement. However, it can be 5-15 times more expensive than term life insurance. Insurance for key employees There are other people in the business whose death could affect the company negatively. For example, a company could have a salesperson who is responsible for a large portion of the sales generated. This person's death means the business will suffer in sales, making them a key employee. An insurance policy on this high-performing individual (key person insurance) can help the business cover the revenue that person would have brought in for a certain period. This allows the business to look for a replacement with little to no financial setback. It is best to take out a term life insurance policy on key employees, because they may only be employed for a few years. Other needs for life insurance Life insurance also provides the liquidity necessary to handle challenges for both your business and beneficiaries after your death. These are some other possible purposes: Settling taxes incurred for the transfer of ownership due to the appreciation of the business, which can be significant. Paying lawyers to ensure that your estate and your interest in the business is distributed smoothly and equally among your beneficiaries. This can be extremely useful if you intend for some of your beneficiaries to become or remain shareholders while excluding others. Calculating your exact life insurance needs Now that we've discussed when you need life insurance, it is time to calculate how much life insurance you need. Term life for family and business liabilities To make sure that your family is covered, as well as the liabilities of the business, follow these three steps: Step 1: Calculate your family expenses. This is the amount of money your family will need after you are gone. A common formula people use is DIME: Debt Income Mortgage Education Each letter in the acronym is a category for grouping expenses. For example, for debt, you can include: Personal loans Auto loans Credit card expenses Other related expenses For education, you can include the cost of your children's college tuition. Once you add up all the expenses from each category, you will know the amount of money needed to cover your family. Step 2: Calculate the total projected business liabilities. Start by listing all of your current (short-term) and long-term liabilities. These are some examples: Accounts payable Taxes on investments Salaries payable Interest payable Add them all up to find out just how much your business owes. Step 3: Add it all up. Add the results from steps one and two. This is your total term life insurance needs for your family. You can purchase term life insurance for this coverage amount. Term life insurance for buy/sell agreements Take these steps to find out how much it would take to buy out each partner in case they die: Use Clearbanc's evaluator to connect your sales, marketing, and accounting data and get a business valuation within 24 hours. Divide the amount you get by the number of business partners. That is how much term life insurance is needed to fund the buy/sell agreement for each partner. Don't buy insurance based on price alone. Consider other factors like the coverage length and conditions to make sure it covers your needs. Key person insurance Follow these steps to find out how much insurance you need for your business's key individuals: List every one of your key employees. Calculate the amount needed to cover the transition period for each of these employees to continue operations until a replacement is found. Conclusion If you have dependents, you likely need life insurance. As a small business owner, you fit the bill. Life insurance ensures that you leave your business and beneficiaries (your family in particular) financially secure. It also allows your business partners to buy you out when there is a buy/sell agreement in place. Taking out life insurance on your key employees as well ensures that you have funds to cover the transitional period if they leave the company or die. Calculating how much life insurance you need is important. Luckily, you have all the information you need right here to get started.

Websites for Small Business: How to Get Noticed in 1 Hour a Day Posted: 04 Feb 2021 01:03 PM PST First, congratulations on starting (or thinking about starting) a small business. No doubt, this is an exciting time. You might have dozens of ideas to grow and market your services. Naturally, I wouldn't be surprised if one of the first things you thought about was creating a website. If there's one thing the pandemic has taught us, it's that it's more important than ever to have a website. But it's not 1999 – simply putting up a website won't get you noticed. I started my first "real" business in 2004. At the time, I leveraged my skill set and created one of the world's first web hosting companies. Naturally, I, too, needed a website. However, what worked back then is not what works today. According to a recent report, there are more than 1.5 billion active websites on the internet. (That's not even to mention the 85% of domains that are inactive.) So, how do you stand out among 1.5 billion other websites? Business owners starting a website in 2021 need to wake up, because getting their website noticed requires a multipronged approach. Also, it doesn't matter what your business offers. For this article, I'll assume that you sell inground swimming pools, and you can substitute the niche for whichever business you're in. You'll discover methods I use for my blog, which focuses on how to become financially independent, and other small business owners' experiences in getting the word out. I'll also give you a bonus that you can use to get some viral attention. Each of these projects requires ongoing work, but you can accomplish each of them in under one hour a day. Building up your SEO Search engine optimization is by far the most crucial aspect small business owners need to focus on to get more website isitors. SEO is the process of optimizing a website so that search engines will find it. The goal is to get on the first page for your keyword, ideally in the top three results. SEO is a long-term investment that initially costs more than ads but pays off in the end.   Blogging Search engines love content and lots of it. The more content a website has, the higher the chances it'll rank for keywords. Use a blog as an opportunity to show off what you know. Start by breaking down your niche into subtopics, and write about them. For example, if you sell inground swimming pools, take an hour to write an article like one of these: "Things to Look Out for When Buying an Inground Swimming Pool" "How Big Should Your Swimming Pool Be?"   "What to Look for in a Swimming Pool Contractor" You can even expand and create an after-sale "maintenance" section. There, you could write articles such as these: "How to Clean Your Swimming Pool" "Ways to Keep Your Pool From Turning Green" "My Swimming Pool Filter Is Clogged – How Do I Fix It?" The idea is to give people quick answers to the questions they're asking search engines. This builds trust in your brand. Then, they will call you if they want more. Local SEO Small businesses that serve a local market need to leverage local SEO. Continuing from the previous swimming pool example, if you type "inground swimming pools" in Google, you'll find national companies with multimillion-dollar budgets, all competing for clicks. Here's where local SEO comes to the rescue.   Instead of optimizing your website for "inground swimming pools," optimize it for the city or town where you do business. You'll find it far easier to get noticed on Google if your website is optimized for "inground swimming pools in Palm Springs." This will narrow the competition and give you a better chance of getting noticed in your community. Small businesses looking to focus on local SEO need to set up a Google My Business account. It will collect information about your business to display to people looking for you. Further, it will show all your customer reviews (so keep this aspect in mind!). Engaging your audience on social media Love it or hate it, social media is here to stay. Tweets, snaps and IMs all play an ongoing role in your website's visibility. But how do you manage it all? Facebook Setting up a Facebook business page takes minutes and packs a powerful punch. There, you can include your store hours, information about what you sell, and a call to action ("visit our website," "set up a call," etc.). You can also use the page to share your blog posts and before-and-after images of your inground swimming pools.   To keep your audience engaged, post consistently. A daily post takes just a few minutes and reminds potential customers what you offer.  Instagram Instagram is primarily about sharing images and popular with a younger audience. You can start an account and connect your Facebook page to share the same before-and-after images. If you share great content, you'll build a following and get noticed. [Read related article: 15 Instagram Marketing Tips for Business] YouTube YouTube requires extra work but can make a world of difference to a small business. You don't need a Hollywood-style movie to make it on YouTube. You can take short videos using your smartphone, then stitch them together using an inexpensive video editor to demonstrate something to your viewer.   People on YouTube look for one of two things: entertainment or education. As a swimming pool installer, you could educate viewers looking to learn about pools.   In the pool example, here are some things you could create videos about: How the hole is dug How to maintain the pump Basic swimming pool maintenance To supercharge your SEO strategy, you can add the videos to your blog posts and share them on your social channels. Twitter Tell the world what you're doing – in 280 characters or less. Tweeting your latest blog posts, pictures, and videos takes just a minute and helps to grow your audience. It's also something you can easily do daily.   Reviews Online reviews are crucial. If someone is going to spend $25,000 on a swimming pool, they will ask around to make sure their chosen company will do the job correctly, on time and on budget. The same goes for pretty much any business. So, don't be afraid to ask your past customers to leave reviews on your social media, Google or your website.   Bonus: Running giveaways One of the best ways to draw attention to a website is to host a giveaway. A viral giveaway can be one of the most effective tools to boost your SEO, grow your email list, gain more followers on social media, and, most importantly, land more clients and customers. The problem is that many small businesses fail to execute giveaways properly and only scratch the surface of what is possible.  Launching a giveaway campaign can be reasonably simple. You choose an item to give away, such as a product, gift card, or some cool swag. Then, you can let a third-party program handle the rest. Programs such as KingSumo Giveaways and SweepWidget not only host your giveaway, but also handle the logistics, legal fine print, and terms of service. Over 200 sweepstakes websites list your giveaway to drive awareness for your business and the product you are giving away. By listing your sweepstakes on these sites, you not only get your campaign in front of thousands of people, but you are also building excellent links back to your website, boosting your short- and long-term SEO.  Small business owners looking to get their websites noticed need to do more to get visits. By spending just an hour a day on a marketing strategy that involves blogging and other content creation, and sharing that content to social media, just about any business owner can draw attention to their brand in 2021.

Understanding and Utilizing Total Compensation Packages Posted: 04 Feb 2021 06:00 AM PST Total compensation is an incredibly effective tool to utilize when attracting top talent and when informing team members about the value they receive in the form of benefits from your company. Understanding what total compensation is and how it works is essential to winning and retaining top talent. Additionally, it helps companies more completely assess the total cost of a hire so they can budget accordingly. What is total compensation? Total compensation is the collective compensation you provide to your employees in return for their services. It includes the employee's base salary (how much you pay the employee as either the hourly rate or their annual salary), the total dollar amount of the fringe benefits you offer (health insurance, paid time off, retirement plan, profit sharing, gym membership, etc.), bonuses and/or commissions. Employers can show employees (or potential employees) the total value of the compensation and benefits they receive by supplying them with a total compensation document. What are the differences between salary and total compensation? Salary is the fixed sum employees are paid each pay period. Total compensation encompasses the base salary the employee receives plus other monetized benefits, such as paid time off and health insurance. In other words, salary is one element of an employee's total compensation. One reason why a company may review one's total compensation, as opposed to salary alone, is that any useful budget needs to reflect the cumulative costs of each employee. What is included in total compensation? The most common benefits employers include within their total compensation package, and statement, include but are not limited to: Annual salary or hourly rate of pay Medical and dental benefits coverage (including employer-paid portions) Healthcare flexible spending accounts or health savings accounts Paid leave (vacation/sick/PTO, holiday, personal, bereavement, military pay, jury duty, etc.) Short-term and/or long-term disability insurance Life insurance An employee assistance program Retirement benefits Educational assistance programs Relocation expenses Learning and development offerings Career advancement opportunities Research from the U.S. Bureau of Labor Statistics shows that as of 2020, benefits (or non-salary-related compensation), on average, comprise 30% of an employee's total compensation. Why is total compensation important? Total compensation, and having an effective compensation management program, is important to winning and retaining talent within your industry. Employees are looking for, and expect to find, compensation packages that are comprehensive and meaningful to them. If your company doesn't offer a good benefits package, candidates may spurn your job offer for one from a company that is extending the benefits they want. And for your existing employees, they may leave for another job offering better benefits than what you offer. Total compensation is discussed earlier in the recruiting process than it used to be. Applicants prefer to hear about compensation and benefits during the interview process now. One of the many reasons for this is the uniqueness of applicants' needs. For example, student loan assistance, work flexibility, and career advancement are sought-after benefits, and if you're willing to offer these perks to new hires, discussing these perks, along with the job duties, can ensure that you capture – and retain – candidates' interest and enthusiasm throughout the recruiting and onboarding process.  What is total compensation vs. total rewards? Total rewards address the policies, programs, and practices that provide employees with a valued and desired reward infrastructure. In addition to compensation, your workplace culture, quality of life, and work-life flexibility are all part of a total rewards program that's essential to attracting and retaining top talent. When it comes down to it, companies choose whether they want to reference "total compensation" or "total rewards" within their nomenclature. Although they do not carry the same meaning, the amount of overlap and similarities between the two commonly result in companies using one term or the other, but rarely both.  Marketing your total compensation Total compensation plans are an opportunity to promote your company to candidates and current employees through tangible data that shows the value they get when working for your organization. For your existing employees, creating and implementing a total compensation (even better, your total rewards) program helps keep team members engaged, lowers turnover and increases a company's return on investment. Total compensation statements are the best tool for achieving this objective. A total compensation statement should be one or two pages long, and it should show what benefits are being offered to candidates or are enjoyed by employees. Although the appearance can vary, the content is essentially the same. The goal is to list the totality of your compensation program. If you can place a monetization quality on a benefit or perk, include it in your statement. How to determine total compensation There are many formulas for determining total compensation. The truth is, many strategies can work, as long as the basic aspects are included. One way organizations achieve this objective is with total compensation calculators. In addition to the use of calculators, assess the value of each benefit you provide to your workers. Most of the common benefits have monetized values listed next to them. What portion do you pay for medical and/or dental insurance? How many paid time-off (PTO) days do employees get? How much do you match in your retirement program? How some candidates assess total compensation Candidates are savvy when assessing job offers. Some add the cumulative value of all the benefits presented within a total compensation plan and divide that by the number of hours typically worked within a year to get the "total compensation hourly rate." That is how some candidates compare apples with apples (if there are multiple job offers). Here is an example: Benefit Name Job Offer No. 1 Job Offer No. 1 Salary $75,000 $75,000 Paid Time Off $4,000 $5,000 Retirement Matching 50% matching first 5% of contribution = $1,850 No match Free Gym Membership $50 per month ($600 annually) N/A Commute Cost Savings N/A $100 per month ($1,200 annually) Total $81,450.00 $81,200.00 Hourly Rate Equivalent $39.16 (based on 2080 hours annually) $39.04 (based on 2080 hours annually)   Some fringe benefits are difficult to place a numeric value on, such as the ability to work from home or enjoying a highly flexible schedule, etc. Putting a value on those benefits is difficult, as for some, it is worth more than healthcare insurance, while for others, they would prefer to work a predictable schedule that never fluctuates. Adding a summary or narrative section to your total compensation (or total rewards) statement can help paint this picture for candidates and employees alike. Customizing total compensation documents when soliciting top talent or hard-to-find subject matter experts (SMEs) is also recommended. If you can tailor your narrative to attract a specific candidate, it may prove to be more persuasive.

The Benefits Stay Interviews Can Bring to Your Company Posted: 04 Feb 2021 05:00 AM PST For many businesses, interviews are conducted during the hiring process or when someone leaves the company. However, there are also benefits to interviewing employees at various points in between. Stay interviews are a great tool that more managers should use to gauge employee satisfaction, company culture, and shared thinking on how to improve and grow the organization. Managers who conduct stay interviews can retain top talent, engage their employees, and lower their employee attrition in ways that others cannot.  What is a stay interview? A stay interview is an interview, or more a conversation, between a manager and an employee, the purpose being to learn what keeps that employee working for the organization, as well as any aspects that need improvement or change. Some may feel that employee surveys do the same thing a stay interview does, but you could argue that holding one-on-one conversations with as many employees as possible teases out much more information for leadership to work with than fixed interview questions that do not allow for follow-up questions or contextual details. Stay interviews can help you reduce overall attrition, retain top talent on your team, and assess your employees' wellbeing within the workplace. Stay interview do's and don'ts In order for these conversations to be successful, and for employees to get excited about them, business owners and managers need to disarm these discussions so employees know what they are and are not. Here are a few tips. Do's Create a setting of collegial conversations between team members and leadership that genuinely solicits ideas and feedback from employees. Invite employees to share what is awesome and not so awesome about their employer. Schedule and plan your meeting with the employee (one on one). Foster an open, fun, creative, conversational, trust-based and strategic discussion. Offer ongoing meetings with as many employees as possible. Acknowledge that this is the first part of two; there will be follow-up on the shared ideas, information and proposed changes. Don'ts Don't make this discussion any type of performance review or personal reflection of the employee sharing the feedback. Don't promise employees that their suggestions will be followed up on specifically as described, or at all. Don't only meet with employees when things are going badly. Don't meet with employees in a group setting; these interviews should be conducted individually. Don't be judgmental, argumentative, hierarchical or combative. Don't make these conversations a one-time event with no follow-up discussion. The company at large should learn what ideas were shared during stay interviews and whether any changes or improvements are being planned based on employee feedback. What are the benefits of a stay interview? There are several benefits to developing and maintaining a stay interview program. It builds trust and employee loyalty. When employees see that their supervisor cares enough to check in and seek ideas from them, it promotes trust of management and loyalty. Employees rarely leave bosses they like and respect. It promotes an outlook of teamwork and togetherness. One of the big differences between "stay" and "exit" interviews is stay interviews focus on idea-sharing between colleagues who both want the same thing – an awesome future and overall experience with the company. Exit interviews often zero in on the negative, without a healthy balance of acknowledging the positive. It addresses problems in the early stages. With effective stay interviews, companies can head off problems before they get too large. Stay interviews are a preemptive opportunity for companies to change policies, practices or related aspects that are not serving team members well. It helps retain top talent and leaders. In addition to lowering employee turnover, stay interviews offer an opportunity to gather as much information as possible from key team members about their employee experience. Are they happy? Do they feel engaged? What aspects of the company need to evolve or change for them to consider it an "employer of choice"? It assesses the health of your company culture. Stay interviews are a chance to gauge your company culture as employees experience it. Is your culture thriving, dynamic, and engaging, or dismissive and stagnant? Cultivating an engaging, inclusive, dynamic culture is an ongoing act, not a singular destination. It lets you assess individual employees' wellbeing. It is possible to maintain a healthy company culture yet have individual employees who struggle within it. These employees often go unnoticed, especially if most team members are giving high marks to the culture overall. Checking in and assessing the individual as well as the company culture is equally important and a huge gain for leadership. It shows how you compare to your competition. Your employees probably know as much as you do (or more) about what your competitors offer their employees. During these discussions, don't be afraid to ask what employees are seeing in the job market or the industry. A good question to ask employees is, "What are our competitors offering in this area?" You could also see what they think about benefits or employment practices that other companies are experiencing success with. It helps you develop more effective training programs. Once you receive employee feedback, you can zero in on requests, desires, or hopes of change that involve employee or supervisor training. Stay interviews can highlight areas of strong interest so that you don't waste time training employees in areas they do not value or need. It energizes employees. The simple act of checking in and asking an employee's opinion can go a long way. You won't always be able to follow the suggestions, but when a manager takes time to focus on the individual thoughts and experiences of an employee, the employee often leaves the interaction energized and determined to do their part to make the company better. It's an expense-free tactic. Last but not least, stay interviews do not cost anything. All they require is for leaders to make the time and take the feedback they receive seriously.  How to conduct a stay interview An effective stay interview model is not difficult to create. 1. Schedule it ahead of time. Planning the meeting with your employee helps keep the interview organized and on point, and shows the employee how important is it to you. 2. Share the purpose and expectations of the meeting. Some employees feel anxiety when managers ask to meet with them. Make it clear that no one is in trouble. Share the purpose of the meeting so the employee can think ahead about the thoughts and ideas they want to share. 3. Conduct the interview in a comfortable, quiet and casual setting. This is not a conversation to have on the fly. Take time to relax the employee and ease into the discussion. 4. Allow enough time for a meaningful conversation. Do not attempt to have this conversation in 15 minutes. Allot about 45 minutes for the meeting in the hopes that rich dialogue and exchange of ideas will fill up the time. 5. Show that you genuinely value employee feedback. Make sure the employee understands that this is just not an exercise; it has practical value. If employees believe that you genuinely care about their feedback, they will invest more in their sharing. 6. Plan your questions (do not wing it). You don't need to ask 20-plus questions to have a successful stay interview, but if you don't have any specific questions planned, it might turn into a simple conversation that leads nowhere. There are many good interview questions that you can use for these conversations. The best questions to get the employee to share rich and detailed ideas are open-ended. These are some examples that the Society for Human Resource Management recommends: What do you look forward to when you come to work each day? What do you like most or least about working here? What keeps you working at this company? If you could change any one part of your job, what would that be? What would make your job and overall work experience more satisfying? How do you like to be recognized for your work? What talents do you have that are not being used in your current role? What would you like to learn more about, within or outside of your current role? What motivates (or demotivates) you? What can I do to best support you as your manager? What can I do more of or less of as your manager? How would you describe our company culture to a brand-new employee? What might tempt you to leave? 7. Communicate the next steps. Once the interview is complete, share with employees what the follow-up will look like. Tell them that leadership will share what ideas will and will not be acted upon and why.  8. Share feedback with the entire company. Although managers cannot always meet with all employees, sharing the feedback yielded from stay interviews with the entire company helps everyone feel informed and in the know. When you follow up with the team, remember: Make no promises. When managers conduct stay interviews, they should not promise any changes or timelines. Publicly thank employees for their feedback. One of the best ways to encourage ongoing employee feedback is to thank them for sharing their ideas and suggestions for improvement. Make it an ongoing process. One stay interview is good. Repeated (e.g., annual) stay interviews are much better. As the company changes, employees grow and change, and your industry evolves, learning what is on your employees' minds is essential to cultivate a desirable company culture and an engaged workforce that is prepared for the future.

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