AFP PHOTO / Karen BLEIER (Photo credit should read KAREN BLEIER/AFP via Getty Images)
The past year has been one of the most challenging in American history, especially for small business owners. Not only was staying financially afloat difficult, but a public health crisis exacerbated the many challenges of running a small business, maintaining healthcare coverage and all that comes with it. A May Small Business for America’s Future survey of more than 1,000 small business owners found that 75% said providing health coverage to employees has increased over the last four years and nearly one in three small business owners have considered dropping coverage with the most prevalent reason being high costs.
In this context, small businesses across the country may be considering what’s next. The same pandemic that created many of these challenges has also shown the importance of public health, healthcare and the new coverage options under the Affordable Care Act (ACA) that help small business owners and their employees access coverage.
In fact, the Affordable Care Act (ACA) made healthcare coverage accessible to millions of individuals, small business owners and their employees who otherwise could not afford it. President Biden’s American Rescue Plan (ARP) then broadened eligibility under the ACA and added tax credits for health insurance, making obtaining coverage more accessible and affordable than before. Even with these benefits, small business owners still have to navigate their diverse needs in providing coverage to employees, such as tax credits and finding the right plan, while also running a business.
Here are three things small business owners should consider about getting coverage under the ACA.
1. The SHOP Marketplace is Tailored to Small Businesses Health Insurance Plans
The Small Business Health Options Program (SHOP) Marketplace provides detailed guidance on the type of plans that are available through Healthcare.gov to small businesses that have less than 50 full-time employees. The plans provide quality, affordable health and dental insurance, but also give small employers a choice and flexibility in selecting the right coverage for their employees. The Small Business Administration (SBA) offers a resource for understanding the options available to small business owners and self-employed individuals in 36 states, five U.S. territories, and the District of Columbia using the HealthCare.gov platform.
2. SHOP Plans are the Best Avenue for Receiving the Small Business Health Care Tax Credit
The SHOP plans are also generally the only way to qualify for the Small Business Health Care Tax Credit, which can be worth up to 50% of an employer’s contribution to premium costs. There are a number of requirements for obtaining the credit, but it is generally available to businesses with 25 for fewer employees who have a SHOP plan.
3. Self-Employed Individuals can also Purchase Plans on Healthcare.gov
Self-employed individuals such as gig workers, freelancers, consultants, independent contractors, and business owners with no employees can also purchase coverage on Healthcare.gov. For self-employed individuals who were not able to qualify for coverage in the past, it is important to note that the ARP broadened eligibility for coverage so they may now qualify. Most people currently enrolled in a Marketplace plan may qualify for more tax credits, making health insurance premiums after these new savings lower than ever before.
Small business owners often work at least 12 hours a day just to keep the lights on and operations running. Whether you are self-employed and check out the individual Marketplace or a small employer who checks out the SHOP Marketplace — it can be an easier option for them to select the right health coverage options for their business and employees and SHOP-registered agents and brokers are also available to help.
Employers can visit healthcare.gov/small-businesses/ to learn more.
Britain’s Small Businesses See Better Times Ahead But Is Their Optimism Justified? – Forbes
Colin O’Flaherty, Head of Small Business at Barclaycard Payments says SMEs are adapting
So here’s the good news. As the U.K. government prepares to lift almost all Covid-related restrictions, Britain’s small and medium-sized companies seem to be well-placed to raise revenues and profits in 2022.
That’s the headline finding from the latest update of Barclaycard’s SME Barometer. According to the report, revenues are up and many companies are planning to raise staffing numbers in response to increasing demand.
But we’re living in strange and unprecedented times. It’s certainly true that Britain’s economy has bounced back most of the way from the downturn triggered by the pandemic and that is certainly reflected in the Barclaycard figures for SMEs. On the other hand, consumer inflation is running high, hitting 4.9 percent year-on-year in January, with an expectation that it will peak above 7.0 percent in the not too distant future. And as power and gas prices rise again in response to sanctions against Russia, energy-hungry companies face a sharp rise in costs.
A Bullish Mood
So how positive are the Barclaycard figures? Well, it can’t be denied that small businesses are in bullish mood. More than half of the SMEs taking part in the survey reported a rise in earnings in the last quarter of 2021 when compared with the same period a year earlier.
A separate report published by accountancy software company Xero paints a similar picture. The January update to its Small Business Index finds that sales rose 3.7 percent year-on-year in January when averaged out to take account of the impact of Covid.
Arguably none of this is surprising. The final three months of 2020 were marked by a sequence of ever more stringent Covid restrictions, culminating in a lockdown over the Christmas period. And while a huge amount of uncertainly hung over the last quarter of 2021, businesses had to some degree learned to adapt. Added to that, the economy as a whole was recovering in fits and starts.
And Britain’s SMEs seem to be optimistic about the year ahead. According to the survey, businesses are expecting revenues to rise by an average of 13.5 percent in the first quarter of the year. Buoyed by an increase in demand, two-fifths of the companies surveyed expect to make an average of six new hires in the coming months.
But there are warning signs that the months ahead could be difficult. Certainly, SMEs are extremely concerned about inflation. Businesses are seeing their own costs rising at a time when customers – also squeezed by rising prices – have less to spend.
Offline to Online
Two-thirds of SMEs said they were concerned about rising prices in general and energy bills in particular, with four in ten seeing it as a threat to their competitiveness. And inflation could force a radical change in business practices. According to the report, nearly 10 per cent of businesses are reconsidering the need for physical outlets. It seems the economic fallout pandemic is continuing to accelerate the move from offline to online.
Staff shortages also threaten the SME recovery. UK employment rates are high and the economy as a whole has around one million unfilled vacancies. Companies planning to take on new staff may have to work hard to attract the right people and pay more when they do. This is reflected in the Xero research. It reports wage rises of 4.4 percent in January, although this falls to 2.7% when averaged out over the two years of the Covid crisis.
Some businesses appear to be feeling the strain. Xero reports that the average payment time to customers was pushed back by 1.9 days in January and many payments were made beyond the agreed terms. Average lateness was 8.9% days. Typically businesses begin to pay later when their own cashflow is stressed.
The Wider Picture
And if you step back from Barclaycard’s report, there are plenty of other issues to worry small companies. For those who either import or export to or from the E.U., it has to be a concern that trade between Britain and continental Europe dipped in the wake of new rules coming into force in the wake of Brexit. There has been some recovery, but according to the House of Commons Public Accounts Committee, SMEs have been particularly badly hit by increased costs and paperwork.
Barclaycard says that SMEs are responding to the economic challenges. As Colin O’Flaherty, Head of Small Business at Barclaycard Payments, observed: “SMEs are also remaining resilient by continuing to focus on areas within their control, such as by improving their operating models to overcome the hangover to supply chain disruption which peaked at the end of last year.”
So it’s a mixed picture for Britain’s SMEs. Those that have survived two years of Covid restrictions are hopeful of better times ahead, but no one can ignore the increasingly challenging economic trends. The sector is not out of the woods just yet.
Three Questions Small Business Owners Should Ask In Creating A Workplace Culture – Forbes
For small business owners, the morale of their employees is key to success.
There is a scene in “The Wire” where Lieutenant Daniels is speaking with another police officer who is about to become a supervisor. He tells him, “all of them will take their cues from you. You show loyalty, they learn loyalty. You show them it’s about the work, it’ll be about the work. You show them some other kind of game, then that’s the game they’ll play.”
While owning a small business is different from working in the Baltimore Police Department, workplace culture is critical in both. For small business owners, the morale of their employees is key to success. Empathy and transparency are important in maintaining a positive, productive morale, and its foundation is rooted in culture.
It is important to establish a positive workplace culture in order to ingrain company values at all levels of an organization. In doing so, here are three questions a small business owner should ask themselves when working to create a workplace culture with intention.
1. What kind of culture do I want for my business?
A workplace culture reflects a business owner’s unique values, beliefs, and attitudes. Essentially, it’s what makes a business stand out. A culture varies from sector to sector and from business to business. Not every business strives for the same culture, and leaders can instill values such as community innovation, care, and a growth-oriented environment.
2. Why will this culture help my business?
Workplace culture is an important part of conducting business, as it informs how employees interact with one another, with customers, and with leadership. It also establishes core values and helps to create a space for employees to grow and learn in their roles. A strong workplace culture also has the potential to attract talent, increase engagement and retention, as well as boost job satisfaction. All of these factors together drive productivity and help a business grow to be more successful.
3. How will I create this culture?
Creating culture in the workplace takes time and hard work and means something different for every business. There are a number of different components and approaches employers can use. For example, many start with an audit of their existing policies, employee skill sets, and assessments before outlining any skill gaps in relation to future business needs to create meaningful work through community-based volunteering and reverse mentoring. Almost all positive workplace cultures have a clear “open door” policy for employees to share their thoughts or ideas. These types of actions are small steps that will make meaningful impacts down the line.
Company culture is a crucial part of creating success for businesses, providing companies a chance to connect with and learn from their employees. This culture should reflect company values because it is essential for employee engagement, retention, and satisfaction.
A Fintech Makes It Easy For Small Businesses To Offer 401(k) Retirement Benefits – Forbes
Woman Restaurant Owner With Waiting Staff
The Great Resignation has made attracting and retaining employees a top priority. After health insurance, providing retirement benefits is the second most frequently offered benefit to attract talent. State and city regulation is prompting more interest in 401(k) plans, too! More than one-third of small businesses that do not currently offer 401(k) plans expect to within 12 months.
A 401(k) retirement plan is also a way to take care of employees’ financial wellness and provide a tax benefit to companies and their employees. But legacy 401(k) providers avoid marketing to the smallest businesses because the market isn’t very profitable. Yet, the vast majority of companies have fewer than 20 employees.
Penelope is a 401(k) platform that gives small businesses an affordable and east-to-use way to provide retirement benefits. It is helping small businesses navigate the challenges of the Great Resignation. At the same time, its CEO and founder, Jean Smart, manages her own challenges.
Jean Smart, CEO and founder at Penelope—a 401(k) retirement benefits platform for small businesses
Smart is a founding member of Chief, a private network for influential women leaders. She became part of a peer-advisory group with female founders and corporate executives who have similar interests and challenges and help each other problem-solve. One founder in Smart’s peer group has already achieved unicorn status—a billion-dollar-plus valuation.
Smart had worked in companies like Citi, Charles Schwab, and TD Ameritrade, and at the time, UBS. She worked on institutional employee benefits, such as 401(k) plans, employee stock options, and financial wellness. Inspired by the female founders in her Chief group, Smart started developing a business concept of her own.
Smart, the daughter of Korean immigrants who own a grocery store and restaurant, saw how her parents sacrificed to provide for their children and employees while neglecting to save for their retirement. Not saving has left them vulnerable in their later years. “With one in four Americans having no retirement savings, my parents are an all too familiar story in the U.S.—equal parts inspiration and cautionary tale,” said Smart.
“I’m a Gen-Xer and I’ve heard my entire life that we’re going to run out of Social Security,” said Smart. For many Americans, Social Security provides an essential source of income in retirement. But its money is running out. Projections say that starting in 2034; the Social Security Administration will reduce retirement benefits.
Smart’s personal and professional background made her think she was the right person to tackle this problem.
“I wanted to do something around fintech, education, and inclusive capital,” said Smart. She wanted to dispel the notion that there was a quick way of getting rich. Investing regularly in a 401(k) was the way to build a nest egg for retirement. “The reality is it takes generations to build wealth,” she sighed. “It doesn’t happen overnight, and it takes people working 20, 30, 40 years before they have money to pass on [to loved ones].” She wanted to create a way to set it and forget it.
Businesses with fewer than 20 employees—the vast majority—of small businesses need help, thought Smart. Many of these businesses are owned by women, minorities, and immigrants. Fintech streamlined processes, allowed her to simplify paperwork, and helped her cut costs by using a self-serve business model, making it affordable for small businesses to provide retirement benefits for their employees.
“It’s hard making things simple,” said Smart. “There are 50 to 60 thousand funds to choose from. We offer 10. The trade-off is there isn’t customization.” Through a low-cost subscription model, Penelope’s technology platform automates employee investing, streamlines cost and paperwork, provides practical savings tools for employees, and offers the choice of Pooled Employer Plans (PEP), traditional 401(k)s and Solo 401(k)s.
Penelope is an intuitive, cloud-based 401(k) platform, which launched in January. There are no 30-to-40 page documents with complicated jargon, and the content is brief, to the point, and uses plain English. People have different learning styles, so content is provided as text and FinTok videos.
Timing can be everything. More and more states and cities are mandating that businesses provide retirement benefits. California, Oregon, Illinois, Maryland, Colorado, Connecticut, New York City, New Jersey, Virginia, Seattle, and Maine do so. Rules and regulations vary, depending on where your business operates.
“During the Great Resignation, we’re all fighting to get the best people,” said Smart. She relies on referrals, and, fortunately, she is well connected.
Her employees could undoubtedly make more money working in larger companies as a startup. But Smart emphasizes the company’s purpose. “The fact that we are mission-based is very attractive,” she said. “It’s really striking a chord, not just with professionals in their 20s and 30s, but also their 40s, 50s and even their 80s. I’ve got five generations working with me,” Smart proudly said.
She recruited Ted Benna, widely known as the “father of the 401(k),” as an advisor to Penelope. “I’ve helped a lot of small businesses in my lifetime, as well as running my own business, and for many of them, the idea of offering a 401(k) was out of reach, expensive and confusing, filled with jargon and too time-consuming,” said Benna. “Penelope provides plans that are easier to understand and economically make sense for small businesses and startups.”
Shifting from a well-resourced mindset to a resource-constrained startup has been a steep learning curve for Smart. “You’re working with a blank slate,” she said. “You make many mistakes. You have to be open.” You have to be an agile leader, and there are ways to improve your adaptability. Once you have, “it’s thrilling.”
Penelope has successfully raised $2.1 million in pre-seed fundraising led by Slauson & Co. Additional investors include Amplify LA, Black Jays and executives from Wells Fargo, Citigroup and US Bank. “Saving for retirement is an essential tool for building wealth and financial equality,” said Austin Clements, Managing Partner at Slauson & Co. “Penelope fundamentally changes the way small business owners and employees invest in themselves, their families and their communities.”
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