Medical Mutual, along with our co-founding Pillar Award partner Smart Business, presents the 16th annual Pillar Awards.
This year, we are honoring an outstanding group of companies and organizations of varying sizes.
While this year’s diverse group of honorees may be different in many ways, one thing that they all have in common is their commitment to strengthening the bond between the for-profit and nonprofit worlds.
It occurred to us many years ago that few things are more meaningful and important than investing time and resources in supporting our community, and we felt the need to honor companies and their employees who have gone above and beyond the call. While support and direction come from management, companies are only as great as their employees.
For that reason, we are proud to present the Medical Mutual SHARE Award. This unique award was founded to recognize companies whose employees best exemplify the ideals of Medical Mutual’s own employee SHARE Committee. SHARE stands for serve, help, aid, reach and educate, and is the heart and soul of Medical Mutual’s charitable giving efforts.
The SHARE committee, comprised of Medical Mutual employee volunteers, helps coordinate more than two-dozen community events involving nearly half of the company’s 2,500 employees.
On behalf of Medical Mutual and Smart Business, we congratulate all our 2013 Pillar Award recipients.
Chairman, president and CEO
- Pillar Award for Community Service - Presented to for-profit businesses for their community service efforts
- Medical Mutual SHARE Award - Presented to one company annually that best exemplifies employee-driven community service, philanthropy or volunteerism.
- Nonprofit Board Executive of the Year Award - Honors contributions by for-profit business executives who serve as members of nonprofit boards
- Nonprofit Executive Director of the Year Award - Recognizes nonprofit executive directors who effectively apply for-profit business principles to their organizations.
- Fairmount Minerals Sustainable Business Award - Awarded to the organization that best demonstrates sustainable business practices.
- Kent Clapp CEO Leadership Award - Recognizes the top executive of a for-profit company for creating a culture of giving.
- Clark-Reliance Youth Philanthropy Award – Presented to the individual or individuals under the age of 22 or who have not yet graduated from college, who best demonstrate the spirit and drive to organize a nonprofit, create an individual initiative that impacts others, or develop a program designed to give back to the community either on an ongoing basis or as a one-off effort.
Kent Clapp CEO Leadership Award, Kevin Goodman, managing director, Blue Bridge Networks
Pillar Award for Community Service
- BlueBridge Networks
- Eaton Corp.
- Main Street Gourmet
- Staffing Solutions
- Sterling Jewelers
- Western Reserve Partners
Medical Mutual SHARE Award
Fairmount Minerals Sustainable Business Practices Award
Executive Directors of the Year
Nonprofit Board Executives of the Year
Clark-Reliance Youth Philanthropy Award
The Kent Clapp CEO Leadership Award
Kevin J. Goodman
Managing director and partner
BlueBridge Networks LLS
From the very marrow
Kevin Goodman survived lymphoma and now gives back to others
This year, Kevin J. Goodman reached his personal goal of raising more than $100,000 for charitable causes — and completed the Boston Marathon. His concern and care for others was further demonstrated at the marathon this year when he assisted victims of the terrorist bombing. Fortunate to have finished the race an hour before the bombings, Goodman jumped into efforts to help victims.
It was a little over 10 years ago when he received a shocking diagnosis: He had stage 4 lymphoma. But receiving the devastating news that he had a potentially fatal illness didn’t throw him into hopelessness. He battled through the chemotherapy and treatment and came out a survivor. The victory also taught him many important lessons.
Goodman, managing director and partner of BlueBridge Networks LLC, made a commitment to donate his time and talent to organizations such as the American Red Cross and the Leukemia & Lymphoma Society.
Goodman joined the LLS Board of Trustees in 2009. His involvement has grown constantly and he now serves as vice president on the executive committee.
On the fundraising side, he has helped lead outstanding efforts to generate funds through the LLS Team in Training. His team has surpassed the $1 million mark. As a lymphoma survivor, Goodman is unable to donate blood, but has arranged for BlueBridge Networks to participate in blood drives at Playhouse Square for the past several years.
There’s a lot of opportunity for investors in Cleveland to fund up-and-coming technology companies.
“There’s a growing sense of entrepreneurship and innovation,” says Steve Haynes, managing partner at Glengary LLC. “It has become the norm for colleges, universities, hospitals and other institutions to think about monetizing the technology developed in their facilities. They’re getting research dollars and they’re trying to convert science into something commercial. In addition to institutional technology transfer, incubators, accelerators, etc., are being formed to drive economic development.”
Patrick R. Roche, a partner at Fay Sharpe LLP, adds that there are many companies in the area looking to assist the right companies with capitalization.
“It’s very competitive — there are a lot of deals to be looked at,” he says.
While the market is fertile with both investors and entrepreneurs, Roche and Haynes say there are many things entrepreneurs fail to account for when seeking funding, including the viability and strength of their intellectual property (IP).
Smart Business spoke with Roche and Haynes about what investors look for in entrepreneurs’ IP before a deal can be done.
What does an investor look for in the IP of an entrepreneur seeking funding?
From an investor’s perspective, when an entrepreneur approaches with an idea the investor has to ask, ‘Will this idea have value in the marketplace?’ If yes, then one of the next questions is whether it can be protected, from an IP perspective. Otherwise, releasing it into the public creates a marketplace for anyone who can reproduce it. Then it becomes a marketing game, and early-stage companies don’t have the money to compete with well-capitalized competitors.
From an IP attorney’s perspective, basic due diligence dictates that a business owner or entrepreneur should present to the attorney what he or she thinks is the IP, so it can be analyzed.
It’s important to know when a patent application was filed and whether foreign rights have been preserved. The IP attorney, working on behalf of the investor, will examine in detail what the U.S. Patent and Trademark Office has done with the application and conduct his or her own research to try and predict what the patent office might do with it, called a patentability study. If it’s determined the patent application has little chance of being granted, that will likely kill the deal.
Patent attorneys also are looking at whether the invention can be designed around. Can noninfringing copycat products be created that could hurt the market?
What commonly turns an investor away from a fund applicant?
At an early stage, many of the potential obstacles for investors relate to whether or not there’s IP protection, both legal and otherwise. The strength of that protection is determined by identifying the difference between the applicant’s invention and prior art — the new invention has to be a nonobvious improvement over the state of the art.
Another part of the due diligence analysis is to determine if there’s an obstruction to the right to practice or use the invention freely in the market. It’s dangerous if it’s necessary to get a license from another party to sell a product in order to avoid infringing.
How can entrepreneurs best prepare before pursuing funders?
Entrepreneurs should check their IP ahead of time. Patent applications need to be filed, research should have been conducted, and their novelty and any likely obstructions identified and clearly understood. Investors need to see a thoughtful canvassing of the principal issues that an investor needs cleared. If the efforts of the entrepreneur are consistent with the IP attorney’s findings, and the entrepreneur is honest and truthful with the potential investor, the momentum carries through to a deal.
There’s not much worse than when an entrepreneur says they have a patent and it’s just a provisional application; the person hasn’t done any research and is just hoping everything works out.
It’s understood that every nickel is precious when a company is in the early stages, but it’s important that a company conducts thorough research on its IP before seeking funding. •
Insights Legal Affairs is brought to you by Fay Sharpe LLP
Christopher Carmon donates half the proceeds from his custom mint business to the Lorain County Blue Foundation
At the age of 12, Christopher Carmon is well on his way to being a leading philanthropist.
Christopher’s business Topher Joe Promotions LLC, which sells mints with company logos printed on the wrapper, donates 50 percent of its proceeds to the Lorain County Blue Foundation, a support organization for law enforcement officers injured in the line of duty. In his first three weeks of business, Christopher raised more than $600 for the foundation.
Christopher is a hands-on business owner, making it his trademark to personally deliver each order. He even gets the business owners to pose for a photo with him for his Topher Joe Facebook page. Christopher’s proud to showcase his clients’ support of not only his business, but the Lorain County Blue Foundation.
The mints are reasonably priced and made in the U.S. Christopher already has some big name clients, which include The Fedeli Group, Pease & Associates, Zito Insurance Agency, Ogletree Deakins, Landscape Management (published by North Coast Media), Firment Chevrolet, AT&F and even some area political candidates.
Christopher is so pleased by the response he’s received so far, that he hopes his efforts will inspire others to give back as well. ●
Philanthropist at heart
Jasmyne Johnson has endless ideas on how to help those less fortunate around the world
You might say Jasmyne Johnson has spent nearly half her life in philanthropy — and it would be true. A senior at John Hay School of Science & Medicine in Cleveland, she has been a member of the Boys & Girls Clubs of Cleveland since the age of 9.
In fact, this summer, Johnson worked as a junior staff member for the organization. She spent the summer being a role model and mentor as part of SPARK, a reading and literacy program for children ages 6 to 9.
Her participation in the Boys & Girls Clubs of Cleveland only scratches the surface of Johnson’s involvement in community philanthropy. When relief efforts were needed for the 2010 Haiti earthquake, Johnson was in charge of the promotion, advertising and collections for her church’s fundraiser — helping to raise $12,000.
Another project that Johnson is spearheading involves providing Bibles to schools in Africa where students are less fortunate and don’t have access to one. She has also proposed a pen pal program with high school students in Africa to encourage them in their education.
A member of the National Honor Society, Johnson has maintained perfect attendance throughout high school while serving as an intern with the Cleveland Division of Water. Johnson hopes to be nominated to the United States Air Force Academy. ●
Young Ambassadors of Middleburg Heights lend support to various community organizations
Every summer, the Young Ambassadors of Middleburg Heights, a group of 10 to 14 year olds, meet on Fridays at the community center to engage in outreach programs in and around the city — and receive first-hand experience in philanthropy.
This year, the Young Ambassadors were involved in several activities that benefitted the community, including the following:
• Making and delivering homemade cards to seniors at an assisted living facility, sharing doughnuts, playing games and visiting with residents.
• Delivering handmade dog toys to an animal rescue facility.
• Collecting litter in city parks.
• Organizing a senior dance at the community center.
• Collecting donations to purchase and deliver school supplies to the Positive Education program.
• Baking cookies and delivering them to safety forces in the city.
“Overall, the program has been successful, and we have received wonderful feedback from the various organizations that we have reached out to,” says Joanna Mocho, Kidzone activities director. “More importantly, the Young Ambassadors along with their parents have been delighted with the positive experiences.” ●
Cloud computing for business has become commonplace. The reason? Companies want technological conveniences and marketplace advantages. However, phone services are often left behind because of traditional phone service capabilities.
This is starting to change. Now, instead of being subject to the capabilities of a phone system, businesses are dictating how they want to communicate with their customers.
In the future, Alex Desberg, sales and marketing director at Ohio.net, says he envisions a mass migration away from stationary services tied to brick and mortar to Voice over Internet Protocol (VoIP) capabilities that incorporate the desk phone, the cell phone and Web-based services.
“VoIP can play a huge role by incorporating offices with telecommuters and a mobile workforce,” he says.
Smart Business spoke with Desberg about the evolution of VoIP, who is driving the changes and what he expects in the future.
How is the VoIP world evolving to serve its customers?
It’s amazing how quickly the VoIP industry has evolved in a relatively short time. In contrast, traditional phone services are nearly exact replicas of what they were decades ago. While traditional telecom offers different services and features on various phone systems, the fundamental telephone service hasn’t changed.
In the VoIP world, the primary change we’ve seen has been moving from basic emulation and hosted services to highly expandable VoIP solutions that incorporate many new features. Businesses have developed a high comfort level with VoIP, so there has been a shift to businesses wanting to manage their own VoIP solutions; they just don’t want the responsibility of hosting the phone system. This do-it-yourself approach has gained traction as a tactic to save money by limiting outsourcing. Since VoIP systems are cloud based, a company’s communications infrastructure, which is hosted remotely, is still safe and secure.
Are there any other areas of evolutionary change?
Another example of evolutionary change is that VoIP providers are now incorporating functionality into cloud platforms that were traditionally only available on a network.
For instance, call recording on a hosted system used to work by having a server with devices that were able to record phone calls. With the second generation of cloud-based private branch exchange, this can be brought into the cloud environment and is immediately available for anyone on the phone network in real time.
Who is driving the changes?
Most VoIP systems are driven by the software and platform that they were built with. That has been the limiting factor of early versions of VoIP. Now, customers are dictating how they want the system to work and how quickly the evolution curve is. In essence, the customer’s input is impacting the direction of VoIP.
How is VoIP able to respond to changes in the telecom market so quickly?
The VoIP life cycle moves at an accelerated pace when compared to traditional telephony. Perhaps the best way to measure VoIP time is to compare it to Internet time, which moves at a much quicker rate than anything we’ve seen historically.
Over the next several years, as software changes and new technologies develop, consumers are going to witness further evolutions in the VoIP field.
How do you envision the future of VoIP?
We are going to continue to see the shift to a cloud-based model. With hosted VoIP, there are still phone devices on the office desk. However, businesses want their phone services to integrate with their mobile devices. A common request from customers is to have their business phone number integrate to their cell phone so they can respond to the needs of their customers more timely.
Businesses are looking for different characteristics associated with their phone system that will help set themselves apart from their competitors. ●
Alex Desberg is sales and marketing director at Ohio.net. Reach him at email@example.com.
Insights Telecommunications is brought to you by Ohio.net
Business owners today may understand that technology can be customized to streamline their internal processes. But exactly how that customization is realized may be unclear.
Software, platforms and applications evolve quickly, which can make finding the right technology intimidating. However, by partnering with the right solution provider, you can improve your current processes with technology that’s inherently scalable.
“Business owners are experts in their industry; they shouldn’t have to be experts on the technology solutions they bring into their company,” says Heather Stump, a business analyst and AIIM ECM Practitioner at Blue Technologies.
Smart Business spoke with Stump about available software, platforms and apps, and how to integrate them in your company.
In your experience, which software and platforms are the most useful?
The most prevalent office applications are the Microsoft Office programs, Word, Excel and Outlook. Other platforms integrate directly with these familiar interfaces to enhance them without replacing what employees currently use, or changing their day-to-day activities.
Imaging applications can be installed on your desktop or embedded in your multifunction printer, which can then:
- Convert documents, such as PDFs and images, to a Word or Excel file on the fly.
- Route documents throughout the enterprise to a shared folder, document management system or email account.
- Name documents at the time of the scan to save time on the back end.
Many document management systems can integrate directly with Outlook or hardware devices. Employees can store and retrieve documents without leaving the familiar email interface, and multifunction devices can allow employees to search, retrieve and print documents directly from a device.
Organizations typically have an accounting and/or a customer relationship management system, such as Salesforce or SharePoint. These systems are vital to any business, but they do require supporting materials to be useful. Technology solutions integrate with these programs to provide a comprehensive view of all necessary data and documentation, such as emails and customer correspondence, eliminating the need to search through multiple systems and file cabinets, reducing the burden on employees.
What are some must-have apps?
Many employees already have a smartphone or tablet, so more businesses are implementing a bring-your-own-device strategy. Most mobile integrations are not device specific and fall into the document or print management categories.
The most well-known document management mobile apps such as Google Docs, Dropbox or SkyDrive allow users to store and retrieve documents. Other apps allow you to take photos or scan from your mobile device, and then upload to the cloud or existing document management repositories. Advanced solutions allow employees to interact with workflow off-site, which facilitates continuity and productivity.
Hardware manufacturers now offer print management apps, so you can print from anywhere, whether on- or off-site. The files are held in a print cloud. The user can then authenticate themselves at any networked device, see their print queue and release the jobs when they’re ready. This helps reduce costs and improve information security — people aren’t as likely to leave confidential documents sitting around.
How can businesses find a provider to maintain, assess and upgrade technology?
Do your research and trust your instincts. Meet with providers and look at a variety of software packages to get an idea of the distinctions. One tip, on the manufacturer’s side, is to see who is spending money on research and development; only innovators survive in the tech industry.
Your solution provider should be assessing the technology quarterly or semi-annually to help you learn new features and functionalities. In addition, manufacturers usually release at least one upgrade and a few minor software fixes every year. Make sure you understand what your provider includes in the yearly maintenance of software or platforms. With due diligence and the right provider to support your software and provide training, you’ll better understand the value of your purchase. ●
Heather Stump is a business analyst and AIIM ECM Practitioner at Blue Technologies. Reach her at (216) 271-4800 or firstname.lastname@example.org.
Insights Technology is brought to you by Blue Technologies
John Carroll University: How a new shipping route from Cleveland to Europe could save businesses money, timeWritten by SBN Staff
Many Northeast Ohio companies receive raw materials or components from European suppliers, or ship their finished products to European customers. The cargo is transported by truck or rail to New York or Baltimore, and then loaded onto ocean-going ships bound for Europe — a longstanding logistical process for Midwestern businesses. However, this route is also expensive, slow and has lengthy delays, especially at the Port of New York.
An innovative concept is being developed to solve these problems. Small, Seaway-sized ships could be loaded at the Port of Cleveland, located next to FirstEnergy Stadium. The Spliethoff ocean carriers then begin a dedicated round trip to Antwerp, Belgium. Dubbed the Cleveland-Europe Express, its service is scheduled to begin in April 2014.
Smart Business spoke with Bradley Hull Ph.D., Associate professor and Reid Chair, Department of Management Marketing and Logistics, John Carroll University, who together with the Dutch Consul laid the groundwork for this project, to learn more about this project and what it could mean for local businesses.
What are the business advantages of the Cleveland-Europe Express?
The advantages are the savings that could be realized in time and money. The Cleveland-Europe Express takes four to five fewer days to make the trip to Europe than the existing route. This makes the Cleveland-Europe Express ideal for Just In Time manufacturers or anyone needing quick deliveries.
Money can also be saved using the new route because water is inherently the least costly form of transportation. The existing route incurs excessive costs from the unnecessary and expensive overland transport to the East Coast, double handling at the East Coast port, expensive ocean carrier rates to Europe, and lost time due to East Coast congestion. The Cleveland-Europe Express is all-water and as such avoids many of these problems and costs.
Companies also gain more control over their cargo since this method relies on fewer people handling the products. Businesses are no longer dependent on long distance overland transportation and handlers in New York. This means companies face less risk of loss or damage.
The service will run on a reliable fixed schedule. Initially, the service will run once per month to Europe. As business grows, the service could become bi-monthly or weekly.
What could the establishment of the Cleveland-Europe Express mean to Northeast Ohio?
Companies contributing to the success of the Cleveland-Europe Express help create jobs in Northeast Ohio. Ports are ‘engines of job creation.’ As business at the Port increases, the downtown area becomes a more attractive location for distribution centers and manufacturers that would benefit from prime transportation access. If successful, the Cleveland-Europe Express could contribute to the revitalization of downtown Cleveland and ultimately Northeast Ohio.
How was the Cleveland-Europe Express developed?
For the past eight years there has been a strong feeling that such a service could be economically viable. John Carroll University and the Dutch Consul have conducted analyses, held four Seaway conferences, partnered with Erasmus University of Rotterdam to get a European perspective of the project’s practicability, given numerous presentations to local and regional groups, and organized a trade mission to the Netherlands was held this past summer. There is much excitement building for the potential of this shipping route to revitalize Northeast Ohio and increase the viability of Northeast Ohio companies. ●
Bradley Hull Ph.D., Associate professor and Reid Chair, Department of Management Marketing and Logistics, John Carroll University. Reach him at (216) 397-4182 or email@example.com.
Insights Executive Education is brought to you by John Carroll University
Ohio is now viewed as one of the leading states in the asset protection arena, thanks to the passage of the Ohio Legacy Trust Act, says Marcia Kendle, Senior Vice President and Chief Fiduciary Officer at FirstMerit Bank.
The law, which went into effect March 27, 2013, as part of Ohio House Bill 479, allows for the creation of self-settled irrevocable trusts – also known as domestic asset protection trusts (DAPTs). These trusts permit the transferor of assets to also be the beneficiary of the trust. An Ohio DAPT provides a high level of protection from creditors dependent upon certain factors, says Kendle.
“A qualified Ohio DAPT is different from a standard irrevocable trust in that it serves as a means to protect assets -- with a few statutory exceptions -- from creditors,” she says. “The Ohio Legacy Trust Act puts Ohio at the forefront.”
Trusts of this kind, which provide an alternative to potentially riskier offshore trusts, are gaining in popularity. With trillions of dollars ready to pass from one generation to the next in the coming years, DAPTs are becoming an increasingly attractive option. As legislatures nationwide consider similar asset protection measures, Ohio joined 13 other states -- most notably Alaska, Delaware and Nevada -- that permit domestic asset protection trusts.
If you’re thinking about creating an Ohio DAPT, here are some things to consider:
Who can benefit from an Ohio DAPT?
Due to the complexities of the act, you should discuss your individual circumstances and goals with an experienced trust attorney, financial planner and/or wealth management professional to determine if an Ohio DAPT, or perhaps another asset protection planning strategy, is in your best interest. The act generally presents considerable benefits to those wanting to protect their wealth, as well as individuals in professions with high exposure to litigation (e.g., business owners, accountants, attorneys, medical professionals, executives, etc.). For individuals considering a prenuptial agreement, an Ohio DAPT is viewed as a viable option for an individual yet to be married.
What are the requirements and restrictions associated with creating an Ohio DAPT?
An Ohio DAPT must, amongst other items, be written and irrevocable, have spendthrift provisions, state that Ohio law applies and appoint at least one qualified trustee, who is either an Ohio resident, a bank, or a trust company, such as FirstMerit Bank, authorized to operate in Ohio. The statute also mandates that the transferor of an Ohio DAPT cannot serve as trustee of the trust.
Residents of any state may create an Ohio DAPT, providing that some of the trust assets are held in Ohio and that other regulations of the Ohio Legacy Trust Act are fulfilled.
What rights and powers can the creator of an Ohio DAPT retain?
The transferor retains the right to receive income from the trust, receive and use assets (within the trustee’s discretion) in the trust, remove a trustee and appoint a new trustee, appoint a protector of the trust, be the investment advisor to the trust, retain the power to change the beneficiaries of the trust (per restrictions detailed in the statute), provide for the use of trust income or assets to pay income taxes generated by the trust, pay debts after death and veto distributions from the trust.
How does the creator of the trust obtain full protection that might be available under the Ohio Legacy Trust Act?
When transferring assets to an Ohio DAPT, the transferor is required to execute an affidavit, consistent with the timing of the transfer of assets stating, among other things, that he or she is not insolvent and is not considering filing for bankruptcy. There are additional steps that should be taken as detailed in the Act and as unique circumstances of a creator may dictate.
Are all debts and payments protected under the Ohio Legacy Trust Act?
No. Exemptions include child support, spousal support or alimony (unless an Ohio DAPT was validly set up prior to marriage), as well as IRS obligations. These exceptions are consistent with DAPTs in most other states, although other states may include additional and more far-reaching exemptions in their DAPT statutes.
What about claims from creditors?
The current untested consensus is that the provisions of the Ohio Legacy Trust Act make it difficult for creditors to challenge an Ohio DAPT and prevail. For example, according to the Act, a creditor has the burden of proving, through “clear and convincing evidence,” that a transfer to a DAPT was made with “specific intent to defraud the specific creditor bringing the action.” Additionally, a creditor must file an action to void a transfer within the later of 18 months after a transfer, or six months after a creditor should have reasonably known a transfer occurred.
Marcia Kendle is senior vice president and chief fiduciary officer for FirstMerit Bank.
The information contained herein is being provided as general information of an educational nature and is intended for current and prospective clients of the Trust Department of FirstMerit Bank, N.A. Also, this information has been derived from sources believed to be accurate and reliable and FirstMerit Bank, N.A. makes no representation as to its’ completeness and acknowledges that due to the complexity of the subject matter relevant information is not complete. This information is not intended to be legal, financial or tax advice and is not a covered opinion as defined by the IRS Circular 230. For advice that is specific to your circumstances, you should consult a qualified financial, tax and/or legal adviser.
No one wants workplace injuries. But accidents can happen, particularly when projects need to be finished right away.
“That’s usually where the breakdown occurs. If you have to rush a project through and you’re potentially cutting corners for the sake of efficiency, that’s generally when injuries happen,” says Derek M. Hoch, president of Leverity Insurance Group.
Smart Business spoke with Hoch about complying with Occupational Safety and Health Administration (OSHA) standards, which can result in a safer overall workplace.
Do most manufacturers have workplace safety programs?
Larger corporations usually do. Some smaller operations may not have any program in place, as they have had the same employees for a long time and, while they know the equipment and systems very well, they don’t necessarily follow established procedures.
Employees may take shortcuts because they’re comfortable with equipment they’re using. They can lose sight of the fact that doing something in a hurry and not in the proper manner can result in a workplace injury.
How is a workplace safety program developed?
The best way is to sit down with your risk manager — your insurance broker — to develop a program because it’s really about managing and controlling risk. You should work with an expert who can guide you through proper policies and procedures that should be in place.
This plan should be followed by a legal review to ensure that everything complies with OSHA regulations.
A good safety program includes appointing a company inspector who will routinely evaluate the workplace and conduct self-audits to make sure employees are following standards and adhering to policies.
The company inspector asks the same questions and uses the same checklist that an OSHA compliance officer would. These items include required employer postings, record keeping, medical services and first aid, fire protection, personal protective equipment, lockout/tagout, company evacuation plan, tools and equipment, environmental controls, electrical safety and accident investigation.
How often do programs need to be updated?
Programs need to be updated accordingly to comply with workplace and regulation changes. But, more importantly, you need to educate employees by providing refresher courses and holding quarterly or semi-annual safety meetings. The staff should have knowledge of OSHA standards and what the regulations are within their specific industry.
Revisit the program and make it real, because there is a tendency to get complacent in a job you’ve been doing for a long time. Spot checks help to ensure that everyone is complying with company procedures.
What are particular areas of risk?
OSHA’s most frequent citations are for violations of standards covering fall protection, hazard communication and respiratory protection.
Problems are particular to industries. For example, a manufacturing facility presents potential respiratory hazards if employees aren’t wearing the proper protective masks, or losing limbs if they are not wearing protective guards or guards aren’t properly installed on the equipment.
Powered industrial trucks, like forklifts, also can pose potential risks if proper training is not established. Another issue involves lockout/tagout procedures — having machines shut off and started up properly when there is maintenance or servicing work.
If violations exist, what are the potential costs and penalties?
Penalties can be significant, but not valuing a workplace safety program will lead to larger issues beyond OSHA citations, like employee injuries, fires and mechanical failures. Unfortunately, many companies wait until there is an accident before focusing on implementing, correcting or amending a safety plan. ●
Insights Business Insurance is brought to you by Leverity Insurance Group
At this point last year, Congress was debating a “fiscal cliff” deal that included the elimination of Bush-era tax cuts and several tax provisions favorable to businesses. Many of those provisions, extended for 2013, are now due to expire unless further action is taken.
“Based on what has occurred in Congress recently, I can’t say I’m optimistic that a lot will be accomplished,” says Terry Silver, CPA, J.D., a partner at Skoda Minotti.
Smart Business spoke with Silver about expiring tax provisions that affect owners of small and midsize businesses.
What key tax provisions are set to expire?
From a business standpoint, most are related to depreciation. Other changes impact individuals, but for businesses the important one is the Section 179 deduction for tangible personal property. For 2013, you can expense up to $500,000 for property placed into service during the year. That starts to phase out if you have property additions of more than $2 million, and basically doesn’t apply once you reach $2.5 million. At that point, you must capitalize purchases of property and equipment and depreciate them over a period of years. That taxpayer-friendly treatment is substantially reduced in 2014 to $25,000, with the phase-out limit falling to $200,000.
Taxpayers can claim Section 179 write-offs for qualified real property as part of that $500,000. You can write off up to $250,000 in qualified leasehold improvements.
Another favorable provision in 2013 is bonus depreciation, which doesn’t contain the taxable income limitations and phase-out provisions attached to Section 179. This 50 percent bonus depreciation allows half of the cost to be expensed without limitations. The only restriction is that it has to be original use with the taxpayer; it doesn’t cover used equipment. Bonus depreciation also is going away in 2014, except for certain aircraft and long production period property.
One other tax provision extended through 2013 is the research tax credit. If your business spends money on research and development (R&D), there’s a tax credit for increasing expenditures related to that activity.
Any chance these might be extended?
Section 179 and bonus depreciation have been extended a number of times in recent years. Given the concerns about the economy, there’s some likelihood that something will be accomplished. While it doesn’t seem likely to happen by the end of the year, it is possible an extension could be put in place in 2014, retroactive to 2013. The most apt to return is the R&D credit, which has been extended numerous times.
Is it too late to take advantage of these expiring provisions?
With some of these, a business may be looking at equipment purchases planned for 2014 and accelerate a purchase to the end of 2013. It is important to note that the property must not only be purchased, but placed in service before the end of the year.
There also are other strategies business owners can follow to reduce their tax burden. Many small business owners, for whatever reason, don’t have a retirement plan. If you put in a profit-sharing plan with a 401(k) feature, careful planning can allow a significant amount of the employer contribution to be skewed toward the owner.
Depending on the nature of your business, you might consider paying out bonuses. But be careful to remember the new additional 0.9 percent Medicare tax related to earned income over $250,000 for couples filing jointly, $200,000 for single taxpayers.
If you’re the owner of an S corporation with a $250,000 salary and have substantial profit for the year, you may want to consider taking distributions in lieu of additional salary. Although the shareholder will still pay income tax on the profits, the 1.45 percent Medicare tax paid as an employee, the 1.45 percent paid by the company and additional 0.9 percent Medicare tax can be avoided. However, the IRS may look at distributions relative to the salary you’re taking — the salary has to be reasonable for the services you provided.
Overall, as 2013 winds down and we head into 2014, owners and executives in the highest tax brackets will face higher tax rates on taxable income, qualified dividends and a 3.8 percent tax on net investment income. Whether Congress passes legislation to provide tax relief and spur the economy will no doubt be a topic of much debate. ●
Insights Accounting & Consulting is brought to you by Skoda Minotti