Although the employer mandate of the Affordable Care Act has been delayed until 2015, now’s the time to consider your company’s strategy regarding health insurance benefits for employees.
“Regardless of the mandate, you have an opportunity now to change what you’re doing in terms of employee benefits,” says Joseph R. Popp, J.D., LLM, tax manager at Rea & Associates.
Smart Business spoke with Popp about what he refers to as the SHOP, drop, roll or self-insure approaches employers can take regarding benefits.
What companies are good candidates for the Small Business Health Options Program (SHOP)?
In Ohio, SHOP is only available to companies with fewer than 50 employees; in a few years, it will be extended to 100 and under. SHOP is the business portal to the health insurance exchange. Businesses can contribute as much as they want toward premiums, including a zero contribution. Employees can then use pretax deductions to pay for premiums. Under SHOP, individuals cannot get federal subsides to help pay for premiums.
SHOP is exchange insurance, so it differs from traditional plans insurance companies offer. For example, Anthem traditional plans include the Cleveland Clinic as a network hospital, but it is not a network hospital with Anthem exchange coverage.
This option is best for companies with employee groups that would not generally get premium subsides and may save money compared to a traditional insurance product.
When does it make sense to drop health insurance benefits?
Drop, which means you’re not offering any health benefits to employees, can be a good option when you have an employee group that is largely entitled to subsidies.
For example, one company provided $400 a month for family coverage, with the employee paying an additional $1,250. Most employees were single-breadwinner type families and would be entitled to premium subsides on the exchange. If the company dropped insurance, the family would go from paying $1,250 to about $700 a month on the exchange for an equivalent level of coverage, even without premium subsides that could take it down further to about $250 a month.
Dropping was the most attractive option for the company because it would save $400 a month per family employee, and most employees would save money on premiums. In addition, the company can use the money it paid toward benefits to provide wage increases for those individuals who would be paying more for insurance.
Even though companies with 50 employees or more that drop insurance will have to pay a $166 a month penalty per employee starting in 2015, the penalty and some wage increases for people harmed by going to the exchange may be less. Both the business and individuals could have a large net financial benefit, and the employer could save more since it won’t have to use resources to address benefits questions.
What is the ‘roll’ option?
That refers to rolling with your current insurance. Many companies are waiting to see how the exchanges work and are taking the roll approach to wait another year.
To manage increasing premiums, companies are raising deductibles, co-pays and/or the share employees pay. Others are instituting wellness programs. Premiums might increase, but discounts are offered if employees participate in the wellness program, which is usually tied to some activity that might promote health. Employees can lessen or eliminate the increase if they participate.
When does self-insurance make sense?
If you have a relatively healthy employee group, it may be a good option. Unlike the exchange products, stop-loss policies are still medically underwritten (and the relative health of the group matters). You may pay the first $25,000 in claims per employee and purchase stop-loss coverage from an insurance company to pay claims above that amount. Savings can be substantial, but the drawback is that as you get deeper into the insurance industry — you’re taking on risk and functioning like an insurance company.
Companies should sit down with an insurance adviser and review all four options, because one may offer great cost savings or better benefits for employees. ●
Joseph R. Popp, J.D., LLM, is a tax Manager at Rea & Associates. Reach him at (614) 923-6577 or firstname.lastname@example.org.
Insights Accounting is brought to you by Rea & Associates
Currently, franchises are an increasingly fast-growing segment of the retail industry, especially in the case of fast casual and quick service restaurants. But before jumping feet first into one, there are some pitfalls prospective franchisees need to navigate before taking advantage of a potential opportunity, says Ian R.D. Labitue, an associate with Kegler, Brown, Hill + Ritter.
“Franchisees are driving the growth of retail right now because the backing of a strong franchisor can provide leverage when it comes to negotiations with a landlord,” says Labitue. “But you have to ensure that the lease terms are in your best interest because ultimately the franchisor will not be operating in the leased space — you will.”
Smart Business spoke with Labitue about what franchisees need to consider regarding franchise and lease agreements.
Is negotiating a lease normally the responsibility of a franchisee?
Many franchisors will place the burden on the franchisee to find a suitable space and negotiate lease terms, however, a franchisor may want to be active in the process as well. Oftentimes, they connect a franchisee with a local broker to assist, but that may create a conflict of interest because the franchisor is paying the broker’s commission. A franchisee should always be actively engaged in the process and never on autopilot, even with the help of a franchisor or broker.
Will the franchisor dictate aspects of the lease space?
A franchise agreement will spell out the use of the leased space, but a landlord may want the franchisee’s permitted use to be as restricted as possible so that they don’t violate exclusives with other tenants. As a franchisee, you want latitude so that you are able to offer any product or service the franchisor offers. They may sell supplemental items to their primary offerings, like T-shirts or other branded paraphernalia, and you want the ability to stock those things to take advantage of the additional revenue.
Can you provide any examples of franchisees overlooking something that became a problem?
The franchise agreement not only governs the relationship between the franchisor and franchisee, but also impacts the relationship a franchisee has with its landlord. The franchisor’s leasing standards will be spelled out in the franchise agreement and are often included on a ‘lease rider,’ which can be incorporated into the franchise agreement. When a lease rider is present, the franchisee is bound by the terms of the franchise agreement to incorporate the terms in the rider in any lease it may enter into. This can be very problematic and restrictive when the time comes for the franchisee to negotiate a lease agreement. In essence, the franchisee is already starting off in a less powerful position because the terms of the lease rider must be included in the negotiation. It may make securing a space more difficult if the landlord is unwilling to agree to the predetermined franchisor lease terms.
What are some other items a franchisee should negotiate to include in its lease agreement?
Opening and/or continuing co-tenancy provision. Ask the landlord for the right to abate rent or even terminate your lease if an anchor tenant in the shopping center closes. If you’re in a development with a strong anchor, you want the ability to lower your rent or terminate the lease if they leave because their absence will almost certainly affect your sales in a negative way.
Exclusive use provision. Try to negotiate for an exclusive as well. If you’re a quick service burger franchise, restrict the landlord from signing leases with other restaurants with the primary business of selling burgers to ensure you’re the only establishment of that type in the development.
Tenant allowance provision. Ask for a tenant allowance for any improvements to the leased space; landlords are generally more willing to provide a one-time allowance than to keep a space vacant for an extended period of time.
Lease negotiations as a franchisee are a balancing act because you have to comply with the franchise agreement, but you also have to protect your interests and reach an agreement with a landlord that’s beneficial to you as a tenant. ●
Ian R.D. Labitue is an associate at Kegler Brown Hill + Ritter. Reach him at (614) 462-5413 or email@example.com.
Insights Legal Affairs is brought to you by Kegler, Brown, Hill + Ritter
If your company sponsors a pre-approved defined contribution retirement plan, such as a 401(k), money purchase or profit sharing plan, your plan documents will need to be completely revised and restated sometime between May 2014 and April 2016.
The IRS requires this restatement process every six years to incorporate all of the regulatory and legal changes that have been imposed by Congress. Without it, the plan will lose its tax-favored status.
Your retirement plan administrator should be having a dialog with you about this already, says Bonny Lightner, J.D., Manager of Technical and Legal Compliance at Tegrit Group.
“We try to get to people right away, especially if they haven’t done anything with their plan in the past six years,” she says. “If plan sponsors know in advance, they can budget for it and have time to be able to really look at it.”
Smart Business spoke with Lightner about what employers need to know regarding restatements, and how to take full advantage of this opportunity.
Which plans must undergo restatement?
About 80 percent of all retirement plans rely on pre-approval letters from the IRS, where the IRS gives its ‘blessing’ to a plan document format with certain limited elections for plan provisions. While all plan documents are extremely complex, a pre-approved document can make a plan less expensive to create and operate than an individually designed document.
All pre-approved defined contribution plans must undergo the restatement process during the upcoming two-year period.
What does the restatement process involve?
This process involves the document drafter — such as a third-party administrator — reviewing, rewriting and updating the plan and summary plan descriptions (SPD), and then assembling and delivering the plan, SPD and related policies to the plan sponsor for approval and signature. Related policies may include separate loan policies, qualified domestic relations orders policies — which are used as part of divorce settlements to divide up a participant’s 401(k) benefits — or withdrawal policies.
How else can business owners benefit from going through a restatement, aside from retaining their IRS tax-favored status?
The plan restatement process is an opportune time for a comprehensive plan review. Don’t just update and restate the document, have your document drafter take an in-depth look at the plan in order to see if it is really meeting your needs. Use this time to:
- Confirm the document provisions match the actions of how the plan is being operated.
- Identify whether changes are necessary or wanted going forward, such as wanting to add a Roth feature.
- Enhance the plan design to be more in line with your objectives, such as tax and retirement objectives, based on workforce demographics. For example, if a person is 50 years or older, he or she can defer catch-up contributions on top of his or her regular deferral amounts. If an employer sees its workforce is aging, the company might want to add that.
- Maximize the value of the plan by making sure that it still meets the needs of your company and its employees.
This type of consulting may or may not be part of the restatement fee, but either way it’s something to strongly consider. Otherwise, six months down the road, the plan sponsor might say, ‘I really don’t like X provision.’ The change will then require an amendment — and amendments have a fee.
Even if you love your plan the way it is and want to keep all plan provisions the same, you still must have your plan updated during the restatement period from May 2014 to April 2016. The fee to restate the plan for IRS compliance may be paid from the plan’s assets if the plan document permits.
Remember, failure to restate a pre-approved plan could result in loss of the plan’s tax-favored status with the IRS. This in turn could result in loss of deductibility of employer contributions to the plan, immediate recognition of income to plan participants on vested account balances and loss of tax-exempt status to the plan’s trust. Missing the restatement deadline is a serious matter. ●
Bonny Lightner, J.D., is manager of Technical and Legal Compliance at Tegrit Group. Reach her at (330) 983-0560 or firstname.lastname@example.org.
Insights Retirement Planning Services is brought to you by Tegrit Group
Many companies talk about the need for employee engagement, but few are taking the necessary steps to engage their workforce.
“While it’s a commonly used term, it’s not common practice. For example, 75 percent of leaders have no engagement strategy, yet 90 percent consider engagement to be a critical component of a company’s success,” says Beth Thomas, executive vice president and managing director of Consulting Services at Sequent.
“Right now, 70 percent of employees are disengaged at work, and it’s costing companies over $300 billion in lost productivity, turnover and diminished business success. Based on statistics, you would think that companies would view this as a critical initiative,” says Thomas.
Smart Business spoke with Thomas, author of “Powered by Happy: How to Get and Stay Happy at Work,” about how to boost employee engagement.
Why have companies been slow to address engagement?
There are several reasons. Some companies believe customer satisfaction is engagement — it’s not. You can have happy, disengaged employees who are genetically happy or pleased with the company, but are not engaged in their work or in the right role.
Surveys will address items like wages, benefits and the company café, but that doesn’t get into the emotional connection to work and employees’ desire to use discretionary effort to be the best performers they can be.
Sometimes companies conduct surveys and do nothing with the results, which creates even more disengagement.
What is the process of engaging employees?
We utilize a nine-step process:
- Create a vision. What do you want to achieve? What’s the value proposition?
- Determine the metrics of success. Use benchmarks and create performance goals needed to improve engagement, which will also build customer loyalty and your bottom line.
- Align expectations. Once you have a vision and decided how to measure success, develop an employee engagement survey designed to get the information needed to improve engagement.
- Execute the survey. We conduct an educational webinar first, so employees know why the survey is being done and their role in making it a success.
- Create an action plan based on the survey results. The plan should prioritize tasks and assign ownership and timing to each milestone. Communicate the survey results and how they are being used.
- Establish a team of influencers. This group will organize activities — based on survey results — to help achieve and sustain a higher level of engagement.
- Develop leaders and frontline managers. They need to understand how to impact the company culture and employees every day. Many managers think they are prepared to coach and lead engagement, but they really aren’t.
- Evaluate if course correction is needed. Training or action plan activities may need to be modified to ensure you’re set up for a successful journey toward engagement, rather than a pit stop.
- Ensure sustainability. Creating that initial engagement is easier than sustaining or improving engagement. We have an engagement application that provides managers with a support network of tips, tricks and hints on how to continually drive engagement. You have to create engagement as a habit; it occurs naturally because of the way you manage people.
What mistakes do companies make when implementing engagement strategies?
One is rewarding performance without behaviors. Someone might be a great producer, but have a bad attitude. Knowing that they have a bad attitude and rewarding them based on sheer numbers or performance is a mistake.
The management and leadership team also has to believe and drive the engagement process; it’s not enough just to say it’s an important initiative.
The benefits of engagement are so great that more companies should make it an emphasis. Engaged employees generate 40 percent more revenue than disengaged ones and are 87 percent less likely to leave. So being able to recruit, retain and benefit from engaged employees will impact your bottom line and the success of your company. ●
Insights HR Outsourcing is brought to you by Sequent
President and CEO
Raising the bar
The Crane Group continues to find ways to be a good neighbor
Tanny Crane puts her heart and soul into her business, and she does the same with her efforts to make Columbus and the surrounding region a better place to live and work. Her recent pledge of
$1 million to Mayor Michael Coleman’s South Side Initiative is just another instance of that dedication.
The revitalization and redevelopment of the Southern Gateway neighborhood involved the renovation of the closed Reeb Avenue Elementary School into a neighborhood center, which will offer social programming and house the South Side Learning & Development Center.
It’s a continuation of the philanthropy that has been demonstrated by the Crane Group since Robert S. Crane Sr. founded the company in 1947.
The company, now led by Tanny, who serves as president and CEO, continues to be involved in a wide array of programs across the region. This includes local arts and education, health and human services, civic organizations, and neighborhood and community groups.
Crane Group has always believed that businesses have a responsibility to support nonprofit efforts that enhance the quality of life in their communities. The company has been the top per capita giver for the United Way in Central Ohio for the past 10 years.
One of the unique programs at Crane Group is called Crane on Board. More than 50 company leaders serve and lend their time and talents to more than 75 distinct nonprofit organizations.
The company’s ability to make a difference energizes everyone, and Tanny helps that flame burn bright by staying so involved. ●
Diamond Hill Investments
Diamond Hill Investments’ associates typify involvement across the community
The associates at Diamond Hill Investments, under the leadership of CEO Ric Dillon, are not only generous with their time volunteering at organizations such as LifeCare Alliance, Faith Mission and Habitat for Humanity, they work to review the Diamond Hill Charitable Foundation’s charter.
The Diamond Hill Charitable Foundation is a charitable gift match program with a maximum match for employee donations being $2,000 per calendar year with a matching policy minimum donation of $100.
A group of four associates each serve a two-year term to review the charter and ways to participate.
The foundation’s objective is to support charitable organizations that are important to Diamond Hill’s clients, shareholders and associates. Donations and matching through the foundation are vetted by The Columbus Foundation.
In addition to the organizations above, Diamond Hill has relationships with: Franklin County Children Services, donations; American Heart Association, 2013 Heart Walk attendees and monetary contributions; All For the Troops, donations sent to the troops; Rock for Hunger, corporate sponsorship with employees attending event; Children’s Hunger Alliance, monetary contributions; Neighborhood Services Inc., donations sent to the organization for the back-to-school program; Night of Chocolate, corporate sponsorship with employees attending event; American Red Cross, employee blood drive; Boys & Girls Club, corporate sponsorship with employees attending event; City Life, employee volunteers; and I Know I Can, employee volunteers. ●
Jordan A. Miller Jr.
president and CEO
Fifth Third Bank, Central Ohio
Helping where it’s needed
Fifth Third Bank supports financial literacy, hunger programs in the community
With one of its goals aimed at increasing the financial literacy of people living in the community it serves, Fifth Third Bank, Central Ohio, under President and CEO Jordan A. Miller Jr., has developed financial empowerment programs that provide access to information and tools that contribute to good financial decisions.
The Young Bankers Club teaches fifth grade students the basics about money, including what it is and how people get it, the importance of saving, and how education and career choices affect their future.
More than 7,000 students have graduated from the program since its inception. The program, which was re-launched in 2012, features an updated, revised and expanded curriculum, incorporating more real-world activities and an interactive video game challenge for the students.
The commitment to financial literacy doesn’t stop there. Dave Ramsey’s Foundations in Personal Finance allows high school teachers to teach students how important it is to plan their financial future. Through a DVD lecture course, accompanying workbooks and online content, students study the value of saving, spending and giving to guide them down the path of financial peace.
The total year-to-date volunteer hours by Fifth Third Bank employees reached 1,880 hours for the Central Ohio region. That includes 981 employee volunteer hours with the Young Bankers Club; 426 employee volunteer hours with the Financial Empowerment Mobile; and 473 employee volunteer hours associated with traditional volunteer work for Community Reinvestment Act qualified organizations. ●
President and COO
Franklin International believes in supporting employee contributions
Franklin International’s commitment to well-being starts at the core. While some might expect the corporate culture of a manufacturing business to center on producing good products, the culture at Franklin is “to appropriately enhance the economic, physical, relational, emotional and spiritual health of ourselves, our customers, our suppliers and our community.”
Franklin, led by Evan Williams, president and COO, is proud to be among the 16 percent of midsized businesses that permit employees to volunteer on paid company time.
Franklin is also among the 25 percent of midsized companies that match employee charitable donations, demonstrating its belief in giving back to the community and supporting employees in their charitable acts.
In addition, Franklin conducts an annual giving campaign for United Way and three other charitable organizations. During this campaign, the company will match between $1 and $1.50 in contributions made by employees.
Charitable activities in which Franklin has participated include Operation Feed, United Way, Urban Concern, National Night Out, Children’s Hospital, PDHC, Salvation Army and Youth for Christ.
The company also demonstrates a concern for its employees and their families’ financial well-being beyond just a paycheck. Franklin participated in a Financial Fitness program, which at a cost to Franklin, allowed employees to complete online modules relating to financial efficiency. And, starting in 2008 as the only company-paid matching program in Ohio, Franklin provided a payroll deduction option for 529 plans. ●
Amy Schultz Clubbs
Dr. Martin Portillo
Chief medical officer
Molina Healthcare of Ohio Inc.
Supporting employees, supporting communities
Molina Healthcare of Ohio gives workers time to give back
Since Molina Healthcare of Ohio Inc. was introduced to After-School All-Stars Ohio, a program focused on helping at-risk youth succeed in school and life, a partnership has grown that benefits the children and families in 10 Ohio schools. The company has been a part of ASAS Ohio through volunteerism, funding, board membership, resources and educational support, demonstrating its commitment to low-income families and youth that goes beyond its core services.
Molina staff members frequently attend community events to inform families and children of their health care options while promoting a healthy lifestyle. The company also supports programming through a grant that has allowed ASAS Ohio to extend cooking classes to its 1,000 after-school participants in Columbus, Dayton and Toledo.
Outside of ASAS Ohio, Molina collaborates with public schools and community-based organizations to deliver health education opportunities and expand health, wellness and education programs offered in schools, community centers and other gathering spaces.
To support their employees’ interests in giving back to the community, Molina established a volunteer time-off program, which gives employees time off annually to volunteer with charitable organizations. In 2012, Molina employees gave more than 2,100 volunteer hours to the community and $200,000 in grants to nonprofit organizations.
Molina also honors organizations and individuals doing exceptional community service work with its annual Community Champions Awards. Recently, Molina honored five people with a $1,000 grant to donate to the charity of their choice and a tree was planted in his or her honor. ●
David P. Blom
President and CEO
OhioHealth supports its community at every turn
As a leading not-for-profit healthcare provider, OhioHealth’s mission is “to improve the health of those we serve.” That philosophy is a big part of the company’s philanthropic efforts, which are focused on investing in the community and making a difference in the lives of those facing tough challenges.
In fiscal year 2013, more than 85 organizations benefitted from the support of OhioHealth under the leadership of David P. Blom, the company’s president and CEO. One thing that makes OhioHealth such a strong supporter of the community is Team OhioHealth. The group is comprised of company associates who volunteer their time with partner organizations at OhioHealth-sponsored events. More than 4,000 individuals participated in 33 Team OhioHealth activities throughout the past fiscal year, an increase over the previous year.
Project Mentor is another component of OhioHealth’s commitment to the Columbus region. Coordinated through Big Brothers Big Sisters of Central Ohio, the program provides mentors from OhioHealth and other local companies to students in the Columbus City Schools. Volunteers also donate their time for other programs that benefit students in local schools.
Overall, 1,256 hours of volunteer time were logged by OhioHealth associates in support of educational initiatives in fiscal year 2013.
The company’s community relations department proactively supports the mission of OhioHealth through partnerships that align with the health needs of the community. The department also works hard to increase visibility for OhioHealth leadership, programs and services, providing opportunities for meaningful associate engagement. ●
A principled approach
For Sequent, giving support to the community is only natural
Contributing to the community where one lives, no matter the size of the contribution, is simply the right thing to do. Following this motto, Sequent chooses projects and donations that primarily focus on community service and philanthropy in the areas of children’s needs, cancer research and the local arts community. It also makes in-kind donations, such as staff hours dedicated to offering pro-bono consultation services and the use of the company’s corporate meeting and training rooms.
Among the organizations that have benefitted from Sequent’s donations are Children’s Hunger Alliance, Pelotonia, The Columbus Jazz Orchestra, The Gathering, Kairos, The Columbus International Program, TiE Ohio, The Furniture Bank and Select Association Management.
The company has first-hand experience with cancer, having lost two associates in four years to the disease, and having several employees who are cancer survivors. In five years, Sequent’s bike-riding volunteers have raised some $61,000 for Pelotonia. Sequent employees also contribute $2,500 to Pelotonia annually.
Sequent CFO Jim Caldwell and other employee volunteers contribute many hours annually at Kairos, a prison ministry. Employees bake some 120 dozen cookies for each Kairos weekend. Caldwell says that the inmates this program serves are very moved by the fact that total strangers bake dozens of cookies for them.
Sequent also backs the Jazz Arts Group by supporting the Columbus Jazz Orchestra. CEO William Hutter, a former member of its board, offered the group his expertise in human resources through consultations. Sequent also sponsors the Inside Track series of contemporary jazz concerts at the Lincoln Theatre. ●
E.W. Ingram III
Chairman and CEO
How White Castle restaurants help those who need it most
LifeCare Alliance and White Castle have forged a strong partnership over the years, which enriches the lives of many in the Central Ohio region. It began in 1988 when White Castle offered its support to the Columbus Cancer Clinic, an agency of LifeCare Alliance.
The Ingram family, who has managed White Castle since its founding in 1921, supported the first capital campaign for the nonprofit health organization, which seeks to identify and deliver health and nutrition services to meet the changing needs of its communities.
From that moment on, White Castle has remained a dedicated partner for the clients served each day by the staff and volunteers of LifeCare.
Today, E.W. Ingram III, the company’s chairman and CEO, and Lisa Ingram, his daughter, who serves as president, lead White Castle. Philanthropy continues to be a big part of what they do in leading the business recognized to be the first fast-food hamburger chain.
The company gets involved in the delivery of pantry items to the homebound and HIV/AIDS clients, transportation to dining centers and leadership to develop strategic planning initiatives. White Castle is also active with Autism Speaks, Wigs 4 Kids, Adopt-A-Child and the Mid-Ohio Foodbank.
But it is the work with LifeCare Alliance that has made a particularly strong impact. Through funding from the Ingram-White Castle Foundation, those in need under the age of 60, a group that is often underserved when it comes to home-based services, can receive meals through Meals-on-Wheels. ●
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 email@example.com.
Insights Technology is brought to you by Blue Technologies
Here comes Santa Claus, right down Santa Claus Lane. He’s got a bag that’s filled with toys, but does he have coverage for those he employs?
The North Pole is very dynamic — Santa Claus has a personal home, reindeer, a toy factory and a sleigh for business use. Like many business owners, he needs to look at a variety of insurance coverages for all aspects of his life.
Because of the animal exposure from the reindeer, the Clauses need to put their residence on a farm policy, or a home policy with an endorsement that extends to the barn and animals.
A business policy would insure the toy factory, while the sleigh would be added to the business auto policy. Any additional drivers also need to be taken into account. If Mrs. Claus or any elves want to drive the sleigh, they would need their driving records checked first, and, if acceptable, added to the policy.
Santa’s agent may strongly recommend umbrella insurance, which are additional liability limits that extend over the home or business limits. In the unlikely event that Santa is sued, the lawsuit could extend from Santa to jeopardize the toy factory and any related businesses. An umbrella provides an extra layer of liability protection in the event of a loss or lawsuit.
Smart Business spoke with Ryan Clugston, a client advisor at SeibertKeck, about how Santa Claus can stay safe this holiday season with the proper insurance coverage.
How should the toy factory be covered?
Santa’s toy factory is a unique risk. Because 100 percent of its inventory is scheduled for delivery on one night, he needs peak season insurance. Peak season insurance automatically provides you with a specified percentage increase in insurance coverage during peak inventory periods when you insure your inventory for its average monthly value. We all know that although the elves have 12 months to make the toys, they really pick up the pace in November and December, significantly increasing the number of toys stored at the factory. Having peak season insurance allows Santa to increase the coverage for the toys for a couple of months while inventory is at its highest.
Santa also should talk to his agent to make sure his business policy has equipment breakdown coverage, in case any of the toy-making machines were to break, and business interruption coverage, which would help Santa if there was a covered loss and he was unable to work in the factory.
What are some additional coverages Santa may need?
An important coverage for Santa as he delivers all the gifts would be cargo coverage. Cargo coverage provides insurance for the goods, in this case gifts as they are in transit on the sleigh, until delivery. For Santa this could include any gifts that fall from the sleigh, are delivered to the wrong child or damaged en route.
Since Santa and his elves make all the toys at the North Pole, another coverage Santa should get is products liability. Products liability coverage is necessary because the manufacturer or maker of the products is held responsible for the injuries those products cause. If a toy were faulty or incorrectly made by an elf, Santa’s factory would be liable if any injury occurred to a child.
Any other tips for Santa — or other insurees — as the year winds down?
Take the time to:
- Put multiple insurance policies with the same carrier. This can be beneficial in the event of a claim and save on premiums.
- Review your personal and business insurance with your agent annually.
- Contact your agent two to three months before your busy season. They will review your risk, make sure coverage is in place and allow you to focus on your business when the rush hits.
It’s critical to have a trusted insurance agent who can advise you how to best bundle your insurance for convenience and premium savings, without sacrificing necessary coverage, to have a happy holiday season and successful year following. ●
Ryan Clugston is a client advisor at SeibertKeck, Best Hoovler McTeague. Reach him at (614) 246-7475 or firstname.lastname@example.org.
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To a business owner looking for market penetration, establishing a franchise provides a number of benefits.
“We’ve taken clients operating from a few local locations to expanding into many states through franchising because they had aggressive expansion plans and were a great candidate to franchise,” says Kacie Davis, an associate with Kegler, Brown, Hill + Ritter.
However, launching a franchise system isn’t an easy get-rich-quick scheme.
“It’s really a cost/benefit analysis for a business as to whether they’re ready to expand and can support an on-going franchise system,” says Davis.
Smart Business spoke with Davis about the process of franchising a business.
What is a franchise?
Essentially it’s a business arrangement where one party grants rights to offer goods or services under its company or brand name. The seller provides significant control or assistance over the business, and the purchaser makes a minimum payment to enter into the arrangement.
What are the benefits of franchising?
Franchising allows you to build brand recognition and increase market share with a limited risk of financial exposure. Franchisors can shift the burden of operations and obtaining necessary capital to open new locations onto individual franchisees. Additionally, the franchise model provides new revenue streams to the franchisor by way of franchise fees and royalties. Franchisees also benefit because they start with a proven business model and leverage a successful brand name to tap into an immediate customer base.
How do you determine if a business is suitable for a franchise?
While it’s somewhat intangible, there are certain hallmarks of successful franchises.
- The franchised business has one or more established and profitable locations.
- The business can be replicated into a turnkey operation.
- The concept is transferable to other markets or locations.
- The business has been lucrative and is attractive in terms of ROI.
Any type or size of business can be franchised, but a key component is its capability of supporting long-term franchisee relationships — a franchise system will only be successful if its franchisees are successful.
How is a franchise established?
In order to sell franchises, you must comply with Federal Trade Commission (FTC) regulations, which involves the preparation of a Franchise Disclosure Document (FDD). The FDD provides the franchisee with information on the business, the services the franchisor will provide and other information about the franchisor, including financial statements. Several states require registration of the FDD before franchises may be sold within that state. This means working with the state’s attorney general or securities division.
In addition to the FDD, you’ll need a franchise agreement and other contracts that detail the franchisee’s compliance requirements, such as how they use your brand name and trademarks, and how you can enforce your rights.
In order to support your franchisees, you also need a very specific operations manual for the business and a training method to teach new franchisees how to operate the business and implement the operations manual. This will ensure uniformity and protect the franchised brand, ensuring consistency and increasing brand value.
What are some common problem areas?
One problem a business owner can run into when expanding is starting to sell a franchise without realizing it. People enter into licensing agreements thinking they are not selling franchises and can avoid FTC regulations and requirements. However, what can trip an owner up, and turn the license arrangement into a franchise arrangement, is providing the right to use your brand name in connection with providing assistance or control over that licensee’s business operations.
Another risk is putting capital into franchising a business that wasn’t market-tested. Without this, you don’t know that anyone would buy into the concept and replicate the success you’ve had. ●
Kacie Davis is an associate at Kegler Brown Hill + Ritter. Reach her at (614) 462-5402 or email@example.com.
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Top earners may be surprised at all the additional taxes they’re paying when they file in April.
Christopher Axene, CPA, a principal in Tax Services at Rea & Associates, says many people could have exactly the same income as they had the previous year, but experience a 6 percent increase in their tax rate nonetheless.
“If they’re not doing tax planning or getting some idea where they stand, it might be a shock for some people,” he says.
Smart Business spoke to Axene about tax changes for 2013 that could sneak up on filers who haven’t accounted for the additional liability.
What are the key tax changes top earners can expect for 2013?
The increase in tax rates is the most significant change, going to a new top rate of 39.6 percent compared to the 35 percent rate in the past for couples with an annual income of more than $450,000.
There’s also a 3.8 percent surtax on net investment income. That applies to individuals with $200,000 or more in adjusted gross income (AGI) and couples with $250,000 or more.
Rates are increasing for capital gains and dividends, going from 15 to 20 percent. The AGI threshold for the 20 percent rate is $400,000 for individuals and $450,000 for couples.
Couples with W-2 income over $250,000 will also see an additional 0.9 percent Medicare tax this year.
Because of all of these changes, it’s important to start doing tax planning now.
Are there things that can be done to lessen the tax burden?
It’s not so much about getting away from these taxes; it’s a matter of being aware of their impact. It doesn’t make sense to take a pay cut just to pay less tax.
Most people will be withholding enough for the 39.6 percent tax rate, so that’s not likely to cause surprises. But the 3.8 percent surtax on investment income isn’t being withheld, and there’s no withholding tax associated with dividends. People might be making estimated payments, but payments based on prior year tax rates won’t be sufficient come April.
While there aren’t any major loopholes or tax havens, making the maximum contributions to a retirement plan continues to be a powerful tax deferral tool both for employees as well as the self-employed. Another thing to consider is the IRA distribution available to people who are over 70½ years old. As long as they are charitably inclined, they can take a distribution up to $100,000 from their IRAs and give that directly to a qualified charity. Those dollars won’t be included as taxable income, but they don’t get a tax deduction for the contribution either. For those who don’t need the money, it can be a useful tool to satisfy the yearly minimum distribution requirement and fulfill charitable goals.
Other than that, you could save on taxes by manipulating when income is earned or when deductions are paid. If you own a business and have control over your income, it might make sense to spread income over multiple years or bunch deductions into one year in order to maximize lower tax rates.
Should people who expect to owe more make additional tax payments now?
Run projections, get estimates and figure out what will be your tax liability. If you need to make up a difference, perhaps withhold more out of a bonus check in December or make an estimated payment in January to lessen the hit in April.
It’s more important this year than any recent year to run projections, particularly for high-income earners. About 90 percent of taxpayers probably don’t need to worry about this, but that top 10 percent could see tax rates going up 6 to 8 percent because of the new add-ons and new top tax rate. Income tax surprises usually aren’t a good thing. Start planning now for what will be coming in April 2014. ●
Christopher Axene, CPA, is a Principal in Tax Services at Rea & Associates Reach him at (614) 889-8725 or firstname.lastname@example.org.
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SBN Interactive proudly presents the Midwest Social Media Summit inaugural class of SoMe Impact Award winners! These awards recognize marketing executives who took a leap of faith into the groundbreaking world of social media and in doing so, drove substantial value for their companies.
Nominations were received from the Cleveland, Akron, Columbus and Pittsburgh regions across three categories — emerging, midsized and large industries. Throughout the nomination period, the breadth and number of entrants that were submitted blew us away. The strategies and innovations represented by these companies are world class, and we want to thank everyone who took the time to fill out surveys or contact us directly with nominations. Sorting through the fierce competition was not easy, but the 2013 SoMe Impact Award honorees are all deserving of the recognition.
While social media was once seen as a passing fad, it is clear that it is no longer enough to have Facebook or Twitter accounts — companies must actively engage their customers. The inaugural group of winners represented marketing executives who effectively used social media to make a meaningful difference at his or her organization. Ranging from companies who promote the social media initiatives of national organizations to those who have had successful special promotions that have garnered thousands of followers and millions of hits on YouTube, the first class of honorees demonstrate the milestones they have achieved in what is becoming the future of marketing. We are excited to announce the winners of the 2013 SoMe Impact Awards! ●
Here are the winners in the large category:
president and COO
EYE Lighting International
EYE Lighting International spent two decades pioneering lamp and luminaire technology and introducing innovative HID and LED lighting products to a variety of customers in both the business world and the home.
In early 2011, it was clear that a new dynamic was in play that EYE Lighting needed to address. Social media was growing every day and the company needed a strategy to allow it to reach beyond existing distribution channels and industry communications media.
Under the leadership of Tom Salpietra, the company’s president and COO, EYE Lighting set out to establish a comprehensive social media policy. It lays out clear expectations for how administrators and employees interact with the company’s social media platforms.
The company’s Facebook page grew slowly at first, but quickly gained steam when EYE Lighting launched a targeted ad campaign and the page now has more than 10,000 likes. Work was also done in the way of Google AdWords and Analytics and new channels were created to make product announcements and generate interest in well-established products that still offer value to customers.
EYE Lighting also took a look at its website and hired a Northeast Ohio web development company to create a better master product database. The company also wanted a site that was mobile friendly for both smartphones and tablets and studied its inbound marketing techniques to adopt a higher level of calls-to-action by visitors to the site.
As new ideas continue to sprout, EYE Lighting will continue to find new and better ways to take advantage of all the opportunity social media provides to interact with customers. ●
director of marketing
Social media is the hot topic these days and everybody is looking for a piece of the action. As the platforms change and evolve, the rules are constantly changing and companies are tasked with developing strategies to get the most out of each tool.
One thing that won’t change no matter the forum or venue is the importance of honesty and integrity. These two traits dominate the 10 points of the Social Media Policy Guidelines at Jenne Inc.
The guidelines are a key element to the social media strategy developed by Susan Elder, Jenne’s director of marketing who came to the company in January 2012. Elder brought 25 years of experience in marketing and corporate communications to the table, having most recently served as chief marketing officer with the American Red Cross of Greater Cleveland.
When Elder came to Jenne, she discovered the company did not have a social media program in place. It was an opportunity to build a program from the ground up.
She began on LinkedIn, developing a group that has grown to include more than 1,000 Jenne customers who are resellers of technology products, as well as vendors who are the manufacturers of these products.
The group also includes content about webinars, training classes and new products and programs that Jenne markets and sells on behalf of the 170 manufacturers the company distributes.
Facebook and Twitter have also been worked into the mix, and Elder has enlisted a core group of subject matter experts in the company to regularly post and contribute to the forums. ●
emerging media and video specialist
vice president of customer demand and experience
SafeAuto Insurance Co.
Ayanna Lewis is a perfect example of the power of social media. The wife and mother of two from Hamilton, Ohio, entered SafeAuto Insurance Co.’s 2013 “Do The Jingle Contest” and won with her minute-long music video. The contest generated over 3.3 million votes, with more than 392,000 of those votes going to Lewis.
While it provides an opportunity for anyone interested to get creative and develop a clever new ad campaign for SafeAuto, the contest itself generates a lot of interest and awareness in the company as people visit YouTube to see what past winners have done or just re-watch their favorite commercials.
The audience that has been developed through the auto insurer’s social media campaign is substantial. SafeAuto has more than 50,000 Facebook and Twitter followers combined and more than 1.2 million views on its YouTube channel.
The results reinforce the power of social media for people in the company as well as customers. It allows associates to see the messaging and brand consistency on social channels and stay up to date and informed on the initiatives taking place at SafeAuto.
Under the leadership of Jason Parks, the company’s emerging media/video specialist and Charlie Kordes, vice president of customer demand and experience, the plan going forward is to continue to invest in social media.
The company will continue searching for more ways to both provide entertaining content and inform customers and followers about all of the things that are happening at SafeAuto. ●
marketing communications strategist
Sara McKinniss found evidence that ODW Logistics wanted to build a presence in the social media realm. When she arrived at the company, however, nothing had come to fruition. It was her job to change that.
She was the first in-house marketing hire in the company’s history and she was given an opportunity to strategically plan and build out a social media program. McKinniss had grown quite fond of the power of social media in recent years and relished the chance to develop an effective platform at ODW.
One of the principles that McKinniss wanted to keep in mind was the idea that strategy typically doesn’t change once it’s conceptualized. It’s the tools that are used that create the biggest headaches for users. When Twitter, Facebook and LinkedIn make tweaks to how things are done, it forces users to adapt to ensure they continue to get the greatest value from the tool.
McKinniss helped ODW launch an integrated approach that consists of a presence on Twitter, YouTube, Wordpress and LinkedIn. The goal is to not only inform people, but engage them and share the same content across multiple channels to ensure the best reach.
The result is an increased presence on the Web and in the social media world, allowing the ability to interact with the communities in which the company lives and does business. It has helped drive traffic to the company’s website, helped bolster SEO and PPC initiatives, and assisted in securing sales leads. ●
interactive media manager, marketing
Tony Zayas has a passion for social media, but he understands that it’s still an unknown for a lot of people. Sure, most people know how to maintain a Facebook page or Twitter account for their personal lives. But what goes into having an active and successful social media presence in the business world?
Zayas is the interactive media manager for Proforma, working with more than 750 franchise locations to help franchise owners boost their social media presence. Zayas understands that these leaders need to be out prospecting and selling to be successful. His goal is to design steps that integrate the process of growing the business with growing Twitter, Facebook, LinkedIn and other popular networking sites.
He established the Intelligent Marketing Mastermind Group that each month offers a webinar for owners to join and learn about how they can utilize social media and other online marketing tools to their advantage. He also maintains an online community for owners to ask questions and provide feedback and success stories. In addition, Zayas offers news and tutorials to help owners improve their own social media efforts.
The strong commitment demonstrated by Zayas has paid off in the form of larger followings on Facebook, Twitter and LinkedIn, as well as an increasing number of success stories that have ties to social media. Zayas has a passion for his own success, but he gets even more excited at seeing the people he works with achieve victories and grow their business. ●