Thursday, February 26, 2009

HR Compliance for Small Business

No matter the size of the business, it is important for owners to be aware of the laws that govern hiring, employing and terminating workers. It only takes one disgruntled employee to bring suit against an employer for a practice which may not match the standards for compliance in today's work world.

There is a website (which we've added to our favorite links to the right of this blog) we would like to pass on to small business owners, and anyone, for that matter, interested in finding out more about things like:

  • developing a policy and procedures manual
  • sexual harassment and discrimination
  • payroll management
  • privacy policy guidelines
  • developing job descriptions and interview questions
  • etc.

You can also sign up to receive free and informative e-mail newsletters, such as "Employment Law Today." There is access to free reports, free HR forms, the HR Soapbox Blog and many HR links.

The website,, belongs to The Alexander Hamilton Institute. In the AHI Store, there are many good products we have used in our SBDC, as well as recommended to others. Our favorite pick is The Complete Policy Handbook, which we use in our offices to assist clients in constructing HR manuals and guidelines. Because of its very fair price ($97.50) most smaller companies can afford the CD--a small price to pay to make sure their operations are litigation-proof.

Check out all of their other products and tools, all very reasonable, and the training sessions offered.

Wednesday, February 25, 2009

More "Tough Times" Suggestions

Keith Yurgosky, Internet Business Manager for the Scranton SBDC, found a great blog post the other day on Taking Control in Tough Times: 10 Things You Can Do Now written by Ravit Lichtenberg.

After reading through many of the blog entries on Ravit's blog, we find we like him, so we've linked him in our favorite blog spots over to the right of your screen and we've become a follower.

To access his February 23, 2009 blog post (noted above), click on this link:

We decided to do a search for more good "tips and recommendation" sites for small business owners experiencing difficulties in today's economy. Below are just a few sites you may want to visit.

For a great USA Today article, click here. "Tough Times Means You'll Face Hard Choices" by Steve Strauss.

Here's another Ezine article: Top 10 Small Business Tips During A Recession.

Finally, on Smart Money's Small Biz site, there's another tip-oriented article entitled: Quick Tips - How to Recession Proof Your Business.

Read them all and look for the common themes.

If you are a small business owner in Pennsylvania, remember the Pennsylvania Small Business Development Center network is also holding a series of workshops for small business owners entitled "Gaining Ground in an Economic Slowdown." These workshops discuss the current state of the economy and assist attendees to understand how to do a cost and cash flow analysis for their business in order to track the impact of the slowdown on their particular situation. Tips on reducing costs and increasing sales are also covered. For more information on where to find a workshop near you, visit

Monday, February 23, 2009

The "R" Word and Small Business: It's a Jungle Out There!

Turn on your television to watch the news, read your morning paper, everywhere you look the word "recession" rears its ugly head. It's amazing to me that a word that was mostly avoided up to a year ago and was "something we were not in" according to the past administration, suddenly became the vocabulary of the day.

My theory is, if the government really would like to know when a recession will occur, interview some SBDC consultants. Based on what happened back in the early 90's and what has happened recently, there are certain predictors we often see in terms of the small business habitat.

Not unlike Marlin Perkins and Wild Kingdom, we can do a little safari run, and look at some of the predictors we see that indicate we may be coming into a "dry season."

(1) More existing businesses come into the SBDC experiencing cash flow and payables difficulties.
(2) The lending market tightens up.
(3) Existing businesses request assistance in finding ways to increase sales, which suddenly drop (this is especially true of our retail sector clients).
(4) Existing and start-up businesses look to cheaper marketing avenues or "no cost" marketing, or may, unfortunately, drop all investments in marketing and advertising to cut corners.
(5) Existing businesses request assistance in stepping up their collection efforts (from customers/vendors who are paying them more slowly, or not at all).
(6) More easy-to-start, minimal-cash-required ideas are presented by preventure clients in terms of start ups.
(7) Existing businesses operate leaner. Inventory isn't warehoused or stocked as heavily, worker-bees are kept to those that are needed and there is no job overlap.

Personally, I can remember back in the early 90's trying to caution a start-up wanna-be retailer about the perils of starting her woman's clothing business. I wanted to present all of the market factors at the time which could affect her sales, and encouraged her to be as conservative as possible in her income projections as she approached the bank for financing. That's when I really began to learn the importance of small business starts during a recessionary period. This particular small business start opened her doors at the worst time, only to surpass her sales projections by nearly 20%. Why?

Well, she took advantage of the following characteristics of a recession:
(a) Suppliers to businesses will also be hurting, so it's the best time to negotiate good supplier contracts at less cost.
(b) Competing on service, quality or something other than price keeps the cash flow where it needs to be. By offering something more unique in the way of service (in my example's case, it was child care while you shopped, and dressing rooms that had all the ammenities), customers don't mind that there aren't necessarily price cuts.
(c) When unemployment rises, people start businesses, so the need for a competitive advantage is even more important to consider before entering the market, because more people will be entering it.

Tips For Small Businesses in the Heat of the Recession

  • In the jungle, when we are down to the last 100 of a certain species, it normally goes on an extinction list. Then alot of effort is put into making sure it survives. In a recession, small businesses need to cultivate their customers in this same manner. Don't let them become extinct. Keep them by doing extra things to make their experience with you better.

  • Remember, there will be more animals at the watering hole in a dry season. Get there early to drink. Capitalize on the areas of the watering hole that are not populated. Use targeted marketing or niche marketing, designing your goods and/or services to meet the needs of a very specific population. Baby boomers come to mind. I'm one of them. There are lots of us.

  • The canopy of the jungle landscape can be a good protector against the elements. Be aware of the federal, state and local government policies and programs coming forward in the form of stimulus packages. Your local governments, for instance, could be receiving monies to perform services which your business can assist with. Understand how you may benefit from some of these programs.

  • Realize that the jungle has preditors. Their hunting increases during difficult jungle times. Don't be a scapegoat. If it looks like a duck and smells like a duck, it's a duck. Don't fall for at-home-money schemes, or quick loans with no fees, or free money scams (see this blog for more info on "free" money). There is no free lunch. Even in the jungle, you have to work for what you eat.

Finally, any jungle analogy would be unfit to print without mentioning jungle law: the strongest survive. Now more than ever, small business becomes the strongest sector of the market. Recession is, after all, just an "R" word.

Wednesday, February 18, 2009

Small Business IRS Information

The Small Business IRS Resource Guide is now only available online and no longer in CD format. We thought we'd post the link here for your benefit. Useful tools in the Resource Guide include a checklist for going into business, as well as a link to the Small Business Administration's Frequently Asked Questions.

There is also a very good section on Hiring Employees.

Another good resource on the IRS site is Publication 583: Starting a Business and Keeping Records. This is also available online and as a PDF file.

Stay tuned to the Blog for Tax Information updates as we receive them relative to Small Business issues!

Wednesday, February 11, 2009

Idle Time - Commercial Bus and Truck Drivers Be Aware!

If you own a diesel-powered motor vehicle or a property that allows owners of diesel-powered vehicles to park, you need to know about the Diesel Powered Motor Vehicle Idling Act 124 (SB 295). This Act restricts the idling of diesel-powered motor vehicles.

Commercial and school bus drivers, as well as truck drivers, are affected. Specifically, the Act prohibits: "diesel-powered motor vehicle with a gross weight of 10,001 pounds or more engaged in commerce” from causing the engine of the vehicles to idle for more than five minutes in any continuous 60-minute period There are certain exemptions, which include school buses and/or vehicles needing to maintain heat or air conditioning for children or special needs children. The Act is enforceable through fines from $150 to $300 per violation and through enforcement orders and civil penalties.

To read more of the Act click on the word.
This information is presented for our clients who may own bus companies, or independent truck companies. If you have further questions on how this law may apply to you, please contact the SBDC.

Monday, February 9, 2009

Greenwashing...It's not about laundry!

Well, maybe it is about laundry. It could be if you are buying a product you think may be environmentally friendly, or "green", only to find out that it isn't what it says it is.

TerraChoice Environmental Marketing Inc., in November of 2007, completed a study of products in North American consumer markets, and the environmental claims made by those companies with regard to their products. The results of the study were translated into TerraChoice's "Six Sins of Greenwashing" and make for interesting reading.

Of the 1,018 products reviewed, only ONE came out actually meeting the claims it made.

As SBDC consultants--meeting with clients who may have products they are developing with claims of "all natural" or "earthfriendly"--it is important we advise our clients to be ethical about their marketing standards in terms of the "green" approach. 1,017 products calling wolf is a good example of marketing that is being stretched to capitalize on what is fast becoming a lucrative market niche, and eventually this dilution will cause the consumer to lose confidence in ALL green products, even those that meet their claims.

We encourage you to read the study: Pass it on!

Friday, February 6, 2009

Sustainable Agriculture: Farming For the Future Conference

Four staff members are attending the 18th Annual Farming for the Future Conference run by PASA (Pennsylvania Association for Sustainable Agriculture) in State College this week. Close to 2000 participants have walked through the conference doors this year and the sessions are informative and chalk full of resources. We are passing a few on to you today, but stay tuned to the blog for our return, when we will pass on many more things we have learned while at the Conference.

If you have not heard of the book Stuffed and Starved by Raj Patel, and you are interested in the way we eat and how we need to change, run right to your bookstore or online ordering process and grab it. Raj Patel was the keynote speaker at the Friday morning conference opening festivities, and delivered one of the best keynotes we've heard in a long time. Raj Patel is a visiting scholar at the Center for African Studies at the University of California at Berkeley, a Fellow at the Institute of Food and Developmental Policy, and a Research Associate at the University of KwaZulu-Natal in South Africa. With degrees from Oxford, the London School of Economics and Cornell University, Patel has worked for the World Bank, interned at the World Trade Organization, consulted for the United Nations and been involved in international campaigns against his former employers.

His book, noted above, discussed the global food system and explains the paradox of why one billion people are overweight, yet 850 million are still starving. In today's environment of food-related issues, and economic disadvantages facing our farming communities and food growers, Patel is an advocate for the sustainable and organic farm movement.

For those of you who are farm owners, ranch owners, food packers, food producers, processors and distributors, you may be interested in examing information about the Food Alliance at The Food Alliance, an Oregon based non-profit association, has a certification program geared to fruits, vegetables, dairy products, meats, grains and processed products. A Food Alliance Certification reduces consumer concerns for health, food safety and the environment, and creates market incentives for more sustainable agricultural and food handling practices. The Alliance has established standards for farms and ranchers, as well as standards for processors and distributors. Certification helps add value to your initiative. The Food Alliance will be forging a partnership with PASA in the near future. We will keep you posted on this activity.

Stay tuned next week for more information and resources we will pass on once back from the conference!!

Sunday, February 1, 2009

Small Business Layoffs

I had a phone call last week regarding the need for an area small business to downsize. Their business is seasonal, and the economy has not helped them one iota lately. So, in an effort to survive, they have decided to use a layoff approach with some of their workers, based on season, need, etc.

Based on that call, I thought it might be wise to cover some information on what a small business owner needs to know in terms of layoffs, unemployment compensation, and a policy manual.

First, let me say that I believe it is very important for even very small businesses to have an employee manual. This document can outline what happens in terms of layoffs, such as, how individuals are selected for layoff purposes, or if the type of job lends itself to layoff. For instance, in our area, we have a number of country clubs that have in-house eateries. Some close over the month of January, causing the need for temporary layoffs amongst staff. Staff sign up for unemployment for the period, then report back to work the first week of February. This normal occurrence would be outlined in a policy manual for the establishment.

Layoff decisions can be challenged under discrimination law, so it is important for a business to come up with the reasons for the layoff, based on a set of criteria. A very good discussion on this can be found at the following site:

This discussion also encompasses the WARN Act (Worker Adjustment and Retraining Notification) which applies to employers with at least 100 full-time employees. This act requires a business to provide employees with at least 60 days written notice before a closing of the business which would involve termination of 50 or more employees or a large layoff involving termination of 33 percent or more of the workforce. An employer that fails to comply with WARN may be liable for back pay and attorney´s fees.

Beyond that, wage and hour laws may also impact layoffs. These laws require employers to pay nonexempt employees for the hours they actually worked. Each state has their own set of wage and hour laws, and there are time periods within which an employee must be paid. If employees were promised they would be paid for accrued, but unused, vacation time, sick time or personal days, state law requires that the employer honor the promise. Actually, in some cases, even in the absence of such agreements, state law may still require payment of these items. These items are often rolled into something called "separation pay."

COBRA is a much used word today, especially in the face of job loss and economically-fueled layoffs. Employers with 20 or more employees are usually required to offer COBRA coverage and to notify their employees of the availability of such coverage. In a layoff situation, employees would be offered the option to continue their current health coverage, however, they have to pay for the coverage themselves. It is best to discuss the options of such coverage with the insurance agency a small business is using to cover employee health benefits, to discover the nuances of the items that will surround payments, amounts, etc.

A business owner should also develop a layoff letter to present to the employee, covering some of the elements discussed in this very good on-line article:

Finally, there is the question of whether vacation benefits and accrued time might affect unemployment collection amounts. For the most part, any lump sum payouts which show up in the final paycheck, have no bearing on the unemployment compensation picture. However, a severed employee cannot receive unemployment benefits for any day they also received vacation benefits, so if an employee decides to use vacation days as part of the layoff, (or if you, as an employer REQUIRE that they be used as part of the layoff) that employee will not be eligible for unemployment for the days chosen as benefit days.

Also, vacation pay or holiday pay may be deducted from an employees' unemployment compensation benefits depending on whether or not the employer has given them a definite date to return to work at the time of layoff. If an employee was not given a definite date to return to work, any vacation or holiday pay paid to them when the job ends is NOT deducted from their weekly benefit amount. If an employee is given a definite date to return to work, any vacation or holiday pay for the period of the temporary layoff IS deductible from their benefts.

The Pennsylvania Department of Labor and Industry is a good source of information with regard to the type of questions which surround layoffs. To access their website, go here: which will direct you immediately to the Unemployment Compensation section.

While I hate the topic, I feel it is an important discussion for our small business owners. Our SBDC has a Human Resource specialty as part of its program efforts. If a small business owner has any questions concerning issues surrounding employees, employment and other HR related topics, feel free to contact our office. If we don't have the answer, we'll find it for you!