Interns and Small Business Staffing

February 18, 2010

Many business owners ask about whether using an intern is cost effective.  The answer is yes, if you plan well.

Interns can provide unique knowledge for specific projects, and in return they learn how their skills can be applied in the business world.  For example, an intern with Final Cut Pro expertise can be the “tractor operator” as you sit with him to edit videos for display on flat screens at your business site or for your web site.  You can’t manage your business and also become an technical expert with video editing, so that need is met by having an intern experienced on the software work with you.  Interns should not be put in back rooms stocking shelves, or doing mundane work all day.  An intern is not “cheap labor,” rather she is person who is looking to you for mentorship.  Try to meet with the intern at least once a day to go over the project you have selected for her.  Maybe you need to prepare an outline for an upcoming meeting.  As you describe the presentation to the intern, you are formulating your outline, thereby accomplishing two things at the same time!

Interns can be paid or unpaid, but either way, my advice is to treat them the same as your regular employees.  That is, include them in staff and project meetings, give them the same perks, such as lunches on Fridays, and acknowledge their work as if they were part of your team.  Similarly, carefully interview and chose your interns just as you would if you were hiring a regular employee.  Interns should also be subject to the same job performance standards and the same disciplinary actions.  Just because you hired an intern does not mean you have to accept that they sit on Facebook all day, or conduct numerous personal phone calls.  To be clear upfront, prepare an “internship agreement” describing the project(s) and your expectations (and theirs) and have interns sign it.

For me, it is personally rewarding to work with motivated interns who are passionate about their career choice, and that’s why I feel strongly that the experience also will be rewarding for them.

Fraternizing with the Enemy: Tips From an Employee-side Attorney

January 20, 2010
Curt Surls, Employment Attorney

Curt Surls, Employment Attorney

by Curt Surls, Employment Attorney

I am an employment lawyer. I represent employees who have been discriminated against, harassed, improperly compensated or wrongfully terminated. As a small business owner, you would undoubtedly prefer to keep me and my colleagues at bay. This will be the first of a series of posts outlining common – and expensive — mistakes I have seen small employers make in my 20 plus years of practice.

Mistake Number One: Misclassifying non-exempt employees as exempt. Picture this: business is picking up again, and your hourly bookkeeper has been working 10 hours a day to keep up with the workload (paying bills, sending out invoices, etc.). You already know that unless an employee is exempt from wage and hour laws, you have to pay overtime (time and a half) after 8 hours in one day and 40 hours in one week. Your hourly bookkeeper is getting rather expensive, and – truth be told – he’s kind of slow and may just be milking it for the overtime. What if you put him on straight salary and gave him a lofty title like Supreme Executive Financial Control Officer (or “SEFCO”) with a gold-embossed business card? Problem solved, right?

Not so fast. In California, all employees are presumed to be nonexempt; that is to say, a sometimes confusing array of wage and hour laws apply, including overtime and meal break regulations. Therefore, the burden of establishing that an employee is exempt, such as your newly-exalted SEFCO, rests with you, the employer.

There are three exemptions under California law: Executive, Administrative and Professional. A salary and a really impressive title is not enough. Under both state law and the federal Fair Labor Standards Act, all employees, including the SEFCO, must meet both the “salary” and “duties” tests to be considered exempt. Under the “salary” test, to be exempt, the employee must earn a wage of at least double the minimum wage (currently $8.00 per hour in California). Under the “duties” test, your employees must spend at least 50% of their time engaged in “exempt” duties (for example, supervising employees, managing the business, performing work requiring advanced training and/or otherwise exercising “independent discretion and judgment”). So, title and salary notwithstanding, the SEFCO is still doing routine bookkeeping tasks and is entitled to overtime.

The consequences of misclassification can be serious, including back wages and penalties. Even the big dogs get this wrong. Wachovia recently settled a class action for $39,000,000 brought by a group of stockbroker trainees improperly classified as exempt. So be very careful before you decide that an employee is exempt from California’s wage and hour laws.

For more information, contact the California Department of Industrial Relations’ website at www.dir.ca.gov. Next time, we’ll discuss whether you can hire that bookkeeper as an “independent contractor” and avoid paying him overtime and benefits.

Small Business Tax and Filing Deadlines

January 18, 2010

Deadlines for end of January are fast approaching ….

(January 15 – 4th quarter Federal and State estimated tax payment)
January 31 – W-2 to Employees
January 31: EDD (California) Payroll Form DE-6 due for 2009 4th Quarter
January 31: Federal Payroll Form 941 due for 2009 4th Quarter
January 31: Annual FUTA Form 940 (Federal Unemployment Tax Return)
January 31: Annual EDD Form DE-7 (unemployment and training tax)
February 28: Form 1099s due to vendors and independent contractors
February 28: Employer W-3 (transmitting W-2s to IRS)
February 28: Form 1096 (transmitting Form 1099s to IRS).
February 28: San Francisco Business License renewal
February 28:  Oakland business license renewal
April 15:  Sole proprietorship tax return, file return or file extension
April 15:  Estimated tax payment for 1st quarter 2010
April 15:  Deadline to make 2009 ROTH/IRA contribution
April 15: Pay corporation tax (Form FTB 3522)
October 15:  Extension for Sole Proprietorship tax return
California Sales Tax:  monthly quarterly, fiscal year or yearly, depending on sales.  Quarterly returns due:  April 30, July 31, October 31, January 31); Yearly return due January 31; Fiscal Yearly return due July 31.

T2 Participates in UCB Externship Program

January 11, 2010

Mina Park, UC Berkeley Externship, T2.com in San Francisco

Mina Park mentored with Helen Thompson for six hours through University of California, Berkeley, Career Center Externship Program for business majors. Mina said “90% of what you taught, I did not know.”  She added, “I now have a better understanding of how businesses are managed and run, how to file a business tax report, how to obtain a business license, and the costs involved in hiring and firing an employee. I plan on having my own business, and I thank Ms. Thompson for taking time away from her work to be my mentor. I also thank her for giving me the valuable information that I need to run and manage my business.”

What is the Most Important Management Skill for Small Business Managers?

December 19, 2009

management-training-san-francisco

When asked what the most important management skill for a small business manager was, Executive Director Gina Maciula’s answer was short and direct: communication. Not only do managers need to be aware of what they are saying, but how to listen as well.

Statistics reveal that a typical audience retains about 5% of what is said. That means that during a one-hour meeting, they might retain three minutes of what you said. Why is this?

  • Staff feels like meetings are a waste of time to begin with
  • Staff members dislike or have personal issues with the speaker
  • The speaker uses emotional arguments instead of facts
  • Audience has different political or cultural views
  • The speaker has poor or dull presentation skills

For example, a manager who begins a meeting with, “I think we should stop usability testing on the new website, what do you think?” has shut down communication with the team by providing their specific recommendations first.

One of our speakers, Gina Maciula, offers a few different communication seminars in San Francisco that covers how to give and receive feedback, called The Dynamic Management Team. This is a key management skill and a subset of listening.

Should I Build my Own Website for my Small Business?

December 14, 2009

Small Business Website Developer Advice

Absolutely not.

Unless you are a web developer by trade, you will inevitably waste your time building an ineffective, confusing web presence. Even worse — having a friend or relative do it for free or trade. (Good luck meeting your launch deadline and working out payment.) The truth is, your website will be the least expensive and most effective part of your marketing (if done correctly), so the answer is a no-brainer: hire a professional.

Today’s web developers have to be highly specialized to remain competitive. They need to be experts with web markup, Javascript, design and color theory, typography, blogs, content management systems, databases, proper search engine optimization techniques, online marketing, usability, accessibility, social media integration, image editing, video compression, hosting and registration, security — the list goes on.

So spend your time making your product or service the best it can be. Determine price points. Study the competition. Find the most effective advertising stream. Meet industry experts. Find Facebook fan clubs and attend local events. Follow industry leaders on Twitter and attend their meet-ups, drink-ups, and other social gatherings. Small business is highly personal, it is about you, so spend your time building you, not a website.

If you would like to learn more about our strategy on how to tackle website redesigns, schedule our ‘web meeting before your next web meeting’ at 800-921-9007.

Choosing a Merchant Account – How and When to Use and Setup Credit Cards for your Business

December 10, 2009

credit-cards-merchant-accounts-for-small-business

Make it convenient for your clients to pay you. The more ways you accept money, the more money you will make. If you have a strict payment policy, (i.e., only accept cash, or only use PayPal), your clients may choose a competitor who accepts all credit cards, including American Express. Even though AMEX charges more than Visa and Mastercard (and, of course, you are paying those fees), you are making the sale by accepting it.

Studies have shown that most people do not carry cash, prefer awards programs of credit cards, and are sometimes forced to use credit cards by their companies.

There are many companies that offer this service, and typically there are two methods: purchasing a point-of-sale (POS) machine, or processing transactions through a web interface. For more specific types of situations, there are specialized machines that you can purchase to fit your needs — for example, they sell wireless card swipers for contractors who are on-location (wedding vendors, farmer’s market vendors, Salvation Army workers).

The latest trend is to bypass all of these methods and just use a merchant account application on your iPhone. Intuit is a great solution, and is only $9.95/month (plus a per sale fee) and it is compatible with Quickbooks. Ask your bank for a merchant account (you will have to qualify credit-wise); they go through a third-party. For $85 I got a USB card reader for the laptop so I can swipe the cards, which saves time and increases accuracy as I do not have to  enter client billing information. The online credit card services also keep records and store your sales so you can search for specific customers.

You need a credit card service for your business — even the guy I bought my furnace from swiped my credit card on his handheld in my garage!

Affordable Backup Strategy for Small Businesses on a Mac

December 9, 2009

backblaze-logo-horiz

“If it isn’t in three places, it doesn’t exist.”

Securing client data is a top priority at T2, and this is why we have successfully avoided losing any data over the last 14 years of business. Because we are asked what we do and how we do it, I have outlined our general approach to backup and archiving. As we migrated to the Mac operating system years ago, this post is mainly targeted towards Mac users, but almost everything can be ported to Windows.

Our backup workflow is optimized for speedy backups, fast recovery, and has been streamlined to be very affordable. The following approach provides secure, redundant backups.

First, start using Backblaze. Backblaze is an encrypted online backup solution that preforms continuous, unlimited backups of all of all your data. They use military-grade encryption, it’s automated, and very affordable ($5/month).

Second, purchase SuperDuper, an affordable backup application that allows you to create quick, easy-to-restore backups as disk images. Configured it to schedule automated backups to any drive, ideally to Network Attached Storage units. Create nightly clones of your system drives and nightly incremental backups of your data drives.

Note that we used Retrospect and Memeo extensively — both were problematic. While Retrospect worked intermittently, support is expensive, and Memeo did not work at all. (SuperDuper’s Dave Nanian is known to reply to forums, threads, and even Tweets right away.)

Third, purchase a NAS unit. We use ReadyNAS NV+ units for twice-daily backups of everything. They hold four to six hard disks (depending on the model you get) and if any one of them fails, no data is lost, as they utilize RAID-5 technology. Simply pop in another drive and it figures the rest out. Highly configurable, these units are not cheap, but are much cheaper than hiring a data restoration consultant at $5,000 per drive.

Fourth, create DVDs or external hard drive copies of your data and store them off-site (safe deposit box, home office, etc). This is a requirement if you are not using a web solution like Backblaze.

Fifth, using TimeMachine to archive different versions of files that you are working on. This functionality can be done with Backblaze as well, but restoring files is faster with TimeMachine. Be sure to configure it to not backup large directories, as those will be covered with the NAS and Backblaze.

Sixth, make sure you are separating your data from your system drive. This way, if the system drive fails, you can use your clone and you will not lose any data.

Third-party services vs. full- or part-time employees

December 8, 2009

When applicable, I recommend expert third-party services versus hiring a full- or part-time employee to do the same job. There are many benefits with using services and business consultants: If you are unhappy with the consultant or service, you can cancel it and sign up for another. If you are unhappy with your employee, it’s a lot more work to make a switch. Third-party services and independent consultants are always on time, and they only bill for time spent, never taking vacations. For many small business applications, this is the only way to go. There is no reason to reinvent the wheel when it comes to standard business operations.

In today’s global world, you can outsource just about everything for your business (accounting, web design, database setup, inventory control, e-commerce, marketing). You only need to hire employees where day-to-day needs warrant it, otherwise use contractors. This is the best way to control costs as you can budget for the contractors and use them only when you need the help. Your payroll is usually the largest expense — keep it to a minimum.

With the crash of the economy in the fall of 2008, employers laid off staff and found that the productivity stayed the same as the remaining employees took over the work left by those who left. Even though the economy improved in 2009, employers are not hiring back since production is adequate even with a decrease in staff. Independent contractors fill the gaps left by this unemployment.

Should I use an Online Accounting Service?

December 8, 2009

The biggest challenge for small business owners is to find superior services at the lowest cost, which brings me to recommending freshbooks.com. This online accounting service is great (especially if you travel) because you have access to your financial records from any location. It is tempting for small business owners because it is easy to learn, and your data is backed up. If you lose your time records, you have lost income — time is money! You can record your time through their iPhone app making it easy to keep track of your time contemporaneously. It has been proven that if you record your time every day versus once a week or once a month, you will consistently bill more.