Employee medical insurance benefits often complicate things for small business owners, and that fact is unlikely to change.  Recent developments in the employee medical benefit arena offer some good news, some bad news, and some options yet to become available. 

You might be relieved to know that medical insurance premiums for small business employers have increased at a slower rate than those for large employers. Despite sharp increases across the board in 2011, rates for small business programs showed a 6% increase versus 8% for large employers.

Small businesses, on the average, sponsor programs with higher deductibles, co-pays, and less comprehensive coverage. On the other hand, small businesses pay more of the cost per employee than the larger companies do. According to the Kaiser Family Foundation, small business owners pay a surprising 85% of single person plans and 64% of family plans. Fully 35% of small businesses pay 100% of the premium for their employees although this percentage has declined steadily in recent years.

Over all, the percentage of employers offering medical insurance has continued to decline. In addition, the percentage of employees declining coverage when it is offered has increased. It would appear employees feel so pressed by the economy that they decline the cost of the benefit offered. At the same time, employers are pressed by the economy into withdrawing the offer.

The Patient Protection and Affordable Care Act takes effect fully in 2014. It will enable employees, without medical insurance at work, to purchase insurance on the open market. Theoretically, that market will prove competitive. The PPACA will protect applicants with pre-existing condition, and the market should offer a variety of options and plan prices – in time.

There are some signs that employees are risking loss by opting out of insurance now in anticipation of the protections afforded by the PPACA. And, some employers may slim down their benefit programs in advance of the Act. How this will affect premium costs is a mystery at this time. Medical insurance is still a risk pool; fewer participants increase the risk. If the employees secure their insurance – and there is no guarantee they will – outside of the employer’s group, they may or may not reduce the loss ratio experienced by the employer group.

If we assume that the insurance underwriters/companies are working forward on these issues, they will aggressively move into the 2014 market with attractive offers for uninsured workers. However, I believe they will prudently develop plans and rates attractive to employers because employers provide a filtering underwriting screen for them. Underwriters know that steadily employed workers have an edge in character, life style, and longevity.

A web administrator can take all the operational “web” problems off your hands – including updates, postings, and new products. But buyer beware:  not all web pros are created equal. Some are very capable, but some could cost you your business. Make sure you know what yours should (or shouldn’t) do for you, then hire accordingly.

A top-notch web administrator should have these skills and abilities:

• Portfolio: Look at finished product, achievements in design, coding, and construction. If programming is over your head, let the candidate demonstrate speed and accessibility, search response, and use of other Search Engine Optimization tools.
• Responsive: You need responsible and maximum use of time. You want as much product as possible, and you want it on time. Very often, the site building parallels your product development and issue. You need web administration that reflects latest prices and catalogue info.
• SEO Background: SEO specialization is vital. This field is very complicated and ideas and tools prove very short-lived. Make sure this “search-ability” is a live issue with your candidate. Ignore the techie talk, and ask for demonstrations.
• Web Analytics: Interview web administrators for knowledge, skill, and ability with Compete, Google Analytics, SiteMeter, W3Xounter, and other web analytics tools. You want an administrator able to drill down into a website to determine and improve customer traffic to the site.
• Collaborative: Web administrators can show self-confidence close to arrogance. You need a partner. While this partner may have the upper hand with web skills, you are the customer with profits to lose. It’s in the administrator’s interest that you succeed; structure and develop the partnership.
• Social Media: Social marketing channels are multiplying. Staying live and competitive among these channels requires a dependable juggler.
• Server Savvy: Your web administrator will handle all upcoming programming issues. S/he needs to understand side scripts, such as CGI Scripts, PHP, and Perl modules.

Of course, you need to negotiate your best price, but skill does not come cheap. I would recommend that you limit your search to web administrators who made this independent work their career. Try to ignore those otherwise un-employed consultants.

Family businesses often happen by accident. The entrepreneur drives the start-up while the spouse and family chip in. Underpaid and overworked, these people are often willing to  sacrifice to make the dream come true.

Serendipity may bring success to a family business; however, the heads-up business owner builds practical solutions for potential family friction into the business plan.

• Identify the members of the family with potential to perform successfully within a structure. “Family” can mean a married couple, parents and children, or siblings and their spouses. In short, there are family members, and, then, there are family business members. Share that picture with the family.
• Separate family issues from business issues. Share an understanding at the very start about what you bring to the worksite and what stays at home. It may take some practice, but everyone needs to know where to discuss family baggage. Everyone needs to know what the process is to solve issues.
• Budget vacation, holiday, and personal time with the family. Keep business out of those moments. However, remember that children are competitive; the best families suffer some dysfunction. So, clarify an understanding for the handling of dependency issues, hostile behavior, and divisiveness.
• Pay fair competitive wages. If early revenues do not permit this, clarify the value of their sweat equity. Create a compensation plan that will reward their effort later – proportionate to their contribution and talent. Seek advice on framing the plan and communicate it clearly.
• Hold regular “tailgate” meetings, family retreats, or key member meetings. Let members vent simmering complaints– within reason. Approach these as learning opportunities. Collaborate and incorporate fairly offered ideas.
• Plan for succession when it makes sense and you are ready. Build cautions into the plan to discourage challenge to the plan. Communicate it well. A well-structured plan should reduce infighting.

Finally, enlist a third party coach – not a crony or other family member. Retain the advice of a specialist in family business matters to get things right from the start and to bounce things off as you succeed at your goals.

Finding – then obtaining – small business funding to start or grow a business can be confusing. Interest rates continue to be amazingly low, and summer reports showed a surge in small business borrowing, (up 25% in May and 28% in June, according to Federal Reserve Board Governor Elizabeth A. Baker).

So, why can’t you get your hands on it?  Read on for three tips to help you get your fair share of small business funding.

Find a lender  The US Small Business Administration has an invaluable website. Just click on your regional SBA office and enter your zip code for a list of lenders authorized to make loans for small business funding. The page provides banks, addresses, phones, and maps. It also provides extensive information on resources in your state and locale including workshops on loans and application.

Think small  The SBA Micro-loan Program makes loans available for as much as $50,000, the average loan is more like $10 to 15,000. The loan can be used for most business purposes – except the payment of debt or the purchase of real estate. Interest rates are determined by the lender but must reflect current Fed rates. The lender has the right to demand collateral and continuing training for the borrowing owner.

Have the courage to borrow  The Fed’s rates are close to 0%. The White House continues to press SBA approved lenders to account for their small business lending. Moreover, the banks decline fewer than 12% of the applicants and fewer than 5% of small business borrowers default on their loans.

The overwhelming majority of small businesses start with personal investments – in addition to those of family and friends. What appears to discourage small business borrowing from approved lenders is the process itself. Applying for and obtaining small business funding is detailed and slow. Among reports  oft required are detailed balance sheets, expense statements, business plans, and proof of a loan declined.

There are consultants lined up to show you how to make application for SBA loans, but you can do it yourself. Study the SBA website, attend a workshop, and talk to your banker and CPA. Among other things, this is good discipline:  planning, detail, and patience are virtues you need to succeed, whether or not small business funding is something you need.

Heuristics influences marketing, management, software development, and decision-making. It contributes to algorithms and that pesky way that Amazon always “knows” what you want. This knack for cutting corners mentally to solve problems quickly and efficiently – heuristics – is one of many things that sets successful entrepreneurs apart.

Sometimes, small business owners get stuck. Worried about risk, debt, and growth, we can sometimes overthink things.

I admit that the best decisions are those made with the best information.  The better your input the less likely you are to decide poorly. Good information reduces bias and develops structure for good decision-making.

Enter heuristics. Very simply, there is value in an approach that is more rule-of-thumb than the management school process of testing a hypothesis with evidence and results. There is a real place for decision-making on a trial and error basis. Mistakes may happen, but it encourages learning, solution evaluation, and deeper understanding.

Setting this fancy talk aside, you want to respect and develop a talent for cool thinking. For example, when you are up against a seemingly large and complex problem, with no clear solution, you need a system to help you think.

1. Block out unessential information.  Someone said, “when the going gets tough, the tough relax.” Remember that “C-file” we all learned about in time management classes? I suggest that you don’t even keep such a file; just burn it. Run away; take your laptop to some place quiet. Turn off any internet access. And, work on the problem without distractions for a pre-determined period, say, 30 minutes.
2. Understand the Pareto Principle. 80% of the importance of a task comes from 20% of the work put into it. So, if you focus your energy on the critical 20%, you won’t overthink the non-critical 80%. Think of the pilot being forced to land on a river or a highway; there isn’t much training to fall back on, and there’s no time to weigh Plan A against Plan B.
3. Separate important tasks from the urgent ones.  It might be important to work out, read a good book, or have a nice lunch. But, these won’t make or break your business. Instead, determine what your personal peak productivity time is: early morning, mid-day, or even the middle of the night. Create walls around your peak productivity where you can work without bother or distraction.
4. Set up a debriefing process.  Knowing you are going to be making a difficult decision or a daring move, schedule a process where you can review and evaluate your decision, adjusting follow-through or implementing remedies.
5. Take aim and fire.  Think simple, and you will do a good enough job of solving enough problems. Move past indecision and take action. Visualize the result. Imagine yourself crossing the finish line. Clarify the problem in one sentence, and take a shot at fixing it. Jot things down, draw a picture, and make course corrections. Be ready to figure out things as you go along.

Imagine you need to move a product cross country despite a transit strike, inclement weather, and a three-day holiday. Think in a straight line until you hit a barrier. Move right until you can see a way forward. Go forward until you hit the next barrier, and continue as before. Eventually, you will see yourself at the end of your plan.

This is the second in a series devoted to building business on value and redesigning your business to maximize customer perceived value.

Small business succeeds when it – consciously or unconsciously – provides customer perceived value. This begins with a new understanding of customer loyalty.

Customer loyalty may be the most misunderstood value in commerce. The US economy grew in the ‘50s on the unspoken marketing concept of “built-in obsolescence,” the presumption that, because customers were repeat buyers, their loyalty would keep them buying brand. Quality, not surprisingly, stole these “loyal” customers away from American manufacturers in the ‘70s and thereafter.

Now that American businesses have learned the value of quality – a reasonable demand of local and global customers – we are winning back markets thought lost. American designs, programming, engineers, and craftspeople have regained dominance in automotive, aerospace, and technology.

Small businesses, on the other hand, have always understood and depended on the values of buying local and customer service. Given small business volume, a lost customer is not just “a drop in the bucket.”

• Small business must move away from so-called “customer loyalty” that is really just reluctant allegiance. For example, every Christmas, a dry cleaner I know, bless him, gives out lint brushes. In his mind, he is repaying customers for their loyalty. But, it isn’t the lint brush that keeps them coming back; it is the convenience of the store’s location and the geniality of the counter person. Open another dry cleaner across the street and cut the price by $1.OO per shirt, and he will be overstocked with lint brushes.
• Small business has to learn that customers don’t like having no choice in the matter. They do not like having their loyalty monopolized. This is what tears at the fabric of small town businesses as customers flee to improved perceived value at the newly big box stores. Customers are fickle and whimsical, but they will stick with you if your perceived value gives them a choice. They are able and ready to compute the cost of travel away from town to save a few cents, but if you can’t offer an offsetting experience, they will one-stop shop.
• Small business rewards only matter so much. Big businesses can lure and harness customers with rewards programs. But, studies show this link is tenuous at best. For example, United Airlines’ frequent flyer points are nowhere near to turning people away from the perceived value in flying Southwest. A flyer may keep his/her United frequent flyer plan open because the boss pays for the flights or because United goes to some places that Southwest does not, but all things considered, Southwest has the edge in value – and an attractive travel incentive plan to  boot.
• Small business needs to learn that customer loyalty is not a tangible asset. You cannot trade on it even though it may figure into the price of your goodwill. You are missing the point of loyalty and corrupting the principle if you think of loyalty as leverage, as customer ownership. A goal – not a strategy – loyalty is driven by total customer experience.

When businesses learn to drive this total customer experience – and to price it accordingly, they will define their future success. If they fail to do so – and do so soon, they’ll wonder what they missed.

The right Small Business Coach can challenge you to set and achieve bigger goals in 2012, while helping you navigate the obstacles.  Know what you are looking for in order to choose the best candidate.  Read on for some practical advice for choosing the right candidate:

Let’s start with what you don’t need in a Small Business Coach:

• Nice is not a virtue. You want someone to hold you to high expectations. If you think you are a good manager, then, you probably have a skill in holding employees to performance accountability. You will best benefit from the advice of someone who practices the same demands. Expect to be pressed to the edge of your comfort zone.
• Expertise is not a priority. You need someone who is a good coach. What you need is cross-disciplinary skills: communication, planning, training, etc. These are valuable transferable skills that help you see the short and long-term.
• Avoid a therapist. Don’t pay someone just to listen to you and all your problems. Look for someone who will turn your path around. You need someone focused on action, plans, and deliverables. You don’t have the time for the coach to worry about your feelings.

So, what do you need?

• Someone you can afford. Bargain basement coaching is not worth the money. It will cost you time and money, and some outcomes may require additional investment. So, you need to be at a point where all this makes sense: the need, the expectations, and the price. Shop available coaches; seek word of mouth; look for referrals. It’s a big decision, and deserves focused investigation.
• Someone you can listen to. Coaching is partly a matter of style. If – and only if – you are ready to take a close look at what you are doing, you need to find someone with the rapport you need to take a few hits. You are paying to be told things you may not want to hear, to get tough about what you have been doing, and to push your face into some bad decisions you may have made. For this to work, you need someone you can work with.
• Someone with a plan. Demand a schedule and agenda in writing in advance. Expect the coach candidate to demonstrate goal-setting and effective planning. Ask to see models and samples of what the coach has done for other clients, and make him/her connect the dots between plan and results. Ask the candidate to introduce you to previous clients with your intent to seek their story of the relationship. And, be sure you talk to more than just one.
• Someone who knows what you don’t know. Remember, you are looking for someone to bring something new to you. Much of this should be in the form of plans and direction. But, you also want insights, product knowledge, marketing strengths, and fresh perceptions about your business. I am reluctant, for example, to recommend a coach who claims to be “all things to all people.” You’d be better off with someone experienced in your line or business or business sector.

A final caution is that you do want to see the track record or credentials of a coach who does this for a living. I am reluctant to recommend the coach who is an out of work MBA. Interview candidates with their experience in mind.

The increasing importance of credit union financing in small business operations and lending has recently been the topic of an SBA Advocacy report. As of this posting, a million customers have moved their checking and savings plans from banks to credit unions. Coincident to the Occupy Wall Street activity and ostensibly prompted by Bank of America’s ill-advised debit card fee, credit unions are swamped by applicants while major banks don’t even seem to notice. What does this “revolution” mean to small businesses?

As recession-bound banks hold back on loans to small businesses, credit unions are taking the initiative. And, with their sudden growth in deposits, they appear ready to move aggressively when Congress raises their cap on loans.

The Small Business Administration watched bank lending to small business decline by 6% in 2010. It also reports credit union financing increased by a comparable percentage. Still, commercial banks lend 200% more than credit unions, so we will have to see if this trend continues. Nonetheless, it’s worth looking at your local credit unions to see what they can do for your small business.

For starters, credit unions account for only 5% of the total lending pool. However, the Small Business Lending Enhancement Act, introduced to Congress in March, could raise the current lending cap to 25% of their assets. This more than doubles their lending potential. With their lending cap raised and their influx of deposits, credit unions will expand, multiply, and hire.

 It is also likely that, as economic confidence returns, lending underwriting guidelines will loosen allowing businesses to borrow more with less secure experience and collateral. Among other things, credit unions are exempt from federal corporate income taxation. They do not belong to the FDIC; instead, they have a separate deposit insurance system and fund – with lower premiums. Such features help them to provide lower-priced products and services. They are non-profits, and this may reduce performance incentives for management.

 Small businesses have been underserved by banks in recent years – despite a $30 billion commitment by Washington. In addition, only 30% of the nation’s credit union lend to small businesses. But, credit unions are seeing gold in the weaknesses in today’s bank market and are upping their staff training to underwrite and market small business loans.

Give it some thought: look at what your local credit unions can do for you, check their credibility with CUNA, move your money if and when it is in your own interest. Remember, that most credit unions – unlike banks – are local and “behave” like small businesses in your community. You may find you have a lot in common.

Is your website an empty grave? Is there any life to it? This is not just a question of content and design; you need to find out if top search engines can find your site.

If search engines cannot locate you, your site is dead in the water. It needs a tombstone to locate it.

It helps to understand that Bing, Google, Yahoo, and other search engines cannot find pictures or animation effects. Search engines do not look for “pretty.” You can build the most visually striking website, but no one can find it if it does not have what search engines need.

I hate to oversimplify, but in general, your website should have tabs, headlines, and content. To see if they are search optimization live, place your cursor on anything that you want to check for life. If the cursor turns into a small hand, the spot is alive and can be found by search optimization engines.

Build your Website with these tips in mind.

• Tell your website designer that “pretty” is nice but not priority. It is more important that a header provide a live link back to your homepage. In addition, the site’s pictures, logo, and company name should link to the site’s blog and Contact Us page.
• Enter a live email address and Skype phone number on the Contact Us page. And, put a footer, including your email, website, and phone number, on every page of the site.
• Never put a design artist in charge of your copy. You want print, size, font, color, and background that can be read easily. Comprehension trumps appreciation.
• Outsource content writing to a professional who understands search engine optimization (SEO). This includes keywords, key phrases, and relevant hyperlinks. Make sure your descriptions, tags, and metatags include these keywords and key phrases.

Now, if you build your own site, revisit it frequently to refresh these keys. Then, ask someone else to explore the site with these tips in mind and build on their advice. If someone else builds your site, stand over their shoulder and pester them towards perfection.

Absent this approach, your website has no life, that is, search engines cannot find it. Save your money and prop a tombstone against it.

Running any business is tough enough, but involving family members can make it even more challenging.   Unfortunately, if family members are drawn in, you greatly increase your risk of failure when you don’t handle it correctly.  Here are a few tips to help you successfully navigate those challenges…

I know of many successful family-run businesses. But, such enterprises have their own set of problems, and success only follows solid management.

• For starters, don’t let a family business happen by accident. As often as not, the business starts; then, you call in your spouse to do the accounting, and/or recruit the children to work on weekends or fill in at the counter or phones. Once you have envisioned your business, decide then and there whether this is going to be family based or not. Then, structure it accordingly.
• Imagine a table of organization with job descriptions. Start to formalize the descriptions with skills, knowledge, and experience. Then, decide which relatives could best serve in those roles. Frankly, you have no obligation to include all members of the family, and this would be a first step in strong management. If your brother-in-law or nephew fits your needs, great; if they do not, you might explain what it is you need and what they need to do to fit your needs. But, you have no obligation to please.
• Form a mission statement. It is your job to keep “your eye on the prize.” Call the family together to share your vision. Invite them to help you with the mission statement, but let them know there job is to defer to your leadership. In doing this, draw a simple but firm chain of command and line of authority. You can do this with authority and still maintain the family magic.
• Confirm how disputes will be handled. Friction occurs among people in any business. Somehow, families make it more intense and longer lasting. In a regular business, the manager can resolve conflicts with authority; in family businesses, dysfunction and grudges can ruin things. With a family business, family matters require different handling.
• Take care of this as much as possible up front. Well before, you “open the doors,” let the family know this is a real concern of yours, and solicit input on structured solutions. Let this happen over several planned meetings, so they appreciate the weight of the problem. And, put as much of this as possible into writing. Let these meetings be the first of regular family meetings.
• Include tough subjects in these early meetings. Present and discuss your succession plan and sharing “the wealth” of sweat equity. These plans can and should evolve with time and experience, but everyone should know where your head is at from the beginning. Of course, these plans are best formed and maintained if you have legitimately secured and integrated the family’s input.
• Finally, formalize a system for conflict resolution. The family can survive arguments over Aunt Sally’s gruffness. But, workloads and salary discrepancies are another matter. Structure a “court” for discussion and resolve, and secure allegiance to the policy and procedure.

Communicating your mission, dreams, and plans early, often, and with reasonably democratic participation goes far towards building the substructure you need for continuity.