How Small Business Can Manage Workers’ Compensation Costs

Running a small business entails a cocktail of challenges in terms of a concatenation of expenses. While some of them are fixed costs, the rest follow in various forms of unprecedented variables.  Keeping these impending expenses in mind, one needs to formulate proper backup plans so as to pre-empt losses.

In case, you are mulling about the possibility of curtailing workers’ compensation insurance, do not forget the premiums, which you need to pay from time to time. In fact, one of the most cumbersome expenses, which hits the small business enterprises includes compensation insurance, covering accidents, and injuries of workers on the job site.

According to the National Federation of Independent Business (NFIB), about 33 percent of small business entrepreneurs have complained about the hefty compensation charges comprising workers’ medical bills, wages for the number of working days lost due to accidents, and compensation costs owing to permanent injuries. These costs vary from state to state. The average premiums, coupled with health insurance, and labor costs keep spiralling year after year, and hence, cannot be ignored. Besides, frequent untoward happenings at the work site lower productivity, and adversely impact employee morale. Also, the replacement costs of damaged equipment should be taken into account. So, what steps should a company take to protect itself?

The wise have stated- Prevention is better than cure. Hence, every small business owner should plan, and implement a strategic safety programme:

  • Talk to your team about workers’ compensation: Talk to your employees, and make them aware of the fact that they are working for a small enterprise where workers’ compensations cannot be granted as freebies. Also, spread awareness about the impunity with which the company would deal with an employee, should he, or she indulge in any fraudulent claims. Make it clear among the workers that the company is liable to pay only the legitimate claims.
  • Take interest in handling the workers’ claims: Many companies tend to overlook workers’ claims thinking that these should be taken care of, by insurance companies. A claim could, however, take alarming proportions if it isn’t handled with care. So, when an injured worker submits a claim, talk to him. Make him sit in your office, and ask him what kind of support he expects from you. The employee seeking claims would feel that he or she is being supported, and would be less aggressive about the massive damages suffered by him or her.
  • Solve the problem in the beginning: Your employee’s well being should be your foremost concern. If a worker has been falling sick off and on, or if he or she feels tired while working quite frequently, then tell him or her to take an off. In such cases, you need to prove yourself as a benevolent employer who doesn’t reprimand his workers for no reason.
  • Prioritize safety: Make sure that safety of your workers should be your priority. Talk to the management team, and frame safety rules right in the beginning. The employees should be trained about the necessary safety norms. Hold regular meetings regarding safety rules, and make your employees aware of the fact that they are accountable for their own safety. Inspections should be conducted at the work place on regular basis so as to rule out all kinds of possible hazards for the workers.
  • Have readymade plans to deal with injuries occurring at the work place: There should be first aid treatment facilities, and healing measures available right at the work site, in order to treat the accident victims. Prompt actions could prevent the minor injuries turning into major ailments. In such cases, your employee would think over before he, or she decides to sue your company. Your immediate response to such untoward situations would eventually make you less liable to workers’ claims.



Things to Do Before Starting a Business

Are you planning to quit your job, and start a new business? If that is the case, then you really deserve the thumbs-up to make headway with such an idea. This is because the world has been experiencing a massive economic meltdown since 2007. Consequently, the phrase “layoffs” has become a trope in the corporate world. In case, you too have been feeling some inklings of facing similar situation in the near future, then it’s high time you started thinking of some other alternative to keep yourself get going!

Starting business is an excellent idea for those who wish to harness their enterprising skills. It should, however, be noted here that setting up a business is not an easy task. It could be an exhilarating, as well as exacting experience at the same time. One needs to do a lot of planning beforehand so as to avoid any kind of setback in his or her venture.

Here are a few things for you to ascertain before starting a business:

  • Do proper research: Do your ground work before hitting upon an idea! You might be having certain grand plans to kick start a venture, but others too could be having similar ideas. So, you need to a great deal of shovelling before hitting upon a plan, which would be unique. Ultimately, you need to have an edge over your competitors so as to gain a stranglehold of the market. In such cases, the best way out for you would be to offer your goods, or services at cheaper rates than what is being offered by your business rivals. This work outs perfectly well for those who are beginners, and want to sustain their presence in the market. 
  • Try out before quitting your job: Set up a small scale business venture while you still exist on the payrolls of your company. Observe the market trends for some time, and build up a strong client base till you are confident enough to run your own show. So, in case, you don’t have congenial work environment in your organization, there is something else for you to fall back on! 
  • Question yourself: Everyone needs to formulate certain business goals, and you too need to do the same. Keep questioning your plans, and why you wish to execute them. There are instances when things go haywire, and being an entrepreneur you need to question your objectives. This constant exercise is imperative to ensure a steady path of growth, and ward off the factors, which could stall the process. 
  • Learn from others: Expand your contacts in the market, and make new connections. Make it a point to constantly meet your veterans, and learn from their prior experiences. Communicate with people on the social networking sites, and join a few groups. Interact with people on social platforms, and enlighten yourself. 
  • Seek legal advice: Take advice from a legal expert before starting a business. Many people think that they would need legal counsels only if they get into dire straits. The wise have always stated that prevention is better than cure. So, take advice from a lawyer before starting a business. Do not hesitate in seeking legal counsel before it gets too late. Or else, things go out of hand. 
  • Survey the market: Keep close watch over the market trends. Take into consideration what the consumer wants. It’s not necessary that people would buy whatever you wish to sell. Ultimately, consumer demands determine the supply factors. 
  • Make your brand: Be innovative, and try to create your brand image. This involves a great deal of experimenting. Take advice from experts, and do something different from your counterparts. In this way, you would definitely outshine the rest.
  • Improve your credit score: Ensure that you have a clear credit history so as to attract investments for your business. It is possible that you would fall into a debt trap in due course. Keep enough savings as backups. If your credit score isn’t good, then you would end up borrowing less money at high interest rates. To start a business, you need a real good credit score so that, you could borrow as much as you want. 
  • Be clear about your tax payments: You need to pay all the taxes on time, in order to avoid unnecessary legal suits. There could be a number of taxes which you need to pay from time to time. Hire an accountant to organize your finances, and put everything on paper in a systematic manner. 
  • Be prepared for slack periods: Every business is bound to experience tides and troughs. There would be lean times when money flows in at a slow pace. You need to have enough savings to stave off unsavoury situations, in case a client turns out to be a defaulter in payments. 
  • Stick to a proper schedule: Fix your working hours, and make it a point to adhere to your schedule. People who are flexible about hours tend to fail in their endeavors. 
  • Work out your exit strategy: Make your plans in advance to safely quit your business, in case things don’t work out in your favor. Keep observing how the market is trending. It is advisable to sell your inventory, and make up for losses on time before it gets too late. Find a potential buyer, sell your business, and reinvest your money elsewhere.


Business Ideas With A Small Budget


Are you planning to open a business that does not require a large amount of money? If your budget is limited, then here are some great ideas to look at to ensure that your money is channelized in the right way and not spilled in schemes that do not provide a decent return on your investments.

  1. Research , Research and Research – Research your market, do adequate research before you even think of having a business plan.  You may have a great idea. However, would the customers be ready for your idea?  A thorough research would show both the market potential, as well as the limitations of the idea.
  2.  Base your Assumptions on objective analysis –  Often, companies are misled by incorrect interpretations of the market and therefore, they rely on half-truths, or false assumptions. Any business needs to be objectively analyzed based on what could be the opportunities and threats to the business, the possible dependencies and a correct estimate is to be built. Buffers for unaccounted risks are to be considered as well as mitigation strategies for enterprise risks are to be planned.
  3. Keep a control on expenses –  Keep expenses low, be frugal in your spending, till assured of appropriate returns. For a startup, it is important to consider ways that keep the budget low. Adequate cost control measures are to be taken right from day one of business.
  4. Develop a team as you grow business – Do not keep every thing with yourself , even if you are a start-up. Time is crucial, and therefore take help of others, who could deliver work faster and cheaper.
  5. Maintain a financial buffer-  Always have a financial buffer which could help in case of emergencies. Ideally, have  a contingency fund of about 6 to 8 months to take care in case of emergencies. Else, have an alternate source of regular income to meet any eventuality that may precipitate.

Read : Think & Grow Rich by Napoleon Hill