The most significant issues our small business owners face are marketing and sales. In assessing many of these businesses we found that business operations tasks such as those involving human resources and accounting take an inordinate amount of time and become distractions for the business owners. Resolving issues such as insurance coverage, medical benefits, health savings plans, timely adherence to estimated and compulsory tax payments, payroll preparation and collection of past due accounts can often be done more efficiently and with more expertise by service companies, thus allowing business owners to focus their efforts on marketing and sales.
We believe very strongly that business owners need to stay involved in that they are responsible to see that the above activities are performed and meet the standards of good business practice. We are familiar with many reputable firms that specialize in one or more of the services and perform them at affordable fees. Treasure Valley SCORE provides referrals for firms that have earned a reputation for quality service.
I asked Joe Reger, a SCORE counselor and former successful business owner, for his thoughts on several areas.
Æ Payroll Prep and Tax Prep Here's Joe's take: "These two go hand in hand. Frankly, in most cases, a small business owner cannot afford the time it takes to do their own payroll, as well as preparing and filing tax reports to various taxing authorities. There are several payroll-processing firms that work on volume and afford a low-cost process. Just miss or file a tax payment late, and you will likely pay more in penalties than it would have cost to have a professional service handle the taxes. I had my own business, and I am a CPA. Frankly, I could not afford to not have an outside firm handle my entire payroll. They screw up, they pay and they stay on top of payroll tax laws as well."
Æ Employee Health Plans There is lots going on these days and it has been difficult for the business owner to assess the requirements and determine a prudent course of action. Joe and I agree that this is an area where you go to the experts. Further, get quotes annually.
Æ Bill Collection Services Joe advises caution. "My concern is that outside agencies may not have adequate knowledge and relationships with the customer. As the business owner,I tried to work with my customers, and since it takes time and money to acquire customers I don't want to be too quick to assign a bloodhound."
Æ Lawyers & CPAs Most business owners readily engage attorneys and CPAs as needed. They recognize the skill sets and experience that those professionals provide. Joe's advice is to "Shop, shop, shop! When you need these professional services make sure that they have the expertise in your field of business. I have known too many of such 'professionals' that say they can handle your business or any business, but do not have the expertise, and you end up paying for them to learn about what you need. Make sure that their fees are reasonable, and get a quote or estimate."
Small business owners often feel that they can not afford the fees outsource companies charge for their services and consequently will try to find the extra hours to accomplish the administrative tasks. That's all well and good, but we suggest you analyze the value of an extra sale. If that value exceeds the cost of outsourcing a task, you can easily make the decision on how to profitably utilize your time and the time of your employees.