The Federal Emergency Management Agency (FEMA) previously reported that over 40 percent of businesses affected by a disaster do not reopen. Of course, the COVID-19 pandemic is unprecedented and that number is likely to be higher as the economy reopens.
We hope these tips will help, as America re-opens.
Seek Assistance
Several organizations are available to help your business rebuild after a disaster strikes. Here is a link to federal information on disaster assistance – https://www.sba.gov/funding-programs/disaster-assistance
- The Small Business Administration – Apply for a low-rate, long-term loan through the SBA’s Office of Disaster Assistance.
- Your bank – Talk to your banker about a low-cost loan or other financial assistance. Paycheck Protection Plan is still available.
- Insurance agent – File a claim and discuss your ongoing needs.
- Community – Ask your community, including neighbors, clients and vendors, to help clean up, rebuild and return to business as usual.
When disaster strikes, your business must be prepared. These steps can help. If you don’t have these steps in place, consider implementing them today in preparation for the next disaster.
Review Your Business Contingency Plan
If you don’t already have one – create a business contingency plan. It’s part of your emergency preparedness strategy. This backup plan outlines the steps you’ll take if you ever face a disaster, and it will address:
- Business continuity. COVID-19 or other pandemics do not qualify for this coverage. It may be a while before we have clarity on this from insurers and courts.
- Emergency response
- Crisis communications
- Information technology
- Incident management
- Employee assistance
Some of the questions this document answers include:
- Who is the go-to contact?
- How will we accept, fill and track orders?
- What alternatives are available if our vendors are non-operational?
- What’s the best way to secure data?
Examine your business contingency plan today and make sure it addresses all your needs. With it, your business can regroup quickly after a disaster strikes.
Review Your Insurance and Risk Protection
You probably carry typical business insurance such as liability, property and employee coverage. Read these policies carefully, and store copies of your insurance documents in a safe place where they are easily accessible any time.
If you see gaps in your coverage or notice that you don’t have coverage for certain disasters, purchase additional policies. An umbrella coverage or flood insurance are two examples of insurance products that protect your business. For more details on how to prepare insurance-wise for an emergency of any kind, talk to your insurance agent.
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With the current COVID-19 pandemic, more people are opting to away from crowds and social situations – and may work from home.
While and employer’s cybersecurity insurance can reduce liability, it makes sense to also implement several security measures in the telecommuting (work-from-home) policy to protect the company.
Use Secure Wi-Fi Networks
Sure, your employees could connect to their neighbor’s wireless network or use public Wi-Fi at a coffee shop. These unsecured networks can open the door for cybersecurity breaches, though. Instruct employees to only connect to secure Wi-Fi networks or provide a safe and secure Virtual Private Network (VPN) for use as they work.
Maintain Security Settings
To protect work-issued devices and confidential data, you may set security settings on the devices you give telecommuters. Remind employees that they should not use a proxy or other method to get around those security settings. Doing so will compromise their device and the company’s data.
Encrypt Everything
From apps to data, everything employees access from their work-issued device should be protected by encryption. This security measure makes it harder for thieves and hackers to steal or access information.
Limit Access
Employees should only have access to essential data and files, not the company’s entire virtual filing cabinet. This limited access protects information and improves security
Strengthen Passwords
To get into the device and access various files, employees should use secure passwords. The ideal password contains letters, numbers and symbols, is not easy to guess and is unique to each site. Change passwords at least once a month, too. For additional safety, utilize a two-step authentication process, PIN or token system when logging it.
Prohibit Device Lending
It’s common for telecommuters to let a co-worker or family member use their laptop or phone for a few minutes to check email, play a game or make a call. Discourage this practice since the other person could download questionable content, drop or damage the device, access confidential files, or otherwise compromises the device or security.
Protect Devices from Theft
Leaving a laptop, tablet or phone unattended gives thieves an invitation to steal the device. Remind employees to keep their devices with them at all times and not leave their work devices unattended or in an unlocked vehicle. Likewise, they should take care to secure USB drives and other accessories from theft. You can add tracking capabilities to devices for additional security.
Log Out
After every work session, employees should log out of the websites they accessed, their Wi-Fi network and their device. This log out procedure protects company data.
Telecommuting is a privilege that benefits your employees and company. Use these security measures to protect everyone.
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A rise in temperatures this month can signal spring fever in your office. Your human resources department staff can improve focus and keep everyone on task in several ways.
1. Provide New Challenges
Your employees may feel distracted in part because they’re bored, so provide challenges. Ask them to work in a different department for a day, take on a special project or work with a high school intern. The challenge can provide a welcome distraction and jump-start focus and concentration.
2. Offer a Class
Give employees the opportunity to learn a new skill. You can poll your staff for suggestions or offer foreign language, management or coding classes. While learning something new, your employees will focus on something other than the nice weather.
3. Promote Exercise
Physical activity improves focus, an excellent reason to host a fitness class over lunch, offer discounts to the local gym or encourage employees to bike or walk to work. As your staff members add more exercise into their daily routines, they also focus better on their work-related tasks.
4. Encourage Breaks
Remind employees that breaks can improve their mental health, productivity and focus. Set a timer for hourly stretch breaks, and share the value of regular lunch breaks away from the desk.
5. Change the Scenery
Hang colorful artwork around the office or commission a floral mural in the break room. You can also allow employees to meet at a local coffee shop, play disc golf during lunch or hold walking meetings outdoors. Employees will appreciate the opportunity to enjoy the warm weather, and the change of scenery boosts creativity, productivity and motivation.
6. Stock Healthy Snacks and Beverages
Fill your break room with healthy food and beverage options, including fruit, veggies, whole grains and water. These snack options boost mood and creativity and improve your employees’ overall health.
7. Play a Game
Challenge employees to participate in a March Madness basketball bracket, host a chili cook-off or reward teams who reach productivity goals. Games keep employees entertained and as a bonus, you’ll see a stronger spirit of cooperation.
8. Bring the Outdoors Inside
Plants can purify the air and improve mood. Arrange plants around the office as you bring a bit of the outdoors inside your office.
9. Adjust Work Hours
If your employees can arrive early and leave work early, they get to enjoy the warm, sunny afternoon weather. Adjust work hours, if possible, and allow employees to indulge their spring fever while completing their work.
Spring fever might try to curtail productivity in your office, but you can improve focus with these steps. Everyone will be happier and work smarter thanks to your efforts.
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Closer relationships among co-workers boost collaboration, teamwork, morale, productivity, job satisfaction, and wellness. As you observe Relationship Wellness Month in February, encourage better work relationships with these suggestions.
Do a Good Job
Employees who consistently do a poor job force their co-workers to do more work. Resentment grows, and your company may miss deadlines and lose customers.
Give employees a clear job description and set expectations for performance. Then celebrate employees who do a good job and meet their goals.
Accept Differences
While it’s tempting for employees with similar interests to congregate together and avoid others who are different, greater acceptance improves relationships and personal well-being.
For this reason, provide opportunities for diverse employees to work together and find common ground. Plan team-building activities, too, as you celebrate and accept differences.
Share Less Personal Information
Your employees are human and will bring personal problems to work. However, distracted employees can make mistakes or cause accidents. Sharing too much information also causes discomfort and conflict between co-workers.
Remind employees to be professional at work. Also, promote the mental health benefits of your employer-sponsored health insurance or provide counseling services for employees.
Avoid Gossip
Juicy tidbits of information about co-workers may seem entertaining, but gossip breaks down morale and can cause projects to suffer. It also reduces trust and respect.
Spread awareness about the dangers of gossip. You can also remind employees to change the subject or walk away from such conversations.
Manage Conflict
Disagreements and conflicts are normal, but these situations create tension and inhibit collaboration.
Create a straightforward conflict resolution process, and maintain an open door policy. With these conflict resolution strategies, co-workers address issues, resolve challenges and restore relationships.
Assist Others
Meeting a deadline or managing a big project can strain busy employees and increase stress.
Promote helpfulness and collaboration as you ease strain, stress and pressure. Everyone on the team can and should work together to get the job done right and on time.
Stay Positive
Sometimes, bad things happen. Employees may make mistakes, struggle to adapt to change or feel unappreciated. Negative and bad moods are contagious, though, and affect everyone.
Instead of allowing negativity, implement a complaint procedure. Then lead by example as you promote positivity.
Plan Fun
In the midst of busy workdays, your employees may not have time to socialize and truly get to know their co-workers.
Schedule an outing, activity or another fun event at least once a month. Give employees time to unwind, relax and get to know each other better.
To observe Relationship Wellness Month, look for ways to improve rapport at work. These tips help you build better relationships among co-workers and increase employee and company success.
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Businesses are shrinking or expanding constantly. Start your renewal process today by comparing your policy estimated payrolls with the summary W-2 sheet produced by your accounting department (must be completed by February 1).
Review the 1099s and check these recipients against your files to assure certificate compliance and proper risk transfer techniques.
After reassessing your payroll exposures for the coming year, estimate your current premium. Talk to your agent about optional markets at that premium level, insurance companies have different appetites for different size risks. Find several appropriate insurers.
Many insurers now demand loss control inspections prior to commitment to offering any quote. Get your reports in order. Make sure loss control measures are in place and working. Order loss runs from your current carrier to have on hand.
Most important: leave enough lead time for the inspections to occur. At least ninety days, so new insurers can inspect your operations.
The insurance markets retool every few years and create new identities, new brands within the industry. Currently, insurance companies are deciding what size accounts they will seek, single lines like workers’ compensation or general liability, or supporting lines requirements: like workers’ compensation, general liability or automobile liability. Ask your agent what the current view is among their companies.
The key to having choices is starting early now. Don’t leave yourself at the mercy of the renewal carrier.
While your reassessing your policies, rethink your program as well. Your program consists of the risk management decisions that have subtle but important impacts on your insurance costs. For example: what is your best expiration date? In the construction industry, January first or April first are popular choices in a well-managed risk management program.
One secret within the insurance industry: rates tend to change on calendar quarters. If rates are increasing on April first, you can always renew on March thirty-first if you have enough lead time. But you need to know in advance and have friendly underwriters, and proactive agents.
Calendar quarters allow for government filings to be used as a basis for the insurance auditors, and audits go smoother. Corporate financial years can be good, especially if they fall on calendar quarters. Decide your best expiration date (and you want all liability lines to share that date)and begin 120 days in advance gathering quote information and loss data. Shop early.
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You and your business partner or partners have a clear and common vision of how to run your business, where it’s going, and how it’s going to get there. As a team, you’ve worked together each and every day to share the daily demands and shape the success of your business. That said, have you thought about what would become of the business and all your hard work if you or one of your partners became ill, was injured, or died?
A business doesn’t have to become disabled or die just because one of the owners retires, dies, or becomes too sick or disabled to work. Whether the transition of business management or ownership needs to take place after death or during life, it can be orderly accomplished through appropriate business succession planning.
A buy-sell agreement is a tool commonly used in business succession planning. This planning feature, when correctly funded and designed, can orderly establish the value at which the business will be taken over and who will be doing the taking over. The owner can have a peace of mind from knowing that the business has a predetermined basis for which it can be sold in a ready market, thereby giving the owner a source of funds when they need it, such as when they are ready to retire. If the owner was to die prior to the above predetermined basis occurring, then the buy-sell can be used to meet the survivor’s needs or pay hefty estate taxes.
Although there are several ways that a buy-sell agreement can be established, an entity purchase agreement and cross purchase are the two most often used:
Cross Purchase
Due to favorable tax results, this is a highly used approach by many small businesses. It’s generally used by businesses that only have a small number of owners. The cross purchase is typically funded with a life and/or disability insurance policy that each of the owners must maintain on their co-owners. The death benefits from the life insurance policy aren’t subject to taxation since the owners, not the business, actually own the individual life insurance policies. Each of the business owners are legally obligated to purchase the ownership interest of the other co-owner(s) upon death.
The deceased owner’s estate sells the owner’s interest to the surviving owners in exchange for the proceeds from the life insurance policy. The surviving owners will get a step-up in the business’s tax basis. Alternatively, the insurance cash value can also be used if one of the co-owners was to need to fund a buyout during their lifetime. One point to remember regarding a cross purchase is that administration is smoothest when there are only a limited number of owners and will become increasingly difficult to administer as the number of owners increase.
Entity Purchase Agreement
This type of buy-sell agreement works somewhat like the cross purchase, but it’s the business, not the owners, that will maintain an insurance policy on each owner and agree to purchase any deceased owner’s interest in the business. As such, the taxation is different.
The death benefits under both an entity purchase and cross purchase agreement, whether being paid to the business or an individual, are exempt from federal income taxation. However, unlike with the cross purchase, there are certain situations that a C corporation can be subject to the corporate alternative minimum tax under an entity purchase. There’s also not a step-up in basis under the entity purchase plan.
Hopefully this brief overview of the entity purchase and cross purchase types of buy-sell agreements has spurred you to think about how vitally important business succession planning is to your business. Of course, this short article couldn’t possibly cover all the factors to consider when developing a business succession plan. As you begin the preparations for you business succession plan with your attorney, accountant, and insurance agent, they should be able to answer any additional questions or concerns you might have.
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