Is Offering Unlimited Paid Time Off Right for Your Company? A Top 5 Pro and Con Review

Offering employees perks is no new concept. Many companies offer great benefits, 401k options, and discounts on everyday purchases through employee rewards programs. For many companies offering perks to employees has been a major selling point when they aim to recruit some of the best talent. But what about offering employees the perk of unlimited paid time off? While this may sound crazy to some, many companies are starting to offer this amazing benefit. But at what cost? In this post we will review 5 Pros and Cons of offering employees unlimited paid time off

1. Pro: Morale Boost

Boosting and maintaining morale is one challenge that every employer faces. Offering an incentive of essentially “unlimited” vacation time at an employee’s disposal is a major draw of talent who may be swayed by other companies offering great benefits packages. Offering and supplying unlimited paid time off is an instant morale boost.

  • Con: Employees may take advantage. While employees would “assume” people would follow the norm of 2-3 weeks off a year, plus a given day here or there, they must be ready to have practices in place if an employee decides unlimited time off means “unlimited.”

2. Pro: No Rush to Take Unused Time

We have all been there. End of year or end of cycle where paid time off is available to be used and we are rushed to use that time before it gets cashed out or blocked by accrual caps. By offering unlimited paid time off, employees are less likely to bank and dump that time. They may spread the time out, take smaller chunks of time off, and use the time when things come up, rather than use it at the worst time or because they were forced to.  

  • Con: No rush to come back. One downside is that once the employee’s foot is out the door, they may be no rush to get that foot back inside. One major risk is some employees may take advantage of this policy or skip out of the office for larger chunks of time. Some employees may come and go so often that it starts to impact their work and those who rely on them.

3. Pro: Monitoring Gets Easier

Human Resources (HR) costs and managing of employee’s time off can be daunting, tricky, and costly all in itself. Watching employees’ time so they don’t abuse it comes at a price. With unlimited time, HR doesn’t have keep track of  how much personal time, sick time, accrued time, etc. so closely.  Some numbers suggest that an unlimited vacation time policy saved companies over 50 hours a year in administrative time.

  • Con: Implementation is tricky. For those employees who have been with a company before an unlimited time off policy goes into effect may be impacted by the banked hours they were able to keep. For many “old timers” who leave they may want to cash out their hours for cash. Those folks would need to be considered if “paid time off” became non-monetized in value.

4. Pro: Less Employee Overhead

Consider all the overhead of housing employees throughout the year and the cost associated with each employee being in the office each and every day. By offering unlimited paid time off, employees may become more efficient, happier, and do not waste as much time in the office because they are tied to a “schedule.” By allowing employees to go when they need, they reduce wasted time, energy, and overall overhead costs.

  • Con: Lack of face time. Employees that are out of the office tend to not be as visible. Therefore, offering unlimited paid time may be a dip in important face time with their colleagues and business partners. If companies rely on face time and presence, this option may put a damper on the party.

5. It Sounds & Looks Good

How good does “unlimited paid time off” sound? It sounds like a perk nobody could pass up, like  freedom for employees, and like it is almost too good to be true. Bragging about this option would make a company sound great to work for and seem very forward thinking.

  • Con: Performance can be bad. One downside with giving employees complete freedom is that for those that may take advantage, could leave a company in worse shape. Performance could go down, which may ultimately impact the overall strength of the company. Having one bad apple may ruin it for the whole barrel.

While there are many pros to offering unlimited paid time off for employees, companies must also think of the other side of the coin. By offering employees such an amazing perk, a company could be positioned to increase productivity, morale, and overall appearances. However that can also be the exact opposite if not implemented correctly. By understanding the above 5 pros and cons, companies can now consider if this is a right move to make at the current time.  By going in this direction, the innovative approach to employee benefits could also impact the company’s interests.

Hiring New Staff During a Business Growth Spurt

Lisa, a small business owner of 8 years, sought out a small business loan from IOU Financial after finding that her type of business is not an attractive candidate for bank lending. Luckily, IOU was able to quickly provide her the working capital she needed to expand her business and hire new staff during her time of growth. See what she had to say about her experience with IOU:

 

If you are a small business and working capital is the only thing holding you back from expanding, give IOU Financial a call. We can help restaurants expand their seating area, retail stores grow their product line, doctors update their equipment, and so much more!

 

 

Would SMS Communication Help Your Business: Top 5 Business Models That Would Benefit from Text Communication or Notifications

The growing expansion of utilizing SMS (Short Message Service) or most commonly referred to as “text messaging” has made its way into the market in a bigger way than telling a friend you’re running late, or notifying a loved one you made it home safely. SMS is now being used by the most popular businesses out there and has given consumers an even more hands-on way to stay in the loop. But is SMS right or even needed for every business? Let’s dive into the top 5 business models that may benefit from the use of SMS notifications in their communication plans.

Business Who Need to Verify a Person’s Identity

You’ve seen this if you have signed up for a Google email account or signed up for an account involving your identity. You sign up and are asked for a cell phone number to text a code to, which is entered on the account to verify you did in fact sign up, and are who you say you are. Well, if your business involved confirming any form of identity, or wants to safeguard personal information, creating an SMS notification/confirmation system may be right for you.

Business Who Need to Notify Customers of Any “Confirmations”

Does your business confirm reservations for dinner? Confirm a car will arrive in 5 minutes? Do you want to notify customers that their order has been placed and should expect a shipment soon? If any of these are a yes, then SMS services are a huge need. People have their phones everywhere they go, so sending a simple text saying “your table is ready” or a text confirming the order of a new slick gadget has made its way to the shipping dock will ensure a happy customer stays happy, simply because they were notified right when the information becomes known.

Businesses That Involve “Timing” of Anything

Movie starts in 5 minutes, plane will be a little late, or the shuttle that was supposed to be arriving now is not quite there. All of these scenarios require timing and with SMS, many businesses are tapping into the simple method of keeping customers in the loop. If your business has anything to do with timing of anything, from shipment to opening its doors, to notifying the next step of the process they are “good to go”, then SMS services could be a huge method to keep productivity high and clock watching low.

Businesses Offering Consumer Sales or Discounts

Ready to upgrade? Want to cash in on a limited time offer? Want a coupon for your next purchase? If your business has coupons or deals to share that can save customers money, text messaging is one way to approach this with consumers. Many businesses are using SMS notifications to alert its current customers of big sales, eligibility on cool new products, and upcoming deals that they can save for later use. If your business has any sort of deals to be mentioned, get the message out there with SMS.

Businesses Who Have a Consumer Demand

Last but certainly not to be dismissed is the idea that any business that has a customer demand for SMS should consider using text communication. Any business knows that if their customers want it, then one should consider it. If customers are asking or suggesting text communication, consider implementing into your service. Simple to use and powerful means of communication may be an easy solution to consider when looking at other means of staying engaged.

Using SMS or “text messaging” in some business models are more appropriate than others. Knowing the right places, methods, and setup are a whole other bag of tricks. If your business could possibly use SMS communication for reaching their customers and growing their brand, considering the use of such a service may be worth a look. By following the above business models or services that may benefit from SMS is the first place to start in implementing the modern day method for communication to the masses.

What Your Small Business can Learn from Big Business in the New Year

The New Year offers the opportunity to analyze your current business practices and consider ways to improve the status quo. One strategy small business owners can utilize is looking at the latest big business trends, and evaluating which can help their companies succeed in 2017. To save you time in your search, we have found and included the most popular big business trends in this article.

Subject Matter Experts Replace Salespeople

While the goal of every business is to sell, business-to-business (B2B) companies can benefit from hiring subject matter experts (SMEs) to lead their salesforce. While a typical salesperson can be entry-level, providing price options, delivery times, and general product information, a subject matter expert is much more than that.

This is an experienced professional who is not only extremely knowledgeable in the product or service being sold, but the company’s goals, the competition and the overall industry. These professionals can provide a great value to consumers as they can make recommendations based on individual business needs and explain clearly the competitive advantage your offerings have over your competitors.

Videos Become Content Musts

It’s no longer enough to write product descriptions or compile written instructions, as the public is demanding video content. In fact, Cisco predicts that videos will make up 69 percent of all consumer internet traffic in 2017.

Hubspot confirms this prediction; their Consumer Behavior Survey found that 55 percent of users report watching an entire video, versus just 29 percent who would read a blog or 33 percent who would finish an interactive article.

What does this mean for small business owners? Invest into creating videos that highlight your products, services and overall company. This effort will pay off with higher sales; Forbes found that 65 percent of individuals who saw an online video then visited the company that posted it.

Social Media Takes Over Direct Email Campaigns

Forbes reports that collaboration tools, like Google Docs, are replacing internal communication between employees. Instead of sending and receiving dozens of emails when working on a project, employees make changes and post comments online, which means that B2B companies will have a harder time getting potential customers to read their email campaigns, as they will not check their inboxes as often.

How do you reach new and existing clients if not through email? Through social media platforms, such as Facebook, Twitter and Pinterest. Updating relevant photos, posts and news about your company will resonate better with your target audience rather than just blasting emails out at them.

If you choose to implement a big business idea for your small enterprise, such as adding a subject matter expert to your team, or creating a video, you may find it difficult to fund these endeavors. IOU Financial makes it our mission to help small business owners succeed and grow their businesses with small business loans. Click here to find out how you can secure a loan in under 24 hours!

DIY or Hire an Accountant?

Many owners of small business do their own accounting, usually with the help of a software package such as QuickBooks. This can make sense if you run a one- or few-person operation, are familiar with basic accounting, and have the time and inclination to take on the work yourself. For you DIYers out there, we recommend our IOU Financial Business Budget Smart Sheet to establish and track your budget.

For some, the question of hiring an accountant is confusing. Here are nine signs that indicate you should go ahead and hire one: 

  1. Knowledge: If you aren’t familiar with accounting terms, financial statements or report creation, you might need an accountant, at least in the beginning, to teach you what you need to know. If you don’t think you have the time to study the subject, you can keep the accountant on as long as needed.
  2. Taxes: Tax law is complicated, and one of the worst mistakes a business can make is to overpay its taxes. But even worse is to underpay and get caught, because then you’ll be hit by penalties and interest. Use an accountant if you don’t understand which deductions and tax credits to take, and/or if you don’t want to file your tax return on your own.
  3. Time: Let’s face it, bookkeeping can eat up your time and divert you from more important tasks. You need to operate the business, make staff decisions, market your offerings and troubleshoot problems. It shouldn’t be surprising that bookkeeping would be low on your priority list. You can hire a bookkeeper who knows how to do other accounting tasks – they usually charge less than full-blown accountants.
  4. Growth: Congratulations, your business is experiencing rapid growth. However, that also means you have more customers to attend to, more staff to hire, more vendors to negotiate with, and so forth. These activities require more paper pushing, number crunching and meeting time. With these management challenges, why not let an accountant lift some work off your shoulders?
  5. Profit margin: It’s nice when revenues grow, but less nice if profits don’t follow. The reason is invariably that your costs are too high. You could use an accountant with a sharp pencil to evaluate your overhead costs and suggest ways to save money. The savings could easily pay the accountant’s salary and hopefully a lot more.
  6. Investors: Have you grown to the point that you have investors? Well, they’re going to want to see professional reports that lay out the current financial condition of the business. Professional financial reports are also useful in recruiting new investors. An accountant can produce the reports you need and make them look professional – that will help keep investors happy.
  7. Expansion: If you are thinking about expanding into a new state, an accountant will help you meet the regional reporting requirements for payroll tax, income and sales. Expansion to a new state may include opening new locations, creating new distribution logistics and hiring new staff. An accountant can help you track the costs of these moves.
  8. Merger/acquisition: If you are looking to buy or sell your business, you’ll need an accountant to evaluate the entities involved and how to structure the transaction in order to minimize taxes.
  9. Audit: If the IRS has signaled that it wants to audit you, a CPA or other qualified accountant will be able to represent you to the IRS. This can help prevent you from making mistakes as well as lower your stress level. Generally, you don’t want to face the IRS on your own.

5 Ways Your Small Business Can Innovate like Big Business

The New Year can mean new goals, products, developments and much more for small and large businesses alike. For many businesses, growth leads back to innovation and how it is essential. Without staying current and developing creative approaches, many businesses find the New Year a not so happy one. This is where small businesses can learn from bigger businesses about not only sales tactics, but how to come up innovative ideas that could keep them a contender in their industry for years to come. Let’s look at 5 ways your business can innovate like big business.  

Expand your Network of Ideas

Many larger companies are starting to go outside their walls to find the next best thing, newest idea, or latest innovative approach to delivering a similar product or service. Consider expanding outside your walls to see what other smaller companies are working on and how a partnership or collaboration could be more beneficial than competing. Harness new innovations by looking beyond your business.

Create an Atmosphere of Innovation 

It sounds obvious but does your business really foster an environment that promotes innovation? Many big companies are creating innovative “labs” or “programs” often called Accelerator teams tasked with developing new ideas, testing them out, and pitching the top ideas to the company. Start thinking about ways you can start to create small teams to create a new product, develop new ideas for marketing, or even ways to modify an existing service to make them more profitable. Test it out and if it renders good initial outcomes take it to market.

Innovate from Within

On the flip side of looking outside-look within. Ask for new ideas, discuss concepts with current team members, and research ways you can provide solutions to any problems. Many big businesses are learning more from the day-to-day employees and current teams on projects about various ways to stay above the technology fold. Look inward towards the employees you have on payroll to suggest and implement new ideas.

Diversify What you Have

Look at current products and find ways to expand and diversify that service. Offer it on new platforms and add new features as part of existing ones. If you sell sunglasses find ways to repackage, make small modifications, expand the line currently sold, or add new colors to your line. It is no surprise that this works… some companies add Emoji options to their platforms and call it the “next best thing.”

Access to Training/Resources Digitally

Are you accessing the most current training and trends in your field? If you are, how much time and money does that cost? Many companies are utilizing technology platforms to attend training online, developing training programs for employees to view, and even using in-house technology to expand messages to others without having to pay for costly travel expenses and meal reimbursement. Have staff take online courses from the office they work within. Many new companies are embracing the technology they used to develop their product to learn about ways to enhance it. Use technology to your travel and budget advantage.

Big or small, businesses can all learn from one another. Learning ways to maximize the market and stay atop of the newest trends and consumer “wants lists” can help carry businesses longer and further. What ties the success together is not only the implementation of innovation, but continuing to to execute innovative ideas all year long. So whether big or small, implementing the above 5 methods in the workplace can make or break the coming New Year’s resolutions.

Extra Inventory From the Holidays? 6 Ways to Use it Now and Plan for Next Year’s Product

Holiday sales for any business can have a major impact on how the next year begins. Anticipating for the rush can sometimes leave small and big business with excess inventory and decisions to make with what to do with it now, as well as what to do next year to avoid over-ordering. By following some simple steps, businesses can learn what to do with their current inventory excess and how to better plan for the next season’s holiday rush.  Paying attention to 6 key ways to use extra inventory can keep any business in the black.

Save It: Sure sounds easy and simple. Almost too simple. But if your product or business is in a position to hang onto the inventory for the following year, or for another time to sell, then try and store it. It may be wise to save it for a rainy day.

  • Next Year: Try and use some inventory from this season for the next if the product can withstand a year of consumer shift. Order less of the “new” next year and mix in current with latest product on the shelves.

Sell as “Bundled” Package Deals: Consumers love great products and they love feeling like they are getting a steal of a deal. So, if you can, bundle some of the extra products into a “package” deal for a limited time offer. Combine items and lower the cost per item for a nice price point and great bundled offer. Consumers will benefit from a “deal” and you will move more than one product off the shelves.

  • Next Year: Start by selling bundled deals from “last season” next to the latest product at a slightly higher price. Consumers may not buy the new product but will quick to grab the “last season” product at a sale price.

Offer Discounts Next Year: Who doesn’t love a deal? So, why not offer a double win for a consumer? Offer your product with the added benefit of an automatic discount on ANY item or product the next season. Consumers like to know they will get something now and like even more the idea of added benefit the next year. If your product is one that consistently is updated, the offer alone will create some buzz for this and years to come.

  • Next Year: Consider how many products were sold with the current offer and the offer for the following year when you go to place new inventory orders. By looking at how many consumers purchased that deal this year, you can better assess how much you will need.

Create Promotions: Current products make great promotional items. Offer consumers a “free” product with purchase of another. If the product is one that can go well with other purchases or even be used as a promotional item at an event, raffle, give –away, and beyond, then the price you “eat” may be good for future business and getting your unused product in the market. Promotions are a solid way to grow your brand and product.

  • Next Year:  Factor in any promotional items you may use and reduce purchasing any promotional items this year. Use what you have and refrain from ordering any other marketing or promotional items if you have inventory on hand.

Slash Prices: Sales sell goods. If you can offer a great discount and cut prices on your products, it’s a great way to get buyers to take your extra inventory. Think about all the extra holiday lights, artificial trees, and snowman wrapping paper that go on sale the day after Christmas. Jump on the price slashing bandwagon and throw one heck of a holiday deal.

  • Next Year: Anticipate this tactic and use to your advantage. See what goes the fastest once you slash the prices and consider the profit made from this. If it’s a good solid money maker, ordering a little extra for this same reason next year may be a good move.

Inventory Liquidator: Not the first choice by any stretch, but if you find yourself in a major pickle then go with a liquidation service-but be cautious. Be aware of the risks to your product integrity and brand name. For some this is a last resort option but if you need to move a lot and reduce the bleeding this may be an option to consider.

  • Next Year: Run the numbers of this years liquidation and forecasted sales to see if you can withstand this same hit the following year. If it’s too close to call, order less and start to consider ideas for back order deals or offers.

Business owners know the ups and downs of planning for the holidays and strategic planning of ordering inventory. However when that inventory doesn’t sell in the current year, the worry and stress to move that product rises. By implementing the above 6 ways to use that extra inventory now and plan for next year’s product, business owners can tackle the holiday rush with a smile and game plan.  Nobody said Santa Claus couldn’t come to town all season long.