New Years is a good time for updating your estate planning. If you have children this is really critical.
And …. IF you own a business this is really critical.
Both? Super critical.
Think you are too young to die?
Been on a highway recently? Heard of Covid?
BYOD = Bring Your Own Device
The smart phone is a major part of our business and personal life.
Two problems:
1. doing business comms on a personal phone
2. doing personal comms on a business phone
The degree of the problem depends on what kind of business you are doing. Is your business super sensitive, or is your business somewhat mundane-but-important?
Even the security experts at the FBI have gotten caught up in using official phones for very unofficial calls and texts.
Selling wholesale hardware is important but not sensitive. Doing medical or financial work is both sensitive and important.
IF you provide phones to employees, there should be a clear policy and procedure statement.
IF you allow employees to use their phones for business, there should be as clear policy and procedure statement.
And whatever you do should be enforced.
(Either way there is likely to be some crossover, people being people and all that - it is the big issues that matter.)
Those of us over a certain age remember the word "Rolodex," a card file of names and addresses of important contacts.
These days the "rolo" is more likely to be an electronic file of some sort, and it is still critical.
A cloud backup is great as long as the Internet is working, a spreadsheet file is great if you back it up off site somewhere, and a printout may be useful if stored in a safe place away from the business site.
A separate file should include employee contact information.
And, speaking of employees, have they been briefed on your disaster planning?
Never depend on a single storage method for critical data.
Businesses in Florida and the west are learning that lesson the hard way (and families are also).
Soggy paper.
Never a good thing, and a difficult salvage job.
Much of your paper may have originated from digital systems, which hopefully are backed up offsite. Some routine paperwork may not be a big loss. But some paperwork may be critical, and you do not want to lose that.
Critical Documents:
Entity legal documents, board minutes, licenses, tax returns, blue prints, warranties, vehicle titles ..... all of these may be critical to your business operations, and some may be difficult to replace.
Advisors and Vendors:
Your CPA and attorney should have backups of some of these documents (if your CPA or attorney office is in your same neighborhood you should ask about their digital backup planning). This can be a great help, but advisors will not have day-to-day paperwork. If you use a payroll service the service will have digital backups of your payroll details. Your bank will have digital copies of your banking records for multiple years.
Digitizing Records:
A flatbed scanner can be had for less than $100 dollars, and is handy for quick scans of small numbers of documents. A faster document feed scanner can be had for under $300. These allow the capture and backup of digital images. This allows for easy digital backup offsite and can cut your file cabinet usage.
Not the Basement:
Many commercial building have basements, and it provides for close but out-of-the-way storage.
Basements are also the first to flood. Bad place for paperwork.
Retrieving and rebuilding your records is time consuming and costly, which justifies the time required for backups.
Assess your risk. Some locations are riskier than others. All locations have at least some fire risk, and most have some level of wind risk. And some are in hurricane zones.
You may be lucky, you may not. Do not depend on luck.
It is time to sit down and list the types of disasters your business might be subject to, the probability of such a disaster, and predict the least and worst damage and disruption.
Can we predict every possibility? No. Many years ago a client had a semi truck drive through his front window and destroy his entire store. Who would have predicted that?
The beginning of preparedness is recognition. Consider:
Fire
Flood
Wind / Tornado
Hurricane
Earthquake
Bio or chem event (the refinery down the street springs a leak)
Power outages / surges / gas leaks
Fires in adjacent businesses
Active shooter in vicinity
Railroad derailments
Risk management is such a cheerful art and science. (?)
In the near future we discuss planning for potential threats.
Data, data, and data.
The world runs on data. Your business runs on data. Most businesses cannot operate for long without data, both current and historical.
Data backup is critical. System backup is critical. Hardware redundancy is critical.
The Cloud
Cloud storage is one way of avoiding physical jeopardy to your data collections.
Downside, you need functioning Internet service to access the cloud, which may not be available immediately after a disaster.
Hardware Storage
Before the cloud physical backup (often tape) was a daily occurrence.
Now many skip that step.
Given the low cost of massive (terabyte level) storage, keeping some periodic data backup on a hard drive may be valuable.
Hardware Backup
A flood just destroyed all of your hardware.
Consider keeping a laptop, loaded with your primary software packages, at a remote location and off of the network.
At least there is one machine that can be used to communicate with the outside world while other services are restored.
A large portable battery pack, always kept charged, can run a laptop for quite a while (small portable charger packs will do smart phones, but not a laptop).
Where to Back Up
If your home is in the same danger zone as your business, that will not work.
Find a place that would not be subject to the same flood or brush fire as your business.
Hurricane Ian should remind all of us that some level of disaster preparedness is necessary for each and every small business.
Assets and inventory must be protected. Records must really really be protected.
Complete protection usually impossible. Tornados are quick and nasty. Location may require a flood protection plan. Fire safety should be a daily event but no plan is guaranteed 100% effective.
An assessment of your risk levels, especially with flooding, forms the basis of your evacuation and recovery plan.
Next entry, document and data protection and recovery.
"I've worked hard here for three years and the new hires are making the same wages as I am. I am job hunting."
Real quote from a frustrated worker.
The last three years have been difficult for employers and employees alike, and some employees who remained loyal and did not leave are feeling put upon.
How do you adjust to the current labor market and not leave loyal employees behind?
Regular evaluations and regular pay adjustments are a valuable approach.
What if you just cannot afford to pay more?
Silence is not a high value management strategy. If the news is bad tell the loyal employees and let them decide their own fate. Look for other means of compensation, such as increased paid time off. Try something.
Silence does not work out well.
The public accounting sector is hitting the perfect storm.
many CPAs are at or near retirement age
fewer young people are enrolling in college accounting programs
there is more work
the IRS code (and state tax codes) are becoming more complex
costs are going up
technology demands are greater, and costs are going up
This will cause higher fees, and your accountant may "fire" you from the client roster, due to the above factors.
Business leaders are in a dither about the loyalty question.
Why so little loyalty from employees?
We will explore this question and the answer will not be pretty.
So for starters - loyalty has largely been a one way street for forty years, the Reagan era started a change in employer-employee relationships that persists to this day.
Employees owe loyalty to employers, but not the other way around. This is no longer working.
The pandemic period changed everything, plus the demographics of retiring baby boomers and low birth rates.
Stay tuned for a longer discussion.
If you are going to terminate or layoff an employee who has key knowledge of your computer security and/or operational systems, you might want to do this carefully.
Six months from now the former employee might have a very poor memory or be hard to contact.
A severance agreement with a cooperation clause might be worth the cost.
Telling lies to job candidates is not a healthy practice.
As employers look to expand and restaff following the pandemic, another pandemic seems to be mushrooming - misleading job candidates about work practices and rules, especially work-from-home (WFH) practices and expected work hours.
If WFH is discouraged or not allowed, say so. If employees are expected to work 10-12 hours a day, or work on weekends, say so.
Tell.....the....Truth
The start of the pandemic was almost exactly 40 years after there was a major shift in US economics and in the treatment of workers.
The new wave changed the level of bargaining power, away from workers and toward employers. The dramatic reduction in private sector union activity was one reflection of this trend.
Good for employers!
Other changes, including the globalization of many activities and the rise of the service economy, further diminished worker bargaining power.
And then, the pandemic blew up ther labor market, and employees started to rebuild bargaining power (aided by the retirement of 3 million baby boomers).
Employers must recognize and respond to this change.
Grumbling about the "good old days" does not make the problem go away.
So the presumption of one way loyalty is gone and over.
President Biden signed a brief but important bill outlawing mandatory arbitration in sexual harassment and sexual assault cases.
Employers have been using mandatory artibration to deny legal avenues and rights to workers (businesses prefer arbitration because is tends to favor the employer).
It appears any policy or procedure statement, employee handbook or contract with such a clause, the clause will be void per se.
Best policy - prevent sexual harassment and assault.
Second best policy - deal with harassment and assault firmly and decisively.
(not legal advice, consult your lawyer)
https://www.congress.gov/bill/117th-congress/house-bill/4445/text
This is a difficult era for politics.
And not surprisingly politics have bled over into the workplace.
Sometimes because of the conduct of owners and managers.
Sometime because of the conduct of employees.
And sometimes because of the conduct of customers and patients and protesters.
What to do?
General Rule:
Politics should be kept out of the workplace.
Reality:
This may not be possible.
Who can be caught up by this?
Employees, employers, customers, patients, vendors, the community, and potential customers, at a minimum.
Rights vs. Responsibilities
This is where the tension lies and this is where the complexity begins.
More in following posts.
Can an employer factor in employee conduct off the job?
Say an employee is involved in some sort of radical political activity and makes the news, and your company is mentioned.
Or gets a misdemeanor pot citation?
Or makes the news for domestic abuse?
The answer to your business and personal response is - "it depends."
Depends on federal law, state law, the type of job, the severity of the activity and etc.
If the job involves handling funds or dealing with sensitive information this may be more urgent. If the job is public facing this may be more urgent. Other types of jobs (roofer) not so much.
Thinking about this ahead of time is important.
And keep the lawyer on speed dial.
Employment at will is a legal doctrine (this is not legal advice) that allows employers to terminate employees at any time or for any reason or for no reason at all, in the absence of a contract, and subject to legal restrictions (race, gender, age disability, etc.).
Employers like this doctrine because it gives them lots of power and flexibility.
Employers forget the doctrine cuts both ways, employees can quit at any time or for any reason or for no reason at all. The "Great Resignation" has hurt many employers, some deservedly so.
Employers may try to bind employees, say with a requirement for two weeks notice in order to receive accrued vacation, but this is not an absolute.
(As usual, employers must be versed in both federal and state employment law, and have a qualified lawyer on speed dial).
Treating employees like humans, and not cattle, is the place to start. Poor management and poor supervision are ultimately very expensive.
More to follow.
True story (without identifying the business):
A business owner became angry and told his employees that if they would not come back to working live in the office they could just quit.
The employees started job hunting and determined they were underpaid according to the market.
So they quit.
Remember the parody prayer:
Lord may my words be tender because I may have to eat them.
The IRS is struggling with outdated computer system, not enough employees and a Covid-driven backlog.
A couple of tips:
keep copies of everything you file
file via express, certified or priority mail and keep the receipts (the postmark date is what really counts)
respond to corespondence soon
keep your CPA in the loop on information
More in following posts.
If you depend on your voice mail to take calls, check your voice mail frequently.
And after you make notes on the calls delete the old messages.
Yes, we called a business today and received a "voicemail full" message.
The pandemic has created a historic mess in the labor markets.
Shutdowns, layoffs, work at home (WAH), medical leaves, changing business models, quick reaction to new events, --- all of this has made a mess of the labor market.
Some employers took the pandemic seriously, others treated it as a personal and business insult to be worked around.
So what do we know:
Employers prefer employment-at-will, that is an employee can be let go anytime for any or no reason. Employers forgot that employment-at-will goes both ways, the employees can walk at any time.
A lot of older employees took the retirement option. Can they be seduced back into the work force? Worth a look.
Moms are having trouble with day care. We need both business and government to work this probblem. so far not much.
After decades of minimal bargaining power for employees, and the proliferation of low wage service jobs, the situation has been reversed. Employees are taking advantage and the market is playing catch up with wages.
"Bad bosses" the screamers and bullies are having trouble retaining help. This also covers supervisors, many of whom have minimal training and minimal skills.
Part-time jobs with irregular hours are difficult to staff, except perhaps for young people looking for less than full time.
More information and recomendations in Part 2.
Someday the pandemic will end, or at least feather down to an annual endemic.
We will greet this with aew g feeling of exhaustion, after battling for so long in such a confused environment.
This may be a time for new business models, new human resource models (possibly forced by the employees), new mercahndise and service models, new geographical locations and a fresh approach to business.
Business evolution is always in motion, but now it will be in motion faster and the staskes will be higher.
We will produce a series of posts on business models and how to do business in a new world.
The pandemic and business in general have delayed and derailed lots of activities, including this blog.
We are back and will be rolling out some new ventures and adventures.
This is free advice, but in this case good things can be free.
Appreciate questions and comments.
Tom
