The cost of hiring a new employee does not stop at the salary a business owner pays them. The cost of recruiting and training can be expensive costs to the small business owner, and one of the many reasons the can hesitate about hiring if they are short in cash. Keeping a talented workforce is another matter. The salary and benefits small business owners provide to their employees can be instrumental in keeping individuals with talent in their businesses. To read more about this and other topics, follow the links below.
How Banks Lost Their Groove In Small Business Finance… And Why They May Never Get It Back
Prior to the Great Recession, easy credit conditions prevailed for small businesses. Cash was free flowing, and relaxed lending practices made it relatively easy to secure financing.
After the Lehman Brothers crash and during the ensuing “credit crunch,” volume fell roughly 19% from 2008 until 2012. This general slowdown in lending coincided with stricter requirements placed on borrowers. Financing simply became less available — even for “creditworthy” companies. For the first time in U.S. business history, small business owners frequently were unable to secure credit even from their own banks.
Many banks suffered losses when the housing bubble burst, and they became risk averse. In order to make loans, they often sought three years worth of financial data. Naturally, revenues declined during the recession, and startups were particularly challenged because they had no financial track record to highlight. Historical data from my company’s Biz2Credit Small Business Lending Index shows that big bank lending hit rock bottom four years ago in June 2011, when only 8.9% of small business loan applications were granted.
IKE TROTTER — Planning is vital for small businesses
Here in Mississippi and, in particular, the Delta, small businesses are the backbone to our economy. And, equally as important, small businesses can be the glue that brings children back home to run and eventually succeed in the ownership of a business. But, as many know, running a small business today involves a great deal of risk.
Needless to say, a small business normally comprises the largest part of one’s estate. Unfortunately, most business owners fail to address the need for succession planning because it is human nature to put off decisions concerning death, disability or retirement. But here’s a typical scenario: upon the departure of a business owner, there are three choices for remaining family members; sell the business, liquidate the business or try to continue operating. Because of this, succession planning is critical in carrying forth both an orderly transition of power to new owners as well as providing continuity for employees and existing customers.
A properly drafted buy-sell arrangement that is adequately funded can provide financial protection for both family and business. Designed effectively, the plan can allow surviving family members and owners to enjoy ongoing economic support for succeeding generations.
Small business advice: How to attract and retain loyal millennials
It’s no secret that building and maintaining stable employee relationships saves money in the short term and increases company performance in the long term. But what does appear to be a mystery is how to build those relationships.
Many small business owners haven’t found a way to take advantage of this insight because they struggle to build attractive benefits packages and cultures that appeal not only to the best employees, but also to the most dedicated employees.
Fortunately, there’s new information available that points to a surprising solution to this problem: Small businesses need to hire more underrated (and underrepresented) long-haul millennials.
“Dedicated” and “loyal” might not be terms that you usually associate with millennials, but new research indicates that you might want to reconsider your outlook. Although you wouldn’t want to focus your entire hiring strategy on one demographic, there are two facts about millennials that you need to consider before dismissing this approach.
