Best Read Friday - Using ObamaCare To Run Lean or Mean

As anticipated, corporations are taking advantage of the ObamaCare mandates as an opportunity to either clean house or run lean.  As noted in my post last week (ObamaCare and the Business Fare), businesses with over 50 full-time employees and an average company annual salary of at least $250,000 will need to contribute to the workers' health benefits.  It appears some research of over 300 companies has prompted a drive to cut back on hours, furlough workers, and increase workload in areas where 1 person can really do the job of 3.  Read this Investor Business Daily article to see the latest in corporate activity partly contributed to the October 1st implementation of ObamaCare.

And check out this video to see if these corporations are running lean or running mean!

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Posted in: 2013 government shutdown,business expert,business planning,Government Shutdown,ObamaCare,Temeko Richardson,The Truth about Obamacare

Being Prepared for the Worst

DISASTER RECOVERY REQUIRES A PLAN...

Natural disasters like hurricanes, tornadoes, floods, earthquakes, explosions, and fires are happening all too often.  The shift in reasoning for the good of the American people in the United States government should have everyone on watch for potentially worse calamities than last week's government shutdown. It has been estimated that 40% of businesses closed by an unforeseen situation never reopen and 72% of nonprofits never regain footing - impacting the individuals they employ or serve.

Here's how both business and non-profit leaders can properly prepare for the worst:

1) Create a business continuity plan.  Identify what is required to have on stand-by for the basic operations to run without delay. This plan should include the individuals responsible to put the plan in action, named alternate locations, several months (recommended - six) of allocated funds to enable the minimalist approach to operating, and disaster recovery plan for data/storage/servers.
2) Develop a communication plan for employees, customers or donors.  Implement a strategy to get the word out to employees who do not need to come into work or telecommute.  There should also be a plan to identify who needs to be on-call or readily available at alternate locations.  Customers or donors will also need to be sent an email to alert them of the situation and that all precautions have been taken to ensure their personal identifiable information is protected and secure during this transition period.  For those expecting pay or assistance, they will need to be informed about how this will work or if there will be any slight delay.  This should be clear by understanding the employee, customer, and donor makeup of the entity. (Read Chapters 3 - 5 in my book, Get A Clue - 10 Steps to an Executive IQ).
3) Keep telecommuting options open.  Ensure the VPN, firewall, and security measures are offloaded to a third-party agency outside of the company's local area to minimize risk of downtime.  Do not expect cell phones to be the only mode of communication.  Email and secure messages provided on the company network should be able to continue without interruption.
4) Start moving systems to the cloud.  Get over the "I need to keep my data inhouse" syndrome.  There are reputable cloud companies that provide storage space, database and business intelligence analytics systems, sales, marketing, inventory, and ordering systems.  Identify the systems with the most valuable data and operational impact and create a 3-6 month plan to move that data to a cloud solution.
5) Revamp contracting with government agencies.  The post on the 2013 Government Shutdown and the follow-up one on  Lockheed Martin furloughs should explain this perfectly.  Shore up enough contracts that will allow you to keep people on the bench and still maintain profit in case of issues.

This type of planning needs to be realistic, familiar, tested, and proven.  But it can be done as long as it is well-thought out and constantly updated.  In the words of John Wooden, "Failing to plan is planning to fail".

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Posted in: 2013 government shutdown,business continuity,business planning,Cloud Computing,Entrepreneurship,entrepreneurship contracts,Get A Clue,program management,project management,Temeko Richardson

Best Read Friday - Government Shutdown Now Impacting Large Corporations

Instability with Gov't Contracts...

Confirmation of my posting on Monday (The 2013 Government Shutdown Affect On Business) is the recent announcement from Lockheed Martin of furloughing approximately 3000 workers.  Lockheed Martin primarily has federal funding for projects sponsored by the government, which is the crux of their business.

With no contingency plan in place for government issues or non-payment, contract managers were forced to lay off workers who were on assignment with a project directly related to government entities that were forced to close during the government shutdown.  

Read this article to see why the business continuity and project planning or lack thereof contributed to 3000 people from corporate America being additionally affected.  

Be sure to check back next week where the posts will specifically focus on business continuity planning to protect the company, the employees, and the data.

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Posted in: 2013 government shutdown,business continuity,business expert,furloughed workers,Government Shutdown,Lockheed Martin,Temeko Richardson

ObamaCare and The Business Fare

BUSINESS STRATEGY FOR MEDICAL CARE..

Almost half of America's uninsured are small business owners, independent contractors, employees, or their dependents because independent insurance plans are exorbitantly priced.  Unless there is an option to be a part of a professional group, trade group, or special-interest group, the age, location, and preexisting condition factors can cost a small business and independent workers nearly the entire profit. Larger corporations with more than 50 people get group discounts that enable them to contribute to health benefits at lower costs and use that as leverage when hiring employees.

For the small business and independent workers group, ObamaCare introduces the Small Business Health Options Program (SHOP) as part of every state's health insurance market for group health plans to be purchased by companies employing less than 50 full-time workers.  In 2016, the limit will be raised to 100.

But what does ObamaCare, the act that goes into effect today regardless if the government is shutdown, mean in general for all businesses?  It's good and bad based on the number of full-time equivalent employees (FTE) and their annual wages.

1)  If there are fewer than 25 FTEs with an average annual wage below $50,000, tax credits will be provided to help pay for employee premiums.
2)  If the business makes over $250,000 in profit, there will be a .9% increase due on the current Medicare Part A tax.
3)  If employers with over 50 FTEs yielding an average annual wage above $250,000 don't purchase health insurance for their FTEs, a penalty will be assessed by 2015.  Companies barely hitting this limit will be exempt from the fee on the first 30 full-time workers. Nonetheless, the employer mandate, a written notice, must be provided to employees informing them that a) they may be able to obtain insurance based on their income at a lower cost through private insurance and b) purchasing insurance through their states healthcare exchange may reduce or eliminate the company's contribution to their health benefits.

Clearly the smaller the business the better the tax breaks.  However, there will be executives enticed to reduce costs by modifying the normal 40 hour work week for some FTEs to that of part-time status or reducing the average annual wage by furloughing higher paid individuals and possibly bringing them back in as contractors or hiring more "temp workers" rather than employees.  But some of that is just good business anyway after learning how to run lean in a down economy.  Whatever category your business falls, the fare can be cheaper or costly but requires planning.

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Posted in: 2013 government shutdown,and smallbusiness,Government Shutdown,ObamaCare,small business expert,Temeko Richardson,The Truth about Obamacare

The 2013 Government Shutdown Affect on Business

BUSINESS NOT AS USUAL FOR SOME...

There has always been a highly-perceived level of stability promoted by obtaining a state and, especially, a federal job.  Mostly because there is buffer in the thousands employed between the individuals that contribute to the necessary work and those that plan the mission of each department.  It does not require the sharpest tool in the tool shed to surmise there are a lot of individuals getting paid huge sums of money to twiddle their thumbs in these federal jobs.  Likewise businesses, especially entrepreneurs, find themselves providing all kinds of financial information and background checks in hopes of security clearance and acquiring different types of certifications (e.g. MBE, DBE, 8A, etc.) to quickly allow them to be able to do business with the government for projects that would normally require a fraction of the time proposed for quality results.   

And now with the 2013 government shutdown, how can businesses protect themselves in the future?

1)  Ensure no more than 30% of business income comes from government.  
If your business is based on all government income, change the business model from this point forward.  The trillion dollar (plus) debt ceiling should say it all.  While the United States is floundering with a lower country credit rating, the payment for the work you may have completed or have in progress could be at risk if there is a sudden stall to payments being issued to non-government staff.  Get out of the comfort zone and search for business in the private corporate sector.  Easy money is not always the best money! After all, the pay is normally greater and hard work is oftentimes rewarded with additional recognition (e.g. future projects, marketing of services, great references, etc.)

2)  Only solicit government business that is mission-critical.
The government shutdown areas that it felt were not really important for the citizens of the United States to be safe and monetarily sustainable. The White House, Senate, Social Security, Military (active), Air Traffic Control, US Postal Service, and NASA Mission Control are a few entities that remain open and operational.  Agencies like the National Parks, Federal Drug Administration, National Institutes of Health, EPA were not considered as viable risk operations.  This should speak loud and clear that all future business should be done with an entity that is identified as essential to the United States of America, even in hard times.  For more listing of agencies, click here.  

3)  Upgrade the business continuity plan.
Most businesses handle disaster recovery in cases systems shut down but never government.  There needs to be careful evaluation on what it will cost the company contractually - fines encountered for not delivering or halting work related to the government agency.  There should also be an evaluation on what staff, if any, must be temporarily laid off if there is no extra non-government work to cover their employment.  And of course, identify what loans will need to be tapped into to cover human capital expenses and potential losses as well as a way to get the money back.  This also includes getting the most of the business continuity insurance which can, in some cases, pay a portion of what will be lost based on the circumstance.

While the government plays with the lives of many people who need services and the checks of those employed by government (deserving or not) who may be living check-to-check to take care of an ailing parent or paying off debt or in a dire circumstance, business leaders need to use this as a lesson on how to plan appropriately.  After all, the divide between political parties has been existent for centuries but it is up to the CEOs and business owners to make sure their business can at least withstand decades of this adversity.

For more business planning, be sure to follow this blog at blog.therlcgroup.com and pick up a copy of the book, Get A Clue - 10 Steps to an Executive IQ.

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Posted in: 2013 government shutdown,8a certified,business continuity,entrepreneur contracts,Entrepreneurship,entrepreneurship contracts,Government Shutdown,MBE Certified,startups,Temeko Richardson,WBE Certified