The primary reason why so many startups fail at processing payroll is because entrepreneurs aren’t payroll experts.
People create startups because they have a vision they want to make real in the world. Rarely does this vision have room for a practical and accurate payroll function.
20% of small business fail in their first year. The number one reason?
They say cash is king and with startups, this is the First Commandment. Access to capital is essential to keeping your head above water and being able to grow. At the centre of any successful business, large or small, is a successful and efficient payroll function.
From paying staff to raising invoices from suppliers to paying taxes, good payroll allows your money to work for you allowing your startup to thrive.
So, if you don’t want to end up as just another failed startup statistic, it’s important to get your house in order.
Get the right skills
Recognizing your limits is what makes the difference between a startup succeeding or failing.
Startups need to shore up their weaknesses in payroll and HR.Whether that’s through hiring a professional, seeking out software or reaching out to a dedicated third party.
While your operation is small, you may not be making your money work its hardest. Effective management of payroll can ease cash flow problems and ensure long-term viability.
Having someone on your staff who doesn’t just know how to “do the books” and process the payroll, but has knowledge of your tax obligations as a business frees up time for others to focus on running the business.
The Directors of most startups end up being jacks of all trades, managing payroll, HR, marketing and sales all at once.
According to a study, multitasking decreases productivity by 40%.With so many payroll regulations and tax laws, you want to minimize the margin for error as much as possible.Improper filing and payroll entry omissions will result in tax audits, which penalize companies with hefty fines.
But if you want your startup to be a force to be reckoned with, you don’t need jacks of all trade, you need masters.
Lessons to Learn: Trolls
In 1965, Thomas Dam, the Danish woodworker, fisherman and creator of the Troll Doll lost the rights to his own designs due to a copyright error.
In 1962, he began selling his dolls in the U.S. through his company Dam Things Establishment. But no one at his company had the skills to understand the nuances of the U.S. copyright laws.
So when his company tried to copyright the Troll in 1965, the design was deemed to be in the public domain in the U.S., making the copyright invalid and the design free for all to use.
Prioritize employee retention
As an employee, choosing to move from an established business to a startup comes with certain risks. Is there room for progression? Will there be opportunities for personal growth? Does the startup have an infrastructure for employment that I have come to expect?
Startups offer exciting opportunities for top talent to explore new ventures. But, if you want to retain the masters of the craft, that you need for your business to thrive, you need to make sure that their basic employment expectations are met.
Employee retention begins with onboarding and is reinforced with accurate payroll. The cost of employee turnover is huge. Some recent estimates putting the price at $45,000 to $150,000 to replace an employee.
When you hire a few more employees, you might not be able to keep them if you can’t reliably and accurately pay them on time.
In the U.S. 82 million employees have experienced paycheck errors. Of those, 49% will start job hunting if they experience just two payroll errors.
Organizations with a strong onboarding process have an 82% higher new hire retention rate. The most effective onboarding programs take advantage of technology, emphasize assimilation and foster new-hire socializing.
Advanced HR tools provide on-demand training that goes beyond traditional “classroom” learning. They also provide proactive structures for learning, so employees and managers can track and record internal training success.
Combining technology with a dedicated mentor or coaching program helps further development and increase new starter assimilation into your business culture.
Assimilation means that your new hire has bought into your company culture.They feel welcome, wanted and part of something that matters. This is further emphasized through the use of social networking during the onboarding process.
Lessons to Learn: The Father of Silicon Valley
William Shockley is best known as the “Father of Silicon Valley.” But thanks to poor management all of his staff went further than he did.
Shockley, along with John Bardeen and Walter Brattain were awarded a Nobel Prize in Physics in 1956. Their research into semiconductors led to the creation of the transistor. The invention of the transistor is how you are able to read this article on a computer.
Shockley was also, by all accounts, the worst manager in modern history. Among his many lacking qualities as a manager, he deeply distrusted his workers.
He had a habit of publicly berating his staff. He would even hook them up to lie detectors to determine whether any of them were sharing secrets with his competitors.
Of the eight highly trained and inventive individuals hired by Shockley to market semiconductors, all of them quit. Those men went on to found 65 companies in Silicon Valley, including giants such as Intel.
Thanks to his inability to retain his staff, Shockley missed out on the potential patents, money and success that his staff went on to achieve.
Structure for growth
Successful startups grow fast. Real fast. Even if its unsustainable, fast growth is what startup investors want to see. From distribution to sales and HR, your internal structure needs to be flexible and scalable.
Growth leads to more growth, but if you can’t support that growth, you’ll start to run into trouble and you may end up a few squares back from Square One.
In order to manage successful sudden growth, your back office functions need to be scalable. Make sure you have internal structures and tools that allow for expansive growth, and that your outsourced providers can scale with you.
Lessons to Learn: Borders
Borders went from being a local bookstore to a global giant. But were unable to sustain growth when it mattered the most.
Tom & Louis Borders founded a small bookstore in 1971, while still at college. Over the years, the business was a modest success, until it began global expansion in 1997.
But their international dreams were dashed by a lack of internal growth structure, which led to mounting debt.
At a time when ebooks were the direction to invest, Borders was unable to pivot. The finances went into freefall and Borders was forced to closed all of its retail locations in 2011.
The business went into liquidation, its assets in the hands of competitors, such as Barnes & Noble and Kobo.
People say that startups need to focus on what they’re best at: “building their business”. But that’s not what they’re best at. Entrepreneurs have a single driving focus towards their vision. They excel at one thing and sometimes that results in something that transforms the world.
But for every successful startup, there are a hundred that failed because they didn’t get the right skills, keep their best talent or weren’t prepared for growth.
Don’t become another startup statistic. Get your payroll in order.
The article was produced for Times of Startups by Gary Webb, Marketing and Communications Director at FMP Global. With over 25 years experience working with household names such as National Express, Halifax Bank of Scotland (HBOS) and Camelot (The National Lottery) Gary has huge market expertise across the outsourced services sector.
6 Reasons to Choose Business Formation Services for Your Startup
Have you finally decided to chase your dreams and take your business live? Laying the foundation stones of a business can be a momentous experience in an entrepreneur’s life. However, handling business formation procedures is not.
Read on to find out why businesses prefer to take help during the initial steps of setting up and officiating their business.
6 Reasons You Need a Business Formation Service
1. Zero Errors During Business Formation Procedure
A new business must always stand on a solid legal foundation. For that, you should ensure that all legal procedures are handled with precision from the outset.
Business formation involves a series of steps such as verifying the availability of your business name, preparing your articles of organization, filing documents, etc. One small miscalculation could lead to large consequences. Even seasoned professionals can make errors while handling the paperwork frenzy that business formation usually entails.
A business formation service will handle your paperwork procedures entirely and ensure that no human errors are committed. From paying attention to small details while preparing sensitive documents to handling their delivery, a business formation provider will shoulder the responsibility with extreme care and finesse.
2. Get Valuable Advice From Experts
Starting out into the dynamic world of business can be daunting, and a smooth start could set the right tone for your business’s future. Setting up properly is probably the very first challenge you’re going to face, and there are many critical questions you’ll need to answer.
For example, do you need protection for personal liability? What business entity do you want to form? What are the pros and cons of different business entities, and which one fits the bill for you? What tax structure are you willing to follow?
Having experts to help you navigate you through these complex problems can be a huge bonus, as it will give you a thorough understanding of legal compliances, the laws that protect you, the tax structure you follow, etc.
Business formation services usually employ experts and skilled professionals, so you can rest assured that your business will be in good hands.
3. Get Complimentary Registered Agent Services
Government agencies mandate that all LLCs and Corporations have a registered agent. Also known as the resident or statutory agent, this is essentially an entity that receives tax and legal documents on your company’s behalf.
The point is to have a registered address that serves as a point of contact between your business and the government. For many startup owners, it is a problem to have a physical location in the same state the business was formed.
A business formation service can provide you with an agent who meets state requirements and can be trusted with handling key business documents.
4. Easy Preparation and Access to Documents
Business professionals usually frown at paperwork, and rightfully so. It is a mundane piece of task that needs to be handled with extreme care nevertheless. When forming a business, you’ll be required to file the following paperwork:
- Articles of Incorporation
- Articles of Organization
- Operating Agreements or Bylaws (depending on your business entity)
- Paperwork for licenses and permits
While filling paperwork, you need to have full knowledge of what details to fill, how to frame your paragraphs, common mistakes to avoid, caveats to pay heed to, and much more.
Business formation professionals are experienced in this and can assist you through the entire process with their knowledge and resourcefulness. Moreover, they can provide you advice and services customized to your business’s needs.
You’ll be able to access your paperwork and monitor everything during the procedure while someone else does the heavy lifting and files it for you.
5. Find Time for Other Important Issues
A new business must tackle a series of question marks- how to get its first customer/clients? How to gain recognition? How much investment to procure? What talent to acquire?
The list is endless. Any entrepreneur would much rather invest their time on growth-related matters than tedious formation-related procedures and paperwork.
A business formation service takes these initial mandatory tasks out of your way so that you can focus on growing your business. You can entrust the responsibility paperwork filing and legal details to your business formation advisors.
Their entire purpose is to take unwanted work off of your plate so that you can pay attention to other matters at hand, thereby enhancing the productivity and efficiency of your business functions right from its inception.
6. Work Smartly by Getting Access to Premium Business Tools
Business formation services seek to make the process fast, easy, and smooth for their clients. Competitive ones offer business tools that provide extra value to their clients.
For example, you might get access to smart document creation tools. If you pay for premium services, many firms will offer quick filing and approval speed to fast-track the process for you.
Be Smart With Your Choices
One skill that entrepreneurs need to work on diligently is decision making. Oftentimes, you’ll have to decide which business operations to run in-house and which ones to outsource, based on a cost-to-benefit analysis.
It’s usually smarter to outsource business formation services, as they can help kick-start your business and save you from getting overwhelmed by uncharted territories.
Customer Discovery: the Hidden Key to a Successful Startup
The term “customer discovery” might make you think of all kinds of processes.
Is it the part where you try to learn as much about your customers as you can? Is it the part where you go out and discover actual flesh-and-blood customers who will buy your products? Is it something else?
Turns out, it’s something else.
What Is Customer Discovery?
Customer discovery is a term used by two of the main figures of the lean startup methodology, Steve Blank and Eric Reis. They define customer discovery as questioning your core business assumptions. It is a way for you to validate your ideas and theories by going to the source – the customer – and a way to flesh out evidence supporting your product-market fit.
When Would You Need Customer Discovery?
In reality, you need customer discovery whenever you are designing a product or a service.
Let’s break it down into three distinct stages:
- You define a problem/market need (that your product/service is meant to fill).
- You develop a hypothesis about the solution (i.e., develop the product/service idea).
- You conduct an experiment to test your hypothesis (gather data from actual customers).
Yes, customer discovery is meant to validate your ideas – but it is more of a scientific approach than asking your friends, family, and coworkers what they think about your idea and whether they think it would work.
Let’s take a look at the four key steps to customer discovery, and see how you can use it to design solutions that fit your customer’s needs.
Step One: Come up with Your Hypothesis
This step encompasses stages one and two we’ve listed above: you are defining both the problem and the solution you are proposing to implement, and you are forming a hypothesis as to how the solution will impact the problem.
The best way to formulate your hypothesis is in a single sentence: my solution solves problem X. As simple as that.
You want to be incredibly specific with your hypothesis, and you want it to be accurate. Don’t just assume certain people have a certain problem. What if these people don’t see it as a problem?
That’s what customer discovery will help you discover, but in order to set off on the best foot possible, ensure you have a firm grasp of the issue yourself.
As for specificity: don’t just say, “I am solving the problem of lack of dog walkers by starting a dog walking service.” Instead, go for “I am solving a problem people living in this area have with walking their dogs from 9-5 by offering a safe, hassle-free, and reliable dog walking service”.
Step Two: Define Your Assumptions
As you can already tell, you were forced to make certain assumptions in step one. They may be correct, or they may be incorrect, and now is the time to write them all down.
You may be assuming that something is a problem (when, in fact, it isn’t), you may be assuming that your solution will help (when in reality, it won’t), and you may be assuming a certain demographic has this issue (which they may not).
Once you have your assumptions down, create a target persona in order to alleviate as much of them as possible. This is the person you are targeting, your ideal customer, the person with these problems.
Go into as much detail about your persona as possible, as it will help you ensure your data is sound later on.
Step Three: Test It out
Now that you have your hypothesis, an ideal customer in mind, and you are (in theory) aware of at least some of the pitfalls you may be facing, the time has come to test your theory out in the real world.
You are going to ask some people some questions.
The people you start with should be your potential customers. In our hypothetical case, dog owners living in a certain area, working 9-to-5 jobs.
Don’t ask people living in other areas, people who own cats and not dogs, or people who don’t own dogs but live in the area and work the nine-to-five. You have defined your audience – stick to it.
As for the questions themselves, you need to be very careful about how you formulate them.
You don’t want to ask, “Do you think this is a good idea?”. You don’t want to say anything about your idea, in fact. You want the people you’re asking to tell you what they would appreciate as a solution, and you are then going to build your solution based on their answers.
This is what customer discovery is about – creating a final product that matches the real needs of real customers.
To that end, your questions should be open-ended and not specifically related to your idea. Here are some examples:
- What do you currently do for…?
- Do you like the process?
- Is it working out for you?
- If you could improve the process, how would you do it?
- What is the biggest challenge about…?
- What do you like about it?
And so on.
The answers you get should help you outline your solution and make it a reality in the future.
Step Four: Evaluate Your Data
Now that you have plenty of data at your disposal, the time has come to go through it.
If you have done your homework well, you’ve likely discovered information you had no idea about previously. Someone has pointed out a solution or an issue you were not aware of.
This allows you to go back and refine your hypothesis and the idea itself, at which point you can do another round of customer discovery.
If, however, you’ve discovered your hypothesis was entirely correct, you can move on to product development.
Test out more than one hypothesis, and keep discovering until you are satisfied that you have come up with the best possible solution.
Customer discovery is certainly a lengthy and complex process, but it’s worth all the effort. It can significantly increase your chances of producing a solution that not only works but that is already sought after by a vast number of people. Consequently, your solution will be much more likely to become a success.
Top 6 Cybersecurity Lessons Startups Can Learn From Healthcare Organizations
COVID-19 won’t be here forever, but cybercriminals will!
Leveraging the COVID-19 situation, cybercriminals are targeting SMEs and even large enterprises to steal valuable information. Many reports claim that cybercrimes have doubled in the last couple of months.
The healthcare industry is one of the latest victims of cybercriminals. According to Accenture, the healthcare industry has witnessed around 41% increase in cyberattacks. The report also says that the healthcare industry on average experiences 130 data breaches in a year.
However, as a healthcare IT consultant, I have recently noticed that healthcare organizations are ramping up their efforts to safeguard patient data. And for that, they are deploying many technologies, solutions and unique cost-effective ideas.
The technologies, solutions and ideas healthcare startups are deploying are so effective that other startups can learn cybersecurity lessons from healthcare startups. Today, in this blog, I will share the same. I will list down 6 cybersecurity lessons learned from healthcare organizations in 2020 during COVID-19.
How are healthcare startups avoiding cybercriminals? (Learning from other startups!)
Avoiding cybercriminals or ensuring data security is not a task, it is the process. And a process is always more complicated than a task. But here is how healthcare organizations are streamlining the process, the cybersecurity process.
- Determine the cybersecurity risks level
Not all healthcare startups are on the radar of cybercriminals. Thus, it is a rational idea to determine the possibility of a cyberattack or to determine the cybersecurity risks level. This process enables organizations to know the threat level – whether they are on the radar of cybercriminals or not.
To find the cybersecurity risks level, healthcare organizations simply link the type of data they store to the motive of cybercriminals. For instance, if a healthcare organization stores medical images of patients and not the patient’s personal and financial data, they should not invest more in cybersecurity.
But if a healthcare organization stores many valuable data of the patients, accommodates less-trained staff and works with legacy networks, they should worry about cybersecurity as their cybersecurity risk is high.
Learning for other startups: You should invest only after confirming that you are the potential target! If you do not store any crucial data, you don’t have to allocate your resources to cybersecurity.
- Find the loopholes through technical assessment
A network has many open doors or errors which work as the opportunities for hackers to get access to databases. They usually scan the network and attack the ‘fragile part’. Thus, it is important to find the loopholes in the network and fix it to close the entry doors for the cybercriminals.
Carrying out the technical assessment is the best way to find loopholes in the network. It is designed to yield the vulnerability in the network. A technical assessment does not only aim to find the vulnerabilities, but it also aims to quantify and prioritize the vulnerabilities.
So, now when cybersecurity experts know the loopholes which cybercriminals can leverage to attack, the cybersecurity experts can easily avoid the attack by fixing the loopholes.
Learning for other startups:
This is the best method to avoid cyber attacks. You should find the open doors in your network and close it to prevent the undetected entry of hackers into your network.
- Software configuration assessment
A healthcare organization uses a number of software to streamline operations. They also use a lot of complex software. Sometimes, the poor configuration of these complex software creates easy paths for cybercriminals to attack the enterprise network as cybercriminals are many times using software to get access to the network or a server.
Learning for other startups:
While installing software on a computer device connected in the enterprise network, make sure the authenticity of the software and do not change the installation setting or software setting without the proper knowledge.
- Quick incident response
Regardless of the efforts healthcare organizations put to safeguard the network, cybercriminals many times find ways to penetrate the security measures. In such a scenario, only a quick incident response is hope.
Healthcare organizations always pay extra heed to incident response. They form a team which quickly takes control over the network and close the paths for attackers before they cause havoc.
The incident response team utilizes many security tools to monitor the network in real-time. If they identify any unusual activity or the system alerts them, they quickly put best practices to work to prevent cybercriminals from getting system access.
Learning for other startups:
Always work best but prepare for the worst. Cybercriminals can anytime, anyhow bypass the security of your system. So, be proactive and prepared.
- Train the staff
Generally, staff working in the healthcare organization lacks the knowledge of the cybersecurity which leads them to click on any malicious links or commit any costly mistake. Thus, healthcare organizations are putting emphasis on staff training. They give basic knowledge about cybersecurity and their deployed network to the staff and keep testing the staff’s cybersecurity knowledge after a fixed interval.
Learning for other startups:
If your staff does not follow cyber hygiene, things can easily go messy as staff members have network access and they spend the majority of their time around it.
- Always deploy feature-packed security solution including firewall
To ensure cybersecurity, deploying software security solutions as well as hardware security solutions is the basic requirement. But a premium security solution works more precisely and efficiently than an affordable security solution. Thus, healthcare organizations generally deploy premium feature-packed security solutions, especially a firewall.
A feature-packed firewall costs a bit more than the basic firewall. But a feature-packed firewall is worth the money. It does not only safeguard the enterprise network but offers many flexibilities and real-time network data to the admin.
- Admin can know the connected network and find the data usage of each network.
- Admin can know the top sources of threats to a network.
- Admin can know the most affected network.
- Admin can impose content filtering to prevent users from opening irrelevant sites.
- Admin can know every single activity of the users on that network.
Learning for other startups:
An ‘affordable security solution’ is the myth, actually!
In a nutshell:
Cybersecurity is the challenge for any startup serving in any industry. An ever-increasing number of cybersecurity attacks clearly depicts that it is a much bigger problem for startups than COVID-19.
However, there is one industry that is pulling out all dots to curb the coronavirus as well as cyberattacks. In this blog, we have discussed 6 ways of how healthcare organizations are safeguarding crucial patient data.
These ways are,
- Confirm the level of cyberattack risk
- Find the loopholes in the network and fix it
- Do not configure the software without proper knowledge
- Form an incident response team
- Train the staff
- Opt for feature-packed security solutions
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