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Risk Management Bulletin
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How to Choose a Franchise
Franchises allow you to own and operate your own business. They're available in different industries and require varied investments. Before you buy a franchise, understand how to choose the right one for you.
Honestly evaluate you and your needs before you invest in a franchise. Ask several key questions that help you choose the franchise that's a good fit for you.
What do you hope to gain from a franchise?
Will it replace your full-time income, provide extra money you can invest or be the first store in your franchise empire?
What are your strengths?
Your strengths and skills, including the ability to cold call, interact with customers and train employees, affect your ability to operate a franchise successfully.
How involved can you be?
Be realistic about how much time you can invest in the business, particularly if you plan to keep your full-time job, so that you don't overextend yourself or your resources.
How much money do you plan to invest?
The total investment includes franchise fees, inventory, equipment, working capital and other costs and ranges from $10,000 to more than $200,000. Also, remember that you need enough money to live off of while your new business grows and becomes profitable.
What's your exit strategy?
It seems strange to think about ending your franchise before you've even chosen one, but many franchises include stipulations that make selling difficult, so you need to know if you plan to pass your business onto your kids or sell it in five.
Narrow Down Your Options
After you know yourself, narrow down your franchise options. Decide if you want a retail, non-retail, industrial or home-based franchise. Then choose an industry. When creating your short list of options, use logic rather than emotion. For example, you may enjoy working as a mobile dog groomer or tax professional, but does that franchise match your goals and skill set?
Do Your Due Diligence
You're now ready to finalize your franchise purchase. Be sure to do all your homework so that you're not surprised by fees or other challenges.
Your first step is to review the Franchise Disclosure Document (FDD). It's a 100-150 page document that answers questions about the franchise costs, rules and restrictions, franchisor's litigation history, financial performance representation and type of training and support offered.
You should also meet with your franchisor. Make sure you're on the same page regarding business philosophies and management style.
Talk to other franchisees, too. Get real world answers to your questions as you make sure this business is right for you.
HMS Insurance Associates, Inc.
Tips for Finding Employees on Campus
If there's a college campus near you, consider hiring the students. They often need a job, and they may even be looking for a career. Take advantage of that market when you use these tips.
Set Up a Booth at a Career Fair
Call the college and find out when the next career fair is being held. Set up a booth, prepare a raffle item and share your business opportunity.
Build Relationships With College Officials and Professors
The college's development officials and professors know the students better than you do. Cultivate relationships and get to know them. When you're ready to hire someone, ask your contacts for quality referrals.
Teach a Class
Use your professional skills to teach a class. One of your students could be your next employee.
Sponsor Campus Events
Sporting, social and civic events are important aspects of college life. When you sponsor one of these events, you increase your business's visibility and support the college.
Use Social Media
College students are active on social media, and your chances of recruiting new employees increases if you jump online, too. Post regularly on Twitter, Instagram, Snapchat and Facebook. As a bonus, use social media to research potential hires, too.
Create a Video Series
Today's students are visual, so create and post videos that are valuable to college students. Possible topics include how to save money on clothes, storage hacks for dorm rooms, ways to get involved in the community and tips for acing a job interview.
Do a Giveaway
Everyone likes free stuff, especially college students on a budget. Host an online or in-person contest where entries are given in exchange for a student's contact information. The prize can be a tech gadget, cash, free food or something else.
Offer a College Discount
Depending on your company's product or service, offer a discount to students. You'll build your contacts list and relationships as the students shop at your store.
Hold an Open House
Invite local college students to an open house at your business. Provide free food and door prizes as you give tours or demos of your products and services. Every student who attends should fill out a contact form, and you can contact those students when you're ready to hire.
Offer Shares in Your Company
If you can't afford to offer an attractive salary or benefits package, offer shares of your business instead. College students value the opportunity to have a voice in the decision-making and future of their company.
HMS Insurance Associates, Inc.
10 Data Security Practices for Your Small Business
Your customers and clients rely on you to keep their data secure. If you don't, their identities, credit cards and other information could be stolen, and you could be sued. Achieve data security in your small business when you take 10 steps.
Perform a Security Audit
The type and amount of data you store and the equipment that data is stored on affects the security system you implement. Evaluate your needs before you implement a security system.
Know Your Industry's Regulations
All data needs to be protected, but different industries have different regulations. Research the guidelines so you can follow the law.
Store Only Essential Data
When possible, err on the side of keeping less data. It's better to delete information and have to ask for it later than to store it and risk a breach.
Store Customer Data Separately
Keep your customer data and business information stored on separate networks. For safety, restrict access to the sensitive customer information.
Improve Your Security
Strong passwords, two-step authentication when accessing systems, pass codes on your firewalls and encryption are four ways to improve your security.
Clean Your Computers
Update and run antivirus and anti-malware software regularly, properly patch software, turn on system logs and archive them monthly, immediately deactivate former employees’ access, allow remote access only through secure VPN and don't use Wi-Fi. You should also follow a written policy that outlines how and when to clean or destroy hard drives, USB memory sticks, CDs and DVDs as you keep your computers clean.
Use a Shredder
Instead of tossing sensitive documents in the trash, shred them. Use a cross cut shredder for best results.
Turn Off Machines
You probably log out of your computers at night, but remember to turn off copiers and printers, too. If they're connected to the internet, the sensitive data stored on their internal hard drives could be compromised.
All of your employees should know how to guard data and how to protect their equipment, including mobile phones and portable storage devices. They should never store credit card information, open suspicious emails or store important anywhere except the company's cloud-based storage system.
Create and Enforce a Data Protection Policy
Educate your entire staff on proper procedure. An official policy gives them something to reference and is easy to update as your security improves.
HMS Insurance Associates, Inc.
What You Need to Know Before You Hire Your First Employee
You've started a small business, and everything's going great. In fact, it's time to hire help. Use this checklist to ensure you follow federal and state regulations as you hire your first employee.
Obtain an Employer Identification Number (EIN)
Apply online or call the Internal Revenue Service (IRS) for an employment identification number (EIN). It's also known as an Employer Tax ID or Form SS-4, and you'll use it when you file taxes and other documents with the IRS and when you report employee information to state agencies.
Prepare a Recordkeeping System for Tax Withholding
As an employer, you are required to withhold taxes from your employee's paychecks. The IRS also requires employers to maintain employment tax records for four years, and you can use the records to prepare financial statements, track expenses and prepare your tax returns. Plan to withhold tax in three specific categories.
Federal Income Tax Withholding - Employees must sign a withholding exemption certificate (Form W-4) that you must submit to the IRS.
Federal Wage and Tax Statement - File an annual Form W-2 that details the wages you paid employees and the tax you withheld. It's required for every employee to whom you pay salary, wages or other compensation.
State Taxes - If your state requires you to withhold state income tax, follow the guidelines for reporting this income tax.
Verify Employee Eligibility
According to federal laws, you have the responsibility to verify that a potential employee is eligible to work in the United States. Be sure your employee fills out Form I-9 within three days of hire, and keep the form on file.
Register with Your State's New Hire Reporting Program
The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 requires you to report your new employee to your state's directory. Complete this step within 20 days of hiring someone.
Purchase Workers' Compensation Insurance
When you were the only employee of your small business, you didn’t' need Workers' Compensation insurance. You will have to purchase a policy for your new employee, though. Purchase it from a commercial carrier or through their state’s Workers' Compensation Insurance program.
Post Any Required Notices
Because of labor laws, you must post certain posters in the workplace. They detail employee rights, responsibilities and safety details.
File Your Taxes
In general, employers with employees who are subject to income tax withholding must file quarterly federal tax returns. Discuss the details with your accountant to ensure you follow the law.
HMS Insurance Associates, Inc.
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