Keeping Paper in a Paperless World

Even though the personal computer is relatively new, dating back to the mid-1970s, the B.C. (before computers) era seems like ancient history with the wealth of information and tools now available at our fingertips; and so, it would make sense that paper also seems obsolete in this age of modern technology. Yet paper still possesses the ability to transcend time and technological advancements to connect cultures and generations of people across the world.

In today’s more climate-conscious society, however, entrepreneurs are adopting the paperless business model. This can be beneficial in quickly locating certain documents and electronic communications without sifting through hundreds of pages or storage boxes. Still, when a business adopts this model, there are important paper documents that every small business owner should have on hand or stored in a waterproof or fireproof container. This guide references these documents and discusses the importance of paper copies.

Head, Shoulders, Knees, and Tax IDs

Similar to a driver’s license number or bank account number, the IRS assigns a taxpayer identification number to individuals and businesses to establish proper administration of tax laws.

EIN

An EIN, or employer identification number, is a type of tax identification number. This nine-digit number identifies business entities rather than individuals. If a business hires employees, withholds taxes, operates as a corporation, or conducts business with a non-profit organization, an EIN must be acquired to ensure tax compliance. An EIN serves as a unique identifier because multiple businesses can operate with the same name. This tax identification number is used by the federal government as well as state and local governments to identify your business. Creditors, vendors, and banks can also identify your business with the EIN.

Determination Letter

A determination letter, also known as a tax exemption letter, is issued by the IRS to validate a business’s 501(c)(3) tax-exempt status. This letter provides several key pieces of information that allow tax exemptions and deductions, such as the effective date of tax-exempt status, end of the accounting period, other tax-exempt groups, annual filing requirements, and tax-deductible contributions. This determination letter is subject to public disclosure upon request, so having multiple hard copies is strongly advised.

Do You Know The Muffin Man…That Has an Equipment List?

Hard copies of equipment lists are particularly important for businesses that utilize big appliances such as refrigerators or ovens. An accurate equipment list, with model and/or serial numbers, becomes especially important in the event an appliance suddenly becomes non-operational or a part breaks off. A sudden flood, fire or structural damage could make equipment useless and you would need a list for your insurance company. Restaurants that cater need to have an equipment list handy so items are not left behind and so you can easily note if something isn’t working properly.

A supply list hard copy can also be beneficial in submitting or verifying supply orders, determining need and the condition or amount of supplies needed each month.

Red Rover, Red Rover…Bring Your Accounting Books Over

Keeping hard copies of financial statements on hand is valuable in determining business performance at a certain point in time or comparing numbers across multiple reporting periods. At the end of a reporting period, transactional information is reformatted into three documents: income statement, balance sheet, and cash flow statement.

Income Statement

The income statement can be a tool to measure a business’s ability to operate efficiently and draw customers. A net loss or net profit is presented after incurred expenses are subtracted from revenues in the reporting period.

Balance Sheet

The balance sheet is useful for establishing a business’s financial position as well as discerning said business’s ability to pay its bills. The assets, liabilities, and difference between the two (equities) are recorded in this document.

Cash Flow Statement

The cash flow statement reports the sources and uses of cash during the accounting period. This document is particularly important for businesses that practice accrual accounting, or if the net income on the income statement does not match the change in cash. Revenue that is recorded with the expectation that the transaction will be paid in the future can clarify any discrepancies in a cash flow statement.

Don’t forget your Tax records!

Keep a hard-copy of your last tax return, even if you have it on your computer. Tax records are always needed for bank loans, audits and to have a firm grasp of your year-to-year earnings.

Business Plan, Stan!

Keep a hard copy of your business plan. You may need it if you go to get a loan, or if your computer crashes and it can’t be retrieved from the cloud.

TAG, You’re IT! (You have an auditor at the door!)

Paper copies of items an auditor might ask for are especially important and key personnel will need to know where those paper copies are kept. Depending on your industry, here are some documents that you might need if an auditor or governing body drops by:

MSDS Sheets:

Material Safety Data Sheets required by OSHA. MSDS records are for hazardous materials in your workplace and how to handle them safely and properly. You may be surprised at which items you’ll for which you’ll need an MSDS sheet; even something simple like ink toner or white-out may require an MSDS sheet.

FDA Records:

The Food and Drug Administration has a list of records that must be kept readily available and how long to keep them.

Health Inspector Report:

Have your latest health inspection ready and available.

Required Postings:

Some businesses require placards or other “papers” that must be visible to the public. Extra copies of these can come in handy if one blows away or gets destroyed.

Business License:

Your license to do business is often required to be posted publicly, depending on your area and type of business. Have an additional hard copy, just in case.

Insurance:

While you may have access to your business’s insurance policy online, copies of your agent’s name, number and policy number may come in handy if there is an emergency.

Having hard copies of all of the documents discussed in this guide is especially important in this modern technological era. You never know when the internet will go offline or a computer might crash, so you can think of these paper resources as the ancient method of backing up your files.

For additional resources on the important documents to keep in a paperless world, or other tips for managing your small business, please contact us at the Small Business Development Center – SBDC – serving Paris and Northeast Texas.

The Post-Pandemic Service Industry

It’s not a secret that we are living in unprecedented times. Every American has been impacted by the COVID-19 pandemic and their daily lives continue to be affected by this virus. Even so, the impact has been hardest for employees in the service industry.

While life for most is finally returning to normal, albeit slowly, what does this mean for the service industry? How does an entrepreneur rebuild their brand in an industry fighting to stay afloat? This guide provides valuable suggestions and advice for small businesses in the service industry to come back better and stronger than ever.

A Tale of Two Employees

One of the biggest struggles the service industry faced during the peak of the pandemic and continues to experience today is hiring new employees while retaining current staff. The intense scrutiny of public health and safety in every aspect of our lives manifested into a fear of even leaving the house; so, how does a small business owner attract potential employees while simultaneously caring for the current staff?

Improved Safety Measures:

Enhancing certain safety protocols might seem obvious with the public eye on health and wellness, but what exactly does this entail? In a restaurant setting, consider having food handlers wear masks and gloves at all times. Easy access to hand sanitizing stations should also be taken into account. If the number of COVID cases begins to rise in your immediate area, consider limiting the number of customers in the store at one time. Testing employees for COVID at specified intervals could also be implemented.

This health and safety initiative has a two-fold effect. First, new and existing employees might feel it is a safer working environment with the new modifications and thus continue to show up for work. Second, the customers might also feel safer in this modified setting and not only provide repeat business but spread the word around town.

Pay Increase:

A pay increase is another seemingly obvious recommendation, but the execution might not be quite as clear. A huge perk for attracting prospective staff is offering wages that are higher than other similar small businesses. It is important to keep in mind that these are starting wages and employees will eventually request a raise. So, review your supplemental profit to determine a decent starting wage with room to grow.

The same algorithm can be used for your current employees as well. A small raise might be insulting to them whereas too much of a raise might threaten your ability to hire additional staff. Look at a long-term plan of raises and retaining good employees.

Schedule Flexibility:

Unlike increasing wages, allowing schedule flexibility may not be an obvious attractor for prospective workers. However, offering flexibility in scheduling can be very inviting and expands the field for potential employees. Certain individuals may only have certain times of the day they are available to work. Mothers may be available while their child is in school, or a full-time student might only be free at night or certain days of the week to work. This principle also applies to existing staff. With the ability of schedule flexibility, these individuals might feel inclined to become an employee or continue on as part of the staff.

Enhanced Employee Benefits:

If employee benefits were in practice pre-pandemic, they should be reviewed to determine which benefits can be enhanced. If benefits were not offered, it can be vital to your business and employees to provide benefits other competitors don’t offer.

Sign-on Bonus:

A sign-on bonus can be alluring to prospective staff. If a full-time student is interested, consider offering student loan repayment options in exchange for a certain period of work-time with the business. Health insurance and paid time off (PTO) are other great incentives for potential and current employees alike. Childcare benefits can be especially attractive for individuals with childcare needs. Review benefit packages to determine which is best suited to your small business employees.

Get creative with employee “perks”:

Sometimes employees just want to feel appreciated and will stay if they feel valued. Getting creative with employee “perks” doesn’t have to cost a lot or affect your bottom line, but can go a long way toward employee retention. Some ideas of creative perks:

Celebrate birthdays with a song and small cake or treat.
Celebrate milestones (months or years of employment) with balloons, certificates or banners.
Offer a free meal after employees complete their shift.
Create “Employee Appreciation” days, once a month or once a quarter that could include drawings for gift cards, movies or a spa day.
TELL them how much you appreciate them and their hard work. (Employees want to HEAR they are appreciated.)
Have an off-site team building exercise with laser tag, paintball or even a movie.
Allow a dress-down day or “casual Fridays.”

The Adventures of Repeat Customers

In a world full of unknowns, one thing is for certain and that is the need for repeat business. Customers are the lifelines of small business ventures. So, how do you keep them coming back for more?

As previously mentioned, the improved safety measures can make them feel safer during their shopping or dining experience. If strategies such as in-store pick-up or curbside delivery were implemented during the pandemic, continuing these services can keep customers returning, especially if customers are utilizing these strategies. Free home delivery is another great post-pandemic strategy. If these product delivery programs have not been previously implemented, you might consider doing so as they can be vital in creating repeat business.

For additional resources on the service industry post-pandemic, or other tips for growing your small business, please contact us at the Small Business Development Center – SBDC – serving Paris area: Lamar, Hunt, Hopkins, Delta, and Red River counties, Texas.