Small businesses are the financial backbone of the United States! As of August 2020, the number of registered small businesses in the USA exceeded 31,000,000. I can tell you from experience, it is NOT easy to run a small business.
During this Covid-19 Era, it is even MORE difficult to run a small business. Over the past few years, new rules, such as paid sick leave and paid family leave, have been enacted, adding to a long list of (non-income-generating) responsibilities that business owners must now contend with. This is in addition to responsibilities such as, updated sexual harassment training, regular employee management issues (like calling in sick), compliance, payroll, worker’s comp, NYS disability, employee benefits (such as 401K), and group insurance.
About 15 years ago, I took a small business practice management course in Toronto, Canada called “The Strategic Coach!” I had founded Intelisano & Associates in 1999 and wanted to take my company to the next level. Strategic Coach teaches small business owners to concentrate on what they do best (which for me is problem-solving and bringing in new business) and outsourcing everything else, including the grunt work they dislike doing.
Strategic Coach refers to “The 3 D’s,” DO It, Delegate it or Delete it!
Wouldn’t it be great if small business owners could delegate everything they dislike such as new employee orientation, human resources, payroll, insurance benefits, setting up the 401k, and conducting mandatory employee compliance and training classes? Wouldn’t it be even better if a said business owner could be relieved of most of the stressful liabilities that running his or her business entails AND save money doing it? All this is possible by using a PEO (Professional Employer Organization) strategy!
The google definition of what a PEO is, “an organization that enters into a joint-employment relationship with an employer by leasing employees to the employer, thereby allowing the Professional Employer Organization to share and manage many employee-related responsibilities and liabilities.”
As per Wikipedia, a PEO is an outsourcing firm that provides discounted services to small and medium-sized businesses. Clients often ask me how many employees would be a minimum to qualify for a PEO. My answer is “it depends!” It depends on the type of business you are in and how many full-time and part-time employees you currently have. Once a business grows to 5 or 6 employees, that business should consider looking at a PEO to benefit from “Economies of Scale!”
The primary downside of working with a PEO is the initial transition (it is a big change in your business model) and a degree of loss of employee control.
Some Benefits of Transitioning to a Professional Employer Organization are:
I have found that few insurance agents and brokers have knowledge about PEO’s (Professional Employer Organizations). If you own a small business with 5 or more employees and are interested in learning if a PEO is a fit for your business, reach out to me at Rob@InsuranceDoctor.us or complete our intake form at www.InsuranceDoctor.us. There are many PEO options out there; however, not all of them are a good fit. We can assist you in matching the right PEO for your specific needs and answer your questions going forward!