The HR Pains and Concerns of a Small Business Owner

January 5, 2017 Zuman

Whether it's selling ice cream or installing roofing, small businesses are a cornerstone of the U.S. economy. Per the Small Business Administration, there are over 28 million such mom-and-pop operations in the U.S. Together, these groups comprise 54 percent of the nation's total sales figures.

It's more than just the economic benefits, too, as these small-scale operations give owners a sense of ownership in their work, and that inevitably passes down to the consumer. But there are certain concerns that come with owning a small business, issues that help define the work and structure of these entrepreneurs.

A Matter of Compliance 
Compliance isn't just an issue for larger corporations. Small businesses need to ensure that they fall in line with the requirements outlined by a number of government agencies as well. These include the Internal Revenue Service, Department of Labor and Equal Employment Opportunity Commission, not to mention legislation like the Affordable Care Act and Fair Labor Standards Act.

These compliance issues touch on the fundamentals of running a business, like taxes, employee payroll and benefits, insurance and requirements specific to your industry. But whereas many large companies have HR departments to handle these compliance issues, small businesses are often left to fend for themselves. 

Managing Company Costs
It's not just compliance that is an unseen issue for most small business; many often don't recognize the extent of costs that go into getting off the ground in the first place. There are start-up costs, such as renting a property or paying for your business to become incorporated, and those require a large sum of money as operations begin. Then, of course, there are the daily costs of operating a business, including payroll expenses, rent, money for expansions and other business developments, and securing inventory and other materials.

Even these are given more attention than the myriad of hidden costs that come with running small business, like professional services, shrinkage and credit card fees.

To Outsource or Not?
Though a large number of companies these days are outsourcing certain components of their HR departments, especially payroll and benefit administration, small businesses often don't have the money or personnel to accomplish this. However, if it is a move your business can make, there are several key benefits to outsourcing. If done properly, this move can help reduce labor costs, minimize certain risks - like compliance issues and changes in the market - and streamline the overall business model.

For small businesses, successful outsourcing often hinges on being picky with what you put in the hands of a third-party source. According to Entrepreneur, there are a handful of key elements that small businesses can outsource successfully, like bookkeeping, content marketing and low-level administrative functions.

Proper Structural Support 
These concerns aren't meant to dissuade anyone from starting a small business. Without this sizable market, there wouldn't be the competition that the U.S. economy depends upon. Instead, requirements of cost and compliance need to be addressed so entrepreneurs can achieve their potential on the job.

It also helps to have the proper support, and even if outsourcing isn't an option, there are many technological solutions available. That includes cloud-based software, which helps address many of these issues in a real-time setting that's geared toward the owner's unique needs. 


About the Author


Zuman is the premium solution for HR, payroll, benefits administration delivering superior control, lower risk, and enhanced employee engagement for growing companies.

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