Starting a new business is a brave and risky undertaking. According to data gathered by the US Small Business Administration, there are 30.2 million small businesses in the country. The US Bureau of Labor Statistics found that approximately 20% of small businesses fail within their first year. By the end of their fifth year, about 50% of the small businesses fail and after 10 years, the survival rate drops to approximately 35%.
These statistics are scary and there are a lot of reasons behind them, including difficulties with financial management, loss of focus and lack of having the best support of their administrative operations. Partnering with a PEO is one of the best ways you can address these factors and more, assuring that your business has the best chance of long term growth and success.
How a PEO Makes a Big Difference to a Small Business
There are many benefits of partnering with a PEO to support the long-term operations of your business. These include:
- Improved Financial Strategies. A PEO will reduce the administrative costs of payroll and human resources while improving the quality of the services. This means that more money is available to support the operational side of the company.
- Value-Added Expertise. A PEO has the HR, legal, payroll and tax experts necessary to meet federal, state and local regulations. These services help you avoid penalties and give you peace of mind that you are compliant across all critical areas.
- Increased Employee Talent. PEOs work with several clients and pool these staffs to achieve better leverage when negotiating health insurance and other employee benefits. As part of a PEO, you can offer new hires competitive benefits that you could not fund on your own, which allows you to attract the right talent for your company.
- Reduced Turnover. The loss of an employee is expensive. You might need to pay a severance package or accrued vacation, but the financial loss goes deeper than that. There is the cost of advertising for the open position, reviewing resumes, conducting interviews, selecting a candidate and the onboarding process. In addition, there is a loss of knowledge and skills that walk out the door with the former employee. Through a PEO you can offer market-competitive benefits and retain a higher percentage of your staff, which saves you time and keeps these valued employees in-house.
- Maintained Focus. Many business owners lose their way because they get so caught up in the day-to-day administration of their company that they forget to manage and grow the operational side, which is their true passion. A PEO removes this administrative burden, allowing you to do what you do best – your core business.
At Applied Business Solutions we help Florida small businesses thrive in their markets. Our PEO partners with companies just like yours to help reduce costs, improve benefits and achieve long-term growth. Contact us to learn how we can help your business avoid becoming a statistic.