Why Do Small Businesses Refuse To Have HR Departments?

Dear HR professional I invite you to read through this article and add your contribution to this pertinent issue.

Why Do Small Businesses Refuse To Have HR Departments?

Aren’t they the ones who really need a department responsible for managing their employees?

Do the bigger organizations not have well-trained employees who can perform very well without the HR department?

Am I the only one who shares these concerns?

The nature of my work allows me to interact with a lot of small business owners and it is always interesting when the issue of instituting a Human Resources department in their organizations arises.

I would need some help here…

The very common reasons most of the business owners I have interacted with gave for not having an HR department set up in their organizations yet include

HR people are not business minded

I found this particular reason very interesting. Most of the small business operators felt that HR people did not know much about business and so they would not bring real value for the organization. Most of them said they needed entrepreneurs like themselves to run their businesses effectively.

HR people are motivators and sweet talkers

A lot of these small business operators said they did not see the need for a Human Resources department because they felt HR was just about sweet talking and motivating employees when they are down. They did not think it was smart to pay someone to just “motivate” employees.

They do not see the need

A large number of the business operators I have interacted with about having an HR department stated clearly that they did not see the need for it. They believe that as long as the employees understand what their job roles are, they HR department is irrelevant.

These were the majors concerns they raised. Now I have a couple of questions and I really need you to help.

For the HR professionals who have followed this discussion, do you think that these small business owners may be right in their pattern of thinking?

Do you feel that in some ways HR professionals have given these business operators good reasons to come up with such explanations?

Do you have helpful suggestions for HR professionals who are currently working in organizations that do not have value for the HR function?

Are there alternatives to having the HR function in an organization?

I would really appreciate your comments and ideas on the issues raised in this article.

Small Business Factoring: Is It Worth the Initial Profit Loss?

Factoring companies offer small businesses a way to get their outstanding accounts receivable transactions squared away without having to have the staff and infrastructure for their own collections department. While small business factoring companies do take a percentage of money acquired, in most cases it is well worth the small loss in order to get the outstanding dues paid.

Large companies and firms that send out thousands of invoices for small amounts of money will likely find factoring economical. This is because factoring companies base their bids on the credit report of the indebted customer rather than your small business. Factoring companies charge for every invoice or account they have to investigate for credit rating information.

For instance, if you have two hundred customers with outstanding accounts receivable of $50 or less, the cost for a factoring company to investigate each and every account will cost more money than you will be saving by outsourcing this kind of work. Small businesses with large outstanding accounts receivable transactions, on the other hand, will find a business factoring loan well worth the small profit loss.

To decide if getting a factoring loan is the right choice for your business, grab a piece of paper and note down the expenses and profits of each option.

To start, figure out how much interest on a regular loan would eventually add up to. Take into account how likely you will be to pay the maximum each and every month. It’s safest to extend your estimates as far as how quickly you’ll be able to pay the loan back.

Next, do a little research online to find a factoring company that meets your specifications. The specifics of their factoring services should be listed prominently on their website, but don’t be shy about giving them a call or sending an email if you have questions. Once you have all this information, you’ll be able to make a realistic estimate about how much of your accounts’ outstanding balance you would lose by choosing a factoring company.

Now, compare the cost of you doing your own collections work against the cost of working with a factoring company. In most cases, small business factoring saves money and extra stress in the long run. However, every business, business model and financial situation is unique and should be given individual attention.

By analyzing and balancing the data gathered, you will be able to see what choice is best for you and your small business. If you need money in hand right away, a small business factoring loan is a reliable and effective way to get just that. You may lose some money up front, but if you invest your sudden influx of cash correctly, it’ll make you a bundle down the road.

Outsourced Network Services For Small Businesses

The use of a computer network, especially for businesses of all sizes, entails many undertakings. Big corporations pay in-house IT professionals top dollar for their year-round services and expertise. However, smaller businesses that may not need entire IT departments can cost-effectively acquire network services from consultancy firms composed of highly dedicated IT professionals.

Network services include network planning, design, procurement of new technologies, implementation of these new technologies and designs, and network maintenance and management. These services, along with many others, can be outsourced to network consultancy firms.

Almost every business today makes use of computers, with needs ranging from basic network file and print management. Many third-party IT consultancy services provide a full range of services, from network planning and design, to implementation and network maintenance and management. Small businesses can have their needs analyzed by these firms’ experienced business-oriented IT experts to receive the best network architecture for their respective businesses. These experts can essentially act as the IT departments of small businesses without having to be hired full-time. This effectively eliminates the need for these businesses to pay regular employee benefits, thus considerably limiting their costs.

Also, an IT and network services provider can supplement existing IT departments by implementing preventative maintenance measures like system backups, security, and remote monitoring. The consultancy firms that provide these services can also recommend hardware or software, and sell or lease it at competitive prices. They can also be hired for expertise that existing IT departments may not have.

These firms can even offer training for managers and IT departments through computer-based training (CBT) modules, as well as live training sessions in order to help both users and management make the most of their IT infrastructure.