Anyone who wants to start a small business understands that there is a financial risk. Not all businesses can succeed given the many startup costs, such as employee wages, rent for business with a physical location, employee benefits, inventory, taxes, etc. While there are some entrepreneurs who are able to use their own capital to fund the business, there are also many small business owners who rely on investors to supply funds for expenses or fill in the gaps where their own savings lack. However, before an investor will supply any money to a small business, they look for certain criteria and qualifications to ensure that their money will be returned when the business is profitable.
One thing an investor may look for is whether or not your small business works with a PEO, or a Professional Employer Organization. A PEO is essentially the back office for your business and provides a variety of services, including human resources responsibilities, employee benefits, handling taxes, ensuring your business is compliant with various agencies, and much more.
At The Medical Link, we’ll partner with your business to help you find a PEO that fits your unique needs. There are hundreds of PEOs out there, each with their own specialties and types of services that they offer. If you hire the wrong PEO, it could cost you time, money, and potentially the loss of an investor. We have been in the employee benefits marketplace for over 25 years and we understand what small businesses need to be successful. Work with us to find a PEO that will work for you!
What You Can Get From the Right PEO
PEOs Reduce Benefit Costs
Like we mentioned above, starting a small business can be costly, so saving money wherever possible is a must. But when it comes to employee benefits, you still want to be able to provide coverage that your employees want and need. And to make it more complicated, potential investors will want to see that you’re doing your best to provide cost-effective benefits. When you work with a PEO, you can get access to more options than would typically be available. Business can spend thousands per employee for a healthcare plan, and depending on how many employees you have, you can save thousands more when you partner with a PEO.
Handles Taxes and Payroll
Completing taxes for a small business is a complicated process on its own, especially when you include payroll taxes, W2 forms, state and federal taxes, handling deductions, and staying up to date with frequently changing tax laws. When you consider the risk of potential penalties that can occur when there are errors with any tax-related work, it can add a significant amount of stress to what is already a stressful situation. A PEO is essentially a personal accountant for your small business but without having to pay for an accountant’s salary. A PEOs ability to handle taxes and payroll will give you and your investors peace of mind knowing that everyone’s investment is protected.
Any business that has employees is required to have workers’ compensation insurance in order to pay for unemployment costs and to protect the business from potential lawsuits. Each state has different requirements and costs, and just like taxes, it can get complicated quickly. A PEO is responsible for understanding your state’s laws, how much insurance is required, and for meeting any deadlines. If insurance isn’t paid at all, is paid incorrectly, or the wrong amount is paid, your new business could be facing a significant amount of money in fines.
Investors love to see that your business is successful enough that you need to hire more employees. However, the time and money it takes to find talented people, interviewing, hiring, and training can add up to thousands of dollars. Investors don’t want to fund your business if you’re going to spend it inefficiently. A PEO will have access to various job boards, sifting through resumes in order to find a qualified candidate and efficiently interviewing and hiring the right people who will continue to help grow your business. While many business owners will still want some involvement in the hiring process, a PEO can save a significant amount of time throughout the process. Further, the right PEO service will even handle disciplinary actions, termination, background screening, harassment, and more. Give your investors the peace of mind they need to continue funding your business.
For start-up businesses, working with a PEO can be a lifesaver. However, it takes more than just any PEO to get the job done right. It takes a PEO that understands what your business needs and one that has a strategy to do it all efficiently and cost-effectively. The Medical Link wants to help you find a PEO that is right for your business. We can navigate the complex systems and find a partner who will help you succeed. Get in touch with our team today to get started.