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How can surety bonds benefit small businesses

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StrategyDriven Managing Your Finances Article |Surety Bonds|How can surety bonds benefit small businessesIf you are a small business owner who is competing for contracts, you will need to demonstrate that you are qualified to perform the work that will be required under the contracts. Depending on your type of business, you might also be required by the state to obtain a license to legally operate. A common state requirement for licenses to operate different types of businesses is a surety bond. These are state-specific, so if you live in Florida, you’ll be required to get a Florida surety bond. Even if your business is not required to get a license, purchasing a surety bond is a good way to demonstrate that you are capable of performing work and can be trusted to meet your contractual obligations.

What Are Business Bonds?

Business bonds or commercial bonds are types of surety bonds that might be required for licensing or for entering into a contract. They are legally enforceable agreements between the following three parties:

  • Principal – The business that is required to purchase the bond
  • Obligee – The party requiring the principal to purchase a bond, which can be the government or a private party
  • Surety – The company that issues the surety bond and guarantees the principal’s performance and legal compliance

Surety bonds are required for many different types of businesses to obtain licenses and legally operate. If the small business that purchases a surety bond fails to complete the work or violates the law, a claim can be filed against the surety bond. The surety company will then pay any valid claim, but the principal will ultimately be responsible for the costs and will be required to reimburse the surety company.

Common Types of Businesses for Which Surety Bonds Are Required

Many different types of businesses are required to purchase surety bonds to obtain licenses. Some of the common types of businesses for which surety bonds might be required include the following:

  • Auctioneers
  • Notary public services
  • Auto dealers and dealerships
  • Travel agents
  • Construction contractors
  • Mortgage brokers

According to the U.S. Bureau of Labor Statistics, 21.8% of adults employed in the U.S. had licenses from their respective states in 2018. Since bonds are a licensing requirement for many different types of businesses, this demonstrates how common bonding requirements may be.

Construction bonds are particularly common. Congress passed the Miller Act in 1935. This law requires contractors who want to perform work on construction projects on federal buildings to have surety bonds for any project worth more than $100,000. At a minimum, contractors that want to perform work on federal buildings must have performance and payment bonds. States also have laws that are similar to the Miller Act and establish different state thresholds for public projects.

Common Types of Bonds for Small Businesses

Some of the common types of bonds small businesses might need include the following:

  • License bond – Bond required by the state for licensure
  • Permit bond – Bond required by a municipality to obtain a permit
  • Bid bond – Bond required by the government in order for contractors to submit bids on projects
  • Performance bond – Bond required by public or private project owners to guarantee a contractor will perform its contractual duties
  • Fidelity bond – Bond a small business owner might purchase to protect the business from losses caused by employee theft or fraud
  • Auto dealer bond – Bond required for auto dealers that intend to sell more than a minimal number of vehicles per year
  • Business service bond – Bond that protects a small business’s customers from employee theft or fraud

How Surety Bonds Work

Business owners who are required to purchase surety bonds can apply through a surety company. The business will be required to submit multiple documents with the bond application to allow the surety company to evaluate the business and its risk.

Surety bonds are not insurance and instead function as a form of credit. This means that you will need to go through an underwriting process before the surety company will issue a bond to you. The surety company will review information about your financials, including your business’s audited financial statements, profit and loss schedules, the resumes of key stakeholders, your business’s organizational chart, and your business and personal assets and liabilities. It will also look at your credit score and compare the size and value of past projects to the one that your business wants to bid on.

If the surety company believes that your business poses too great a risk because of problematic credit, poor performance in the past, or evidence of poor character, it will likely deny your bond application. This makes it important for you to operate your business in an above-board manner and keep your credit in good standing.

The surety company will provide you with a free quote if you pass the underwriting process. The quote is for the bond premium, which is the amount you will have to pay to purchase the bond. The bond premium is typically a percentage of the total bond amount and can range from 1% for experienced business owners with excellent credit to 15% for businesses with little experience or problematic credit.

If you accept the free quote and pay the bond premium, you will also have to sign an indemnity agreement. This means you agree to indemnify the surety company for any valid claims that might be filed against your bond.

Benefits of a Surety Bond for a Small Business

Surety bonds offer several benefits for small businesses. When you are approved for a bond, it functions as a prequalification and demonstrates that your business is stable and able to perform the work as promised and in compliance with the law. Having a surety bond might demonstrate that your business is trustworthy and encourage others to contract with you.

Surety bonds also protect other parties beyond the obligee. For example, if you own a construction business, your bond will also protect the suppliers and subcontractors that you contract with, so it might be easier for you to find subcontractors and suppliers that are willing to work with you. Surety bonds also provide you with access to more valuable projects.

Many businesses are required to purchase surety bonds by the state to get licenses to legally operate. Others may be required to purchase bonds to perform work on specific types of projects. While purchasing a surety bond is another expense for small businesses, doing so can help you to demonstrate that your company can be trusted to perform its work ethically and legally.

All The Right Reasons to Get an MBA

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StrategyDriven Professional Development Article |Get an MBA|All The Right Reasons to Get an MBAOpting for an MBA (Master of Business Administration) degree is one of the important decisions for aspiring entrepreneurs. It is one of the initial steps to start your entrepreneurial journey on a high note. It plays a key role in nurturing your management skills and helps you build the right business sense. To establish a successful business, you have to manage everything efficiently. From marketing to dealing with clients, investment to sales, you have to streamline everything. You have to ensure that your business operations keep working smoothly. So, earning a high-level business degree like an MBA also positively impacts your decision-making and helps you make progressive decisions.

Achieving business success is not only about managing everything properly. You also have to expand your business at some point, so earning high-level business qualifications makes you aware of how to build a strong network. Once you start networking, it opens the gates of new business opportunities for you. Eventually, it allows you to increase your brand recognition, leads to business growth and ROI-driven results. Let’s find out why you need to earn an MBA degree.

1. To Earn Specialization as per Your Goals

There is a wide range of MBA programs that you can consider according to your interest or goals. For example, if you want to build a career in the accounting field, then you can opt for an accounting degree in MBA. It will give you insights into the latest accounting practices that significantly impact your career growth. To know more, check out these three ways to boost your career with an MBA in accounting degree to get a better idea that will help you make the right career decision.

On the other hand, you can also consider disciplines of general management, strategic management, marketing, human resources, and many more. There are plenty of branches of business, so earning MBA as per your preference can help you advance in your career. You should understand that you cannot do well in all aspects of the business. Therefore, you need to identify your area of interest and make the decision accordingly. Judge your personal capabilities and understand the demand of every business role. Going for the right MBA discipline is important not only for your career success but also for the success of the company where you will serve in the future.

2. To Nurture Advanced Management Skills

Management is one of the critical components of any business, so earning an MBA degree allows you to develop management skills. The curriculum of different MBA programs can be different, but every program will help you take care of the various business management aspects. You have to keep an eye on different things, from keeping track of financial health to monitoring projects. So, an MBA degree allows you to come out of your comfort zone and to do justice to all responsibilities.

In today’s rapidly changing business environment, you have to stay on top of the latest advancements. While completing an MBA degree, you get exposure to the advanced business practices that make you aware of the latest management techniques. Once you start challenging yourself, you can also develop collaboration skills that play a key role in the management and working with the team.

3. To Avail Better Career Opportunities

One of the major benefits of an MBA is that it provides you with an excellent career-changing opportunity. Almost every business student opts for an MBA degree to improve career prospects. Before applying for the MBA program, you should try to get a job to work in the industry. It will give you hands-on experience in your relevant discipline, so it will be easier for you to decide which career path is the best fit for you. Also, you will be able to set clear future goals and pursue your passion.

MBA graduates have higher chances of securing top managerial level positions with a higher pay scale. It increases their worth in the industry and allows them to work in multinational organizations.

4. To Build Business Network

Being an MBA student, you get great opportunities to expand your business network. You get the chance to interact with professors, fellow students, and different influential people who can help you in setting up your business. It is that time when you get the chance to learn the dos and don’ts of business from the people who have been in your situation earlier. So, it gives you great learning lessons that go a long way with you in your business journey.

You can gain valuable business insights when you access a great alumni network of different MBA programs. It makes you aware of different business ideas and how you can target your potential customers to become a top brand. You should understand that your connections are a great source to keep you one step ahead of your competitors. Because establishing a successful business takes years, and if you already have a good PR, then it means you do not have to put much effort.

5. To Start Your Business

The main purpose of pursuing the MBA degree is to prepare yourself to start your own company. It makes you aware of all the technical aspects of business and helps you take growth-driven steps. You get to know about the possible traps in which any rookie businessman can fall easily. So, it allows you to form your business vision and hire the right individuals who can become a part of your success journey.

Acquiring a high-level degree like MBA is one of the initial steps you take to build your business from scratch. From marketing, investment, and communication to management, it makes you aware of different business traits that you need to become successful at the top level. Also, having a successful business can give you plenty of perks, but it also puts a huge responsibility on you to look after your team. You have to treat your team like a family because eventually, they are the ones who will help you achieve your goals. It is not possible to manage everything on your own, so earning an MBA degree also enlightens you about such aspects.

Running An Awards Ceremony For Your Promising Business

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StrategyDriven Managing Your People Article |Awards Ceremony for Business|Running An Awards Ceremony For Your Promising BusinessThere are many ways to define and design a healthy and blossoming company culture. Of course, to start with, we must make sure that everyone is afforded the respect they deserve. This often means curating policies with absolutely zero tolerance for workplace bullying, harassment or mistreatment of any kind. Our HR department should also be there to prevent that from happening, and help those who may have been victimized.

After all, no company culture can thrive without getting the essentials right, and as unfortunate as it is that this needs to be addressed, every company can benefit from laying those principles as its fundamental grounding point.

But while it’s important to tackle the difficulties and misfortunes of running a team, it’s also a good idea to invest in the positive aspects of working at your firm. This can help a healthy company culture thrive. While this is worth doing for its own sake, being defined as a great employer and gaining many healthy employee reviews can only help you attract better talent to your firm, and market your positions with renewed confidence.

One of the best annual efforts geared towards this outcome is of running an awards show. This can be humble or offer great production value.

In this guide, we’ll discuss a few means for setting up and maintaining such an event:

Select A Venue

An awards ceremony with its own sense of place is more than worthwhile. Renting space in a venue, such as this best place for a corporate retreat, can make all the difference. This adds a sense of fun to your award ceremony, as well as giving staff the means to let their hair down and attend with a drink in hand, enjoying a celebration of the year just gone.

With a speaking podium, arranged tables to sit at, and a bar or food to enjoy, you can make sure that everyone together can socialize and feel like they’re a welcome part of your family. They are, after all.

On top of this, selecting the venue based on its table arrangement, safety precautions such as fire exits, and the means by which you can enjoy a private affair without being bothered by other hotel or venue guests is worthwhile. You may also be able to get something of a discount if you book a good number of rooms for such a retreat, so it’s always worth asking.

Allocating Awards

It’s good to think of a number of different categories you can use to define these awards. There are many services out there that will engrave and print names or titles on small awards, be that a nice little trophy, a badge, or a certificate.

Perhaps categories could involve a ‘best employee per department,’ or ‘shining customer support’ or an employee that has ‘gone above and beyond.’ It might be that ‘best new hire’ could be allocated to someone who joined in the last twelve months, or ‘best traveling agent’ could be applied to someone who has gone abroad to help your business connections.

You may also decide to throw a few fun ones in there to help the team laugh. If a staff member has been bringing in their oatmeal, fruit and stretching at their desk during lunchtimes, you may allocate a ‘most health-conscious employee’ award just for them. Of course, the benefit of an awards ceremony is that not everyone gets them, so don’t go overboard.

You can put the award categories up to an anonymous vote in your business, and then use actual metrics of performance and potential to decide on the winner. Larger businesses will potentially offer more awards, while small businesses may offer two or three.

Attach Awards To Prizes

Of course, an award does meaning something without a given prize, but it can be nice to offer rewards that actually mean something along with the gesture of winning something. For instance, the employee of the year award might be linked to a paid vacation at the expense of your company, including flights and lodgings for a week.

For others, it might be that you offer gift vouchers. For joke prizes that are tongue-in-cheek, such as the associated health prize mentioned above, you might offer a gift card for a yoga studio. This kind of approach can help the awards ceremony actually mean something more than a team-building event, incentivizing staff year-round to give their all and work on potentially being in with a shot.

Use The Event For An Annual Debrief

Of course, awards are fun, and the ceremony can be a real event that takes place, but it can also be worthwhile to tie an important message to that. For instance, this might be a good place to announce a new product or service you plan to launch, or the opening of a new office, or to perhaps just give your thanks for working so hard during the pandemic.

In some cases, it might be that running an awards ceremony after the end of a training retreat can help you cap off this hardworking effort with real potential. The more you can do this, often, the better off you’ll be.

Get Staff Feedback

Of course, running an event like this can be a complex affair, no matter how simple the actual process of awarding prizes and trophies may be. Getting staff feedback can help you make the next year’s affair that much better. It might be that this time, the awards ceremony lasted too long, or perhaps it would have been better to get a more skilled speaker on stage despite the best efforts of one of your managers.

This way, the yearly awards event can be a fun part of your corporate culture, not just a one-off that you do once and forget about for five years afterwards.

With this approach, we believe your awards ceremony is sure to be an utter success. Perhaps you could give yourself a little award for pulling it off so well.

Everything You Need to Know About UX User Experience Research

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StrategyDriven Online Marketing and Website Development Article, Everything You Need to Know About UX User Experience ResearchUX research, also known as user experience research, is used by both small and large corporations to help determine what customers want and need in a product, experience or website. Unfortunately though, when consumers hear this term, they have no idea what it means that they often ask what is user experience research. Learning more about UX user experience research can help you to better understand what this research is and how it can be used. Read on to learn more about user experience research.

What is User Experience Research? 

User experience research, also known as UX research, involves studying individuals and evaluating their response. User research may be done when consumers are testing out a new website, looking at a protype product, looking at or listening to advertisement material, or utilizing a service. All in all, a team evaluates the response of the user when they are utilizing something new, and then obtains feedback from the user about their experience with the product, service, advertisement or website. This allows companies to get honest feedback about items before they launch them or roll them out to all of their current customers.

Why is User Experience Research Important? 

User experience research is extremely important for a number of different reasons. These days, there is a lot of competition among businesses. As such, businesses want to do what they can to stand out. Utilizing user experience research allows you to get feedback about your ideas, products or services before you spend the money further developing the product or rolling it out. This gives you unique insight into whether there is a market for your product or service, what people are willing to pay for that product or service, or whether the idea may be a flop. Knowing this before you invest a lot of time or money into your idea can help you to spend on great ideas and help you to cut off bad ideas before they drain your business of valuable money and resources.

What Are the Different User Experience Research Methods? 

When it comes to user experience research, there are a lot of research methods that can be used to gain valuable insight into different users’ experiences. One of the ways that experience can be researched is with focus groups or surveys. Remote usability testing, diary studies, card sorting and interviews are a few of the other research methods that are used. Different companies use different methods, based on what they think is the ideal way to test out their website, advertising methods, products or services. When it comes to user experience research, there is no right or wrong way to get feedback on these items, which is what makes the process so interesting. You can use different methods to obtain feedback, and that feedback can then be used to help you develop new products, make changes to existing services, or determine whether to bring a product to market.

If you have never heard of UX research, you may find yourself asking what is user experience research. However, once you know what user research is, why it is used and what methods are used, you will better understand how valuable this type of research is. This type of research is so valuable because it helps companies learn more about consumers, allowing them to tailor websites, products and services to their customers and enhance their user experience. This also helps to ensure that consumers have the experience, products and services that they want, need and expect. User experience research is changing the way that business operate and the day-to-day lives of consumers.

3 Things to Consider When Starting a Manufacturing Business

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StrategyDriven Starting Your Business Article |Manufacturing Business|3 Things to Consider When Starting a Manufacturing BusinessIn this day and age, there are a variety of industries that are full of opportunity for aspiring entrepreneurs. One such industry that many people are looking to break into is that of manufacturing.

The demand for manufactured products of many varieties is only increasing, a fact that leaves the door open for quite a bit of success for those looking to establish their own business. With the right steps in place and preparation taken, you can start your journey towards owning and operating a successful manufacturing business.

It is important to ensure that you are putting the right measures in place so as to give yourself the best start in the manufacturing industry. Here are three such things that you should consider doing in order start a successful manufacturing business.

1. Do Your Homework

Before you can start a successful manufacturing business, the most important thing that you can do is educate yourself about the specific type of manufacturing that you will be engaging in. There are going to be a variety of industry specific regulations that you will need to follow and important guidelines that need to be kept in mind as you establish your business.

For instance, if the product that you are going to be manufacturing needs to be produced following the strictest hygiene standards, you need to outfit your location with everything from AL-6XN tubing to sanitary holding containers and vessels.

Become an expert in the area of manufacturing that you are attempting to break into so that you can get things started in the best direction possible.

2. Focus on Funding

As with any new business, it is important that you are able to secure the right amount of funding necessary so as to give your business the best start in the world of manufacturing. It can be an expensive industry to break into, but with the right business plan in hand you will be able to set yourself up for a desirable return on investment.

If you are going to need to seek out investors for your business venture, make sure that you have a solid presentation prepared that will outline all the steps that you are going to take in order to properly establish your business for the best return possible.

3. Choose Staff Wisely

When it comes to manufacturing, you might be attempting to break into a specific sort of industry. For this reason, it is crucial that the staff you hire is experienced in how to properly manufacture your products.

Take the time to train your staff accordingly so that they are prepared for any and all challenges that they will face in the early days of your business. From time to time, it is a good idea to help them brush up on their skills as well as on any and all changes that have taken place in your industry with regard to health and safety as well as any other regulations.