Develop a plan to invest in your employees

One of the greatest challenges you may face as a small business owner is the ability to attract and retain quality, dependable staff members, particularly as your enterprise evolves and grows. investing in your employees by offering them a health benefit plan and a retirement plan can help you tackle this challenge. But where do you begin – and when?

In the following case study, read how Josh and Kim are successfully working with their advisor to identify the critical steps they should take as they develop their business.

A happy anniversary

Josh and Kim have been on cloud nine for weeks, reading the notes of congratulations that have been accumulating on their office bulletin board – messages of support and appreciation from family, friends, suppliers and clients. It hasn’t been easy, but the couple’s physiotherapy practice has gone from start-up to take-off. Yesterday, the office celebrated its fifth anniversary with cake and refreshments for staff and customers. Today it’s back to business. With an eye towards the future, Josh and Kim have plans to expand the practice and add new staff. They’ve set up a meeting with Mark, their advisor, to discuss their goals and ask for advice.

The start-up years

As Josh and Kim drive to meet with Mark, they reminisce about their first five years in business. “With more physiotherapists on staff, we won’t have to work around the clock,” says Kim. “It’s definitely hard to believe,” Josh chuckles, “but thanks to some careful planning, we’ve reached a point where we can really grow the business rather than worrying about just keeping our heads above water.”  In the early years of a business, many owners work long hours and pour every possible penny back into the company to get it off the ground. Josh and Kim remember just how tight money was during that period.

Despite those early struggles, Josh and Kim have always understood that fairly compensating their employees is a key ingredient in the recipe for running a successful business. With Mark’s guidance and support, they’ve set up an affordable start-up health benefits plan for all staff, knowing that, without one, holding on to talented employees – and attracting new ones – would be difficult. “A health benefits plan is vital for us as a growing business,” Josh asserts. “Prospective employees are looking for a fair salary, but they also want to know they are protected in the event of an illness or injury. Our business is all about health care so, for us, the well-being of our employees is vitally important.”

Josh and Kim are both happy that the first years in business are behind them, and that they now have a much better understanding of how to run a business and make sound financial decisions – thanks in part to Mark’s ongoing advice and recommendations.

Josh and kim enter the growth phase

“Hey, happy fifth anniversary,” says Mark, inviting Josh and Kim into his office. “What a milestone!” “We appreciate all you’ve done, Mark,” says Kim. “As we discussed over the phone, we’ve started renovating the office and purchased some new equipment to accommodate additional physiotherapists. Before we hire additional staff, however, we want to review the benefits we offer to our employees.” Josh continues, “When we talk to peers who don’t have any employee benefits in place yet, it’s clear we have a competitive edge. Our staff helped build what we have today, and they’ve told us one of the things that motivates them to stay is the fact that we care enough to offer benefits.”

“It sounds like your current health benefits plan is meeting many of the goals you set out to achieve when you put it in place,” says Mark. “That’s excellent. From a cost point of view, the plan is performing well, and you’ve told me you’re already ahead of your competition in this regard.  Now, I know you’re paying down your debt, but have you started thinking ahead to your own retirement, and that of your employees?”

Josh and Kim admit they’ve been so busy getting the business off the ground that they haven’t spent much time considering retirement, which still seems a long way off. “Of course it seems that way,” says Mark. “But think about what you ultimately want to get out of your business, and why you’re running your own practice instead of working for someone else. Forty-one per cent of businesses in Canada typically start considering a retirement plan when they are in the growth phase of the business life cycle – and that’s where you are now.

Think about employee loyalty. You’re already helping with your staff’s physical health; helping with their financial health might be
the best next step.”

Looking forward to an established future

As they wrap up, Mark schedules another meeting with Josh and Kim in six months’ time so he can talk to them further about the advantages of a group retirement plan and begin helping them identify business goals that the plan can be designed to achieve. “At the rate you’re going, your business will be soundly established in no time,” he says. “This doesn’t mean we stop planning for the future, though.”

Contact us today!

Whether you’re starting a new business, growing your current company or enjoying the satisfaction of running a solid, established enterprise, we can help you discover innovative ways to invest in your future by investing in your employees.

© 2013 Manulife Financial. The persons and situations depicted are fictional and their resemblance to anyone living or dead is purely coincidental. This media is for information purposes only and is not intended to provide specific financial, tax, legal, accounting or other advice and should not be relied upon in that regard. Many of the issues discussed will vary by province.  Individuals should seek the advice of professionals to ensure that any action taken with respect to this information is appropriate to their specific situation. E & O E. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Any amount that is allocated to a segregated fund is invested at the risk of the contractholder and may increase or decrease in value. Manulife, Manulife Financial, the Manulife Financial For Your Future logo, the Block Design, the Four Cubes Design and Strong Reliable Trustworthy Forward-thinking are trademarks of The Manufacturers Life Insurance Company and are used by it, and by its affiliates under license. TMK1651E 12/13