Velez was able to get the services he needed -- at a reasonable cost -- through CFO On-Call, a financial outsourcing company based in Weston. Mobility Link gets the services of Adam Wasserman, a CPA and chief executive officer of CFO On-Call, for less than half of what a full-timer would cost, Velez estimates.
Outsourcing -- hiring an outside firm to perform job functions traditionally handled by employees -- allows a company to reduce operating costs, tap talent that would otherwise be unaffordable and adjust its personnel needs to the cyclical needs of its business. The most common function outsourced is information technology, followed by human resources, marketing and sales, and finance, according to the Outsourcing Institute, a New York-based trade organization.
"Outsourcing is a way to take care of the things you're not able to because of time or money constraints," says Barbara Kate Repa, vice president of HR One.com, a human resources portal with offices in Fort Lauderdale. "You only have so many hours a day and so many hands, and outsourcing is a way to have other people fill in your blanks."
Small businesses that need financial expertise -- or legal, human resources, training, public relations, payroll or information technology services, among others -- are turning to outsourcing in droves, making it one of the hottest trends in business today. Outsourcing expenditures exceeded $141 billion in North America last year, according to Dun & Bradstreet, up 21% from 1998. And those companies that try outsourcing apparently like it; more than 90% of companies involved in outsourcing report that they plan to continue using it.
In Florida, many small businesses have embraced the concept. Coleman Technologies, a software development firm in Orlando, has 48 employees -- and one human resources manager to handle all their needs. The company outsources some of its HR functions via EZLink Plus, a benefits and payroll administration system operated by Aetna U.S. Healthcare and Genesys Software Systems. "Before, I was barely keeping up with the paperwork, and now I'm actually calm," says Holli Rodrigues, Coleman's human resources manager. "We've probably saved close to $600 a month just in time alone."
Yet despite its advantages, outsourcing is not for everyone. "People can become too dependent on outsourcing," cautions Repa. "They can give too much away and lose sight of their businesses."
And business owners need to exercise caution when contracting for outsourcing services. "There are lots of claims outsourcers make," Repa says. "But often what's dangled out there in front of you doesn't cover what you assumed it might. It really pays to do a little shopping around."
Cutting Edge
Top-of-the-line equipment can be costly, but it can also save a bundle.
Matt Biagiotti, owner of Boca Raton-based Oxford Group Design, a graphic design firm, is "heavily invested" in office technology. Biagiotti's one-man office is equipped with three Apple computers -- a high performance Power Mac G4, an iBook laptop and an iMac, all networked via an Ethernet hub -- as well as a large-format color laser printer. He also subscribes to a wireless Internet service.
All the spending on high-tech gear isn't a frivolous investment in gadgets; Biagiotti's high-tech office lets him operate far more efficiently. Indeed, Biagiotti says he's been able to postpone the expensive move of hiring an additional employee. "My workstation and three Macintoshes make me like two or three people," he says. "Sometimes I get more done now in a day than I used to get done in a week."
Other small businesses in Florida are taking advantage of cutting-edge technology in computers, copiers, cellular phones and wireless broadband data services. Advancements in PDAs -- personal digital assistants such as the Palm Pilot and Handspring Visor -- will soon allow users to add pager, digital camera, walkie-talkie and cell phone functions to their devices. And Franklin Electronic Publishers' soon-to-be-released eBookman will allow users to read digital books, listen to MP3 music files and record voices, at prices starting at $129.95.
Even office telephone systems can pay off big. Dwayne Ore, office manager of EdgeDesign, a web design firm in Miami Beach, invested in a Siemens Gigaset phone system with five cordless handsets. He says, "Staying on the cutting edge makes our business as productive as possible."
A Better Idea for Small Businesses?
Florida legislators enact two new laws designed
to ease access to health insurance.
Tom Caldwell has started a business, completed an acquisition and attracted a half-million dollars in venture capital. But he can't get group health insurance.
"It's frustrating," says Caldwell, vice president of TDI Products, a manufacturer of cable management systems based in Jacksonville Beach. The problem isn't money. "It's not that we can't afford the insurance or that we haven't capitalized the company enough to allow for insurance. We did all of that, and we just can't get anybody to give us a policy," he laments.
So Caldwell and his partner are relegated to obtaining coverage through their prior employers, courtesy of the federal COBRA law. But it's costing them a fortune.
Caldwell's company is having trouble attracting employees because of its inability to provide group coverage, and he's forced to pay the COBRA premiums of new hires. "That's a huge expense -- 30% to 40% more," he says.
TDI is not the first small business in Florida to have difficulty obtaining group coverage. In the last three years, some 33 health insurance carriers have left the state, leaving employers in some markets with only two insurance carriers. The National Federation of Independent Business (NFIB) in Tallahassee reports that 80% of its 15,000 Florida members faced double-digit rate increases this year. That's a big hike that will be tacked onto the $4,896 already paid on average for small-group family coverage in the state.
But small businesses throughout the state have new hope, thanks to two new laws. The Legislature tried to increase availability and affordability of group health insurance for small businesses in Florida by allowing health insurance companies that write policies for small groups to adjust premiums up or down -- up to 10% per year, but no more than 15% over the life of the policy -- based on the health, claims experience and duration of coverage of employees.The theory is that more insurance companies will be willing to write small group policies if they can recover their costs by raising premiums for higher-risk employees. The law took effect on July 1.
A second bill enacted this year, S2086, repeals Community Health Purchasing Alliances (CHPAs) and establishes "small employer health alliances," non-profit corporations that will offer group policies to small employers. The law, effective on Oct. 1, is expected to provide new options to small employers.
Small Change
Working Capital Florida offers micro-loans to startups and growing businesses.
For big, established businesses and cutting-edge tech companies poised to make a splash on Wall Street, 2000 has been the year of easy money. So why is it so tough for entrepreneurs to get a paltry $1,000, $10,000 or even $50,000?
Small loans aren't cost-effective for most lenders because they take just as much time to process as big loans, but the return is tiny. Working Capital Florida is a not-for-profit corporation that has found a way to use funding from banks and foundations to make loans ranging from $500 to $25,000.
Here's how it works: For a Working Capital loan of $500 to $2,000, a borrower must join a "peer lending group" of four to 10 members that reviews loan requests and is responsible for its members' loans. If one borrower is delinquent, it cuts down on other group members' accessibility to loans. No credit or collateral is required. The group provides borrowers with technical assistance as well as capital.
For loans ranging from $3,000 to $25,000, Working Capital requires businesses to be a year old and provide financial statements and collateral, typically accounts receivable, business assets, real estate or vehicles.
Working Capital Florida has offices in Miami-Dade, Broward, Palm Beach and Pinellas counties. For more details, call toll-free at 1-877-722-4505 or check the web (www.workingcapitalflorida.org).
Small Talk
Wired
Eighty-eight percent of Florida CEOs have personally bought or sold a product over the Internet in the past 12 months, according to a recent survey of 450 CEOs by TEC Florida, an organization of CEOs of companies with at least $3 million in revenues and 25 employees. The survey also found that 64% of CEOs personally send or receive more than 50 e-mail messages per week.
For Women Only
The University of South Florida's Small Business Development Center will hold its "Sixth Annual Women in Business Symposium and Expo" in Tampa Sept. 22. Topics include e-commerce, finance and raising capital, Internet marketing, law, taxes, business plan development, steps to starting a business, government contracting and women and minority certification. One-on-one consultations with business experts will be available. The program will run from 7:30 a.m. to 5 p.m. at the Doubletree Hotel on West Cypress Street. To register ($75 including breakfast, lunch and materials), call 813/905-5816.
Workers' Comp Online
A Sarasota company, WorkersCompensation.com, has launched a website with workers' comp information and forms for all 50 states. The site, www.workerscompensation.com, is designed to offer simple-to-understand information to employees, employers and health-care workers. It includes workers' comp statutes and rules, forms and a wide variety of payment schedules, lists and maps. The information is free.
NFIB Meets in Orlando
The National Federation of Independent Business (NFIB) will hold the first meeting of its new NFIB Orlando Action Council Sept. 6 at the Rosen Conference Center. The program, which will run from noon to 2 p.m., includes an address by Jack Faris, national president of NFIB, and a video address by Gov. Jeb Bush. To register, call 850/681-0416. The fee is $30 for members of the NFIB, the Lakeland Chamber of Commerce and the Florida Restaurant Association, and $40 for all others.