Why Prescott, WI Matters to You

Just across the Mississippi River from Hastings, MN lies Prescott, WI. A town of about 4,300 people in Pierce County, Prescott is more than a small border town filled with Packer and Brewer fans. Prescott is also a textbook example of why you should never ignore what’s going on in the world of politics. You see, Prescott is also home to a brand new industrial park, sprawling with new construction.

In May of 2013, a new set of state business-to-business taxes were approved by the Minnesota Legislature. One of the tax hikes added a state sales tax to business-related warehousing and storage services. It targeted all tangible goods that are sent through third party warehousing and distribution. Essentially, you could argue that the majority of goods produced in our state our consumed in our state would have been subject to some sort of new tax. Minnesota had the dubious distinction of being the only state in the nation implementing a tax on third party warehousing and distribution.

To say tax policy doesn’t affect business decisions is ignorant at best, though admitted ignorance has been a common theme here in MN that last four years. I won’t get real political here, but when several businesses signed up to build new warehouses and distribution centers in Prescott after the tax was passed, it wasn’t a coincidence. (In full disclosure, our legislators eventually repealed the tax this spring, but the damage was already done.) A few of these businesses pulled out, but United Natural Foods (UNFI) is in the process of constructing a 300,000 square foot distribution and warehouse that will add up to 314 new jobs and inject $37.8 million into the WI economy.

Think for a moment what that tax would have meant to their business. Had they ignored what was going on at the legislative level, they may have wound up building here in the wonderful city of Hastings. We have the land available here for them, and we would have loved to see them set up shop in our industrial park. You could argue Hastings was a better location because of our vicinity to the cities and other major highways. Had they ignored our legislation and built here, they also would have been saddled with the burden of paying this extra tax that is not around in 49 other states. That would’ve had a huge impact on their profitability, and it all could have been avoided (and was).

Taxes are just a small portion of the red tape and other legislative issues that can impact your business. Different bills and amendments get passed into law each year, sometimes under the radar, and it is important to know how they affect you so you can plan for the future. Rather than ignoring politics, you should be actively involved trying to put people in office who are going to support your interests. As a small business, there are many different trade associations or business interest groups who will do the lobbying for you and keep you in the loop about what’s coming through the pipeline. You could also have someone on your staff tasked with staying up to speed on any and all laws and pending legislation that will affect your business. Regardless of what you do, do something!

Before you vote this year, remember the story about Prescott, WI. If you haven’t previously done so, make a conscious effort to pay more attention and get more involved in your local politics. The future of your business depends on it.

Andy Bertram CPCU, ARM-E
abertram@cobrown.com
651-800-6173
www.northriskpartners.com

Be the Best Boss and Save Your Business

I have one bit of advice that will make you the best boss ever, and at the same time, I could save your business. What is that magical advice you may ask? Mandatory vacation. No, that is not a typo.

Wouldn’t it be great if your employer came in and told you that you were required to take five consecutive days of vacation? I can just imagine him saying, “Andy, you’ve been working too hard. As a condition of your employment here, I am requiring you to take a five day vacation. Forget about those financial reports and the payroll you planned on doing. It’s non-negotiable. I don’t want to see or hear you at all next week.”

As an employee, I’m thrilled that I’m “required” to take five days off because let’s face it, I doubt I’d do it on my own. I hate doing payroll at the end of the month. Not to mention that balancing the books often means late days at the office.

As an employer, my boss is very shrewd. He probably isn’t real concerned that I never take a day off. In fact, he loves it. And he also doesn’t have some sick desire to do payroll and balance the books. What he does want is to make sure that the numbers are the numbers are the numbers.

We typically put individuals in charge of our finances that we have a great deal of trust in. Whether it’s a family member or employee, if we were concerned about them embezzling money, fudging numbers, etc, we wouldn’t put them in that position in the first place, right?

Because of this trust, it can be easy to ignore the possibility of malfeasance. Make no mistake. Payroll fraud is real.  According to the Association of Certified Fraud Examiners, it’s the number one source of accounting fraud and employee theft.  According to an article in Forbes:

• Payroll Fraud happens in 27 percent of all businesses
• Payroll fraud occurs nearly twice as often (14.2 percent) in small organizations with less than 100 employees than in large ones (7.6 percent).
• The average instance of payroll fraud lasts about 36 months. That’s three years of paying ghost employees or overpaying existing ones.

http://www.forbes.com/sites/matthewgarrett/2013/09/10/payroll-fraud-a-big-threat-and-how-to-avoid-it/

Trust is an important aspect of every successful business. You need to be able to delegate to thrive in your career, and you need to be able to provide your employees the flexibility to do their jobs well. Great things can happen if you let them. Trust, but verify.

So go ahead, be the best boss around. Let your trusted employees know they deserve a vacation. It may just save your business.

 

Andy Bertram CPCU, ARM-E

Risk Advisor

C.O. Brown

651-800-6173

abertram@cobrown.com