How PEOs help small businesses survive and thrive, and move on to the next level.
Starting a small business is no place for the timid. Statistically, the chances of your new business merely surviving, let alone finding success, are akin to betting on a coin toss. According to the Small Business Administration (SBA), half of all startups in the United States will fail within the first five years. Many of those close shop within the first year. Of those that do make it through the brutal beginning phases, far less than half actually turn a profit. The rest are either barely scraping by and breaking even, or outright bleeding money.
It turns out getting off the ground to begin with is the first big wall all new businesses face, and only about half manage to overcome it. The first few years are always the toughest, with the smallest margins of error, yet are also the most crucial when it comes to forging a formula for long-term success. That means hiring the right people from the get go, growing strategically, and keeping costs down. Entrepreneurs love talking about running a lean business, but what does that actually look like in the real world when so much is demanded, in both time and money, and so much is at stake?
Well, for thousands of small businesses and millions of their employees, the solution to the problems of finding and managing skilled workers, ballooning costs, and anemic growth could very well be a co-employment arrangement with a PEO.
In a co-employment arrangement, PEOs effectively hire a client’s employees, thereby taking on all the HR-related burdens and administrative functions including payroll, benefits, hiring, and health insurance. This allows a client firm to run an extremely lean operation, and frees up the business owner(s) and other key personnel to focus on what matters most to them – growth.
Beyond Mere Survival
According to a 2014 study by McBassi & Company, businesses that use PEOs are approximately 50 percent less likely to fail (permanently go “out of business”) from one year to the next when compared to similar companies in the population as a whole. That’s a massive improvement over the control group. Perhaps more interestingly, another study done by the same company in 2013 found that not only did PEOs drastically improve the survival rates of their clients, they also significantly boosted long term growth (i.e. success).
For small businesses looking to get lean while still maintaining a quality workforce and commensurate employee benefits, outsource to a PEO. Their HR experts and professionals can take on the administrative tedium, cutting costs, improving the quality of your workforce, and boosting sustainable growth.
Boost your growth today! Find the right PEO for your company today through PEO Broker.
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