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Offering worker benefits

September 15, 2008|Karen E. Klein | Special to The Times

Dear Karen: I want to set up a benefits program for my employees but have no idea what it'll cost or where to get started. Can you help?

Answer: Start by talking to your business insurance broker about providing health and other benefits to your employees. If you don't have a broker, get a personal referral from an entrepreneur, preferably someone who turned a small start-up into a successful firm, said Alex Chernoff, president of New York-based Cohn Benefits Consulting.

"There are insurance companies and payroll companies that sell preset programs that are bundled for small companies," Chernoff said. You'll typically be inquiring about group medical plans, life insurance policies, disability insurance and perhaps dental and vision coverage as well.

In terms of retirement plans for small firms, you have several options that can be handled for you by a third-party administrator at reasonable cost, Chernoff said. "Several of the insurance companies have plans that are easy to implement," he said.

"You need to look for a high-quality insurance person and be as smart at choosing that person as you are at doing other things in your business," Chernoff said. If you work with an independent insurance broker, that person should be able to look at many options and present you with the best deals for coverage for your firm.

Outsourcing to Chinese factories

Dear Karen: I'm thinking about having the products for my new business made in China. I know outsourcing manufacturing is cheaper, but is it too risky?

Answer: Outsourcing production can put your company at a competitive advantage, but you must have good oversight and quality controls in place to make it successful, said Ruth Horaczko, an accountant and risk assessor at Lyndon Group in Newport Beach.

"This is your business. This is your product. You have to ensure that your contract manufacturer provides a level of service and product quality that meets your standards and exceeds your customer's expectations," Horaczko said.

You also need accurate estimates and flexibility.

"If you don't understand your business environment -- your customer, your products, the budget and the economy -- you run the risk of overproduction and paying penalties to alter the contract," she said.

Payments from customers abroad

Dear Karen: Lately, we find our company doing more international business on our website. What is the best way to get payment from customers overseas?

Answer: That depends on whether you are selling wholesale primarily as a supplier to other businesses or selling directly to consumers who live overseas.

"If you serve a high number of end-customers directly, a credit card payment facility set up through a respected ePDQ provider" is your best bet, said Retha Queenan, chief executive of AA Lingerie Proprietor, a small British company with many international customers. Several established financial institutions offer ePDQ, which is a secure online service that allows you to authorize and accept credit card payments over the Internet.

For business-to-business transactions, in which you're likely to have longer-term relationships and more formal financial arrangements, consider wire transfers.

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Got a question about running or starting a small enterprise? E-mail it to ke.klein@ latimes.com or mail it to In Box, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012.

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