Whether it takes the form of advertising campaigns, branding initiatives, or targeted networking, marketing is an integral part of any firm’s business strategy. But, unlike other parts of a business plan, the results of marketing efforts can seem difficult to measure. Are new customers calling because of your marketing initiatives? If so, which initiative produced the most bang for your buck? Consider whether your current marketing activities were selected because there is clear evidence that they are effective, or simply because your competitors are doing the same thing.

Cost-Benefit Analysis

Given the costs associated with marketing—and the risk of losing out on potential business when marketing is ineffective—your firm can hardly afford not to calculate the return on investment of your current marketing strategies. A cost-benefit analysis may, for example, reveal that your company is sinking money into a series of expensive ads generating little business, but a blog that costs nothing to operate is attracting high-profile clients.

Among the leading reasons why firms fail to measure their marketing efforts is the perception within the organization that measurement is too hard, too costly, and too time-consuming. It may be inaccurate to judge a particular marketing initiative or technique based on such amorphous targets. Just because one ad failed to produce the desired results does not mean another ad, or the same ad placed in different media outlets, would not produce better results. While the aggregate return on the annual investment in print advertisements will be a strong indicator of the usefulness of this approach, a closer examination of any changes in business activity immediately after a particular ad has been placed could yield some startling results. Only by carefully mining your marketing data will you discover exactly which approaches worked and in what particular contexts.

Measuring Results

Before launching each marketing initiative, define your objectives and consider how you will measure whether those goals were reached. If, for example, you place a series of ads online and in print, find out if the volume of phone calls or if the number of website hits increases immediately after the ads appear. If your company issues a press release, log any press inquiries, monitor the media outlets to see if the story receives coverage, and check for a noticeable increase in phone or web traffic after the stories appear. Be alert to any changes in business activity following less formal networking events, such as speeches or presentations.

A useful measurement tool is an intake system that surveys new or potential customers on how they came to contact your company. This information can be gathered when they first call your company, place an order, or log on to your website. For a more in-depth profile, ask existing clients to complete a market research/customer satisfaction survey, which can be sent out by mail with business reply envelopes.

Many businesses spend too little on marketing and even less on tracking the success of their marketing initiatives. These companies may, therefore, tend to underestimate the potential impact of marketing campaigns. By spending a bit of time and money assessing which approaches are working, you can better target your marketing budget expenditures and determine whether it makes sense to devote more—or less—resources than you have in the past to getting the word out about the products and services you offer.

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Under pressure to balance work, family, and other personal commitments, paid time off is among the benefits employees value most. However, employers in the United States are generally under no legal obligation to offer paid leave to workers. But, as a business owner, you will likely find it difficult to attract and retain skilled employees without providing paid vacation, holidays, and sick days.

The most common practice among U.S. employers is to provide employees with a minimum of ten paid vacation days after six to twelve months with the company, and three weeks after five years of service. Some companies also offer a fourth and a fifth week of vacation after a decade or more. Because many organizations use this seniority system, providing workers with progressively more vacation time can act as an incentive for long-serving employees to remain with the company. Extra paid vacation days may also be offered as a performance-related bonus.

As well as giving workers the rest they need to recover from an illness, paid sick leave discourages employees from coming to work when contagious and unproductive. Companies typically offer between four and 10 days of sick leave a year, sometimes more based on the seniority or rank of the employee. To better manage the cost of providing an income to employees when they are unable to work due to a serious illness or injury, consider enrolling employees in a short-term and/or long-term disability plan.

There are certain types of leave that most employers are legally obligated to allow, though these may be unpaid. Employers must, for example, permit workers to take time off to vote, serve on a jury, and fulfill military training commitments. Under the Family and Medical Leave Act (FMLA), organizations with 50 or more employees are required to grant eligible employees up to 12 weeks a year to recover from a serious illness, to care for a sick family member, or to handle the birth or adoption of a child. States and cities may also require employers to provide workers with additional forms of unpaid leave.

Instead of allotting a certain number of days for each type of paid leave, you may want to consider establishing a “paid time off” (PTO) bank. Companies with a PTO policy combine vacation, sick time, and other forms of leave other than paid holidays into a single bank of days. Employees can use these days at their own discretion, and are not required to specify whether they are taking vacation, a personal day, or sick leave. Compared with traditional leave programs, PTO banks offer workers greater flexibility and autonomy, making it less likely that healthy employees will call in sick at short notice for personal reasons or take advantage of unused sick leave. PTO banks are also easier for employers to effectively manage and administer.

There are some potential disadvantages to moving to a PTO bank, including the possibility that employees who would not otherwise use all of their sick days will end up taking more time off. Workers also tend to view their PTO allotment as vacation time, and they may come to work sick to avoid using their paid time off. On the other hand, the perception that a company offers a large number of days that could be used for vacation can give the organization a competitive advantage in attracting qualified employees, especially young people who appreciate having time for recreation but do not expect to get sick.

In developing a paid time off benefit program, you should attempt to balance both the needs of the business and the interests of your staff. To minimize unscheduled absences and avoid abuses of paid leave benefits, establish clear guidelines on when, and under what conditions, employees are permitted to take leave. On the other hand, you may find it necessary to structure your program to encourage hardworking employees to take time off to rest and recuperate.

If workers appear to be taking too much or too little time off, examine the reasons why. Employees who are shirking their responsibilities or who, conversely, feel they cannot afford to take a vacation, are often signs of a company culture in need of an overhaul.

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The idea of hiring individuals to perform certain jobs without having to put them on the payroll is appealing to many business owners. But before you decide to use an independent contractor, make sure the person you hire is a genuine freelancer who is not needed to perform services integral to the operation of your company. Otherwise, the government could determine retroactively that the worker is actually an employee of your company—a change in classification that can result in severe financial and legal consequences for your business.

While companies outsource jobs to independent contractors for a variety of reasons, a primary motivation is often to save money. For employees, companies are obligated to withhold federal, state, and Social Security (FICA) taxes, and to pay unemployment and workers’ compensation insurance. Many employers also provide a range of voluntary benefits to employees, such as health insurance, retirement plans, and vacation and sick leave. Because these taxes and benefits can add to the cost of hiring an employee, the temptation is great for a company to instead classify a worker as an independent contractor.

Classification Rules

You should be aware, however, that the Internal Revenue Service (IRS) and other federal agencies apply a set of common-law rules to differentiate an employee from an independent contractor. While a worker must not meet all of the government’s criteria to be considered an independent contractor, the onus is on the hiring firm when questions are raised to demonstrate that the contractors it hires are in business for themselves and are not employees-in-disguise.

The IRS has established as a general rule that the hiring firm has the right to control or direct only the result of the work performed by an independent contractor, but not the means and methods of accomplishing the job. Independent contractors may not be given extensive instructions by the hiring firm about what hours they should keep, where they should perform the work, what tools or equipment they should use, whom they may hire as assistants, or from whom they may buy supplies or services.

Businesses are also not permitted to issue detailed instructions to independent contractors on how to perform the assigned work. Because the rules specify that independent contractors should not be responsible for jobs that are integral to the business’s day-to-day operations, contractors do not usually receive training in company policies and procedures. Indeed, an independent contractor more typically provides specialized services that are not otherwise performed within a company, such as IT support or legal advisory services.

Another defining characteristic of an independent contractor is financial autonomy. When considering whether a worker or service provider may be properly classified as an independent contractor, the IRS views favorably evidence that the contractor has a significant investment in his or her own tools and equipment, charges flat fees, covers his or her own business expenses, and has the opportunity to make both profits and losses. Independent contractors often work for a number of clients simultaneously and may publicly advertise their services.

A worker who relies substantially on the income provided by a single a client is less likely to pass muster as an independent contractor. An individual is typically considered to be an employee if he or she works full time for the hiring firm, is engaged for an indefinite period of time rather than for a specific time frame or project, receives hourly pay (with the exception of law and certain other professions), works on the firm’s premises, collects employee benefits, and is entitled to quit without incurring liability for breach of contract.

If you are uncertain about how to classify a worker for tax and legal purposes, you have the option of completing IRS Form S-88, “Determination of Worker Status for Purposes of Federal Employment Tax and Income Tax Withholding.” The form, which may be completed by either the firm or the worker, includes a comprehensive list of questions intended to establish the nature of the relationship between the hiring company and the service provider. An IRS technician will review the form and render a decision.

Often companies do not fill out S-88 until forced to do so because they are being audited or a complaint against them has been filed. If the IRS determines that a worker you have classified as an independent contractor is actually an employee, your firm will be required to pay back taxes, as well as a penalty. A failure to classify workers properly can also lead to charges of labor law violations. For specific guidance, consult your tax professional.

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