Our latest newsletter covers hot topics, including Captive Insurance, Retirement Plan Governance, Short-Term Incentive Plans, BYOD and Tangible Property Regulations.

1. ISSUE 56 • SUMMER 2013
BIZGROWTHS T R A T E G I E S
I D E A S T O H E L P G R O W Y O U R B U S I N E S S
IS CAPTIVE
INSURANCE
THE ANSWER
FOR YOUR
COMPANY?
our business
is growing yours
WHEN SHOULD YOU ADOPT
TANGIBLE PROPERTY
REGULATIONS?
MARKETING:
KNOWYOUR CUSTOMER
SHORT-TERM
INCENTIVE PLAN
DOs & DON’Ts
THE LATEST
BUSINESS
REVOLUTION
BYOD–
GOVERNANCE IN A
FEE
RETIREMENT PLAN
DISCLOSURE
WORLD

2. In This Issue…
To view the electronic versions
of current and past issues of
BIZGrowth Strategies, visit
cbiz.com/bizgrowthstrategies.
To register for our online version,
visit cbiz.com/invitation.asp.
You can also call us at
1-800-ASK-CBIZ (1-800-275-2249).
@cbz CBIZ BIZ Tips
Videos
Employee Benefits.......................2
Retirement Plan Governance
in a Fee Disclosure World
Tax & Accounting........................4
Tangible Property Regulations:
Is Early Adoption Right for You?
Marketing...................................4
Marketing: Begin with
Knowing Your Customer
Insurance Strategies...................5
Is There a Captive Insurance
Solution for Your Company?
Human Resources.......................6
DOs & DON’Ts of Short-Term
Incentive Compensation Plans
Management & Performance.......7
BYOD – The Latest
Business Revolution
CBIZ in the News
For complete articles:
cbiz.com/in_the_news.asp
The Wall Street Journal
Tax court slaps down IRAs holding
‘alternative assets’
May 17, 2013
FoxBusiness.com
Out-of-the-box loan options
to start a business
April 23, 2013
Forbes
Networking at incubators, accelerators
and coworking spaces
April 22, 2013
Employee Benefits
2 | BIZGROWTH STRATEGIES – SUMMER 2013 CBIZ, INC.
T
o attract and retain quality employees, employers must provide
a benefits package that includes a quality retirement plan. In
providing this benefit, employers and plan fiduciaries assume a
number of responsibilities. Although professionals may be retained
to perform the duties associated with offering a retirement plan, an
effective and meaningful governance process must be developed to
ensure best practices are followed in maintaining the plan. This will
allow plan sponsors to manage the legal and financial risks while
delivering a high-quality retirement program for plan participants.
An effective plan governance process will provide for oversight
protocols, identify the plan fiduciaries, develop monitoring processes
and document plan decisions. As a practical matter, the governance
process should address 1) plan compliance issues; 2) management of
plan assets; and 3) administrative concerns.
Plan Compliance
ERISA and the Internal Revenue Code (IRC) impose a compliance
burden on sponsors of tax-qualified retirement plans. In order to meet
the rules set by these statutes, a governance plan should address
the following:
• Plan document. This instrument details the terms of the
retirement program and needs to be updated periodically to
reflect discretionary changes made by the plan sponsor or
regulatory changes required by law.
• Governmental filings. These filings include Form 5500 which
reports financial, investment and operational information about
the plan; Forms 1096 and 1099R which report distribution
information; and any other forms required by regulatory agencies.
• Testing. Annually, a tax-qualified retirement plan must
demonstrate that the plan does not exclude a disproportionate
number of lower-paid employees (generally making less than
$115,000) or provide benefits that discriminate in favor of higher-
paid employees. If the plan sponsor is under common control with
other entities, these tests must be based on the employees of all
entities under common control.
• Operational compliance. It is important to monitor that the plan’s
operation is consistent with plan document provisions.
Plan Assets
Fiduciaries responsible for the management of plan assets
are subject to the prudence standard, which requires a fiduciary
to act with the care, skill and diligence that would be exercised by
a prudent person familiar with the matter and acting under similar
Fee Disclosure World
GOVERNANCE
Retirement Plan
in a

3. circumstances. In meeting this standard, fiduciaries
must:
• ensure plan assets are diversified so as to
minimize the risk of large losses, unless under
the circumstances it is clearly prudent not to
do so
• comply with the plan’s investment policy statement
• monitor the reasonableness of fees charged by
service providers
• ensure that the plan has sufficient liquidity
• act in the best interest of the plan participants
Administrative Issues
Fiduciaries must make sure all of the plan’s
recordkeeping/administrative issues are addressed.
Regulatory agencies, participants, the courts or other
entities may have a legal right to access plan records.
DISCLAIMER: This publication is distributed with the understanding that CBIZ is not rendering legal, accounting, or other professional
advice. To the extent anything herein could be construed as tax advice, such advice is not intended to be used and cannot be used
to avoid penalties under the Internal Revenue Code, or to promote, market, or recommend to another person any tax related matter.
This information is general in nature and may be affected by changes in law or in the interpretation of such laws. The reader is
advised to contact a professional prior to taking any action based upon this information. CBIZ assumes no liability whatsoever in
connection with the use of this information and assumes no obligation to inform the reader of any changes in laws or other factors
that could affect the information contained herein.
BILL KARBON
CBIZ Insurance Services, Inc.
Lawrenceville, NJ
609.895.5332 • wkarbon@cbiz.com
Therefore, it is incumbent on the plan administrator to
maintain historical records that include copies of plan
documents, participant notices, government filings,
enrollment forms, beneficiary designation forms, census
data and evidence of required insurance coverage.
Without an effective governing process, it will be
virtually impossible to fulfill all of the duties associated
with maintaining a tax-qualified retirement plan. Hiring
qualified professionals to assume all or some of
the aforementioned duties does not relieve the plan
sponsor of their duties. A documented process must
be developed for selecting these professionals and
monitoring their performance.
CBIZ, INC. BIZGROWTH STRATEGIES – SUMMER 2013 | 3

4. new expenditures are depreciated over the shortest
period allowable.
Does your company acquire many small-dollar fixed
assets on an annual basis?
If you have an applicable financial statement and
have expensed property costing below a specified
amount, the de minimis rule may allow you to deduct
expenditures below the de minimis cap instead of
capitalizing them.
Does your company accumulate large expenditures
to maintain equipment?
You may be able to use the de minimis rule or
the routine maintenance safe harbor to increase your
current deductions or at least deduct them with more
certainty. The new regulations provide favorable rules
to correct any impermissible methods that are used
in accounting for materials and supplies.
Does your company have Net Operating Losses (NOLs)?
Early adoption of the tangible property regulations
based on the facts and circumstances described above
are typically negated if you have NOLs. Consult your tax
provider regarding your specific circumstances.
MICHAEL FINNEGAN
CBIZ MHM, LLC • Phoenix, AZ
602.264.6835 • mfinnegan@cbiz.com
4 | BIZGROWTH STRATEGIES – SUMMER 2013 CBIZ, INC.
I
n late December 2011 new tangible property
regulations were issued by the IRS to guide
taxpayers on how to account for amounts paid
to acquire, produce or improve tangible property.
Originally scheduled to be effective for tax years
beginning on, or after, January 1, 2012, mandatory
compliance with the new regulations has been delayed
to tax years beginning on, or after, January 1, 2014.
Despite the delay, certain taxpayers may benefit
from early adoption of all or select provisions in the
regulations. Regardless of whether early adoption
is right for your company, it is expected that most
companies will incur additional expenses next year
in complying with the new regulations. The following
questions identify key triggers that can help determine
whether early adoption is right for your company.
Does your company own a building?
If you have replaced a significant component of
your building, you may be able to write off the old
component still sitting on your books. You also may be
able to use general asset accounts to group types of
expenditures together, potentially increasing the ability
to deduct similar future expenditures as repairs.
Has your company recently completed renovation
or expansion projects to your buildings?
You should have your records reviewed to ensure
that replaced components are written off and that
Tax Accounting
Tangible Property Regulations:
Is Early Adoption
Right for You?
I
moved away from marketing because it wasn’t
working for me,” said Doug, a small business
owner. He continued, “I took a class on marketing
where the presenter advised that I should use
postcards. He even gave me the messaging I
should put on them and said they got results for
businesses like mine. I spent thousands of dollars
and I’m not sure I ever saw the results I wanted.
It left a bad taste for marketing in my mouth.”
It turns out that Doug attended a lunch seminar
presented by a postcard salesperson. Countless dollars
had been wasted or at the very least not effectively
distributed. What Doug put his money into was a
postcard advertising campaign, not a well-planned
marketing strategy. Jumping into a campaign like
this without any research or planning is like a doctor
“I
Marketing
MARKETING: Begin with Knowing
(Continued on page 8)
Your Customer

5. O
ver 28% of all commercial insurance premiums
today are paid to captive insurance companies.
Yet, there still exists a sense of mystery
and confusion amongst middle-market commercial
insurance buyers as to what benefits this arrangement
can provide. The goal of this article is to simplify the
captive insurance arena into a few broad categories to
better help middle-market business owners understand
the potential advantages of these risk financing
arrangements.
Definition
A captive insurance company is a privately-
owned insurance company whose owners are
also its insureds. These insureds are then the
principal beneficiaries of all underwriting profits
and corresponding investment income generated
from premiums paid into the captive. Captives have
been utilized by business owners for more than 100
years, with over 6,000 captives operating today.
Let’s look at the potential benefits for middle-market
companies, using a few different scenarios.
Group Captives
Privately-held or smaller public companies usually
do not have the size or legal/taxable diversity to
qualify for insurance company status on their own in
the eyes of the IRS. These companies typically have
an annual commercial insurance spend of between
$150,000 and $2 million. For certain portions of their
commercial insurance program (General Liability,
Workers Compensation and Automobile) they can
participate in a group captive arrangement whereby
up to 65% of their premiums are available for them to
retain if not used for claims. Companies in this space
currently utilizing high deductibles or retrospectively-
rated programs will find captives less expensive
and more financially efficient over the long term.
Additionally, most privately-held companies own their
captive stock outside their personal estate, thus
Insurance Strategies
CBIZ, INC. BIZGROWTH STRATEGIES – SUMMER 2013 | 5
COURTNEY W. CLAFLIN
CBIZ Insurance Services, Inc. • Minneapolis, MN
612.436.4614 • cclaflin@cbiz.com
Is There a
Captive Insurance
allowing captive profits to be held in a vehicle not
subject to estate taxes.
Balance Sheet (Micro) Captives
Higher pre-tax profit companies can set aside
these pre-tax profits, on a tax deductible basis, into a
captive to insure business risks for which they currently
do not buy insurance or for which they do not buy enough
insurance. As long as premiums are less than $1.2
million per year, profits are retained inside the captive on
a tax-exempt basis. Profits distributed from the captive
are in the form of a dividend and are taxed as such.
Stop Loss Health Insurance Captives
One of the hottest trends in the health insurance
industry is the group stop loss health insurance captive.
This vehicle gives current fully-insured employers with
as few as 25 employees the ability to achieve qualified
self-insured status, along with all the advantages of
being “self insured” and without the economic volatility
of being self insured on their own. Additionally, current
self-insured employers in these vehicles have access to
profits normally only available to their current stop loss
insurance provider.
Insurance is the purest form of socialism; the
“haves” subsidize the “have nots”. Captive insurance
companies are designed to reward those companies
that, through their risk management discipline,
consistently pay far more in premiums than in claims.
With a limited amount of “risk” attached to captives
and with the client’s ability to keep the underwriting
profits and investment income, it’s no wonder the
captive marketplace has grown at over 200 times the
rate of the traditional market in the past 15 years.
for Your Company?

6. M
otivating workers is critical to corporate
success. Organizations across the country
are seeking to continuously improve
employee performance, while simultaneously
controlling costs. Establishing or expanding incentive
compensation programs can be an effective strategy
to achieve this objective.
When designed well, incentive plans align
employee behaviors and activities with specific
goals. When designed poorly, incentive plans can
cause confusion and frustration among employees
and dissatisfaction among owners and management.
There are several practices to be avoided and
others to be considered in order to design an
incentive plan that succeeds in motivating and
recognizing desired performance.
Don’t: Use corporate performance measures that do
not apply to the industry or organizational operations.
Do: Focus on metrics that are meaningful to
organizational strategies.
Organizations at different stages of development
are likely to have different goals and, thus, different
performance measures that should be included in
incentive plans. For example, a start-up company is
generally focused on gaining customers and growing
sales. As a result, increases in market share and
revenue growth are likely to be appropriate measures
to incorporate into incentive plans. Conversely, mature
companies often have reached maximum market
penetration and revenues have stabilized. These
companies therefore should emphasize profitability
and cost controls.
Don’t: Wait until the end of the period to determine
performance measures and corresponding payouts.
Do: Establish and communicate incentive plan
criteria before the performance period begins.
For budgeting purposes it is financially responsible
to estimate potential incentive payouts prior to the
performance period. Furthermore, employees are likely
to respond much more positively to the plan if there is
clear understanding as to what results are needed to
earn the incentive.
Human Resources
PRIYA J. KAPILA
CBIZ Human Capital Services • St. Louis, MO
314.995.5558 • pkapila@cbiz.com
6 | BIZGROWTH STRATEGIES – SUMMER 2013 CBIZ, INC.
DOs DON’TsOF SHORT-TERM INCENTIVE
COMPENSATION PLANS
Don’t: Overemphasize corporate financial
performance measures.
Do: Adjust the relative weighting of corporate and
individual performance based on job levels.
While including corporate performance as an
element of the incentive plan encourages employees
to have a more holistic perspective, considering “line
of sight” is imperative. If employees cannot influence
the incentive plan’s performance measures, the ability
to earn incentives is beyond their control. This means
the plan will be largely unsuccessful at motivating
employees. At lower levels of the organization
individual or team performance measures should
compose the majority of the plan’s criteria.
Don’t: Award incentives indiscriminately across staff.
Do: Determine eligibility based on line of sight,
market prevalence and job level.
Many employers believe in rewarding all staff when
organizational performance is strong; however, this is
one of the most common ways of fostering feelings
of entitlement and misunderstanding among staff.
Additionally, there is compliance risk if incentives
for non-exempt employees are not calculated
correctly. The ideal way to determine eligibility for
an incentive plan is to identify employees who
can impact the performance measures
and those for whom incentives are
a market-competitive practice.
Corporate initiatives to
improve worker performance
and motivation are nothing
new. However, such endeav-
ors have taken on
greater significance
as companies focus on
enhancing organizational
results in the midst of
uncertain economic times.
A key objective of incentive
compensation is to encourage
and reward desirable employee
performance and behaviors. As a
result, any incentive plan that does not
illicit improvement falls short of overall plan goals.
Incentive compensation plans should be developed
conscientiously, keeping the basic “DOs and DON’Ts”
in mind, and continuously reviewed for effectiveness.

7. Y
our business is experiencing a revolution and
you may not be aware. Even if you are aware, you
may be underestimating its scope and long-term
effects on your business and bottom line.
Spawned from cloud computing, this revolution is
“Bring Your Own Device” (BYOD).
BYOD applies to employees bringing their
personally-owned mobile devices, such as smart
phones, tablets and laptops, into the workplace,
using them to access privileged company information,
programs and applications.
According to Massachusetts-based technology
information and consulting firm Forrester, among
North American and European information workers,
70% of tablets, 67% of smart phones and 46% of
laptops used in their work are personally-chosen
devices. That is, employees buy whatever device they
want and use it for work.
Forrester reports that, because of this growing
trend, 60% of companies in North America and Europe
are developing BYOD programs to integrate and
support employee-owned devices.
Should you embrace a BYOD program in your
business? Here are a few things to consider:
Risks
• Security. Keeping sensitive and confidential
information secure is not a small endeavor.
Increasing access requires increasing security.
And, what happens to a personal device that’s lost
or stolen? There are solutions, but they must be in
place from the get-go.
• When a business issues a device, it can set the
terms of use as to what internet content can be
accessed and so forth. This is not so much the
case with an employee’s personal device, leaving it
more open to viruses.
• Not every personal device can be integrated.
Technologies are so numerous and fractured that
one Android-based smart phone, for example, can
be integrated and another cannot.
• In sales- and service-based businesses it is
possible customers have employees’ personal
phone numbers. If the employee separates from
your company, those customers may be lost.
• Your IT department may find itself spending
valuable time addressing non-business-related
issues as employees try to avoid contacting a
device’s help center for routine troubleshooting.
Obviously, plenty can go wrong; however, for many
businesses there are significant advantages to be had.
Advantages
• Reduced hardware expenses. Device costs are
shifted from your business to the employee. Even
if your company subsidizes the device’s original
cost, the employee is responsible if it’s lost, stolen
or needs repairs. Your business doesn’t need to
maintain replacement inventory or parts.
• Your IT department will still be busy; however, it
should be less so, meaning some IT resources can
be allocated to other areas.
• Increased productivity. Not only do people work
more efficiently on devices with which they are
familiar; they also have the ability to work on a
more flexible timetable. Using personal devices will
also reduce the learning curve of new hires.
• Because new technologies historically reach
consumers before being accepted by businesses
(the iPad, for example) technological advances will
be introduced into the workplace more quickly.
The Reality
In reality, depending on the size of your
organization, you may already have dozens or
thousands of employee devices accessing company
information. As a result, sooner or later, your business
will probably have to deal with BYOD, if it hasn’t
already.
Your business and bottom line will be better served
if you proceed in an organized way. However, don’t be
blinded by the promise of cost savings from workers
providing their own devices. Without proper planning
and the appropriate policies in place, the potential
risks outweigh the potential benefits.
Management Performance
ROBERT CINI
CBIZ MHM, LLC • Boca Raton, FL
561.922.6099 • rcini@cbiz.com
CBIZ, INC. BIZGROWTH STRATEGIES – SUMMER 2013 | 7
The Latest
Business
RevolutionBYOD

8. our business
is growing yours
©Copyright2013.CBIZ,Inc.NYSEListed:CBZ.Allrightsreserved.•CBIZ-020,Rev.56
Marketing (Continued from page 4)
doing surgery before the patient has undergone any
diagnostic testing. The results are ineffective and
counterproductive to the overall goal.
Marketing is all about the customer. It helps
identify current and future customer needs and
brings to light how your company is uniquely qualified
to fulfill those needs. When you understand the
customer better, you are able to service their needs
more effectively, more easily attract new customers
and better retain existing customers.
Do you know who your customers are? What is
most important to them? What makes you uniquely
ELI CLEMENS
CBIZ, Inc. • Salt Lake City, UT
801.364.9300 • eclemens@cbiz.com
8 | BIZGROWTH STRATEGIES – SUMMER 2013 CBIZ, INC.
qualified to deliver your products or services to them?
Why do they choose you over a competitor? Have you
identified how your current service offerings align
with your customers’ needs, or how your competition
measures up to customer needs? These questions
are basic and essential to your overall marketing
strategy and business growth goals. If you don’t have
the answers to these questions, before you do any ad
buys, campaign management, event planning or other
marketing plans, find out.
The discovery of your unique position in the
market from the perspective of current and future
customers is critical in developing your marketing
strategy and business growth. Marketing should be
interconnected with your operations and business
planning. It works in conjunction with new product
releases, improvements to existing products and
services and, of course, new customer acquisition
strategies. Before you spend your next dollar on
operations, product development, advertising or
marketing strategy, remember… it’s all about the
customer, so get to know them.