Long-term care can be costly

Dear Karen: I provide health and life insurance for my employees. Recently, an employee asked about long-term-care insurance. What is it?Answer: Long-term-care insurance pays for institutional or home care for chronically impaired seniors. Although only 13% of full-time employees in private industry are offered long-term-care insurance today, that number is expected to go up as the U.S. population ages, said Larry Hazzard, a senior vice president at Berkshire Life."These policies can be pricey because of how rich the benefits are when you receive them," Hazzard said. You can offer long-term-care insurance to your employees at their expense, or your firm can pay all or part of the cost. Either way, the coverage is discounted when offered through a company rather than being purchased by an individual, Hazzard said. Another perk: Long-term-care insurance benefits are generally tax-free, even for employer-paid policies.Experiment with effect of pricingDear Karen: Will my sales decline if I raise prices in this economy?Answer: You won't know for sure unless you try, said David Cochran, vice president of operations at QualPro, a consulting firm. "Increase prices on small customer segments, varying the amount of the increase, and measure the impact on sales. You can then determine what your optimum price is," he said.Despite popular belief, pricing is not always the most important factor affecting sales. "Often, the right advertising message can overcome the effects of raising prices and you can sell just as much product or even more at higher margins," Cochran said."While lower prices often do increase unit sales, the use of aggressive wording such as 'Great price!' in your advertising may be equally effective. The fact that the price may be higher than a price you've offered previously may not matter a lot," he said.Outsourcing's not just for big guysDear Karen: Can my small business cut expenses by outsourcing?Answer: Yes. Many small firms save on labor costs by outsourcing routine jobs rather than hiring full-time employees, which involves providing a work site and incurring salary, overhead and administrative costs. "Small businesses typically start out as one-man shows, with an entrepreneur working 12- or 14-hour days, seven days a week. They can't afford to hire help at $30,000 or $40,000 annually," said Chris Johns, chief executive of SupportSave Solutions, based in Alamo, Calif.His company trains and employs workers in the Philippines to answer telephones and do back-office work for small U.S. companies, he said."For $897 a month per full-time employee, we provide the infrastructure and the dedicated staff that are hired and trained specifically to become part of the small business," he said. "This enables start-ups to keep their overhead costs low so they can reinvest their revenues and grow to the point where they can hire staff in the U.S."An outsourcing firm also handles employee screening, hiring, training and supervising, freeing up the entrepreneur to concentrate on sales and planning. "We have a large talent pool, and we routinely screen and interview 100 applicants daily. Often, we can hire somebody for a small firm in a day or two days," Johns said. 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.