Archive for March, 2014


Nextiva Tuesday Tip: Should You Hire Your Spouse to Work in Your Business?

Stocksy_txpb6090cd68s3000_Small_17056If you have trouble finding workers with the dedication and loyalty you need, there’s a solution that can offer the best of both worlds: hiring your spouse. You get an employee who you know truly cares about your business, and the money you pay your spouse stays “all in the family.”

But before you broach the idea to your spouse, there are some important factors to consider.

How will working together affect your relationship? Some spouses can work together all day long and enjoy a happy marriage after hours, while others find business stresses spilling over into their personal lives. Clearly define roles within the business so each of you knows what he or she is responsible for. Also set boundaries outside the business, such as not discussing business over dinner or taking regular weekends off.

What does your spouse expect from the job? Perhaps your spouse expects to work closely together and spend lots of time with you, while you expect to scarcely see each other because you’ll both be so busy handling your separate duties. Clarify your expectations from the beginning and make sure you are both on the same page. Is this a short-term arrangement or a permanent move? Will your spouse need to work for free if money is tight?

How will a spouse working in the business affect your company’s dynamic? When you bring a family member into the business, nonfamily employees may assume your spouse will get favored treatment, that they will be passed over for promotions or that they can’t be honest with you about problems with your spouse. Discuss these issues openly to ease their worries.

What are the legal and tax implications? The way that you report and pay taxes for a spouse in the business will vary depending on whether your spouse is considered an employee or partner/co-owner. If the spouse is an employee, you need to withhold appropriate taxes from his or her pay just as with any employee. If your spouse has an equal say in the business and/or contributes capital, he or she is considered a partner, which affects your business’s tax reporting and payments. (See this IRS article for more information.) To avoid unpleasant surprises, consult your attorney and accountant regarding the tax and legal implications of bringing a spouse on board. 


Mondays with Mike: The Quick Qualifier – The Secret To Better, Faster Hiring

For entrepreneurs with a sizeable staff, payroll can be one of the biggest expenses.  That expense can multiply quickly if we don’t hire the right people, so any techniques we can find to improve our hiring outcomes can make a huge difference in our bottom lines.  The fact is that there aren’t a whole lot of shortcuts when it comes to running your business better, but I’m going to share one that can help you simultaneously speed up your hiring process while sifting out your best choices – automatically.

????????????????????????????????Conventional wisdom may tell you that casting as wide a net as possible in your hiring search will yield the highest quality result, but given today’s job market, your problem is unlikely to be a shortage of applications.  Rather, you’re likely to be buried under a sea of resumes, and your greatest challenge will be separating the wheat from the chaff – reducing the flood to a manageable stack of resumes from qualified, competent folks.  That’s where my technique comes into play.

When I post an ad for a job, about 75% of the way through the ad, I insert the following:  “To prove that you’re a meticulous reader, you have to include the following sentence when you send your resume: ‘It is with my utmost respect that I hereto surrender my curriculum vitae for your consideration.’”

Now here’s where the automation comes in.  You create an email filter that searches for the specified sentence, and sorts all of the qualifying resumes into a folder for you to review.  Think it won’t make a big difference?  Think again!  I’ve had as many as 80% of the resumes for a specific position eliminated by this filtering tactic.  Now you may be worried that you might discard a great resume, but let me tell you why this technique works:

  1. The unemployment rate is still so high that folks are desperate, sending off resumes to any ad they read, regardless of whether or not they’re qualified.  In fact, the applicants who don’t include the sentence may not have even read the application, and might have zero relevant experience.  They’re not the employees you’re looking for.
  2. Regardless of the field, attention to detail is crucial, and including the sentence demonstrates that an applicant cares enough to get it right.
  3. You’re looking for candidates who can follow instructions, and applicants who comply with your directions demonstrate a willingness to do what you expect them to.  They’re eager to please, and that’s important for nearly every position in a business.

I’ve used this technique repeatedly, and it’s proven to help select the very best candidates for my careful consideration.  In fact, one of the best employees I’ve ever hired responded by writing: “Yes, I’m so detail-oriented I am including the sentence you requested. However, I also noticed you spelled the word ‘meticulous’ incorrectly, and here’s the correct way to spell it.”  She ended up being a partner in one of my companies.


How to Launch a Philanthropic Program Within Your Company

The concept of corporate social responsibility, or CSR, is incredibly popular in large companies where deep budgets allow employees time off to participate in community-oriented projects. But what about small businesses? Without big budgets, is it possible for the little guys to make an impact?

“Absolutely, yes,” says Lauri Flaquer, small business expert and owner of Saltar Solutions, a business consultancy in St. Paul, Minnesota. “In fact, I’ve been seeing a ton of small businesses develop their own philanthropic programs as of late.”

Interested in getting involved in your community? If so, here are some helpful steps to get you started.

Poll your employees

You want your company to get involved, but you aren’t sure where to allocate your resources. Chances are good that some of your employees may already volunteer or give to specific charities in their off time, so start by involving them in the development of your CSR program.

“Ask your employees what organizations they think the company should give to or volunteer with. Then, task those who are passionate with giving a presentation on their pet causes and ask the group to vote,” recommends Flaquer.

Be choosy

Don’t have any takers for a charity presentation? Find your own non-profit to support. Flaquer recommends looking at organizations that are somehow connected the mission of your company.  “If you own a water filtration business, for example, try supporting a charity that promotes clean water,” she says. “Or if you are in the publishing industry, maybe join a non-profit that prevents the destruction of the Amazon rainforest.”

Do your homework. Flaquer recommends checking with the IRS to make sure the organization is a 501c3 (tax code for non-profit) and with the Better Business Bureau to research on its reputation in the community.

????????????????????????????????????????????????????Schedule volunteer time strategically

Too busy to volunteer? Flaquer recommends scheduling volunteer days (or hours) when your business is in a lull. “If your organization is cyclical, choose a time when it isn’t all that busy,” she suggests.

Transform a volunteering activity into a team building activity. Instead of renting an expensive hall and calling a catering company, opt to spend a day out of the office, cleaning a local park. Then spring for some pizza at nearby picnic tables. The event will end up costing you less and your employees will probably enjoy it more, too.

Set boundaries early

“When you are volunteering your time, it is easy for that time to take over your full-time job because you feel so good about helping others,” Flaquer says. “I recommend that before you start your program, set out exactly how much time you and your company will spend giving back, how much money you will spend and how many resources you will.

“Those guidelines will help you feel good about the impact you are making, but also help you keep an eye on your core business.” 


3 Ways to Sink the Sale of Your Company

??????????????????????????????????????Many small business owners dream of selling their company for a huge profit. After many years of hard work, they finally found the right buyer to acquire their company. After negotiating business terms, they signed the letter of intent (LOI). Now comes the tough part: collecting all the due diligence information and having the lawyers on both sides negotiate a final purchase agreement.

Here are the three ways that sink the sale of any company:

1. Pressure from external parties. This can be from overly aggressive lawyers arguing over largely irrelevant legal terms on the purchase agreement. One lawyer in a deal I was involved wanted to know what the seller’s responsibility would be if “the sun exploded”. Remember, in the sale of most small businesses, the only terms that really matter are the upfront sale price, sale payment schedule, representations and warranties. Many times, the seller’s accountant insists on charging added fees to give financial statements to the perspective buyer. One accountant even wanted a lump sum “research fee” for the client to collect all their historical records. It is common for the landlord to approve the transfer of any leases. They sometimes charge a steep “transfer fee” for their approval. Regulatory agencies with licensing requirements can also mean a delay of months. The remedy: Make sure that to have a lawyer that is familiar with small sale transactions. Collect all the information from the accountant up front for due diligence. Seek outside regulatory agency approval far in advance of the completion of any transaction.

2. Inconsistent financial numbers or other changing “facts”. All financial statements tell the company’s story. If during due diligence, this story changes, and then it will raise questions from the buyer.  Weaker numbers (specifically profitability) that differ from those provided in the LOI will always result in a price reduction. Additionally, changing “facts” may get the buyer nervous. This can be in the form of profiles of customer concentrations, revenue trends or employee status. The remedy: The small business owner always needs to know what story they are telling with every fact disclosed and explain any difference in the narrative.

3. Sellers or Buyers changing their mind. This happens very often. The seller decides that they don’t want to sell their company. The reason they give now is the sale is not enough money. More than likely, they are afraid what they will do with their time a day after the sale. The buyer sometimes has a change of heart on how the new business will fit into their company or “what they thought was true now isn’t”. The remedy: As a seller, the small business owner must determine what they will do the day after the sale of the company before they decide to sell it.

Barry Moltz helps small businesses get unstuck. His new book, “How to Get Unstuck: 25 Ways to Get Your Business Growing Again” is available in March. Barry can be found at www.barrymoltz.com


Work Your Biz Wednesday: 5 Things I’ve Learned

Happy 15th Anniversary to the Small Biz Lady, Melinda Emerson! Check out her list of the top 5 things she has learned over the years, and follow her on Twitter at @SmallBizLady.

From March 5-25, Melinda is giving away a prize every business day to help support your small business venture! Apply to the "15 Days of Giveaways" contest today at www.succeedasyourownboss.com!

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Nextiva Tuesday Tip: Is Your Business Senior-Friendly?

Stocksy_txp2258803bJk3000_Small_80398You may think your small business is doing a great job of providing amazing customer service. But if your customer experience isn’t in line with what senior shoppers want and need, you could be leaving money on the table. And since the latest Global Aging Report from Nielsen projects that by 2050, nearly one in five people will be 60 or older, that could be a lot of cash!

Seniors often have more money to spend and more time to spend it than younger consumers. Here are some things seniors care about that you should consider when creating a senior-friendly customer experience:

  • Print size. Half the seniors surveyed struggle to read package labels. Make sure your in-store signage, menus or marketing materials are legible for older readers. In general, a minimum of 12-point type is best. Avoid reverse-out type (light type on a black background), as this is harder to read.
  • Good lighting. Is lighting in your store, office or restaurant adequate for older shoppers? If they can’t read your menu without getting a headache or worry about tripping and falling in a dimly lighted store, they may avoid your business altogether. 
  • Noise. As we age, background noise can drown out normal conversation. Make sure your location is conversation-friendly by using window coverings, carpet and décor to cover hard surfaces and muffle noise. Keep background music to a level that doesn’t make hearing difficult or offer to seat older customers away from speakers.
  • Physical comfort. Wide aisles, handicapped-accessible restrooms and seating that can accommodate walkers or wheelchairs make a difference in whether older customers visit your location. About one-fourth of older customers in Nielsen’s survey complain that retailers don’t have enough places to sit down and rest, handicapped parking, handicapped bathrooms or wheelchair-accessible ramps.
  • Personal assistance. Older customers may need help with heavy packages or bags. They are also more likely to want personal advice before making a purchase, rather than using a smartphone to go online to look up product information as younger customers tend to do. Be sure your employees are sensitive to older shoppers’ needs.
  • Senior-friendly websites. Older customers do go online, but typically on their desktop computers. Make sure your site is senior-friendly by keeping it simple and readable. Use plenty of white space, easy-to-read fonts and colors, and clear navigation. You can even provide options for enlarging type in case users don’t know how to do that in their browsers. Finally, provide various options for seniors to contact your customer service department—they may prefer to speak to someone on the phone rather than use chat or email. 

Mondays with Mike: The Sure-Fire Plan For Killing Your Business

2014-02-27_1405I’m sure you’re wondering if I’ve lost my mind.  Why on earth would you want to read an article telling you exactly how to kill the business that you’ve worked so hard to build, nurture, and grow?  The answer is that it’s useful to take a step back from all the hard work we do to make sure we’re not inadvertently doing things that damage our companies.  Here’s a look at what not to do:

  1. Turn your hobby into a business.  Just because your friends tell you that your spicy barbecue sauce is the best they’ve ever tasted, that doesn’t mean you have to find a way to profit from it.  There’s a difference between a hobby – something you do to relax and release energy – and a passion – something you do to create energy.  While successful businesses thrive on passion, they can also destroy the pleasure that we take in our hobbies.  Not everything you enjoy needs a business plan.
  2. Get rich quick.  You may be thinking, “Isn’t that the point?”  The fact of the matter is that the best way to get rich is by investing your time and energy in your passion and organically growing your business, rather than chasing what you think is the next trend in an attempt to cash in and get out.  Isolate your passion and nurture it, rather than trying to work in a field just because you think it’s the next big thing.
  3. If things are going south, work harder.  By the time most businesses fail, the entrepreneurs who started them are absolutely exhausted.  Instead of trying to add hours to the day or taking time away from family and friends, spend you time finding ways to work more efficiently.  If you can automate aspects of your business, you’ll be working smarter, rather than harder, leaving you time to enjoy the fruits of your labor. 
  4. Nurture the weak.  I’m constantly amazed by how many companies cater to the least lucrative (and most difficult) clients, at the expense of building business with the big customers – you know, the ones who keep the lights on.  Rather than trying to squeeze an extra few bucks from the reluctant spenders, commit to cultivating your heavy hitters and providing them with excellent service.  You can’t please everyone.  Why not please the ones who are the most valuable?
  5. Measure revenue from the top line.  Yes, it’s essential to bring money into your business, but that’s only part of the equation.  You could land a million dollar contract tomorrow, but if your expenses eat up $990,000 of it, your bottom line is only $10K.  Focus on what’s left after you’ve paid your staff, covered your other expenses, and paid yourself.  That’s what you’re really earning.
  6. Focus on your wallet.  When you realize that every single business decision you’re making is based on money, it’s time to take a step back.  Successful businesses make money, but they do it by working with passion and ensuring that their customers are satisfied.  Steve Jobs didn’t build innovative products just to make money (though he certainly did profit.)  He wanted to introduce elegant, functional solutions for everyday problems.  Remember why you started your business and work to leave a positive impression on your community.

There will never be a shortage of businesses in trouble, and savvy entrepreneurs will learn from the mistakes of others.  Make sure you’re not sabotaging your own success.   


Why to Question Assumptions When You Are Successful

It’s easy for small business owners to question themselves and their assumptions when they are failing. But at that point, it may be too late to fundamentally make changes that can turn their company around. The success rates goes up if the owner questions assumptions when things are going well. However, most entrepreneurs will have a hard time doing this because they will not want to “mess with success” or “if it’s not broken, don’t try to fix it”. Many times, they do not even know what the success formula really is. They make cause-and-effect connections where it truly does not exist.

Stocksy_txp5226ac4eb53000_Small_135613For example, the phenomenon of success actually not bringing more success has been statistically documented in basketball. A  study called “The Hot Hand in Basketball: On the Misperception of Random Sequences” states, “ The chances of success on the next shot are not correlated with the success of the last shot. In other words, the ‘hot hand’ idea is a fallacy.”

To increase success in the future, look to see what conditions exist in the market that will make the company profitable now. Evaluate past results, but do not base future actions solely on them. Don’t say, “Well, it worked in the past, so it should work in the future!” Keep thinking like a start-up entrepreneur as long as possible. This worked for IBM in the early ‘80s when the company moved the work on their new personal computer to a separate business unit so the effort would not be “weighed down” by IBM’s past success in unrelated areas.

A $75M company I know had been in business for 50 years. Historically, they were only able to deliver five percent net profit to the bottom line. Sales had grown slowly over the years, so there was never a need to make any changes since they could predict what they could contribute to the parent company. A new CEO got worried about what would happened to the company’s profits if sales dipped during a recession.  She realized that even a small drop in sales was going to mean disaster for their overall profit contribution. The CEO needed to find ways to cut their expenses or increase their gross profit while not cutting revenue. She was able to do this by throwing out established distribution channel assumptions, cutting discounts for many vendors and raising prices for newer products to their customers. When sales eventually shrank during the Great Recession, the company was able to deliver the same dollar profit to the parent corporation. Now that times are better, and sales have grown again, they have become even more profitable.

What assumptions are you not questioning?


Public Speaking: 5 Tips for the Perfect Presentation

Stocksy_txp46994a3ceH3000_Small_128894You are a few weeks away from giving your first talk at a big industry conference and you’ve never been a fan of public speaking. Fear not. Study the following tips and you will be ready in no time.

Research your audience

Who will be listening to your talk? What companies will they be representing? What will they be looking to learn from your presentation? If you don’t have the answers to these questions, try asking the conference organizer for attendee demographic information, recommends Jeannine Kay, public speaking coach and owner of Giving Voice in San Francisco.

Establish your takeaways

In the process of developing your presentation, think hard about what you want your audience to talk about after the fact.  “Ask yourself what your key messages will be,” suggests Kay. “What do you want your audience to walk away with and remember?”

The best presentations impart wisdom that couldn’t otherwise be gleaned from a simple Internet search or reading an industry-specific book. Come to your talk with some original insights and have a solid idea of what actions or lessons you’d like your listeners to learn from your talk. 

Plan to interact

The most memorable presentations are those that somehow incorporate the audience, be it by way of bringing an unsuspecting conference-goer on stage or polling listeners with electronic survey consoles.

“Be authentic when you are up there; it will help you make a connection,” she says. “Speak the language that they speak, don’t talk in jargon that they may not understand. Identify a few key messages that you want to get across and talk about those messages in several different ways. Don’t overload your audience with too many concepts; they may zone out.”

While speaking, try to change things up. Don’t just stand behind a podium; instead walk around on stage or maybe even stroll down to the level of the audience. The more you interact, the more effective your presentation will be.

Practice, practice, practice

Even if you think you know your material cold, it is vitally important to practice. If you don’t, “game day” can feel a lot like “trying to get up and run a race by just putting your shoes on, but not doing any training at all,” says Kay. She recommends not only focusing on what you will say, but how you will say it. “Non-verbal communication such as what you do with your hands and your face is very important.”

Calm yourself down

Even if you have glossophobia (a fear of public speaking), there are ways to calm yourself down before you go on stage. “I frequently refer to Amy Cuddy’s TED Talk where she found that when people make themselves bigger and take up more space, it encourages people to take risks,” says Kay.

A person who is hunched over and staring at their smart phone will be less mentally prepared to stand up in front of a crowd than a person who is standing in a confident position with their arms at their side and their head held high. “When you are in front of a crowd, instead of putting your legs close together or having your arms wrapped around your torso, balance yourself on two feet with a few inches between them and don’t shrink behind the podium.”

Simultaneously, try to breathe slowly and deeply. Kay explains that when we get anxious, we tend to take shorter breaths high up in our chests. “Combat that by slowing down your breathing even before you get up there.” 




 
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