Start Smart: Creating Great Performance

Small Business Human Resources - Great Employee Performance ManagementThe smaller your organization, the more important each person in it becomes. Think a moment – what would happen if you just lost $5,000 or $10,000 tomorrow? Yet hiring and retaining the wrong person can easily cost you that in lost opportunities or time or energy quite quickly.

So, how do you ensure your staff are terrific assets?

Start with your hiring process. New companies often hire family and friends because they are ‘comfortable’ with such people. Small organizations often think of people as an expense to be minimized, rather than an investment in your success and future.

Look carefully at how you design a new job and hire for it. You do not need an elaborate job description or expensive search process. You do need to be very clear about the work that needs to be done and the experience, attitude, and knowledge actually needed to do it well. Where will you find such a person? How will you know? What will you pay for?

Many of us lose valuable employee productivity from the start, through bad assumptions and poor planning. Your new hire checklist – mental or written – probably focuses on things like keys and payroll and forms.

What you need is a new hire checklist that ensures you:

1. Reinforce why you hired the person: say what you saw in their experience, attitude, and knowledge which demonstrated their value to your organization.

2. Explain the basics of ‘how we work here’. What are your organization’s common habits and practices that a new person needs to know?

3. Define your vision and goals and relate to the person’s specific job.

4. Set the standards for behavior and high performance at the beginning. Have the materials and equipment each needs and someone to train them on any company specific processes. Be clear in explaining what the person needs to know to successfully do the job. State your expectations in terms of daily activities or weekly accomplishments. What goals do you want achieved in the first 3 months? 6 months? What standards does the person need to meet? Do you expect all calls/email to be answered within one business day? All customers to be greeted when they enter your store? Be clear about all those details.

5. Talk about how you like to work. If you expect employees to bring up problems immediately, say so. If you want them to try to solve the problem first or bring you a proposed solution, tell them. Do you do a weekly staff meeting or scheduled individual meetings? Do you prefer written or oral reports? Are you calm and deliberative? Creative and outgoing? Tell new people.

Not there with current employees?

You can change. Define your own processes and expectations and clearly communicate them to existing staff. Then, as you grow, do so with each new hire too.

Now, of course, the reason this does not happen all the time is that many of us expect others to know and understand our goals and standards. Magically, without our having to do the work ourselves to clearly define and articulate them! So your own performance is the first person’s to sort out.

But the value of doing so is an immediate boost to productivity and performance in your organization. Your staff will know how to succeed and how to help the organization succeed.

Patricia Frame is an experienced management consultant, speaker and author on human capital issues. Ms. Frame founded Strategies for Human Resources in 1993 as a consulting firm specializing in meeting the human resources needs of small to mid-size organizations. 

Bookkeeper and Your Accountant

Bookkeeping and Your Accountant - MBS Bookkeeping ServicesThere can be confusion among small business owners when it comes to responsibilities between bookkeepers and accountants.  There are some who believe that they will save money by using the services of a professional bookkeeper rather than services of a Certified Public Account (CPA.)  I answer that question with this analogy:  would you ask a nurse to perform open heart surgery, or would you ask a heart surgeon?  Both are critical to the field of medicine just as the bookkeeper and the CPA are both critical to the field of accountancy.  Let me point out a few important differences.

CERTIFIED PUBLIC ACCOUNTANT

A public accountant is qualified to help you strategize and make important decisions so that you can grow your business and avoid some common pitfalls.  A CPA can also help you with strategic tax planning.  Your CPA takes your business financial planning to the next level.  If you don’t currently have a CPA, get one.

BOOKKEEPER

The bookkeeper then implements at the nuts and bolts level the strategy you and your accountant develop.  Your bookkeeper will set up your books and classify transactions that correspond to your business strategy.   At the most basic level, your bookkeeper spends a great deal of time posting transactions to the correct accounts so that your financial reports correctly reflect the financial health of your business.   Other important functions include maintaining reconciled book balances and managing your accounts payable and accounts receivable.   Your bookkeeper must be able to provide you with your current cash position when you are faced with a critical financial decision.   I’ve just scratched the surface.

These are your most basic differences.  But as with all things, bookkeeping professionals have different skill sets and areas of proficiency.  There are many professional bookkeepers who are trained and skilled to help you in many other areas.  These might include budgeting, forecasting, pricing, payroll, training, and so on.  So what should you do?  Your business is your ship and you are its captain.  You should make a list of skills and assistance you are looking for in a bookkeeper and look for someone with those skills.  A good place to start is by asking for referrals from similar businesses or from your accountant.  Schedule a meeting with the Alexandria Small Business Development Center; they have professionals available to advise you.  If you have an in-house bookkeeper, make sure your bookkeeper gets the training she/he needs.  If you are a start-up, meet with your accountant on a periodic basis to be sure you are on track and give your bookkeeper feedback.   Bad bookkeeping means poor output which can mean insufficient data for you to use when making critical financial decisions.  Don’t be penny wise and pound foolish, as the old saying goes.  The little you may save today may cost you plenty in the future.  Be smart and get professional advice.  It doesn’t matter if you keep your own books, if you staff it, or if you outsource… Be Smart!

 —

Sue McLaughlin is the founder and principal of McLaughlin Bookkeeping Services, LLC and MBS Bookkeeping Seminars. Her mission is to offer small-business clients a fair price for bookkeeping services while delivering excellent customer service.

Who should buy what you sell?

Part two of my four-part Marketing for the Best of Us™! Blog series, which answers the four critical questions for growing the revenue of any business.

Who Should Buy what You Sell?

If you are a typical business leader, you’d like your product or service to be purchased by scores, maybe thousands, even hundreds of thousands, of people.  Whether your business is just beginning or has been operating for some time, is selling to individuals or organizations, if you are determined to excel you’ll want to maximize the number of your buyers.

After divining your answers to “What are YOU selling?” (see my June xx, 2012 blog post), what’s the best way to determine which types of customers or clients are most likely to buy what you are selling?

To find out, let’s break down this process into digestible bits.

  • Hone in on those wants or needs that (your customers perceive) you are fulfilling when they buy what you sell?
  • Identify the customer characteristics (or demographics) that best represent your buyers.
  • Determine where your customers are located so that you can craft the most effective tactics for inspiring them to buy your product or service.

Wants or Needs

Remember from my June xx blog that, in addition to your actual product or service, what you really are selling is fulfillment of your customers’ wants or needs.  The nature of your product or service determines what those wants or needs are – perhaps convenience, timesavings, or prestige.  With this understanding of your customers’ wants and needs and how you can fulfill them, you have the basis for identifying which characteristics your customers possess that inspire them to buy what you sell

Customer Characteristics

Customers who buy from you and those whom you want to buy typically are labeled as your “target market.”  Customers in this group, your target market, are those which you are, or should be, trying to acquire.

Customer types can be identified by any number of telltale characteristics, such as income level, location, lifestyle, gender, age, race, personality traits, or types of activities in which they engage, to name a few.

The attributes of your product or service foretells those customer characteristics, which ultimately reveal the types and numbers of customers who will be interested in buying what you sell.   If you sell yachts, income level, location, and personality traits are likely to be relevant customer characteristics.  On the other hand, chewing tobacco probably appeals to those having a certain lifestyle and gender.

Truth be told, this process takes time and effort if you want it to be the critical component of your marketing program that it should be.  Gather as much relevant data from as many sources as possible to complete your analysis.  Here in Alexandria, there are several rich suppliers of these data, including: our very own Small Business Development Center; the Alexandria Economic Development Partnership; SCORE; the Small Business Administration (SBA);and Reference USA.

Locating Your Customers

The most efficient and cost-effective method of acquiring customers is from referrals made by satisfied customers and third-parties (your “evangelists”).  Which means that, if they’re not proffered voluntarily, referrals have to be requested – either directly (“Do you know anyone else who might be interested in my widget?”) or indirectly (“Submit a testimonial and the names of other buyers for a chance to win a widget.”).

Additional acquisition techniques for finding customers include cold calling, advertisements or commercials (newspapers, yellow pages, radio, television, Internet, smartphones), direct mailers, brochures & pamphlets, newsletters, social media, your (Search Engine Optimized!) Website, membership directories, customer lists, public relations, holding workshops, exhibiting at trade shows, and, importantly, networking.

By developing a strategic process (I use and recommend the Prospecting Pyramid™), you can transform prospects (from your target market) into customers by converting leads into qualified prospects into hot prospects into customers.

Peter Baldwin, with over 30 years of marketing and business development experience, is founder, Managing Principal and Chief Marketing Coach of MarketForce StrategiesTM, a business coaching firm specializing in the design of more effective marketing strategies for small-to-medium businesses that will  improve performance, attract more clients, and increase revenue.   

 

Culture – What is it Good for?

Whether consciously planned or not, your organization has a culture.

In several HR seminars I’ve done for Alexandria’s SBDC, a common comment was surprise at the importance of culture to their organization’s future. Many attendees said they simply had not thought about their culture or its impact on hiring or productivity.

What creates the culture in an organization?

  • First is the vision since many people join (or buy from) because of what they understand the business or organization to be about.
  • Next is what we say about our organization – our story, our values.
  • Third is how we implement our vision and our values.

While other issues of culture may be included, these three give you the basics of the culture in your organization. How are you actively manifesting them?

When I do organizational assessments, I often find a difference between what founders/CxOs say they want as a culture and what their practices actually are. For example, you may have been in a ‘do as I say, not as I do’ work arena – and that is one critical strike against a positive, productive culture.

Aligning your culture, your policies, and your actual practices is critical for success. Sometimes, the culture originally developed is not what you now need. Or worse, the culture you thought you had created is not what you actually have.

As you prepare for future success, take a look at your existing culture.

  • Is it what your organization needs?
  • What you want?
  • How is the desired culture expressed in basic practices and policies?
  • Will the existing culture support your strategic and business plans?
  • If so, great! If not, what are you going to do? How? When?

One of my clients was an ethical, terrific founder who knew his business and had great ideas. He was quite successful at first. But over time, his dislike of and avoidance of conflict led to a culture where all disagreement was avoided. People were retained when they should have been fired, and critical decisions were delayed or left unresolved. And it cost him his business. While extreme, this is not an unusual failure – it happens too often in organizations where the culture has become a hindrance to success. 

You can create a culture that helps your organization succeed.   But it takes attention and thought to do so.  And to maintain its best aspects, you need to keep your culture in mind  as needs change, as you grow, as your environment changes — all those may require tweaks to your culture.

Should I Hire an Employee?

The decision on whether to hire a person is especially critical whether you are just beginning to grow or need specialists you are not sure you can afford.How do you decide whether or not to hire employees?ASK YOURSELF:  1. Is this work which must be done over a long term?

If the work is on-going and critical to your organization’s success, consider hiring or leasing an employee.  If it is not, consider other options.

Work can be done by independent contractors who specialize in the area, by temporary staffing services, by consultants for a project or a specific need, by an interim executive, by a paid intern, or by sub-contracting.  Would one of these options work better for you?

Too often, small organizations add a non-core position because of short-term or part-time needs and then realize that work has expanded to fill the time, not because of actual necessity.  So a real 10-20 hour a week need has become a full-time employee.

2. Can I afford to hire a regular employee?

Hiring employees who support your revenue or mission growth is smart.  But once you hire, you cannot skip pay periods, tax or legal obligations.  Costs
include the person’s pay and also:
* mandated benefits including: OASDI (‘Social security’ and Medicare), unemployment insurance, workers compensation insurance
* costs for space and equipment for the employee
* pay processing and accounts establishment costs
* legal compliance and risk management costs

Check out your state’s small business services or your local economic development agency – these provide detailed guidance on any local laws you need to comply with.

OK, I want an Employee

Think: What type of work and level do I really need?

Classically, small employers want folks to wear multiple hats.  But the work combinations must make sense and be right for your organization’s needs.

There may be a terrific sales person who is happy to be doing administrative work half of the time but it is unlikely!   Two part-timers or outsourcing one part makes far more sense where the work needs are very different.

The other classic is to want a senior-level person to show you are growing and to get some strategic advice, but want that person to also do basic level work.  A CTO is not going to do programming.  And hiring a CxO of any sort usually results in hiring several more layers as well.  So, you had a Manager of Accounting and one accounting clerk before and now have a CFO and 5 staff, but no more revenues.

Not sure how to structure a position?

Take a good look at similar job ads from larger organizations: what set of skills and requirements do they combine?  Many put fairly detailed descriptions on their website employment section.  Check to see if your trade association offers sample job descriptions you could tailor to your needs.  Ask other business owners.  Ask your vendors in that area for ideas.

Before you add a position, make a clear list of exactly what business necessity creates the need, all specific responsibilities that need to be fulfilled, and what increased revenue will result.

OK I’ll outsource    I don’t need an employee, but the work needs to be done.

Make a list of potential options.  As with an employee, structure the work clearly.  Ask your advisors and network for recommendations.  Current vendors are a great resource; e.g., CPAs often know other services providers, such as IT support, and can recommend people to meet your needs.

Grow Smart!

Hiring people who can contribute to your organization’s growth and success is an important step.  A little thought and effort first to ensure you only add costs you can afford and you spend your money on the best possible solution for your needs will repay you handsomely.  Unfortunately, too often the opposite is true – and having a staff becomes a nightmare of added work, added costs, and negative results.

Ask questions, seek advice, consider alternatives – do all the things that you would do before offering any new product or service to your customers or clients.  You will grow much more successfully with less hassle if you do!

Workshop Recap: From One to Many — Smart, Effective Hiring – Patricia Frame of Strategies for Human Resources

Attendees of Small Business Hiring Workshop at the Alexandria Virginia SBDC

Alexandria SBDC hosted their monthly Brown Bag Workshop yesterday and it was a packed house! Patricia (Patra) Frame of Strategies for Human Resources provided a higher-level prospective with some well-conceived, practical lessons for hiring practices for Small Business entrepreneurs new and growing. If you haven’t yet, you should check out Patra’s blog post, Hiring the Talent You Need to Succeed, that was published last week here on AlexandriaSmallBusiness.com. Here’s our Twitter transcript and summary video, and I’m sure the slidedeck will go live on the Alexandria SBDC website soon. We hope you can join us at future Brown Bag workshops or via our live Twitter conversations!

TWITTER TRANSCRIPT

David Martin of Gold Works Custom Jewelry Design and Repair discusses his hiring needs
David Martin of Gold Works Custom Jewelry Design and Repair discusses his hiring needs

We launched our first foray into live-tweeting on Twitter at this workshop with the hopes of engaging Small Business entrepreneurs in Alexandria that cannot make it to the event but would like to participate and learn with us anyway. While live tweets will never outweigh the benefits of attending in person (think of the free, one-to-one networking opportunity!), being with us via Twitter is a great way to market your business, generate Twitter buzz around content for your target audience, and to learn and share virtually with your fellow local businesses.

Click the link to the right for the transcript: Tweetchat for alexvasbdc hrsmarts 2012-04-03

SUMMARY VIDEO

Google+ for Your Small Business [event]

Google+ logo

 

Google+ for Small Business
Technology That Can Help Your Business Grow!
February 29, 2012
9 am – 12 Noon

 

With only 20 spots for this hands-on workshop, we anticipate more demand than space.  Email or call Patricia Melton if you are interested.  Slots will be filled on a first come, first served basis, and then we’ll start a standby list.  See information below.

 

Google is the well-known search engine and leader in the Web advertising world, but if you haven’t already started seeing and hearing, they have recently launched a new service platform called Google+ and its Google relations, the +1 buttonDirect Connect and Search Plus Your World. Together, Google+allows businesses share, promote and measure the building of relationships between the business brands and the people who care about them. In this seminar and workshop, you get the best of both worlds from Alexandria Small Business Development Center. First, Ray Sidney-Smith, president of W3 Consulting, a Web and digital strategy firm for Small Business, presents a strategic overview of Google+ for small businesses. Following the presentation, Ray will walk you through the steps to launch your own Google+ pages for your business. This event is not to be missed!

 

From Google+ Pages’ site:

 

Share

 

Different people are interested in different parts of your business. Whether it’s breaking news, updates, promotions, links, photos – even talking face-to-face with groups via easy-to-use video chat –Google+ lets you easily share the right things with the right customers.

 

Promote

 

Help word get around. Put the +1 button anywhere you’d like people to be able to recommend your business, products or services to friends and contacts all across the web.

 

Measure

 

How’s your page doing, and how could it do better? Google+makes it easy to learn more about how your followers’ interactions on your page affect your brand, and your business.

 

Bring your wireless-enabled laptop, netbook, or mobile tablet (e.g., iPad). The session will be held in our boardroom, located at 625 N. Washington Street, Suite 400.  Because we expect this to close out early, we ask if you register, please attend or let us know if you cannot, so others may have the opportunity!

To register, email or call Patricia Melton, SBDC Counselor, at 703-778-2960.

 

Enter the “Retail Parking” garage via Pendleton Street for free parking.

______

Photo courtesy of Wikipedia.

Do I Really Need a Business Plan?

Alexandria SBDC Business Planning GuideMany people ask themselves that very question before starting a business or expanding an existing one and the quick answer is yes. Many entrepreneurs state that they have most of the information in their heads or on notes in outline form – why take the time to write it down in a format? It is well-accepted that if you take the time (a true commitment) to put your ideas in a clearly written form, the chances that your plan will be successful is multiplied many times over.

If you have never been a business operator and owner before, a detailed yet succinct formal business plan is what you need to give you tracks upon which to run. This train, with each of its cars (sections), will be pulled by a strong engine from the departure platform directly to a successful destination.

If you are an existing business owner considering an additional office or another retail store nearby (or completely out of town), a modified business plan will be helpful as you consider the costs and sales ramp-up period involved to reach breakeven.

On the other hand, if you are an experienced entrepreneur and have been through the process a few times, a “mini-plan” may be all that will be necessary for you to move ahead and obtain financing, if that is necessary.

If you foresee that funding the project will involve a lender, investor(s) and/or a landlord, a Business Plan is mandatory. Write for your intended audience but always write the plan for yourself. This plan will be an individual creation different from any other and bear your personal stamp.

Now, let’s talk about exactly what is in a business plan and how it works to help you. It is comprised of five major sections:

  1. Executive Summary;
  2. Business Description;
  3. Marketing;
  4. Operations; and,
  5. Financial.

In addition, there are sub-sections to the marketing and financial areas, cover page, table of contents and an appendix.

Contrary to what you may think, the Plan is not written in the order one may read it. The first section to complete is the Marketing section. This is the “engine” that drives the train and delivers the revenue you need to insure that your business can meet its cash flow requirements. The second section to craft is the Financial section with the project costs and performance projections spanning up to five years supported by written financial assumptions. When these two sections are considered to be in final form, you have completed about 80% of the hard work.

Finally, you are likely interested in how long it will take to finalize a business plan. You can anticipate it taking about 60-90 days if you work on it studiously and consistently. How long will it be? It will be anywhere from 30-40 pages (plus copies of tax returns for lender) dependent upon the audience for your plan. How does it affect the plan if it’s just for yourself? It shapes into a shorter and less wordy document. And, for a bank or other lender? Work on just the facts and prove the ability to service the debt. Lastly, for an investor(s)? Show returns over longer periods, concentrate on the return on investment (ROI) and exit strategy for the investor. You will find the task engaging and rewarding in many ways and glad that you took the time to do it right.

For more details on creating your business plan, visit Alexandria Small Business Development Center’s website or call us to schedule a meeting to discuss your needs.