Stealing

Theft by employees takes many forms - and all are unacceptable. The assets of the company belong to the owners and there is no justification for stealing them. These expectations need to be set up front, with no tolerance for compromise.

Stealing can take many forms: unauthorized discounts, bartering for services without permission, on the clock without working, use of equipment/materials/vehicles/supplies for personal use without permission, and more.

In much the same way that small business owners should share the income and profits from the enterprise with employees (giving everyone a stake in the business), owners must clamp down on stealing - since all employees and the enterprise itself are harmed as a result.

Utilize your three step warning process - a verbal warning, a written warning with consequences spelled out, and a final written warning with a required written response from the employee. This doesn't mean you can walk an employee out the door at any time, but working through the process establishes your professionalism, and becomes a benefit for all employees. While the warning process must be kept confidential between you and the employee - eventually you will need to explain the circumstances to the rest of the team. Take the needed steps to protect the rights of the employee and their dignity in the face of the situation.

Quick action on stealing will ensure the entire company works better and trust is built and maintained.

There is a wealth of information on detecting theft and dealing with it on the internet. Here's a good place to start for more information.

New Year's Resolutions

Now is a great time to set down a plan for your business. It doesn't have to be complicated or take a lot of time - mostly it takes an hour or two of quiet time for some quality thinking.

Start with a blank page - fill in 5 categories - and then add the goals or plans. No more than 5 per category - that will keep you busy for the year.

Use your own categories - or the following:

1) Business Goals for Revenue, Spending, and Profits

2) Marketing and Sales Plans

3) Investments and New Capabilities

4) Productivity and Quality

5) Employee Training and Development

Think about where you want to be in 12 months and write it down. Makes the goals measurable and clear. 

When you are done, show them to your business advisor, your spouse, your partners, your bank, and of course, your employees.

Once a quarter, take out the sheet and check your progress. Don't be afraid to amend or correct the goals - things do change. 

This planning exercise will improve your focus - and get you moving towards your goals.

Click here for more help on writing meaningful and impactful goals.

Happy 2009!

Share the Wealth - Share the Pain

As a small business owner - you are the boss - for better and for worse. But that doesn't mean you shouldn't be sharing the wealth - and the pain - with your key employees.

No matter how large or small the business, give your employees a stake in the business through variable pay and shared ownership. Variable pay means simply that when actionable goals are achieved, everyone's pay is increased as a result. This means having set the goals, monitoring the goals, ensuring that the employees can impact the progress towards achieving the goals, and when the goals are met - making the 'payoff' both quick and visible.

Shared ownership is a longer term incentive and one reserved for key employees. Right now, you own 100% of the business. If it can be sold for $1m - that's yours (less any loans outstanding). To create long term incentives, reduce turn-over, and attract key employees - consider setting aside a significant minority stake in the business to be shared with employees. There are obviously legal and accounting aspects beyond the scope of this tutorial - but in general, in return for all their hard work, you reward them with an actual ownership stake in the business.

You can read more about employee ownership plans by clicking on this link.

Have a happy and prosperous New Year.

Tough Times

During tough times everyone is in sales. As a small business owner you have two choices when in comes to a decline in sales: 1) view your employees as variable expenses that can be cut to help maintain the bottom line, or 2) view your employees as strategic assets that can be redeployed to generate new sales, bolster relationships with customers, and to seek out new opportunities.

To do this, you need to start thinking of your employees as an underutilized sales force. And a non-traditional one. It won't be obvious to treat your production workers as sales people - but most if not all have a great grasp of what customers want - and probably an excellent sense of what people buy and why. Put this knowledge to work - from brainstorming sessions to delivering finished product to the customer's door - to participating in advertising campaigns, booth duty, even a little cold calling.

When times are tough - everyone is responsible and capable of focusing on the top line. Set out the sales targets, discuss progress and lack thereof, and solicit volunteers to take on new duties. Before you fire or layoff that experienced worker - give them the opportunity to earn their salary. You will be surprised, your team will feel a new sense of control (and appreciation), and your customers will benefit from closer contact with the knowledgeable workers on your team.

Give it a shot - what do you have to lose?

For more information and ideas - check out this article.

Payroll Service

The mantra for small business owners is always the same - do what you do well and contributes to the bottom line - and outsource the rest. Your time is your most critical resource - so using your precious time to process payroll is probably not the best use of time.

At a minimum, use the Payroll function embedded in Quickbooks. It's easy to use and automates many of the tedious tasks.

For almost the same price, call your local payroll service. Ask them a few questions: how long have they been in business? how many companies do they serve? are they insured and bonded? can they provide referrals? what is their average number of employees per company? who will you deal with? and most importantly - how do you submit your data? You are looking for a tech savvy company that works over the web or email - that provides input and output reports electronically - and that allows you to access your account 24/7. If they mention "Fax" - move on to the next company.

Better yet - contact a PEO in your area. The Professional Employee Organization takes payroll processing to the next level - and becomes your virtual HR department. They will handle everything from employee manuals to tax filings. Just in terms of time saved and value added - this is a great source of help for most small business owners. Beware - some PEO's use very aggressive selling techniques and hide fees that only seem to appear later. If you get the hard sell - move on to the next company. There are many PEO's serving every market - so you can be very selective. For more information - check out the PEO Association web site.