Small Business Success Index 4

Index Score^*		Grade
SBSI INDEX	73	C-
Capital Access	67	D+
Marketing & Innovation	65	D
Workforce	76	C
Customer Service	88	B+
Computer Technology	73	C-
Compliance	92	A-
*Index score is calculated on a 1-100 scale.

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Posts Tagged ‘Business Tips’

Small Biz Resource Tip: The Company Corporation

November 3rd, 2010 :: Rieva_L

Incorporate.com

S Corporation, LLC, partnership or something else altogether? How you structure your business not only affects your taxes, it also protects your personal financial and legal assets. Once you choose a legal structure, changing that structure is not a simple feat-so do your research beforehand and learn all you can. The Company Corporation website contains pages and pages of helpful information to help you decide on the right structure for you. The site also contains personalized information by industry. Then, once you’ve decided which route to go, you can incorporate or register your LLC right online. The Company Corporation is a one-stop shop where you can also purchase the appropriate business licenses and permits for your business, along with registering your business name and more.

DISCLAIMER: The information posted in this blog is provided for informational purposes. Legal information is not the same as legal advice — the application of law to an individual’s specific circumstances. The information presented here is not to be construed as legal or tax advice. Network Solutions recommends that you consult an attorney or tax consultant if you want professional assurance that the information posted, and your interpretation of it, is appropriate to your particular business.

Tags: Business Tips, small business, Startups
Posted in Resources | View Comments

When Hiring Workers With Disabilities, Businesses Fall Short

October 20th, 2010 :: Rieva_L

By Karen Axelton

October is National Disability Employment Awareness Month. But 20 years after the passage of the Americans with Disabilities Act (ADA), things have not gotten better for employees with disabilities, reports a new study conducted by Harris Interactive for the Kessler Foundation and National Organization on Disability.

Just 21 percent of all working-age people with disabilities have jobs, compared to 59 percent of working-age people without a disability, according to the Kessler Foundation/National Organization on Disability 2010 Survey of Employment of Americans with Disabilities.

Most employers say employees with disabilities have the same abilities and workplace behaviors as employees without disabilities. (Interestingly, 35 percent think employees with disabilities have more dedication, and 33 percent think they have less turnover). Most employers also say the cost of hiring a person with a disability to be the same as hiring a person without a disability. And most employers say hiring employees with disabilities is important.

But companies are not putting their money where their mouths are. Just 56 percent of employers have hired someone with a disability in the past three years. Large (74 percent) and midsized (68 percent) companies are much more likely than small companies (43 percent) to have done so.

Is the economy to blame? Kessler Foundation president and CEO Rodger DeRose says the economy is disproportionately affecting people with disabilities, but believes lack of awareness among employers is also a factor. Of the 70 percent of companies that have diversity policies or programs, only two-thirds include disability as a component.

The situation has actually worsened since a prior survey was done in 1995. Fewer companies today have either a disability policy or program (29 percent in 2010 compared to 66 percent in 1995). Nineteen percent of companies have a specific person or department that oversees the hiring of people with disabilities, down from 40 percent in 1995. And just 18 percent of companies offer an education program to help integrate people with disabilities into the workplace, down from 63 percent in 1995.

For companies considering hiring as the economy picks up, employees with disabilities can be a “ready talent pool of … dependable workers,” said NOD President Carol Glazer. “Hiring people with disabilities can expand the productive power of [a business’s] work force.” Find more information and advice about hiring people with disabilities on the NOD website.

Image by Flickr user man pikin (Creative Commons)

Tags: Business Tips, small business, Small Business Trends
Posted in Workforce | View Comments

Social Networking Etiquette 101: 5 Ways to Mind Your Manners While Online

December 2nd, 2009 :: Monika Jansen

When I first joined Facebook, I got a friend request from a total stranger. Turns out she was a “2^nd”, aka, the friend of a friend. That’s really ballsy, I thought, but I wasn’t totally surprised. It’s happened to all of us. While having a total stranger follow you on Twitter is flattering, LinkedIn and Facebook are a bit more intimate. Being approached by a stranger on those sites is kind of stalker-ish. Needless to say, I blocked the person who tried to “friend” me.

I do wonder, though, why social networking causes so much mindless behavior. Perhaps it’s because we’re in a rush, or perhaps we’re just trying to stay active on all those social networking sites, or perhaps it’s because some of us were raised by wolves in the outback. Most of just really want more connections on LinkedIn and more followers on Twitter. Whatever the reason, though, gazillions of people out there don’t think before they type…or click…or send friend requests.

So, here you go: 5 ways to mind your manners while online.

Don’t automatically subscribe someone to your e-marketing or e-newsletter program. Engage with that person first, then ask if they’d like to be added to your distribution list. And be sure that instructions for unsubscribing are clearly stated somewhere in your email.
Do not attempt to “friend” someone on Facebook or connect with someone on LinkedIn unless you personally know them. If you’d like to meet them, figure out someone you have in common and ask for an introduction. If that fails, email them through Facebook and introduce yourself.
Don’t ignore attempts to connect. Respond to someone’s note with a note of your own and suggest an alternative way to connect. However, if you don’t even know the person (see above), go ahead and block them.
If you are attempting to connect with someone you only met briefly, remind that person how you know each other.
Don’t attempt to connect two business acquaintances, colleagues, or friends without a heads up to both people. Fair warnings are always appreciated.

If you have any other etiquette tips, email me at [email protected]. If I receive enough suggestions, I’ll write them up in a future blog post.

Tags: Business Tips, etiquette, Facebook, LinkedIn, Monika Jansen, Social networking, Twitter
Posted in small business | View Comments

Financing A Business: Using Equity vs. Debt

November 16th, 2009 :: Gary Honig

At various times in the life of a company there are going to be requirements for outside capital in order to grow the business. Choosing which type financing vehicle is best for your company is very important. Deciding whether to seek equity capital or debt financing is the first step. Usually companies trying to get equity capital are very early stage with little or no real assets, while companies on their way to a steady growth curve use debt financing.

The equity route

As the owner of a business idea, plan, or company – you hold ownership to a subjective value called equity. The equity of any type of property whether intellectual or physical is the value someone is willing to pay for it minus any liability attached to it. In business that could mean the value of an entity today measured in time and money invested versus the value in the future measured by comparable growth.

Once the owner and investor determine the “valuation” of the equity, the owner can then sell parts of the equity in order to raise capital. There are a variety of methods you can raise equity capital (Seed, Angel, Venture) and you should learn the pluses and minuses for each. An equity capitalist is interested in picking a company that shows great potential. They are expecting that there will be significant growth due to their involvement. That could mean that the company will grow tenfold within five years.

Debt Financing

Securing capital through debt financing does not entail “selling” your equity, but instead works by “borrowing” against collateral assets. Debt financing is only available to business owners who have something of value that the lender can instantly liquidate. The debt finance company is not interested in becoming a partner, instead they are in business to make money from their money, letting you use it for periods of time.

Like equity financing there are a variety of methods available to raise debt financing. Traditional banking will always be the least costly source for your financing, but remember bankers are not in business to take on risk. When they ask for three years of company tax returns it’s because they want to see a steady reliable set of profitable growth numbers. Borrowing from the bank relies on two variables, the collateral that secures the loan, and your ability to repay the loan. You might have enough collateral, but if your business is losing money, the bank can’t expect you to handle the added expense of loan payments.

Many early stage companies turn to private commercial financing which is better suited to deal with riskier issues. Factoring companies use the loans you make to customers (invoices for finished work) as the collateral for their funding. Here the emphasis will be the creditworthiness of your customers rather than the credit of your company. Equipment leasing companies will allow you to purchase new equipment and pay for it over time, usually three to five years.

Finally,

When seeking outside capital, whether equity or debt, remember that certain sources are familiar and like to work with particular industries. Take the time to look around and be sure that the source you are considering is well-aquatinted with your type of business.

Tags: Business Tips, Grow Smart Business, Raising Capital, small business
Posted in small business | View Comments

Eight things to keep in mind on during your project

October 8th, 2009 :: Michael Dougherty

It’s time for another excited edition of “Mike Dougherty’s Eight Things”. In other posts in this series, I’ve gone over things to have figured out before you meet your designer, things to help you choose your next marketing piece, and things to think about before you start your logo. I’ll get back to other things about different pieces, like websites and such, but for now we’re going to talk about things to keep in mind during the project.

A project is much more than just figuring out what you want and hiring a designer. You have a place, and a job to do, in the project as well. Without any further ado, here are eight things to keep in mind during your project.

Home Runs aren’t common. As a designer, there are reasons we do comps (mock-ups of the possible project design) and ask a lot of questions. It happens, but very rarely, that a designer will nail the exact nuances of a project on the first try. The main reason for that is we, designers, are not mind readers. We’re more like detectives trying to figure out what the final image will be by asking you for your input. We’re more like archeologists of imagination. We keep working till we find that magical, mysterious beast that is your project.
The Milestones of your project. There are steps, in any project, that deliverables and notes are required. Make sure you, and your team if you have one, are keeping on schedule so that when it’s time for your approval, or notes, the window of time for response doesn’t turn into a gaping hole.
Your approval process. It is critical for you to be fully, mentally and physically, present for the approval process. If you sign off on a design know now that you have just completed that portion of the project. Going back to make changes, because you didn’t invest the full amount of time you needed to make it right…is going to cost you time and money. Before you put your pen to paper to approve…see #8 of this list.
That your scope isn’t being “creeped”. You, and your designer, agreed to a list of certain items, and tasks, that would make up this project. Adding things, after the project has been agreed upon and started, will cost you time and money as well. Rather than go on about it here, read my previous post “It’s called a SCOPE of work, you CREEP” here on GrowSmartBusiness.
Your friends won’t live your choices. I’ve seen, time and time again, people take the comps, the designer gave them to approve, to their friends for feedback. Bottom line, you have to live with this design…not your friends. Very rarely will your friends be brutally honest with you. More often than not they will not want to hurt your feelings. A better source of feedback is your current, or prospective, clients. If you are unsure yourself it might mean that you aren’t happy with the design and can’t articulate why…which is ok, but work with your designer to see what you can do to get you to #8.
The designers’ time is just as valuable as yours. When it comes time to meet with your designer, for the first time or on Milestone steps, make sure you dedicate that time to your designer. They cleared their schedule for you, and your project, the least you could do is do the same. Let the phone go to voicemail or someone else get it. The emails will be there after the meeting to be addressed. And for, Pete’s sake, do not try to close a sale while your designer is present. Yes, all of these things have happened in my presence and I’ve actually had to say, “If this project, and my time, is not important to you…then maybe we should put this on hold”.
If you want to add more…it’s a new project. I know you love your designer and you two have become friends. Or you think you’re designer is such cool frood who knows where his towel is (if you get that reference award yourself 20 geek points…I’m keeping track), but anything beyond what was agreed upon, I hate to say this, is a new project and will add time and money (gee…do I sense a theme) to your project. Take a minute, if you haven’t already, and review the eight things to help you choose your next marketing piece. These could help ensure that you, and your designer, successfully get you to #8.
You have to be happy with the results. This process takes time, but at the end of the day you, the client, ultimately have to be happy with the results. It’s partially your job to make sure you are. You need to be so excited about your marketing piece that you want to tell it to the mountains. If you aren’t, keep working with your designer to get there…as long as it is within the agreed scope of the project of course.I, personally, don’t believe in the “these are your only three choices to pick from” game that some designers play. I know that’s going to make me very unpopular, but ultimately we’re providing a service. IF your designer wants to keep you in a “only three choices” box that only allows you so much room…get a new designer, but know that you have to respect #6 to get to #8.

I want to know if there’s anything you think I’ve missed. Who knows, you could inspire another “Eight Things” list, which you would be credited for.

You can always reach me on Twitter by sending a message to @wickedjava, or on Facebook at facebook.com/mcdougherty.

As always dear reader, thank you for reading and stay wicked.

Tags: Business Tips, design, entrepeneurship, entrepreneur, entrepreneurship, Generational Marketing, Grow Smart Business, Marketing, michael dougherty, scope creep, Startups, success, Technology
Posted in Branding, Marketing, Thought Leadership, Web Design | View Comments

It’s Customer Experience…Not Just Customer Service

October 1st, 2009 :: Michael Dougherty

My posts here generally circle around marketing, design, and social media, but today I am going to go off the beaten path. I am going to talk about something that creates its own marketing whether you plan for it or not. That, my dear readers, is customer service. There is an old marketing rule that I am fond of that relates perfectly to customer service as a marketing to help you understand what I mean. I am going to paraphrase, but “give one person a good experience and they will tell one person, but give one person a bad experience and they will tell ten people.”

My wife will tell you, if you ever get the chance to meet her, that I am a stickler for customer service. It might embarrass her when I’m more than vocal about it when it’s bad, but it is a major pet peeve of mine.

Customer service has been severely abused and taken for granted. It’s been seen from everything as yet another opportunity for a sale to the last reason anyone in the company should pick up the phone. I’ve sat in more than enough consulting meetings where they are worried about customer retention or new customer acquisition, but at no point is customer service ever brought up. It’s as if the reaction to customer service, for some companies, is “Give them a link to the FAQ and if that doesn’t work…let them send an email.” If you’re wondering, I heard that in a meeting that I eventually walked out of when it was obvious the client did not get it.

To be fair, and honest, I have been guilty of it. Looking back, it is a driving force now as to why I’m crystal clear about details of an agreement. It’s also the reason I get so frustrated when I see other companies do it. I want to jump over the counter and scream “Do you know how much money, and reputation, you are costing your company by giving me bad service? Trust me…I know!”

Customer service is one of the interactions with a client/customer that could sway a negative customer to a loyal one or kill any future interactions your company may have with them …and it’s swept aside in planning meetings for “more profitable solutions”.

Think about this, you plan for how to guide a prospective, or current, client/customer to your website, take an action, or make a call, through marketing pieces. You plan on what your messaging will be to gain their attention. You plan on how to make sure every dollar you spend has a great return on the investment. You plan for all the bells and whistles, but do you plan on how to service your customers beyond that step?

I hear the cries now…but Mike, how can we plan for this?

It’s simple, really. Do you plan on what your sales people or receptionist will say if they get a call? Or how many steps a customer will have to go through when trying to address an issue? Do your people know the right person to send customers to?

Decide, here and now, that the people who have invested their time and money into your company/product are just as valuable now as they were when they first gave you their business. Once you make that decision, make sure each person on your team feels the same way, because one weak link in the armor could cause the whole image of your company to be seen negatively by your potential/current customer.

In my previous post “Just take the black eye with a smile”, here on GrowSmartBusiness, I talked about what you can do when you get negative reactions to your business in social media, but good customer service will help those black eyes be fewer and fewer. Customer service isn’t the silver bullet solution, but more like an extra effort to help your marketing strategies be bullet proof.

I would love to hear your customer service experiences, good and bad, here in the comments. You never know, you could be helping someone else see ideas that they could improve or adopt.

You can always reach me on Twitter by sending a message to @wickedjava, or on Facebook at facebook.com/mcdougherty.

As always, thank you for reading, dear reader, and stay wicked.

Tags: Business Tips, Customer Service, Marketing, michael dougherty, Rules for Entrepreneurs, Small Business Trends, social media, Startups, success
Posted in small business | View Comments

Just take the black eye with a smile…

August 25th, 2009 :: Michael Dougherty

I just got out of a “social media” round table discussion with several individuals whose companies are still either new to or on the verge of starting with social media. What I found the most interesting was that they were still trying to fit the square peg of traditional marketing into the round hole of social media. Now don’t get me wrong, the two work hand in hand, but you can’t force one to be the other.

Where does getting a black eye come into all of this?

The biggest concern I heard was “If we open our organization up to these tools then we’ll see all the negative things people say about us.”

Well…duh.

I’ve also got some other really bad news for you if that’s your primary concern for not getting involved in social media…people are going to speak negatively about your
company/organization/product/service whether you like it/want them to or not. Social media doesn’t stop that, but gives the world a more transparent environment to air their grievances. I am strictly going to focus on the social media side of things, but I believe this can translate to the real world as well.

You’ll be surprised to know that most people I have talked to who complain on social media do so in hopes that the person/company/service they are complaining about will actually hear them. Imagine what you could do when the biggest advocate of an issue with your service, becomes your biggest advocate to your solution.

How you handle/react to those negative comments, both in the real world and in the realm of social media, will separate you from the others in your industry, and earn some valued respect and appreciation from clients.

Kermit Pattison, over at nytimes.com, put out an article called “Managing an Online Reputation“* in which he goes over some great advice, but I would like to offer a few of my own.

1) P.T Barnum is famously quoted as saying, “You can’t please all the people all the time.” Recognize that no matter what you do you’re going to get bad comments from someone. Probably for reasons well beyond your control, maybe for something you didn’t even realize would be a cause of pain for someone, but it will happen. I believe it is what you do with that information that will set you apart from your competition.

2) Know this isn’t your time to attack back, but your time to listen. If you can source those people/complaints out, source out the reason for their unhappiness, and do your best to resolve it…I believe you are more likely to see an unhappy client/vendor/etc. become someone who looks at your company/services/etc. with a bit more understanding. Just don’t go killing yourself trying to find them. Don’t become so obsessed on trying to find that black eye that you end up giving yourself one by neglecting other areas of your business.

3) Smile. Black eyes hurt, but they aren’t the end of the world. I look at them as learning experiences and sometimes even badges of honor. Don’t live in fear of when or where the black eye is going to come from, but be prepared, when it does, to take it like a champ. Don’t fall back and whine. Get out there and take the next one with an even bigger grin. You are here to server your customers good AND bad. One should not get attention over the other, but one should make you work harder to make sure you/your company/your services are doing everything you can to make sure that misstep won’t happen again.

4) Learn from it damn it! You got the black eye for one reason or another. The worst thing you can do is ignore the reason you got it and act just as surprised the second time around when you get one for the same reason. For Pete’s sake (who says that these days anyway…well…me), take away some knowledge from the experience.

In closing, dear reader, black eyes are going to happen. I’ve had my fair share and probably have more in store in the future. Some we deserve, some we’re unsure if we earned, and some we know should be someone else’s. In the end, black eyes fade and tomorrow is another day.

Until next time, as always, thank you for reading and stay wicked.

Tags: Business Tips, entrepeneurship, entrepreneurship, Marketing, michael dougherty, millennials, small business, Small Business Success Index, Small Business Trends
Posted in Entrepreneurs, Marketing, Web Design, small business, social media | View Comments

Rules for Entrepreneurs #3: Avoid Founderitis at All Costs

June 9th, 2009 :: Steven Fisher

This article was originally posted on Solutions Are Power, but the series is now residing on Grow Smart Business.

leadershipbutton In this next rule in our series “Rules for Entrepreneurs”, Rule #3 deals with the affliction of “Founderitis”. Don’t know what it is? Sound like a weird dermal disease?

Wikipedia defines Founderitis as “the unhealthy condition that afflicts many companies whose founders maintain a stranglehold on organizational leadership. While many companies owe their success — and in fact their very existence — to their founders, those same individuals can create chaos that ultimately leads to the organization’s collapse. The challenge to founding CEOs and boards of directors is to take steps to change conflict and chaos into opportunities for growth.”

Founders, because they are not detail-oriented and are driven by their exclusive devotion to mission, often disdain management tasks. At some point, staff members begin to complain to the CEO or perhaps even directly to the board, calling for more systems to be established. Founders, comments Linnell, may “see all such challenges as malicious or wrongheaded or an abysmal waste of time in the face of the real (mission) work of the organization. This can lead to all-out battles between the champions of mission and the champions of systems.

While this may not be a disease that makes you sick, you sure can feel stressed and nauseous working for someone with this “affliction”. Unfortunately, I was someone who used to have this problem in a bad way. Over time I have learned that hiring people smarter than you and getting the hell out of their way is usually the best way to build a company. More on that topic in a future “Rules for Entrepreneurs”.

Symptoms of a Larger Disease that can Kill Your Company

Founder’s syndrome manifests in numerous ways. The Center for Association Leadership has an excellent list of the symptoms. The leader who suffers from founderitis exhibits these types of behaviors:

Gives short shrift to planning activities, staff meetings, and administrative policies;
Is reluctant to relinquish strategies and procedures that worked in the past, although circumstances may dictate new approaches;
Neglects to institute new systems, even though the board has formally requested them;
Seeks and accepts little input from others in making decisions;
Sees all challenges as hostile and drives away staff and board members perceived as disloyal; and
Refuses to delegate authority.

Treat the Personality not the Problem

Managing through a fit of founderitis requires a tricky mixture of growth opportunities, board involvement, and a firm delivery method. In the mean time, here are a few things you MUST do to beginning shed the affliction of Founderitis from infecting your company:

Respect the need for planning activities, staff meetings, and administrative policies;
Realize that as the company grows circumstances may dictate new approaches;
Institute new systems with approval of your board;
Seeks and accepts input from others in making decisions;
Delegate, Delegate, Delegate
Accept the fact that you can’t do everything themselves and you need to bring on people whose strengths complement your own.
Separation of your identity and goals from your role as a founder.
Accept that the organization’s success no longer depends solely on your creativity and decisions but instead requires the input of partners who are equally or perhaps more skilled than you.
Dance around the room to let things loose
Shift responsibilities to worthy successors and trust them to fail and succeed.

Don’t worry if you can’t over come this there is a simple solution. Get your board to hire a professional CEO and take a long vacation.

Do you have Founderitis and not even know it?

Do you see yourself in these words? Have an errie feeling that you might be like this or working in an environment where you engender Founderitis?

First, read this article again and see how many symptoms you may have already. If you notice some, ask those around you if you fit this profile. Tell them it is ok to tell you if you do and be very honest. If you are a classic case of Founderitis then go back one section in this post and follow the instructions on beginning to let go. This is not something that will happen over night. It took you all your life to build up these habits and it can take just that long to work them out of your system.

Photo Source: iStockPhoto

Tags: Business Tips, entrepreneur, founderitis, steven fisher
Posted in Entrepreneurs, Rules for Entrepreneurs Series, small business | View Comments

Rules for Entrepreneurs #2: Pay Yourself First

June 9th, 2009 :: Steven Fisher

This article was originally posted on Solutions Are Power, but the series is now residing on Grow Smart Business.

I originally wrote this on VentureFiles which is now part of the Technosailor Galaxy of Blogs but as Aaron Brazell, Editor and fearless leader of Technosailor.com said, this post is more relevant than ever when you are trying to keep your business running and growing (even in this economy). I originally wrote the post about a year ago so below is the original post and after that is an update that tries to do a little reflection on doing this during the current state of the economy.

Original Post:

Over the last 9 years and two startups I have learned many things and screwed up royally in some cases. This series is about providing you best practices of lessons learned and avoiding the mistakes I have already made.

In the past, I have had good years and bad years. When you have employees, they expect to be paid and when you mess with payroll (and payroll taxes, but that is a post for another time) you create such a negative culture that nothing will get done.

With that said, when you are starting your business regardless if it is a service or product company, you will have startup costs and probably forgo paying yourself for 6-12 months to keep growing the business. That is fine and to be expected. What you should not do (and what I did) is keep adding staff and sacrifice your own salary in the name of growth. If you keep going like that and have a bad quarter you will have nothing saved for a rainy day and if the business fails you will probably be in immense debt and get nothing out of the business.

Granted, the balance between growth and cash flow is a tenuous one but it is one thing you should never defer to someone else in beginning. Plus, there is a difference between creating a lifestyle business and an enterprise. A lifestyle business is really making enough money for yourself and having some contractors or 1-2 people that gives you a good salary but is more about freedom. An enterprise is a business that scales and gets big over time but you will be working intense amounts in the beginning but will need to hire those smarter than you with the intention that you are looking for an exit and will have time for freedom when you cash out.

So when you are growing the business you should work the first 6-12 months paying off the initial capital expenses and getting about 6 months of cash flow for yourself before you hire anyone else. Once you have that done, start paying yourself something, even if it is small and will ramp up over six months, pay yourself first. This will get you in the habit of being committed to making the business pay for itself and you so you are not worrying about living month to month and lets you find some resources to help you deliver while you continue to sell and grow the business.

Once you are looking at hiring someone use these two rules as a starting basis:

– Have six months of payroll for that person in the bank on top of your salary

– Have 90 days of projects or sales committed for that person to deliver so they not only have something to do but are earning their keep.

You may have to be conservative at first in your growth but in the end you will scale better and create a business that is focused on delivery and customer service without putting you and your employees on a cash flow roller coaster.

Update, One Year Later:

When I read that post I reflect on the mistakes of past and having had a business through the dot com bust and subsequent recession. Granted, it was not as deep or as long as this one, but the word that comes to mind is, balance. And while it holds true that you need to pay yourself first before you keep growing, the original post was written with the tone of growth and not reduction which may be more likely these days.

When you are growing you are tempted to throw caution to the wind and sacrifice your pay in order to hire that extra person that keeps the idea factory turning out wonderful widgets. When times are good and the sales are going upward, your risk threshold increases. When times are tight, you might feel like you are holding on with your fingertips to a 5,000 overhang below you and no way to see up over the ledge. In these cases, it is natural for people have a tendency to pull WAY back into their shells and not hire when they know they need to or lay people off in order to stay cash positive. In this case, you might sacrifice your entire salary to keep people on board. While this might sound noble, I have done this and it usually ends badly.

This is where the word “balance” comes in.

You can only go so far to reduce staff and pile tasks up on people that are probably already overworked, but cutting down too much can keep you from potentially delivering to clients in the end making things worse. Look to reduce costs in other ways, like office services you may not critically need, or ask if people would volunteer (including you) to take a 5% pay cut so we can keep everyone and deliver at the level of quality clients have come to expect so we can keep our clients happy and ride out this recession together.

Tags: Business Tips, Entrepreneurs, entrepreneurship, Rules for Entrepreneurs Series, small business, steven fisher
Posted in Entrepreneurs, Rules for Entrepreneurs Series, small business | View Comments