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Small Business Success Index 4

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Should You Encourage Your Employees to Use Social Media?

November 26th, 2010 :: Thursday Bram

As a small business owner, you are responsible for how your employees spend their time at work. After all, you have to pay them, whether they’re doing something to help your business or just twiddling their thumbs. That means that you have to decide whether or not you want your employees using social media at work.

You can’t, of course, decide whether or not your employees can use social media at home — at best you can support them in the endeavor if you approve of the idea of having them use social media, or you can request that they don’t discuss your company if you’d prefer your employees not use social media.

Should Your Employees Use Social Media?

The big question on the table in many companies is how valuable social media is — or might be. Many small businesses have experienced incredible growth as a result of their social media efforts. Others have found that social media just burns through resources, without providing an equivalent return on investment. It’s difficult to tell where your business will fall until you’ve actually had a chance to try out different social media strategies.

If you do have an employee who is interested in social media, you may have an opportunity to move faster with your online marketing efforts than if you were relying entirely on yourself to handle the work. There can be a clear benefit to having employees who are socially savvy.

However, if you have an employee acting as your business’ main face online, you should be prepared for other businesses to make an effort to recruit that particular employee. As he or she builds up your business’ social media presence, an employee can easily build up his or her own online presence. That’s the price of working with a social media-savvy employee.

Keeping Your Employees in the Comfort Zone

The worst social media nightmare is that a none-too-bright employee will broadcast something unpleasant about your company to the world — and that’s a risk you will essentially be running if your employees are active in social media. But it’s also a risk you run if your employees aren’t active in social media in the office, but they are at home. It’s not a problem that will go away by ignoring it. Rather, the best step you can take is to invest in training for your team to help them use social media effectively.

It’s impossible to keep your employees entirely away from social media. Whether or not you have a social media plan in place in your business, you have to be aware of that fact. It’s impossible to control social media — but you can preempt it with positive campaigns, rather than waiting for something negative to happen. Otherwise, your only option is to prepare a response to that inevitable day when an employee posts something like a choice photo from the company holiday party to Facebook.

Image by Flickr user Jason Pratt (Creative Commons)

The Ethics of Outsourcing

November 24th, 2010 :: Thursday Bram

These days, you can outsource anything. You can have a virtual assistant in India checking your phones, a call center in the Philippines handling your customer service and a manufacturer in China creating your product. But there are some ethical questions that go along with the decision to outsource your business’ tasks. Those questions won’t stop you from outsourcing, but they may cause you to think about what you’re outsourcing and how.

Am I Being Fair to My Employees?

If you’ve been working with certain employees for the long term and plan to fire them once you outsource the tasks they currently handle, it’s worth thinking about what that will mean for your employees. You have no obligation to keep on an employee if you find an outsourcing opportunity, but if you have a great working relationship with your employees, simply letting them go can be an uncomfortable prospect. Take a look at the situation and see if there are other opportunities, like offering them some of the tasks that simply can’t be outsourced.

You might also think about your new employees. You might find an outsourcing company that swears $1.50 is a fair wage overseas, but it’s important to look into that for yourself and decide if you’ll really get the value you need from an employee paid at that rate. You may find that not all local organizations are comfortable with the idea that you might be paying such a low rate for your labor, and you’ll need to be able to assure them that you’re paying a fair wage if you want to work with them in the future.

Am I Providing the Best Value to My Customers?

It may sound well and good to hand your customer service off to someone else, but that can easily mean that the first person a new customer interacts with doesn’t speak English as a first language. That’s not necessarily as helpful for your customers as you might hope, and it can make for a less than ideal experience for customers whom you would like to continue selling to. The same goes for manufacturing and other parts of your business you might outsource. You want to be sure that your customers are continuing to get the value they expect from your business if you outsource any part of your company.

If you can’t guarantee that value, that might be a stopping point for your outsourcing plans. You may have a lower margin of profit using local labor or doing something yourself, but you might have lower profits entirely if you can’t keep your customers happy. The changeover just may not be worth it for a small business.

Image by Flickr user Marc Smith (Creative Commons)

Can Hiring Family Members Mean a Tax Break for Your Small Business?

November 23rd, 2010 :: Karen Axelton

By Karen Axelton

Keeping track of tax breaks available to small businesses—especially in the current political climate—can be a complex task. The good news is, there is one kind of tax break that just about every small business can take advantage of: the advantages gained by hiring family members to work in your business. Here’s a closer look at some of the options:

Hiring your spouse: In general, the IRS considers a spouse an employee as long as an employer/employee relationship exists. In other words, one spouse must truly control the business in terms of making key management decisions, and must direct the other spouse’s work duties and activities. Specific rules related to hiring your spouse depend on the business structure you’ve chosen for your company. Visit the IRS website for more detailed information about tax issues related to husband and wife businesses.

Hiring a parent: Hiring a parent is becoming more of an option these days with many seniors and retirees more interested in continuing to work—or needing to work to supplement retirement income. If you are hiring a parent, know your business will be subject to income tax withholding, Social Security tax, and Medicare tax; however, you are not subject to Federal Unemployment Tax Act (FUTA) tax.

Hiring your children: Having your children work for you in the business is a great way to transfer income from your higher tax bracket to your children’s lower one. This is also a way you can transfer wealth to your children without worrying about gift and estate taxes.

If your company is a sole proprietorship or partnership, wages paid to your children under age 18 are not subject to Medicare or Social Security taxes; wages paid to children under 21 are not subject to FUTA tax. At any age, their wages are subject to income tax withholding. If your business is a corporation, get more details about the tax issues of having your kids work in your business at the IRS website.

Before hiring any family member, discuss the issue with your accountant to make sure you follow all the rules. It’s especially important to maintain detailed records of the person’s duties and the hours he or she works to protect you from any questions of fraud. And, of course, be sure the person’s salary or wages is in line with what he or she actually does, or you risk raising red flags.

Tax savings aren’t the only benefit of hiring family members. Working with your spouse can build bonds as you feel that you’re working together for a goal. Children at any age can gain responsibility and learn from seeing their parents working hard to build a business. Children approaching adulthood can be groomed to take full-time roles in the business and be part of your succession plan. Start your children in the business at a young age, and you’re less likely to face resistance from other employees as your kids take on more important roles.

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.

Small Biz Resource Tip: Rescue Time

November 22nd, 2010 :: mhaubrich

Rescue Time

Are you worried about what your employees are really doing during work hours? They look busy, but unless you look over their shoulder all day, they could be checking the latest fantasy sports stats, for all you know. Enter in Rescue Time. By installing an application on your employees’ computers, you can track what sites are being viewed and for how long. You can also customize the information you receive and not track certain sites you know are work-related. If this all sounds a bit “Big Brother” the site explains that when you let employees know from the beginning you have this application in place, it simply boosts accountability.

Is a PEO Right for Your Business?

November 16th, 2010 :: Karen Axelton

By Karen Axelton

Your business needs employees to run—but sometimes, managing employees can be a pain in the neck. I’m not talking about the personal issues, but all the regulations and paperwork that go along with having a staff—like benefits, insurance, taxes and vacation hours. There is a solution that can take some of these hassles off your hands: a Professional Employer Organization (PEO)

According to the U.S. Department of Labor Statistics, the number of companies using PEOs is growing; the DOL projects that by the year 2020, over 50 percent of American workers will be employed by a PEO.

How does it work? A PEO (also known as an employee leasing company) hires your employees (including you), then “leases” them back to your company. Since employees now work for the PEO, it handles human resource administration issues such as administering benefits and processing payroll.

There are some benefits-related pros and cons to a PEO. Pro: Since the PEO most likely has thousands of employees, your employees are now part of a bigger organization, so they can get better and cheaper insurance options. Con: Since you and your staff are now employed by the PEO, you may not have a choice in the health insurance and other benefits offered. Ask about this before you sign up.

The National Association of Professional Employer Organizations (NAPEO) offers some guidelines for choosing a PEO:

  • Start by making a list of what you need before you contact PEOs.
  • Ask to meet and talk to the specific people you will be working with at the PEO.
  • Get references and ask them how well the PEO handles problems and situations your business might face.
  • Check the company’s PEO’s history and reputation. Find out how long it has been in business, and talk to your networks of colleagues to see what people are saying about the company.
  • Find out how employee benefits are funded and what benefits are offered.
  • Make sure the company meets all the requirements set by your state.
  • Look over your terms of agreement. Are the respective parties’ responsibilities and liabilities clearly laid out? What guarantees are provided? Under what situations can you or the PEO cancel the terms of the contract, and are there fines or penalties for doing so?

Do your homework, and you just might find a PEO can be the ideal solution for your HR headaches.

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.

Part-Time Workers Can Mean Full-Time Headaches for Small Businesses

November 12th, 2010 :: Rieva_L

By Rieva Lesonsky

Are you adding part-time employees to your work force as a way to pick up the slack without having to provide the salary and benefits that full-time workers require? Or are you shifting formerly full-time workers to part-time status—either because your business’s workload has dwindled or because you simply can’t afford to pay them their full-time salaries?

If you’re doing either of these things, you’re not alone. More companies are turning to part-time workers to save money. But what many small businesses don’t realize is that sometimes part-time workers can open the doors to full-time legal headaches.

Part-time workers are often viewed as a less complicated option to full-time workers. But in reality, part-time workers are subject to state and federal labor laws, just as full-time workers are. And because small business owners may think part-timers can be treated more loosely, they often don’t take the same precautions they would when dealing with a full-time hire.

Here are some things to consider before you hire a part-time employee.

  • Understand how overtime regulations and rules regarding mandated meal and rest breaks apply to part-timers. For instance, in some states, an employee who only works one day a week could still qualify for overtime if he or she works more than 8 hours in one day.
  • Know what benefits are triggered and when. For example, if a part-time worker logs a certain number of hours in a year, he or she may become eligible for being included in your company’s retirement plan or for leave laws such as the Family Medical Leave Act.
  • If the part-time worker is the first employee you’re hiring, it’s especially important to know the right steps to take. For instance, hiring just one part-timer means you have to buy workers’ compensation insurance to cover that person.
  • Understand how the addition of a worker affects your company’s size status and what that might mean in terms of rules and regulations. Adding one part-timer might put your company into a larger size category, which could mean you have to comply with certain federal or state rules you didn’t before. It could also affect your eligibility under federal contracting opportunities, such as whether your business is considered small or disadvantaged.

Small businesses often get into trouble with employees when they decide to “wing it.” Even if your company is tiny and you’re hiring just one part-timer, it’s important to create an employee handbook and decide on specific benefits and policies before you bring that person on board.

Work with your attorney and/or a human resources consultant. Employment law is complex and varies from state to state, so it’s best to get help from an expert in setting up your plan. If you start off on the right foot with your first part-timer, part-time workers can be a source of help—not headaches.

Image by Flickr user Phillie Casablanca (Creative Commons)

How to Apply Marketing Strategies to Attract the Best and Brightest When You’re Hiring

November 10th, 2010 :: Monika Jansen

Though I currently have two superb interns, I know that eventually I will have to write a job description and craft an ad to hire my first employee.  Because I’m a marketing person, why not apply some marketing strategies to attract only top quality applicants?  Why not indeed!  Finding great candidates for a job opening is basically lead generation.  You need to define your target market, position the job and your company in a way that is most attractive to your target market, and promote it through select channels.

Here is how to apply marketing and lead generation strategies to attract the best and brightest candidates when you are hiring:

Define your target market

Write a profile of your ideal candidate, and make it as detailed as possible.  Include:

  • All job experience, education, and certification requirements
  • How much supervision they will need
  • Traits they’ll need to thrive: motivation and energy levels; creativity, critical thinking, and problem solving skills; familiarity with specific technology, tools, and methods; sales and business development skills, etc.

Sell that job!

Write an energetic, attractive, and clear one-page description of the job that lists all responsiblities and expectations.  Action verbs, adverbs, and adjectives are your friends!  Be sure to specify what, if any, job requirements are non-negotiable.

Include a request for a cover letter and portfolio of work, if applicable.  If the job is a creative one and/or requires a great deal of critical thinking or problem solving, create a hypothetical situation and ask all candidates to describe (within a specified number of words) how they would address the situation/solve the problem.

Position your company as a great place to work

If your company is growing; the job is challenging; there is a great opportunity to learn new skills, lead projects, and grow with the company; the work environment is casual; employees can bring their dogs; telecommuting is allowed…mention it!

List all aspects of the company that make it especially attractive.   Start with your location and include information on your office building, qualities of the neighborhood, access to public transportation, and convenience to restaurants and shops.  Discuss salary and benefits in as much detail as you’re comfortable sharing.

Promote the job

Skip the large online job boards.  Post the ad on your website, relevant professional interest listservs, niche job boards, your Facebook page, and industry-specific LinkedIn groups.  (I would avoid Twitter unless you have a very industry-specific following.)  E-mail the ad to clients, business partners, and professional associations; include a note requesting that it be forwarded appropriately.

Image by Flickr user HiredMYWay (Creative Commons)

Employee Management Lessons From the Military

November 9th, 2010 :: Karen Axelton

By Karen Axelton

Would your employees rather be working for a drill sergeant than for you? Quite probably, according to the results of a new survey of the “10 Most Blissful Workplaces” by CareerBliss, a website that helps people find joy at work.

The results of CareerBliss’s study showed that despite multiple ongoing engagements, lengthy deployments, and lower pay, the U.S. military is among the most blissful places to work in America.

Military personnel were more satisfied at work than many in the private sector. All four major branches of the military and the Army National Guard outranked well-known companies such as Disney, Johnson & Johnson and Microsoft in overall happiness.

Drilling down to specific aspects of happiness, The U.S. Army and the Army National Guard ranked number one and number two, respectively, out of all places of employment in career advancement, topping corporations such as Google and PricewaterhouseCoopers. CareerBliss also found that, on average, military members are happier with their benefit packages than employees in companies such as General Electric and Qualcomm.

What are some reasons military members love their jobs—and how can a small business owner emulate the military?

Security. Job security is a key reason U.S. military members valued their workplace. If you’re in danger of having to lay off employees, try everything you can to avoid it – whether it’s cutting hours, cutting pay or cutting overhead. Employees who know you’ll do everything you can to stick by them will be more loyal to you in return.

Development. The military places a high priority on personal and professional development for employees. Offer your workers chances to improve their skills, whether by cross-training them, giving them flexible schedules to take college courses or further their business training, or signing them up for online webinars and industry training events.

Camaraderie. The bonds forged in the military enable members of the armed forces to do the impossible. Foster an environment of teamwork, friendship and caring in your business, and you’ll create the same kinds of strong ties. When you and your employees truly trust and care for each other, there’s nothing you won’t do to get the job done.

What Your Hiring Process Says About Your Company’s Brand

November 4th, 2010 :: Karen Axelton

By Karen Axelton

As the economy shows signs of picking up, more small businesses are considering hiring employees. If yours is one of them, take some time to think about your hiring process and what it says about your firm.

While many of us think of the hiring process in terms of how our businesses can be hurt (for instance, if we neglect to do a background check, we might hire a criminal), few of us think about the point David Lee makes in this ere.net article: Creating a poor hiring experience can permanently hurt your business brand.

When you’ve weeded down job applications and resumes to a precious few, what do you do before you contact those candidates? You probably go online and search their names. Well, you can be certain that job candidates are doing the same thing with your company. And if anyone they know has had a bad experience applying or interviewing at your company, they’re likely to share those thoughts.

Before you place your next want ad or start networking for candidates, take some time to assess your hiring process with an outsider’s eye. Here are some basic questions to ask:

  • Is it easy to apply for a job? Your ad should clearly state the process by which people should apply. Specify who to contact and what to do (and not to do). This saves time on their end, and on yours.
  • Are requirements clearly explained? Any applications, tests or projects that applicants need to fill out or complete before a live interview should be clearly explained. The applicant should be able to contact a specific person at your business with any questions.
  • Are interviewees treated courteously? The environment of the interview gives applicants a glimpse into what it’s like to work for you. I’ll never forget one job interview where I was kept waiting for two hours in a chair next to the office copier while my future boss kept postponing the interview because she was swamped. That should have been a sign to me not to take the job.
  • Do applicants receive a response? It’s simple to set up an automated response by e-mail. Everyone who applies should get at least this courtesy. But you’d be surprised how many companies take employees through several interviews, then never contact them again. One of my friends recently traveled to another state at her own expense for a second interview with a major company. After an intense series of interviews with a team of executives, the firm never contacted her again. Not only that, but her voice mail messages and e-mails went unanswered.

No matter how busy you are, taking time to treat job applicants properly pays off for your business’s brand. More than that, it’s simply the right thing to do.

How to Build an Awesome Team

November 3rd, 2010 :: Monika Jansen

“If you could get all the people in an organization rowing in the same direction, you could dominate any industry, in any market, against any competition, at any time.”

Though The Five Dysfunctions of a Team was written for people working and leading teams within a large organization, the advice in this book is perfect for those of us who are building teams at our small businesses as we grow into larger businesses.

The author of the book, Patrick Lencioni, has learned that genuine teamwork is elusive because many organizations fall victim to five natural, but ultimately dangerous, pitfalls or dysfunctions.  Instead of getting into those, I’m going to instead share Pat’s list of how members of a functional team behave:

  1. They trust one another.
  2. They engage in unfiltered conflict around ideas.
  3. They commit to decisions and plans of action.
  4. They hold one another accountable for delivering against those plans.
  5. They focus on the achievement of collective results.

Trust

Pat defines trust as the confidence among team members that their peers’ intentions are good.  If there is full trust among all team members, they will focus their energy and attention on their jobs (rather than political maneuvering).

As you build your company, you can encourage trust by demonstrating vulnerability first and creating an environment that doesn’t punish vulnerability.

Conflict

Ideological conflict, or conflict that is limited to concepts and ideas, results in the best possible solution in the shortest period of time.  It’s OK if that conflict is passionate, emotional and even frustrating.

As you build your company, let your team engage in conflict and allow them to resolve the conflict naturally.  You should also continually set an example of appropriate conflict behavior.

Commitment

Commitment refers to both buy-in and clarity around direction and priorities.  A team that is committed to a decision understands the priorities, embraces common objectives, and takes advantage of opportunities before competitors do.

As you build your company, be comfortable with the idea that the decision could be a wrong one.  Push your team for closure around issues, and make sure the team sticks to its schedule.

Accountability

A functional team is not afraid to point out performance or behaviors of other team members that might hurt the team.  When team members hold each other accountable, they demonstrate respect and high expectations for each other’s work.

As you build your company, encourage your team members to build accountability among themselves, rather than you imposing it on them.

Results

Results are really about outcome-based performance, which drives profits.  To perform well and achieve great results, your team needs to be focused on specific objectives and clearly defined outcomes.

As you build your company, set the tone for results.  Be selfless, objective, and reward and recognize only those team members who make real contributions to the achievement of the team’s goal.