Wednesday, August 25, 2010

How are you laying off your employees?

NEW YORK - MARCH 25: (L to R) Former co-worker...Image by Getty Images via @daylife
Sadly during these economic times, small and big business owners alike must make the difficult decision to lay someone off. The smaller the company, the more difficult the decision can be. How you handle the situation says a lot about you and your company and could affect how people view you in the future.

There is a right way and a wrong way to deal these situations. Too often businesses will try to avoid paying higher unemployment taxes by avoiding the layoff and using other less ethical means to get rid of employees. I am going to give you some sad examples and one good example of how to deal with the situation. The first couple of situations are just acts of poor management. The other examples are worst as the just tend to be down right unethical.

Some of these examples happened to me personally and others are ones that I am aware of.

The first example happened to me shortly after I was out of college. I was working for a company out of Charlotte, North Carolina that was allied with one of the major automobile manufacturers. The economy was in recession so layoffs were necessary. The main manager of the business was the son of the owner and his wife was the human resources manager. No conflicts of interest there but then again it was a smaller business.

However, as I said the son did not have many leadership skills and was in the position because of his father. When the time came to lay off employees he did not have the guts to actually face the employees and tell them. Instead he made one the employees who was not being laid off and not in a real position of management to do the dirty work while he and his wife watch from a corner office. If you need to lay off an employee have the decency to do it yourself and do not make someone else do your dirty work.

The other incident actually made headlines when a major retailer laid off a large number of employees a few years back. However, the company got plenty of bad publicity in the way they handled the situation. Instead of telling the employees directly that they were being laid off the company sent them all email notices that they not longer had jobs and were to leave the building immediately. At the same time police officers came into the building to escort them out. Not a good way to handle a lay off.

While the first two examples is nothing but cowardliness and poor management, the rest of the examples are just outright unethical.

At a Oregon photography store, a person is hired to be a manager when the company opens the new store. However, what this person does not know is that he is only being hired until the owners son's best friend can take over the store and run it. After about a month the person walks into the store to buy some stuff on the persons day off to see the friend in the store. The son's girlfriend sends him to the backroom while the employee is told he no longer has a job. To top it all off they are late getting the last check to them and refuse to return some important contact information.

In another situation two locally owned security companies located in the inland northwest region of Washington & Idaho were merging. The company taking over the other promised to bring on a couple of long time employees of the other company which meant that they had to get rid of one of their employees. To avoid paying higher unemployment taxes the company spent several weeks trying to make this employee leave by making this employee feel as though the employee could not do the job. In the end they called the person and told him he was fired because of a customer complained that he followed company procedures on dealing with an alarm situation. It just happened the employees from the other company started that day.

Finally there was a employee working for a retailer and he was transferred to another state with a written agreement that if this person stayed for one year the company would move him to another location. However, new management was brought in and when the company was about to close down the stores in that region, they fired the employee in an attempt not to pay for his move to another area.

On the other hand I have to give credit to Gateway Computers. When they were suffering from the affects of the Y2K sales slump, they gave the employees the option of either being transferred to another division or getting and severance package. This way the employee had the choice of what they wanted to do.

As I said many of these examples are down right unethical. There is a right way and a wrong way to handle these kinds of situations and the better you handle them, the better your surviving employees will feel about you and your company. The last thing you want your employees that are staying to see is you mistreat the employees you let go.
Enhanced by Zemanta

Monday, August 23, 2010

Are you too Dependent on Assessment Tests?

145 - Crunching the NumbersImage by Holtsman via Flickr
It seems that many company these days are doing assessment test to check the quality of not only candidates applying for jobs in the company but also to see how well a potential employee would be when being promoted. However, it appears that some companies are almost becoming too dependent on them and in some cases taking them as the be all, do all system for evaluating employees. The problem is, like anything assessment tests are not foolproof and if not taken in with other factors could cost the company in the long run.

Let me give you an example I recently dealt with. Two people at a company have applied to be promoted.

Person A is currently a department manager, has a desire to achieve, has good results, is the leader in sales in the store and works with other employees to improve their numbers. This person also has the respect of the staff and this person is one of the first people they come to in the management staff. Not only does this person have the respect of the fellow employees, everyone above this person through the district manager wants to see this person promoted.

Person B on the other hand had to loose their department management position because they could not perform the duties of the job. In addition this person has show no initiative to improve themselves and has no respect among coworkers. In addition this person caused a $1200 loss to the company because of not paying attention to what they were doing. The only reason this person wants to promoted is to make more money. In addition store leadership does not consider this person to be reliable.

Who would you promote in this situation?

Well the assessment test shows that person B should be interviewed by the company for promotion and not person A. Because this is a big corporation that has the habit of running like a dinosaur at times, the company will interview person B but cannot go beyond the assessment tests and promote person A despite the fact they are the better candidate.

Of course the ultimate result will be that there is a good chance that person A will ultimately leave the company by finding a better position with another company possibly a competitor. On the other hand if the company actually promotes person B just because of results from the assessment test, most likely that person will fail at the position and either way, the company loses.

So while assessment tests may give you a look into an employee, you need to have a system sets up that lets you go beyond the results of an assessment test to insure that the right person gets promoted.
Enhanced by Zemanta

Thursday, August 19, 2010

Who Needs Venture Capital?

A view of downtown San Jose, the self-proclaim...Image via Wikipedia
The New York Times Small Business Edition has a great article about Elizabeth Charnock who is running a start up company in the Silicon Valley area but is doing it without venture capital.

Bootstrapping a Start-Up in Silicon Valley

There is some great lessons to be learned from this article.
Enhanced by Zemanta

Wednesday, August 18, 2010

Don't Battle over Price

lowest pricesImage by TheTruthAbout... via Flickr
Thanks to the influx of discount store, it seems like everyone has reduced themselves to trying win customers over price. How many times do you see that someone has the lowest prices, guarantees the lowest price or will match any price.

The Small Business Branding Blog points out that if you try to fight on price, then you reduce yourself to a commodity and as a small business you will loose against the big boys.

Lowest Price Guaranteed – All The Way To The Bottom

As the blog points out, instead of battling on price find ways to create value with your customers. Now there is always going to people who only look at price (but these are the same people who complain about a lack of service and the poor quality of products they buy). As a small business owner you want to concentrate on the customers that can see value in doing business with you.

As a small business owner the biggest advantage you have is to provide better service and better services than someone could receive in a big box store. What kind of services you can provide your customers will depend on what type of business you are in.

One way to find out what your customers would like to see is to ask them. They will be glad to tell you what additional services would make you stand apart. Also look at the business news and find out what the big retailers are dropping such as Layaway programs.

Once again it comes down to finding your niche and making sure you are setting yourself apart from the competitors, not on price but on service and services.
Enhanced by Zemanta

Monday, August 16, 2010

Checks and Balances

Credit cardsImage via Wikipedia
If you are a single person operation, you don't have to worry about checks and balances when it comes to finances and your business, but once you hire employees you need to ensure that you have checks and balances as a firewall to an employee robbing you blind.

A couple of weeks ago I talked about an employee that ended up steeling $10,000 from a company simply because they did not check peoples bags as they walked out the door.

Many small business owners do not want employees to think that they are not trusted so they do not put in necessary checks and balances to protect themselves against theft. You need to create a balance between protecting your employees and creating an environment of trust.

Here are some examples of creating checks and balances in your business.

If your company has credit cards (I recommend debit cards), either assign a card to a specific person. If you only have one card to go around, have employees sign the card in and out and if something shows up on the bill that you have no receipt for, you will know who had the card at that time and talk to that person.

Checks should require two signatures to be valid. Another alternative would be to put things such as utilities on EFT so there taken out of your account directly. This will require you to check the bill and make sure there is funds in the account to cover it, but then you are writing fewer checks and there is less chance that one will fall into the wrong hands.

Bag checks are another easy way to deter theft. If your employees know that their bags will be check when leaving the store, they are less likely to put something in there that does not belong. You will need to check the rules in your jurisdiction to see what rules you will have to abide by to avoid costly litigation.

Another big area that is becoming a concern is computer usage. Do you have employees spending more time surfing the web instead of performing important tasks? While this may not be direct theft the employee is still stealing from your business because you are paying them but they are doing personal things on the computer. Computer monitoring software could be a wise investment to insure your employees are doing what they should.

These are just some basic ideas to protect your business. It is not an all inclusive list but hopefully it will give you some ideas to keep money from walking out the door.
Enhanced by Zemanta

Wednesday, August 11, 2010


Assorted international currency notes.Image via Wikipedia

Budgeting is one of the biggest challenges facing small businesses. Often times the person that starts a small business is good at whatever type of business they start but when it comes to the financial end of it they fail. This is why lack of capital and bookkeeping are two of the biggest reasons why a business will fail.

The All Business Blog has a great entry on 8 Budgeting tips for Small Business.

Since yesterday we talked about technology, one of the important things to remember is that budgeting should be easier than ever today with the software that is available in the marketplace. While items such as Quickbooks Pro is very popular Intuit the maker of Quickbooks also makes a version of the personal budget software called Quicken Home and Business that many small companies could use.

The great thing about these software programs is that they are easy to learn and use. There is no excuse for not having some basic budgeting software on your computer.

One area I will agree with is number 5 that says don't budget to the last penny. I feel you need to start with zero add in your revenues then subtract out your expenses. Not doing it to the last penny will leave some fidget room that could lead to problems in the long run.

One thing I would add is to be conservative with your numbers. It is much better to be conservative with your budget that too optimistic. If you are conservative and do better that is good thing but if your too optimistic you could end up hurting yourself.

Many transit agencies across the nation are figuring that out after budgeting for sales tax increases because numbers were good for many years running and were caught with their pants down when numbers tanked in the recession.

The success of your business depends on how well you budget. Your success depends on your budget.
Enhanced by Zemanta

Tuesday, August 10, 2010

What are your technolgy needs?

DeskImage by William Hook via Flickr

The Small Business Technology Blog has a link to a Wall Street Journal Blog entry about the technology needs of small businesses.

Technology Basics for Business

The article is actually an excerpt from the book by the Wall Street Journal about the technology needs of small businesses.

It wasn't that long ago that small businesses did not have to worry about technology that much. For most a basic desktop computer and printer was pretty much all they needed. Today we live in a world surrounded by technology and to need to be more aware of what is happening in the technology field to stay ahead.

That is not to say you need to run out get an iPhone, iPad, and every other next big thing to come along. What you need to do is stay aware of the technology and find what is going to improve your business and make your more productive.

You also need to be aware of the latest software that is available for your business. As the article points out software services via the web are becoming a viable solution to actually buying "boxed" software which has been done since the first days of the PC.

In the late 90's and early 2000's we saw dramatic changes in personal computers. In the last few years we have seen dramatic changes in about every other area when it comes to technology. Today it is harder than ever to stay ahead of the changes and find the right technology for our businesses.

Enhanced by Zemanta

Monday, August 09, 2010

Losses are Increasing from Theft...

Credit cardsImage via Wikipedia

Losses from theft has been increasing recently due to the economy and other factors, so in the future I will dedicate some space to talk about what I am currently observing so that you as a business owner or company can be sure to be looking out for these and try to prevent them.

A few entries ago I mentioned how you have to look out for that employee you would not expect theft from. Today I am going to tell you some of the what I am seeing going on in stores today that will cause you theft if you are not careful.

One of the things that you always have to watch for is the decoy or distraction. This is a person that is designed to distract those looking for shoplifters or other thieves. The decoy will carry in the backpack and just walk around the store looking suspicious while someone else is actually going through and shoplifting.

The other is the person designed to distract employees. This person will find an employee and try to distract them from the person doing the shoplifting. While this is been happening for years what is on the rise recently is the number of people using their daughters or sisters to be the distraction.

The girl will dress up in tight jean shorts or something else design to provoke the male employee to be distracted and not pay attention. The sad part of this is some of the girls have been in the 12-15 year old bracket and dressed up very provocatively.

The latest incident I saw the young woman who was in the aforementioned age bracket dressed in the jean shorts and showing lots of cleavage distracted the teenage male employee while the brother stole hundreds of dollars in game console games. They then headed to a waiting car being driven by the father who was running the ring.

Parents are not just using their teenagers to steal for them. Another disturbing trend is parents sending their young children in to steal for them. Since kids are often ignored unless they are destroying something or in a toy department, the kids will be instructed to walk around the store and pick things up.

A recent incident I observed was a 10 year old who went around picked up some clothes, changed in the fitting room then walked out to the car to the waiting parents.

I wish I could say the above incidents where isolated events but I have seen reports and the incidents in many locations for myself.

Of course you always have to be looking out for credit card fraud and stolen cards. Once case is people are going into stores buying lots of gift cards and clothes and trying to use a stolen credit card. When it comes up as needing authorization the people will tell the cashier an authorization number that will work and they go off. This means that people ringing customers up need to be more prepared than ever for these kinds of attempts.

These days you need to be more aware that ever to ensure that your company doesn't take serious hits in theft.
Enhanced by Zemanta

Friday, August 06, 2010

Have Trouble Saying No?

don't just say noImage by cheerfulmonk via Flickr

Do you have problems with saying no?

As a small business owner or even an employee if you wish to succeed it is often hard to say no. You feel that if you say no to anything you have the possibility of loosing a customer or not being eligible for the next promotion.

However, not saying no may be doing more long term damage than the no would be. First of all you may be taking on too much and not doing the best possible job. Also, you could be carrying so much on your shoulders that some important things may fall by the wayside. You are also putting additional stress on you that could leave to long term health problems.

I know from personal experience how hard it can be to say no.

When I was working for other people I was afraid if I said no they would think I was not good enough to move ahead but I wasn't able to take on every task that came along. As a business owner I am afraid that if I say no it could mean one less important customer.

The Zen Habits blog has some simple ways to say no:

7 Simple Ways To Say “No”

To perform at your best you need to learn how to say no at the right time.

Enhanced by Zemanta

Wednesday, August 04, 2010

Renting or Buying?

Office building in Warsaw, Poland.Image via Wikipedia

The New York Times has a blog done by a business owner that talks about the decision of whether to rent or buy a building.

While buying worked for this particular person, each business owner must look at his own needs and decide what is the best option for you.

Once thing you need to consider is expansion. If you own your own building and your business out grows the location, will you have move to a new location, or will you have the room to expand your business at the place you own.

If you own the complex and need to move, you have the complications of not only moving the business but finding a new place to buy and selling your existing facility. On the other hand you may be able to expand your existing location but at what cost? what disruption your business? and will the current zoning laws allow for it?

On the other hand if your renting you need to know what restrictions you have on using the building, what improvements or changes you can make, if you have a purchase option (often more expensive than buying direct), and what expenses you are responsible. I would also find out what other tenants think of the landlord and how they take care of the property.

You will also want to do a cost benefit analysis of each option and see which one will work out for you in the long run. Like anything when it comes to running a business, it does not come easy and there is some difficult questions to answer before you make any move.
Enhanced by Zemanta

Monday, August 02, 2010

Are you looking for Magic Pills?

BEIT HANOUN, GAZA STRIP - SEPTEMBER 08:  Medic...Image by Getty Images via @daylife

The Positivity blog has another great entry, this time for those people that seek those magic pills. Either it is a book, tip, or something else that is going to magically turn their life and business around.

Four Healthy Reasons to Stay Away from Magic Pills, and How to Do It

Another example of magic pills is the get rich quick schemes. Everyone thinks they can find a magic pill and presto they will be rich. As anyone who has made will tell you it takes lots of time and smart money management.

Enhanced by Zemanta