Category Archives: employees

Performance Reviews That Get Floundering Employees PUMPED!

ImageEmployee performance reviews.  Believe it or not, they’re a task some business owners actually look forward to.  It’s a fresh opportunity to remind your team what an appreciative guy or gal they work for.  Warm feelings abound when you let your employee know in specific terms that you’ve noticed their best efforts.

But some of you may be procrastinating, all because of one or two “tough cases”.  Maybe someone in your organization hasn’t been pulling their weight lately.  Maybe there’s a personality clash with you or a co-worker.  And you hate to exacerbate the situation by creating a confrontation.

I don’t need to tell you that ignoring a problem won’t make it go away.  In fact, without your intervention, it may actually get worse – and it’s your business on the line.  If an employee’s poor performance or bad attitude affects your bottom line, the responsibility is entirely yours.  You’re the leader. You know this.

But here’s the good news.  That inevitable conversation you’ve been ringing your hands over doesn’t have to be uncomfortable.  Try these tactics for creating a more productive and less confrontational meeting:

–        Before the meeting, psyche yourself into this idea: your goal is to send your employee out of the room feeling pumped up about his or her job.

–        Don’t pull him or her into your office without warning.  Schedule your meeting in advance and give the employee a chance to prepare.

–        Remember that blatant criticism is almost never helpful.  Instead, take the employee into your confidence by sharing your goals for the company and how you envision that individual playing a role.  Tie the employee’s work and results in to your vision, and discuss what could be done differently to reach a shared goal.  Include the employee in developing his or her “plan of attack”.

–        Always include some kudos.  Even if you have to look really hard for them, find and acknowledge the positive aspects of the employee’s performance.  You’re less likely to get the results you desire if you dwell entirely on the negative.

For those of you with small businesses in New Jersey, you’ll find a wealth of valuable information in my book Straight Talk About Small Business Success in New Jersey: How to Maximize the Growth, Cash Flow, and Profitability of Your Small Business.

Until next time,



The Hidden Benefits of Staff Meetings

salim102OK, be honest: when was your last staff meeting?  Granted, some of you are very good about having regular meetings with your team members, and that’s great.  But I also know a hefty percentage of you like to let it slip.

Why have them?

Regular staff meetings are the heartbeat of a thriving business.  They allow your staff to connect, get informed, and be prepared for their forthcoming work days.  They’re also a valuable opportunity to take advantage of your team’s collective wisdom concerning the inner workings of your business at every level.  Tap your team for solutions.  Have a brainstorm.

Take special note of the first word of that last paragraph: regular.  Sporadic meetings won’t be taken seriously by your team.  Make a consistent schedule and commit to sticking by it.

But back to why you may be avoiding these meetings.  Do you fear you won’t know what to say?  That you’ll be boring?  That the whole thing will be a waste of time?

None of these things need be true.  Decide in advance on an agenda – and the narrower the agenda, the better.  Make sure all attendees are aware of the agenda in advance.  Then, stick to the topic at hand.

Be firm about steering the conversation back to the agenda if you see the meeting headed in too many other directions.  Table the participants’ other concerns and comments for future staff meetings, or agree to meet with staff members individually.

Before wrapping up the meeting, assign action steps to specific people.  Follow up with those people within a reasonable amount of time to ensure the task is getting done.  If not, you’ll have the opportunity to dig deeper and find out what tools the employee is missing in order to make things happen.

Haven’t had a meeting in a while? Your assignment: identify one nagging problem in your business.  Have a meeting and ask your staff to help you find a solution.  I think you’ll be hooked.

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To Avoid IRS Scrutiny, Be Smart With “Little” Employee Benefits

salim91Many smart and generous employers understand the value of providing employees with “little extras” – sometimes known as “de minimis” fringe benefits.   These are small-value, morale-building gifts like tickets to concerts or sporting events, soft drinks and the like that you probably don’t consider significant enough to account for.  These benefits are not taxable to your employee.

However, in order to avoid scrutiny by the IRS, it’s important to monitor the frequency with which you give such gifts, and to understand what qualifies as “de minimis” benefits, and what doesn’t.

These de minimis benefits should only be given out occasionally – not on a regular basis.  In addition to the aforementioned tickets and soft drinks, they include:

–        Holiday gifts (other than cash) with a low fair-market value

–        Occasional parties or picnics for employees and their guests

–        Coffee, snacks and other refreshments

–        Occasional meal money or local transportation fare for employees working overtime (not based on hours worked), and meals provided to enable employees to work overtime

–        Typing of a personal letter by the business’s secretary or occasional use of company copy machine

–        Group-term life insurance of $2,000 or less payable on the death of an employee’s spouse or dependent

Small fringe benefits are an excellent idea.  They’re a way to show appreciation towards employees for a job well done, and often a method of encouraging extra effort.  Just be sure to keep them “occasional” rather than a routine form of compensation that employees come to expect.  This should keep you out of trouble with the IRS, while still keeping your team happy.

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Sam Walton’s 7 Rules for Building a Successful Business

salim75Some years ago I stumbled upon Sam Walton’s rules for building a successful business. If you’re not already aware, Sam Walton is the founder of Wal-Mart. I was heartened by how many things I’d been doing right according to Sam’s guidelines, and I’ve since improved in all the points I felt I was lacking back then. How do you stack up against the Sam Walton rules?:

1. Commit to your business. Walton says you have to believe in your business more than anybody else does. You have to have passion. You must love your work and do it the best you can, every day. I agree. I think a big part of what makes a strong leader is having a crystal-clear vision, and being habitually able to communicate to those around them. From there, getting buy-in from others is easy.

2. Appreciate everything your associates do for the business. Sam says, “Nothing else can quite substitute for a few well-chosen, well-timed, sincere words of praise. They’re absolutely free and worth a fortune.” I would add the same sentiment towards vendors, too. To get the best service and products from your vendors, view them as valuable members of your team and treat them accordingly.

3. Celebrate your successes. Loosen up. Have fun. And try to find humor in your failures.

4. Listen to everyone in your company. And more importantly, Sam advises, try to get them talking. The team members who talk directly with customers are the ones who really know what’s going on.

5. Exceed your customer’s expectations. Sam says, give them what they want – then give ‘em a little more. To add to that, I highly recommend a book on this same subject: Raving Fans by Ken Blanchard.

6. Control your expenses better than your competitors. If you’re efficient, you can survive a lot of mistakes. In fact, here’s something I do with my business tax clients: we meet regularly and allot a portion of time to examining his or her expenses, in order to identify any distortions. It’s an essential activity all business owners should engage in on a consistent basis.

7. Swim upstream. Sam recommends ignoring the conventional wisdom; instead, find your niche by going in another direction. And he’s not the only one who thinks so. Many years back, I stumbled upon a book titled The Strangest Secret by the late Earl Nightingale. He advised not to be afraid to go against conventional wisdom. Since then, my philosophy has often been to do the opposite of what most folks are doing in the industry. As a result, my CPA firm stands as a recognized leader in its industry, while many others struggle.

What business leaders have been most influential to you as an entrepreneur? I’d love to hear!

By the way, are you on Twitter? If so, you’ll benefit from a daily stream of small business intelligence by searching #njsmallbiz. Courtesy of The Omar Group. Be sure to follow us, too!


Light a Fire Under Sluggish Employees

Light a fire under sluggish employeesDo you feel like getting your employees to accomplish even the simplest things is like pulling teeth?

What’s going on with your people?  Why is everyone so apathetic?  What are you doing wrong?

Your business might be suffering from mediocre employee morale.  And yes, there are things you can do about it — without investing in expensive corporate retreats or turning into a stand-up comic.  Here are just a few:

Applause and Fanfare.  When somebody does a great job, acknowledge them publicly.  Show that you’re the kind of business owner who notices exceptional effort and appreciates it.

Love Letters to Home.  Send a thank you note or gift to your employee’s family at home.  Tell them how fabulous you think the employee is.  Send a gift home on the employee’s anniversary with your company.

Stay in TouchMeet with each employee on a regular basis.  For some employees, an absent employer equates to an employer who doesn’t care.

Openness and Honesty.  Insist on being direct, truthful and constructive with your team, and tell them you expect the same from them.

Accentuate the Positive.  Follow a personal policy of refusing to engage negativity.  If you have a concern about an employee, praise what they’re doing right, and focus on finding solutions for what’s wrong.

Be the Party.  Provide opportunities to celebrate with your staff off-premises.  Consider hosting regular lunches, after-work refreshments or activities like mini-golf or bowling.  Don’t forget to acknowledge employee birthdays!

Shake things up.  Wow your people with positive changes.  And most importantly, be consistent.  For employees who’ve been discouraged for a long time, it might be tough convincing them that things have really changed.  Give them time to see that you really mean it, and watch the life return to your business.

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Top 10 Bookkeeping Mistakes Made by Small Businesses

Top 10 bookkeeping mistakes made by small businessesHere’s a checklist you’ll want to print, share and use.  You already know that bookkeeping is essential for ongoing recordkeeping, legal protection and accurate tax filing in your small business.  But are you making a mistake that could bite you in the butt later?  Here are the ten most common bookkeeping mistakes made by small businesses.  See how your business fares:

  1. Poor Receipt Recordkeeping.  Many business owners keep accurate records on larger receipts, but fail to do the same for expenses under $75.  Not only will maintaining accurate records save you money on your income taxes, but it provides much-needed documentation in the event of an audit.
  2. Lack of Professional Help.  Never fail to recognize the importance of hiring a professional to manage your bookkeeping.  He or she probably stays abreast of legal changes that can affect your capital better than you do.
  3. Sloppy Expense Tracking.  Too many business owners pay expenses out of their personal funds, then fail to keep track, whether the expenses are reimbursed or not.  Sound like you?
  4. Improper Employee Classification.  Some businesses use a combination of independent contractors and employees.  Be sure to properly classify your employees for tax purposes.
  5. Bad Communication.  Many reporting and other financial mistakes are avoidable, simply by ensuring open communication between employees and bookkeepers.
  6. Lack of Regular Reconciliation.  It’s vital that you reconcile your financial records on a monthly basis.  Errors are more likely when you drag your heels.
  7. Failing to Back-Up Records.  Every business should back-up their data to avoid crucial losses.  Are you protecting your digital records?
  8. Poor Sales Tax Reporting.  Be sure to report sales tax and account for your sales tax accurately.
  9. Bad Petty Cash Management.  It’s common for small businesses to operate with a modest sum of petty cash, but many lack a system for tracking it.  Set up a system to account for how on-hand cash is used.
  10. Improper Expense Categorization.  Business expenses should be properly categorized for proper tax reporting.  Formal bookkeeping practices can help reduce the likelihood of error.

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How to Reduce Payroll Costs in Your Small Business

How to reduce payroll expenses in your small businessAre overhead expenses in your small business running away like a wild, untamed beast?

You might be like a lot of entrepreneurs we know, whose success crept up on them — and along the way, so did their overhead expenses.  As business got better and better, maybe you started spending more freely on things that seemed so unaffordable in those tough start-up years.  You operated for a long time with a tightened belt.  As you began to prosper, you delighted in finally being able to put more money into your business, trusting that it was an investment that would pay off in the long run.

Those investments could very well pay off.  However, if your overhead is beginning to feel like a runaway train, it may be time to pull back.

One of the biggest overhead expenses for small business is payroll.  It can sap cash flow from a business faster than any other expense.

Is payroll your runaway train?

Take an honest look.  Are you overstaffed?  Along the path of growth, you may have hired too many people.  Each one of those people costs you money.  You’re subjected to registration and record-keeping requirements which can be expensive.  You also have to pay unemployment taxes, withhold state and federal taxes (as well as Medicare and Social Security taxes), pay for workers’ compensation insurance, and remain in compliance with safety regulations to avoid injury to your workers.

If you fail to comply with all of the above employment requirements, you could face severe penalties, and maybe even be found personally liable.

If you need to reduce your payroll expenses, consider these suggestions:

Restructure employee compensation/bonuses to link to production or desired goals.  I have a client in the construction industry who literally doubled his net profit using this one strategy.  Salespeople are accustomed to working on a performance basis, yet many businesses feel the need to offer a base salary in addition to a low commission structure.  Instead, skip the salary and try offering salespeople a higher commission or bonus structure.  You’ll attract more aggressive talent and produce better sales figures for your business.

Are your people properly trained?  Too many employers assume their employees know how to do their jobs.  Sometimes, their lack of skills or know-how might be handicapping your business, and you won’t even know it.  Spend time training each of your employees so that they understand their roles and how to perform at an optimal level.

Hire slowly, fire quickly.  Don’t hold on to people who aren’t contributing to the success of your organization.  When hiring, develop a screening process that includes having several employees interview a candidate.  You’ll be more likely to get it right if you let your team members evaluate the potential co-worker.

Be clear about expectations and deadlines.  Make sure each and every employee understands what’s expected of him or her, and agree on deadlines together.  Follow up to ensure the employee has what they need to complete a task correctly and on time.  Never just assume the work is getting done.  Inspect results and offer constructive feedback.

Try employment alternatives.  If you need help in your business, consider using a temporary employee from a staffing firm, or hire an independent contractor.  You’ll avoid paying all the fees associated with bringing someone onboard as an employee.

When you reduce your payroll expenses, you’ll be making a huge impact on your overall overhead.  Lower expenses mean an instant boost to your company’s bottom line.

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