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76 Posts authored by: Touchpoint

TeamofRivals_Body.jpgby Iris Dorbian.


America has always been imbued with the spirit of competition, especially in sports. Whether it’s a swimming race at a national heat or a championship tennis match, the drive to win is a powerful catalyst.


A similar mindset exists in the workplace, where very often employees vie for leads, coveted accounts, or simply power, with the same gusto they might display at an athletic contest. However, if not harnessed properly, competition can lead to a toxic, cutthroat culture resulting in high employee turnover and erosion of morale.


For small businesses with a skeletal workforce, this scenario can have particularly dire consequences to the bottom line. How then can internal competition at your workplace be leveraged positively and in a way that will strengthen your company’s bottom line? Below are a few tips:


Avoid positioning employees against each other

This is a surefire remedy for internal discord and disharmony. If you’re issuing a challenge to staffers, let them know what they will be judged on. Emphasize the effort.


Don Fornes, founder and CEO of Software Advice, an eight-year-old software consulting company based in Austin, Texas, often works with small business clients and agrees. “Don’t make it a zero-sum competition,” he stresses. “Rather make it where theoretically everyone can win.”


For example, Fornes says everyone at his company is eligible for the same rewards. “All employees receive a bonus if they hit their sales or performance goals,” he explains. “We don’t just offer a bonus to the one person who performs the best.”


TeamofRivals_PQ.jpgDon’t overstress the rewards

This takeaway might sound counterintuitive to anyone who has ever entered a contest or race but sometimes, it truly is the spirit of competition that drives and galvanizes people to do their best. Make the challenge light-hearted and fun. Employees shouldn’t feel that they’ve let down the entire organization because they couldn’t keep pace with a goal or win a challenge.


Kristy Sharrow, director of marketing for LevelEleven, a Detroit-based provider of software solutions that caters to small businesses, concurs. “The prize is less important than most people think,” she explains, adding that many of her company’s clients have run successful competitions that offered only “bragging rights” or “inexpensive incentives.”


One client, in particular, Sharrow notes, infused its competitions with playful humor. “They offered incentives like toy chatter teeth or a plaque that said, ‘Chatter It Up.’”


Her own company takes part in similar whimsy. “We run cold-calling competitions daily for a macho man figurine and everyone gets fired up to win it,” she says. “Another client just ran a contest with an incentive of milk and cookies. The employees loved it. Most of the time, it’s the competition itself that motivates employees—not what they’ll win.”


Emphasize improvement

To avoid turning your team of rivals into a team of backstabbing, Machiavellian power players, it’s important to place a premium on improvement rather than winning at all costs. Such a positive reinforcement may result in happier and more confident employees who may be induced to go the extra mile for you when times get tough.


Jim Grew, president of the Grew Company, a consultancy that frequently works with small businesses, subscribes to this best practice. Having mentored many small business leaders, Grew looks especially askance at the negative aspects of internal competition.


“Usually, it’s great at first, but then it erodes into competition for its own sake, with the wrong priorities emphasized,” he says.


Instead, says Grew, small business owners should reward improvement. “This requires carefully defined and specific targets, short timelines [to achieve goals] and encouragement by management,” he explains. “Try with two teams who may or may not compete directly. Ask the leaders what is one thing they could do to ramp up results in an amazing way? Guide them in picking the activity, and ensure that the measure is unambiguous. Tell them it’s a test.”


Grew tried this precise approach with a mid-size manufacturing client. “[We helped them structure] a small monthly bonus for all their employees if all orders were shipped on time with no errors or quality problems,” he says. “Earnings jumped $1 million in a year.”


Don’t make the competition interminable

To foster internal competition that will benefit your bottom line, make sure that the challenge you issue is for a specific length of time. You want to motivate your employees—not make them feel they’re running a marathon. With no end in sight, staffers might give up prematurely out of sheer fatigue, boredom, or frustration.


Sharrow echoes the sentiment. “If a [contest] drags on, it’s difficult to keep employees motivated to compete,” she says. “We suggest competitions run for anywhere between an hour and a few weeks. If it’s around something like a quarterly bonus, competitions can run longer. But that should be the exception.”


Keep employees in the loop

Lastly, to increase and maintain employee engagement, make sure each competition participant knows their individual standings as well as the deadline for the competition. Use in-person meetings, social media platforms, and e-mails to communicate updates. And be sure to stay consistent. If employees become confused about the details of the competition, the entire exercise loses its effectiveness.


Using competitions or challenges to motivate your staffers can be a great way to boost your bottom line while increasing employee engagement. But make sure they’re executed in a manner that encourages effort. Otherwise you may end up paying a costly price when it comes to both company morale and profitability.

Hiring-Interns_Body.jpgby Susan Caminiti.


Remember when you were in college and couldn’t wait to get some work experience out in the so-called “real world”? Well, there’s a current crop of college students who feel the same way, and when utilized correctly, they can be a big help to your small business.


Contrary to what you might think, college interns aren’t just for Fortune 500 companies. Whether for the summer or during the fall and spring semesters, hiring an intern enables you to influence the next generation of professionals that will soon be out in the workforce—and gives you valuable insights from young, enthusiastic men and women who are interested in your industry. In fact, in a survey of their members, the National Association of Colleges and Employers (NACE) reports that employers last year planned on hiring 8.5 percent more college students for internships than they did the prior year.


Before you rush out to your local college or trade school to find students to hire, however, there are some basics do's and don'ts of internships that are important to understand. Some are simple common sense, but others, if violated, could run afoul of the Fair Labor Standards Act.


Define the job

The first thing to understand is that these opportunities are more for the benefit of the college student than your small business. Think of internships as a smart way for you to take your experience and success and pay it forward. That's not to say, however, that there can't be an upside for your company.


That's why it's important to take the time to define what you really expect from any intern you bring in—the same as you would a full-time employee. Decide on the job functions, how he or she will benefit from the internship, and who will supervise the intern.


Crissy Koehler, vice president of sales and marketing for Parties That Cook, a San Francisco-based firm that stages hands-on cooking parties and corporate team-building events, says that her company hires interns for its marketing department and for its kitchen management functions. “The students we bring in for our marketing department need to be proficient in social media and communications,” she says. The students in the kitchen management program need food- and cooking-related skills.  “We make it very clear in our job descriptions what the candidate will need for a specific internship,” Koehler adds.


Hiring-Interns_PQ.jpgGet your staff involved

Tara Goodwin Frier, founder of the Goodwin Group, a public relations firm based in Walpole, Mass., has two to three unpaid interns working for her at any given time. She typically finds them by attending college fairs or through the connections she's developed as a guest lecturer at Boston University.


While she always makes sure to interview each candidate herself, she also has her younger employees interview the college student as well. These “peer interviews” as she calls them, often reveal more than what Frier will be able to glean. “It’s amazing what a college student will say—or reveal—to someone closer to their age,” she says, noting that some candidates have admitted during the interview process that they’re not even sure what they want to do with their lives. “As much as we value transparency in my company, I do tell these students that that’s something they probably don’t want to repeat in other job interviews,” Frier says.


Decide paid or unpaid

Given that most small businesses are not flush with money, many opt to offer unpaid internships. In most cases, the student will receive college credits for the hours worked in lieu of a paycheck. While hiring an unpaid intern is perfectly legal, there are some guidelines established by the Department of Labor that must be followed. Among them: The intern’s training should be centered on the skill they’re pursuing in college—writing, accounting, culinary trade—and not something unrelated to their studies. In other words, having an unpaid intern around as a source of cheap labor to pick up office supplies or fetch your dry cleaning would likely be frowned upon by the Labor Department.


Frier doesn’t pay her interns, but she does cover expenses related to any events she has them attend on behalf of the company and its clients, and does offer a stipend of several hundred dollars at their end of their internship. “They are getting college credit for the time they’re spending with the company, but I also think the stipend shows that we value their contribution,” she says.


Be ready to offer feedback—and patience

Though some interns will shine brighter than others, it’s important to keep in mind that they’re still college students and will likely need some gentle course correcting—or sometimes more—while they work at your company.


As a public relations firm with several high-profile clients, including the NFL’s New England Patriots, Frier often needs her interns to interact with reporters. “One of the things I noticed was that college students lack telephone etiquette,” she says. “They’re so used to simply texting or emailing.” To break them of that habit, Frier says she’s written out scripts for what they need to say on the phone when they reach a reporter to figure out if they’re interested in covering a particular event or client. “We work in a multi-generational world,” she says, “so it’s important that we stay aware of the skills that each generation brings with them—or doesn’t.”

HireaCEO_Body.jpgby Susan Caminiti.

It may sound counter-intuitive, but the skills needed to start a small business—perseverance, patience, and passion, to name a few—aren’t always the same ones necessary to take a company to the next level. Sure, as the founder you’re the person who came up with the brilliant idea for your product or service, and can zealously promote it to potential customers better than anyone. But if you can’t (or don’t want to) deal with the day-to-day functions of running a growing enterprise, it might be time to consider bringing in a chief executive officer.

Charley Polachi, a partner at Polachi & Co., an executive search firm in Framingham, Mass., works with many small companies as they’re entering their early growth stage. He says the first step he recommends for any founder looking to hire a senior manager is to define the pain they’re trying to address. “Usually it’s a matter of too much or too little,” he says. “The small business owner is either too busy and can’t keep up with all aspects of the business adequately, or the business has stalled and he or she needs someone who can come in and move it ahead.”

Know what you want

Regardless of which scenario is driving the decision, the experts we spoke with all agree on one thing: define the CEO job thoroughly before you start your search. It’s not enough to say you want someone with financial or organizational skills. As you draw up a detailed list of the attributes and qualities you’re looking for, go a step further, suggest Polachi. What functions will this person be responsible for every day? What are you able to pay? And of course, as the founder, what roles and duties are you willing to realistically delegate? “Very few small businesses need a clone of the owner,” explains Dan Bowser, president of Value Insights Inc., a business valuation and exit strategy consulting firm based in Summerville, Pennsylvania. “When you’re drawing up the specs for this new person, you want to hire someone with skills and abilities that you don’t have.”

Evaluate the person, not just the resume

Once the job has been defined, don’t rush through the interviews. “There should be no fewer than three interviews when you find a promising candidate,” says Polachi. Each time you bring them back, the conversation should delve deeper into determining if you’ve found a good fit. “Ask them if they’ve ever scaled-up a business and how they did it,” he adds. “When you’re bringing someone into a small business in a senior position, his or her management style is absolutely critical.”

That’s because the skills and style that worked wonderfully in a billion-dollar corporation with thousands of employees doesn’t always translate well into a million-dollar organization with dozens (or fewer) workers. “There is a huge difference in support and responsibilities between a big and small company,” observes Bowser. “Everything from having to make your own travel arrangements to the ego boost that comes from working for a big company—all those issues have to be considered before bringing someone into your small business. I’d have real concerns about an otherwise great candidate if all they have is big business experience.”

HireaCEO_PQ.jpgDon’t expect perfection

What if you do everything right to find a CEO for your company and the person still doesn’t work out? For starters, don’t panic. Experts say most small business owners aren’t terribly good at (or even like) the hiring process, so the chances of getting it wrong—even when looking for a senior person—are pretty high.

John Brown, president of the Business Enterprise Institute (BEI), agrees. He recently worked with a couple that was routinely clocking 50 hours to 60 hours a week at their small business and hadn’t taken a vacation in 15 years. They hired a senior manager to relieve some of the burden, but when he didn’t work out they moved him into sales and contacted Brown about selling the company. “They were so burned out and so sure they’d never find the right person that they just felt they had no choice other than to sell the business,” he says.

To avoid that sort of draconian response, set 60- and 90-day performance reviews once you’ve hired someone into a senior position. “You’ll probably know within the first 30 days if this person is going to work out, but after 90 days you should certainly have a feel for whether this was a smart hire,” says Brown. And if it’s not, Brown says he likes to remind his clients of management consulting guru Peter Drucker’s advice: Hire slow and fire fast.

Understand your new role

“Someone can be an ex-CEO of a company or an ex-president, but no one ever introduces themselves as the ‘ex-founder’ of a company,” says Polachi. “Once you’re the founder, you’re always the founder.” That doesn’t mean, however, you’re going to play the same role if you’ve decided to bring in a CEO.

Bowser advises clients to take the time to introduce the new manager to existing staff, outline his or her responsibilities within the organization, and then clearly state that this new person has your full support. Do not tolerate end-runs around your new hire by employees who say they’re more comfortable working with you. “That will only confuse people even more and undermine the person you’ve brought in,” Bowser says. “Calmly explain that the new person is now handling some of the duties you had been and ask them to work directly with him or her. Eventually employees will get the message.”

EmployerHealth_Body.jpgby Jen Hickey.


Despite all the discussion surrounding the Affordable Care Act’s (ACA) (known by some as ObamaCare) as employer health mandate, there remains some confusion about who will be affected. A recent survey found that one-third of small business owners believed they would be required to provide health insurance for their employees in 2014, while another third wasn’t sure. It pays to know the details of this law, though.


According to the ACA, small business owners who have no employees will have to purchase health insurance for themselves to avoid paying a penalty. There is, as the Wall Street Journal notes, a “hardship exemption” for sole proprietors if the annual insurance premium costs will be more than eight percent of their household income. Though the rules and potential costs associated with this health care law can seem daunting, the federal government has begun to clarify these issues with new regulations. These new rules explain purchasing and coverage guidelines for the health care market as well as define essential health benefits and wellness requirements.


[Note: All data in this article is accurate at the time of publication, but because government regulations are often changed and frequently updated, any small business owner should confirm the latest rules regarding the ACA by visiting and, and seek professional guidance before making any major changes regarding health insurance.]


Beginning in 2014, businesses with 50 or more full-time equivalent employees (FTEs) must offer health coverage that’s “affordable” and meets “minimum value.” (These two terms are defined as a) having a premium that does not exceed 9.5 percent of income and b) covering 60 percent of actuarial value, or the amount of expected health care expenses.) The annual penalty for not complying is $2,000 per employee not covered after the first 30 FTEs. According to the ACA, full-time workers are now defined as employees who work 30 hours or more a week (130 hours per month). While businesses are not required to offer coverage to part-time employees, part-time workers’ hours will still be used to determine whether they’re subject to the mandate. For example, three part-time employees that work 10 hours per week for a total of 30 hours will now equal one FTE.


Businesses with less than 50 FTE workers are not subject to the employer mandate, and those with fewer than 25 FTEs that also provide health coverage may even be eligible for certain tax credits. (The average annual wage of workers would have to be less than $50,000.) Through 2013, small businesses that pay at least half the cost of health premiums for each FTE can receive a credit for up to 35 percent of their contribution toward their employees’ coverage. And starting in 2015, when the new state and federally run “health exchanges” fully launch, small businesses that purchase coverage through these platforms can receive a tax credit for two years of up to 50 percent of their contribution.


Lenny Verkhoglaz, CEO and co-owner of Executive Care, a Hackensack, New Jersey-based home health care company, has considered offering insurance to his employees in the past. But he could never meet the 75-percent-participation rule many group healthcare plans demanded. Since many of Verkhoglaz’s employees are documented immigrants with family roots in other countries, he says, they prefer to send home the extra cash that they might instead use to pay health insurance premiums. What’s more, many of his workers are covered by their spouses or through New Jersey’s state-sponsored health insurance plan. And to complicate matters, determining whether his employees are full or part time can be a fluid calculation, since their status often depends on the nature of the assignment and length of time between clients.


“This is not a 9-to-5 job,” explains Verkhoglaz. “An aide may be servicing a client for 40 hours a week, and then that client passes away and they may be working few or no hours until another case comes along.” However, Verkhoglaz still believes he will be subject to the employer mandate, because of the use of part-time employees to calculate FTEs.


Even the insurance brokers Verkhoglaz has spoken with still seem to be grappling with how the mandate will affect businesses like his, with regulations still being issued on how certain industries will be classified. Despite the uncertainty, Verkhoglaz, who co-founded his company 10 years ago, recently franchised his business. “I haven’t changed my growth plans even though I’m not sure how my business will be affected,” he says. In the meantime, Verkhoglaz continues to reach out to home care associations and read industry publications for guidance. “It’s not clear if there will be differences in how these exchanges run from state to state,” he notes.


Because the annual cost of non-compliance is far less than the cost of typical health care premiums, Craig B. Garner, an adjunct professor at Pepperdine University School of Law who teaches a course on the ACA, says some business owners may opt to pay the penalty and shift their employees onto the new state health exchanges. “There’s more to benefits than just cost,” cautions Garner. “Often it’s the difference when it comes to recruiting and retention.” He points out that the exchanges are expected to function much like an online travel booking site. There, business will be able to shop various plans that offer different levels of coverage, ranging from bronze (which cover the minimum 60% of actuarial value) to platinum (which provides up to 90% of coverage).


EmployerHealth_PQ.jpgGarner does not believe the penalties will have much of a financial impact on those businesses already offering a health plan. Jim Edholm, owner and president of insurance brokerage firm Business Benefits Insurance in Andover, Massachusetts says dropping existing health coverage could prove more costly in the long run. “Your employees will be looking for a bump up in pay to make up for that lost benefit plus the amount that’s lost to payroll taxes,” he points out. “You’ll end up paying much more in the end.”


The ACA also calls for all non-grandfathered individual and small-group market insurance plans to cover 10 health benefits deemed “essential.” These include services most would expect to be covered, such as ambulatory care, emergency room visits, hospitalization, maternity, newborn, and pediatric care, prescriptions, and laboratory services. It also will include care for mental health and substance abuse and preventive and wellness services. “This prevents those mini-med plans with all kinds of limitations and maximums from calling themselves a health plan,” notes Edholm. Where it gets murky is coverage for mental health, which is not well defined and varies from state to state. “Some states, like Massachusetts deem biologically-based conditions, such as depression, as mental health disorders,” he explains, “while others like Alaska do not.”  And the federal benchmarks for essential benefits largely leave the definition of required mental health services to the discretion of the states.


Also in the ACA and set to take full effect in 2014 are several other changes to current health care regulations. First off, the new law puts an end to annual and lifetime caps on coverage. Second, it establishes penalties for businesses that have healthcare eligibility waiting periods of more than 90 days. Finally, it creates new reporting requirements (sections 1512-1514) for employers of 50 or more FTEs on whether they offer health insurance or not.


While Livingston, Montana-based PrintingforLess offers a high-deductible health plan (HDHP) for its 155 full-time employees, CEO Andrew S. Field says he has already seen higher administrative costs. “There’s a lot of disclosure and legalese that now has to be provided to our employees,” Field explains. “We had to bring on another person in human resources to help with the additional paperwork and time spent working with our provider and broker/consultant to make sure we remain compliant.”


Until recently, Field had primarily relied on full-time workers. However, he has altered his hiring practices to prepare for expected higher employee costs. “Partly because of ACA and partly because we don’t know what the future holds, we’re far more inclined to invest in technology that may save us on headcount,” Field says. And when they do hire, they’re more likely to bring on part timers, who now represent about 20 percent of the company’s work force.


There have also been changes to the individual and small-group insurance market (50 covered employees or less), which have historically been regulated by the states. Unlike large employers, which have a larger pool of employees to spread the risk of catastrophic illness, rates available to smaller employers have traditionally been much higher, since there is a smaller pool to spread that risk. However, the ACA is meant to curtail this practice by setting up health care exchanges that create more competition for that market and establish more uniform guidelines of how insurers can determine expected costs and, thus, price premiums.


Edholm believes many smaller businesses may opt for a self-insured health plan, which is exempt from costs and taxes related the ACA. One of these exemptions involves the 80/20 rule, which requires health insurers to spend at least 80 percent of collected premiums on medical costs. Under a self-insurance plan, an employer assumes the risks of all claims, whereas in a fully insured plan the employer pays a fixed rate regardless of whether the costs are incurred or not. As a recent National Association of Insurance Commissioners study points out, when self-funding, it’s often necessary for a small employer to purchase a secondary, stop-loss policy to protect against the risk of large expensive claims that can result from serious illnesses. However, stop-loss providers require detailed information about the health and demographics of your employees, which will be used to establish the deductible. And such cost savings largely depend on the relative health and age of your employees.


[Note: All data in this article is accurate at the time of publication, but because government regulations are often changed and frequently updated, any small business owner should confirm the latest rules regarding the ACA by visiting and, and seek professional guidance before making any major changes regarding health insurance.]

Telecommuting_Body.jpgby Robert Lerose.


When Marissa Mayer, the recently-installed CEO of Yahoo! rescinded the company's permissive telecommuting policy and required employees to work on-site, it sent ripples throughout the business world. Some critics of her decision say that it unfairly undermines the work-life balance of hard-working households. Supporters argue that regular face-to-face interaction fosters creativity.


The jury is still out, but one thing is clear: Mayer's decision sparked a conversation about the gains and losses of a telecommuting arrangement. We checked in with three small business owners to get their perspectives on this heated topic.


Clearly define expectations

To begin with, some people mistakenly conflate flextime and telecommuting. "The umbrella term is flexible work arrangements," says Pat Katepoo, founder of WorkOptions. These arrangements cover a variety of situations, including a compressed work-week, part-time schedules, job sharing—and telecommuting. The flexibility lets you "change when you work and how you work," she says. "Telecommuting is a change in where the work is done, [such as] at home, the coffee shop, or a library."


Katepoo says that telecommuting provides tangible benefits to both sides in the relationship. "For employers, the big gains are in productivity, retention, and reduced absenteeism, since [bad weather] or a sniffle won't stop [telecommuters] from doing work that day," she explains. "Employees save time and get more control over their work. Their perception of stress is less and they can actually do more work." Studies and surveys support Katepoo's findings.


And the drawbacks? Managers who are used to having workers in the office at their desks may have a hard time keeping tabs on their telecommuting staff. For the latter, being isolated from their fellow workers or lacking the self-discipline necessary to focus on work by themselves can seriously disrupt the new routine.


For a business that is trying telecommuting for the first time, there are some common issues that need to be addressed in advance to make the transition smoother, including setting a schedule, establishing work goals, and building a communication plan. For example, a telecommuter could work remotely on Tuesdays and Thursdays, accomplish an agreed-upon set of tasks, and report to their supervisor at the end of the day by email. Another communication option is Google Hangouts, which lets up to 10 people have an online video conversation.


Managing remote workers sometimes requires a special set of skills, so Katepoo recommends the tools and resources found at When Work Works and the Society For Human Resource Management. Establishing a telecommuting relationship takes patience and willingness. "I do suggest a minimum trial period of at least three months and up to six months," Katepoo says. "And the trial period should not be seeing if [telecommuting] works out. It should be working out the issues that surface [in order to make it a viable working arrangement]."


Telecommuting_PQ.jpgBe accountable

For companies that allow telecommuting, it's not uncommon for workers to split their time between the office and a remote location. However, some business owners have done away with a central office entirely and have every member of the team work on their own remotely.


Case in point: The Content Factory, a Pittsburgh-based public relations and social media marketing agency. Founded in 2010, it has a staff of about eight made up of contractors and full timers, as well as a fluctuating number of part-time service providers.


"We thought we were going to go the employee route, but when we outlined the job responsibilities and saw that it was very much project-based, we started changing the way we looked at how we were going to run our business," says Kari DePhillips, one of the co-owners. "We haven't really needed an office. You save so much time by working from home."


One of the early lessons DePhillips learned was to be very clear about the deliverables of each project and when they were due. For example, the agency is contractually obligated to produce a specific number of social media updates every day for their clients. Team members are held accountable for making sure the work gets done on time and that the quality of the copy is up to standards. "You can't have lazy people working from home," DePhillips says. "Some people can't handle the freedom. The big red flag is almost always [whether] deadlines are met."


DePhillips says that the majority of her core team is in Pittsburgh, but she has people working for her across the country. You might think that could lead to a breakdown in communication, but just the opposite appears to be true, she says. Her team stays in touch through Skype and e-chats and has regularly scheduled meetings—all managed virtually. "On the whole, I've been very impressed with the quality of the work that our team turns out remotely," DePhillips says.


Collaborate in person

As the owner of The Marks Group, a Pennsylvania-based company that sells software applications, Gene Marks closed down his physical offices eight years ago. Today, he and his 10 employees all work from home. Yet he also approves of Marissa Mayer's controversial decision to end the practice of telecommuting.


"There is something potentially significant to be gained from having your people around in the right work space and talking to each other, exchanging ideas, and discussing clients," Marks says. "All the collaboration technology we use—such as Basecamp and Dropbox—have great value, but sometimes I think we all take things too far."


By way of example, Marks explains that he has three people in his company each working on a Microsoft Dynamic project for three different clients—yet none of them are really talking to each other. "But if they were in an office working together, it's quite possible [they could suggest ideas] which might be more productive and create more revenue and more value."


That said, Marks has no plans to re-open a central office. Both he and his team members are almost always out on the road visiting clients or developing new business opportunities. "Telecommuting is not the answer for everybody," he says. "It worked for my company because [my team] was already used to doing it and being on the road. But I think requiring somebody to come into the office at least once or twice a week is a good thing overall."

NoNews_Body.jpgby Iris Dorbian.


When small business owner Hillary Kelbick co-founded MKP Communications, a financial services marketing-firm based in New York City, 18 years ago, one of her key goals was to treat her employees with dignity and respect. “That’s because previously [my partner and I] worked with someone who was like an abusive parent,” she recalls. “[There was] this notion that if someone was doing well then no one else was doing well. You were only made to feel good at the expense of someone feeling badly.”


Repelled by a work environment that resembled a toxic family, Kelbick seeks to run a business that subscribes to the Golden Rule: Treat others the way you would want to be treated. This means recognizing that employee feedback not only has immense value, but is also critical to the solution of a problem.


“Just because I’m the owner doesn’t mean I know the answers,” says Kelbick, who adds that she usually works with eight or nine salaried employees at a given time (not counting the myriad contractors and consultants hired on a periodic basis).


Case in point: In 2009, at the height of the recession, Kelbick’s business was experiencing, like many others in the country, severe financial straits. “We had a couple of years in which we lost more than we made,” she admits. “There were no secrets: people didn’t have enough to do.”


Seeking to keep her business alive, Kelbick held frank discussions with her staff, asking them for input. “I put forward the idea that everyone could take a temporary salary cut—or not,” she recounts. Her workers agreed and when business improved, their former salaries were reinstated, with bonuses added into the mix.


“I was also honest with letting them know I was getting a bonus, so I could pay them from that if there’s another economic shortfall,” continues Kelbick. By engaging her employees and making them feel they were part of the process, Kelbick not only avoided a business calamity—the closure of her business—she helped maintain positive employee morale and boost loyalty. To prove her point, Kelbick cites an uncommonly low attrition rate among her workers, most of whom she says have been with her company since its inception.


Certainly, being more “transparent” in ones’ employee communications is a solid best practice when it comes to increasing and ensuring company morale. However, some small business owners may be apprehensive about how to implement this “honesty is the best policy” due to bad experiences with past employers. What then are some takeaways that can help guide them in the right direction to secure employee buy-in?


NoNews_PQ.jpgDeliver bad news in person

Because many small business owners often have experience working in larger corporations where distant headquarters may not have regularly passed along important information about the company, some entrepreneurs may instinctively bring that same type of resistance to openness when interacting with staff. Aside from its basic disingenuousness, what makes this management style even more troublesome is that it can also blindside workers in a devastating manner.


Susan Baroncini-Moe, president of Business in Blue Jeans, an Indianapolis marketing consulting firm that frequently works with small businesses, recalls a near disastrous example involving a client’s financial hardships.


“Against my advice, the client kept the financial struggles of her company secret from employees,” recalls Baroncini-Moe “But you can't keep secrets very well in small businesses. Rumors about the company's troubles got started. Employees, assuming the worst, quickly started looking for new jobs and gave notice. Had I not come in and cleaned up the mess, my client might've lost her entire business, simply because she was too afraid to be transparent with her team.”


Keep staff in the loop when it comes to their performance

For many people, there’s nothing more disconcerting than to do a job and not get feedback except at the annual salary review. Avoid turning your business into a communications vacuum. Be proactive and fair when it comes to monitoring and assessing a staffer’s progress. It will not only help them but you as well.


Susan Johnson, owner of the Minneapolis-based Rue 48 Salon, a hair salon, is a passionate proponent of this management practice. Since launching her business three and a half years ago, Johnson likes to meet individually with her 12 stylists every 30 days for a one-on-one evaluation to discuss their performance and future goals. During these sessions, she will refer to reports that show each stylist how much product they sold the previous month as well as their customer retention rate. She says these confabs are highly beneficial to her workers who are paid on commission.


“It all kind of works together,” explains Johnson, a former social worker. “It’s teaching the stylists to take a hold of their own numbers and know what their paycheck will be next time. I explain to them when I set goals, it’s not to set goals for me to make money; it’s to make sure we survive. I don’t want anyone to lose their money.”


Acknowledge efforts of staff

This doesn’t mean you should gush over them nonstop if they’re doing well and forget you’re their supervisor. Rather, let a conscientious worker know that you appreciate his or her work ethic and the quality of their performance. But always be sincere in your language and demeanor and avoid glibness. Making workers feel that they’re important contributors to the fabric of your company and not just cogs in a machine will maintain employee morale even during challenging periods.


Don’t cloister yourself in an office

If you want to invest your transparency efforts with credibility, then you will need to show your workers you follow through on your promises.  An effective way of doing this is to work alongside your staff. Don’t barricade yourself behind closed doors in an office. Remove the silos and your workers will be more amenable to treating you with respect and opening up to you.


Salon owner Johnson agrees wholeheartedly.I will clean the toilets and mop the floors to make sure this place is up and running,” she says. “They see that and respect. It’s a lead-by-doing tactic. “


Semantics also helps. “Nobody has ever said anything about me being a boss,” she notes. “The way I refer to staff is that I never call them my employees. I say they’re my co-workers. They know I take the lead, but I do work alongside with them. I would shampoo one of their clients if need be.”


Whether your business is large or small, being upfront with employees can be an invaluable tactic to maintaining good morale. But it must be backed by sincerity and action. Otherwise no amount of transparency will help you win the loyalty and respect of your workers, no matter how seemingly well meaning you appear.

YoureHired_Body.jpgby Susan Caminiti.


Earlier this year, Dan Wolf, owner of the Keller Williams Realty Group in Anchorage, Alaska, realized he needed to hire an office manager to help run his four-person real estate office. He wrote up an ad, poured through a stack of resumes, and began interviewing the most promising candidates.


Within a few weeks he was certain he had found the right person for the position and brought her back in to discuss salary, hours, and to offer her the job. “One of the things I made sure to tell her was that I wanted someone who could commit to the job for at least two years,” Wolf says. “The next day I got a call from her saying that her husband was probably going to be transferred in less time than that, so she couldn’t promise me the two years. I thought I was going to have an anxiety attack. All this work and preparation and just when I thought I had the right person, I found out she couldn’t take the job.”


Ask any small business owner to name a few of the duties they dislike most, and chances are interviewing job candidates ranks right near the top. It’s not that entrepreneurs are, by their nature, withdrawn or anti-social. In fact, it’s quite the opposite, say human resources experts. “Most small business owners are hiring based on an impression, not an assessment, of the person before them,” explains Lynne Curry, founder of The Growth Company, a human resources and training and development company. “They start talking to the candidate and establish a rapport and they think that because there is this warmth between them, this must be the right person for the job.”


Clearly, that’s not always the case. So what are the best and most effective ways to interview a job candidate? And what questions yield the most useful information? The experts we spoke with distill the process down to three basics: be clear about the duties of the job you need to fill; ask open-ended questions; and spend more time listening than speaking during the interview.


Define the job functions

Gene Fairbrother, president of MBA Consulting Inc., a Dallas-based firm specializing in start-ups and small business issues, advises entrepreneurs to put the job description in writing. “Before you bring that first person in for an interview, take the time to write down a detailed job description and the exact duties that position requires,” he says. Most small business owners don’t do this, Fairbrother explains, which means they spend the first 15 minutes talking and trying to describe the position on the fly.


And as you’re preparing that detailed written description, be realistic. Doug and Polly White, co-founders of Whitestone Partners, a consulting firm based in Midlothian, Virginia, recall once advising a client who ran a scrap metal business. “When he was looking to hire we made sure he was clear that the position required the employee to work outside in all kinds of weather, rain or shine, and that it was a dirty, nasty job,” Doug says. “If they can’t live with that, then they’re not going to be a good hire.” A less dramatic example would be the duties of a receptionist or office manager. If you expect him or her to wash out the coffee pot at the end of the day, make that clear. Not doing so—or springing it on a new employee once they get settled in—just breeds resentment.


YoureHired_PQ.jpgAsk the right questions

Once you’ve narrowed down the list of candidates to meet with in person, make the most of your time. According to the Whites that means asking open-ended questions that go beyond the resume. For their book, Let Go to Grow, Doug White says the couple interviewed over 100 small business owners who readily admitted that interviewing was difficult and furthermore, that they weren’t very good at it.


As a result, most of them spent the majority of their time doing what Polly calls the “resume review interview.” Says she: “You’re not going to gain much insight in an interview by going over someone’s resume job by job. You’ve already had a chance to look at that document. Ask questions that get beyond the resume.”


For instance, she recommends asking open-ended questions and then the follow up. “If you ask someone to describe his or her biggest accomplishment in life, don’t just stop there,” she says. “Ask why and ask for details. If will give you valuable insight into what that person values.”


And don’t be afraid to get specific, advises Doug. For example, if you’re hiring an office manager who also needs to have bookkeeping skills, it’s perfectly fair to ask them how a $10,000 sale would affect both the income statement and the balance sheet. “A person interviewing for that position should be able to answer a question like that on the spot,” he says.


The one caveat to all this: hiring entry-level employees. Here, behavior, not experience is what matters most. “I always tell our clients, when it comes to entry level employees, ‘Hire behaviors. Train skills.’” Polly explains. “When someone is just starting out as an employee in a small business—a cashier, or a stock room person—you want to know if they’re going to show up on time, have a good work ethic, and are honest. If those are there, the skills can be taught.”


Speak less, listen more           

Once the interview gets underway, resist the urge to monopolize the conversation. Yes, the story of how you started your company may be fascinating, but you’ll gain little insight into a potential new employee while regaling them with anecdotes of your early days. Instead, concentrate on listening. “I can’t stress this enough to small business owners: keep your mouth shut during the interview,” says Fairbrother. “You should be listening 75 percent of the time and talking only 25 percent.”


If you’re hiring an accountant ask questions about the candidate’s facility with an Excel spreadsheet—and then be patient enough to listen to the answer, he says. If it’s a sales position you’re hiring for, ask the candidate to describe how he or she would go about sourcing new clients. “Then let them explain fully and ask for details,” Fairbrother says. “It’s amazing what you can learn when you’re not the one doing all the talking.”


That’s certainly the lesson Dan Wolf learned. Once he realized he needed to start the interviewing process all over again, he sought some outside human resources help and was much more discerning during his next round of interviews. “I’m a realtor, so it’s my job to relate to people, to try to make them feel comfortable with me right away,” he says. “I saw that doing that during a job interview is actually a detriment to finding the right employee. We weren’t meeting for a cup of coffee. I’m hiring them for a job. Once that was clear, the process became a lot easier.”

QAdavidlewis_Body.jpgby Iris Dorbian.

As president of the 12-year-old OperationsInc, a Stamford, Connecticut-based company that offers HR solutions and consulting to small and medium-sized businesses, David Lewis is an expert when it comes to dissecting employment issues, particularly sick pay policies. In light of the recent flu outbreak, considered one of the worst to hit mainstream and corporate America in years, this topic has a special timely resonance. Recently, Lewis talked with business writer Iris Dorbian, where he offered up a few tips on how small businesses can institute an effective sick pay policy that both maintains productivity and respects employees who are genuinely ill and not faking it.

ID: As an HR professional/expert, what are some of the current trends and/or developments you see when it comes to SMBs' sick pay policies? Are they doing anything now that perhaps wasn’t done before?

DL: For a certain category of those businesses, which often tend to be more blue collar-oriented, they are being forced—and I do mean forced—to provide more comprehensive sick time policies than in the past. I’m referring to [new mandatory paid sick time laws] in the state of Connecticut and in major cities like Seattle and San Francisco. The idea of having a mandatory sick time policy [is increasingly becoming] more common based on state law and maybe on federal law.

So you have companies that traditionally had not paid you if you didn’t show up for work because you were sick now being forced to offer some minimum number of paid sick days. And then for the rest of the country, you have a bunch of [health] issues in the last several years where more small businesses are starting to formalize policy and offer paid sick time as a way to make their employees feel better about the company.

The majority of businesses in the white-collar space already offer some type of sick leave benefit. The standard is about five days of sick time [per year]. That’s not to say you won’t find more generous packages. [These can] range from more days to the ability to carry the time over and bank it, all the way to the point that you’ve got some trendier firms making the decision to offer unlimited sick time.

ID: What’s the cost of “presenteeism”? How does it impact productivity in the long run?

DL: Hugely. We have 5,000 subscribers to a newsletter and we put something out three weeks ago that talked about the importance of employers reaching out to their employees to remind them that being noble and dragging themselves to work while being infected with what’s being described as the worst flu ever is not doing anybody good. We have a couple of clients who lost 40 percent of their staff for a week because of the flu—40 percent of a small business’s workforce is just devastating.

[Unfortunately], it’s very much a mixed message out there in the business community: you’re allotted five paid sick days, but please note that if you use most or all of them it will be used against you when measuring your performance and dedication to the company. Of course, a policy’s message is never really communicated that way, but that’s what a lot of employees feel in terms of how companies respond to employees who wind up being out sick.

QAdavidlewis_PQ.jpgID: So how do you combat presenteeism and do it in a way that’s both favorable to the employer and employee?

DL: I think practically speaking when employees come to work while they’re sick they’re going to be likely spreading what they have to others in the workplace. Also, it’s probably going to be a less productive day for that individual who’s not operating at 100 percent. You have to look at the practicality of it for your business: if people who are feeling ill are compelled to work, see if it’s possible to have them work from home. In this day and age, more positions in the workforce can be performed at a remote level; if the person is able to do the job from home, then it’s even a dumber move to allow them to come into the office. Let them work from home. Get them a Skype account and have them participate in meetings through Skype where they’re not going to spread germs to others when they cough, sneeze, or shake hands.

ID: Based on your knowledge and experience, what would be your best practices to small businesses seeking to institute an effective sick pay policy?

DL: We advise our clients to provide their employees with five paid sick days a year, but don’t allow for carryover—have it be a “use it or lose it” policy. Never make it so rigid that if they have to take more than five days that it results in the person’s pay being docked or worse. Now the people who abuse it, the people who are faking illness or using it for vacation time—those people should be disciplined up to and including termination.


Look at it from the perspective that five days is a fair number. If your policies are written correctly in your handbook, they’ll always provide you, as the employer, with optimum flexibility to deal with situations on a case-by-case basis.

The big challenge here is that for some employees you’re not going to want to offer that option. For some employees you might view the sick time they’ve taken as excessive or questionable. You just have to be careful about how selective you are because you can put yourself in the position where you look like you’re being discriminatory in some fashion against some group of people by doing that case-by-case thing. And you don’t want to get yourself in the position that in an effort to do the right thing for certain employees and discipline others you wind up with a lawsuit or some type of complaint from a state or federal agency.

Disclaimer: The opinions expressed are solely those of the author and interviewees.  You should consult a qualified HR professional to assist you in developing and implementing sound personnel policies and practices.

QAadamrobinson_Body.jpgby Heather Chaet.              


Your employees—whether you have five or 500—are likely your business’s biggest investment. With the success of your company at stake, your hiring mojo needs to be in top form. Helping individuals, small businesses, and Fortune 1000 managers across the country make better hiring decisions is Adam Robinson, CEO and co-founder Hireology, a web-based application that has “helped take the guesswork out of hiring.” Business writer Heather Chaet chatted with Robinson to find out the key tools and tips every small business owner needs to know to hire the best person for the job.


HC: You have been involved in the hiring sphere for a while. What drew you to this business?

AR: I [had worked with] mostly technology start-ups in my career. As a manager of a large technology team in early 2000s, I realized a couple of things. One, I had never been trained in interviewing and selection. No one had ever told me the right way to do it. So, I largely had to figure it out on my own. And two, the HR team at my company had never been trained on it either! Here we were hiring 200 people a year, and there was no system or structure in place to be sure we were doing that [correctly].


The single largest investment our company made every year was in its people, it was the biggest line item, and there was no oversight managing the process of how we put people on the payroll other than “I like this person! Let’s give them a chance.” We got it right about half the time, and it just struck me—there is this massive ROI available to us if we would figure this out. I felt compelled by it and, when the timing was right, I exited that opportunity and started my first business, which was an outsource recruiting provider to solve that very problem.


HC: How did Hireology come about?

AR: So, in 2004, I launched the outsource recruiting provider business and focused on companies that hired 50 or more people a year, with [an emphasis on] project-driven hiring, mainly for technology and professional services firms. The problem was my customers did not know how to conduct interviews, and they internally had no structure in place to handle this massive influx of prescreened candidates that we would follow on a pretty strict methodology.


In short, it became hard to make money because we were, effectively, unpaid consultants teaching our customers how to build a hiring process from scratch. We decided that we needed to build a system that our customers can use and [that is what we did.] We built a hiring system that was largely paper-based. For example, when a customer would need to hire account executives at eight locations across the Midwest, we would send candidates in—along with interview guides, so our customers knew what to ask, and they could make a decision that wasn’t based on their gut.


After a couple of years, customers started calling, saying they loved the interview system and asked to buy it. My answer was no. It was what made us different. Well, then 2009 came, and the world stopped hiring people for about eight months. I moved on from that recruiting business, moved that book of business to a staffing company, and I set out to commercialize the hiring concepts we had implemented—that is where Hireology came from.


HC: So, with your knowledge and research, tell us—what are the top things small business owners should look at when hiring employees?

AR: Based on the thousands of interviews we have scored over the years, we know what is going to make someone successful across various job categories. The data we have collected tell us there are four things that are critical and predict the percentage chance of success, no matter what the job is.


First is a documented record of success and prior-related roles—that’s the resume. What has this person done and how did they do it. That is what everyone knows to do—look at the resume. But, at the end of the day, a resume is just a marketing document. A candidate is not going to say to you, “I just achieved 60 percent of my goals, and, every other Friday, I took off at 2:00 to go home.”


Second is attitude. There are research studies that show that people with a positive attitude are much more likely to be top performers at work no matter what the job is. This research indicates that attitude is, more likely than not, an inherent trait—it is not something you can learn or change. Your general level of being positive or negative at work tends to remain stable. How do you detect that? Simply listen for the language. If you hear a candidate talking ill about a boss, talking ill about the company, generally showing a negative attitude toward peers, a boss, the market, that is a [red flag].


Third is the locus of control. That’s the degree to which someone attributes the things that they accomplish or outcomes to their own doing versus external factors. Someone with internal locus of control would use a phrase like “I should have done a better job understanding what you wanted from me on this project” or “I should have asked better questions.” An external locus of control would be a statement such as “You didn’t tell me you wanted that.” It is attributing the outcome—good or bad—to other factors. It is easy to listen for these. Those with an internal locus of control are more likely to be successful at work.


The fourth one is culture fit—simply the degree to which the candidate shares the norms and attitudes and beliefs of the company and has a genuine interest in the job.


QAadamrobinson_PQ.jpgHC: What tips do you have for an employer sitting across the table, in the middle of interviewing a candidate, to really get a sense of those four things?

AR: First rule of thumb is don’t talk. Let the candidate do the talking. In a one-hour interview, the manager should talk maybe 10 minutes. But, small business owners tend to get so excited about their company. What usually happens is a candidate walks in, introduces himself or herself, and the manager or business owner launches into a 45-minute monologue about what an awesome company it is, how great the opportunity is, how business is going to triple this year—and the candidate sits there and nods. Then 45 minutes later, he or she walks out of the door, and the owner walks into his partner’s office and says, “I love that guy!” That is not an interview.


Ask open-ended questions, and [avoid asking] leading ones. Here’s what I mean: a manager will ask, “Have you ever worked with Salesforce CRM?” and the candidate will say, “Yes, I have!” because it is obvious the manager is looking for someone who has worked with Salesforce CRM. Or an owner will ask, “This job requires lots of deadline-driven writing. Is that something you can handle?” What candidate will say no? Better questions are ones like “Tell me about the last manager you worked for?” or “Why do you think they decided to hire you?” or “On a scale of one to 10, what do you think your boss would have rated you?” After those kinds of questions, you will know everything you need to know.


If you don’t feel like you get a good answer, all you need to say is, “Tell me more about that.” The good information comes when you have dug two or three layers deep.


HC: What are the biggest mistakes small business owners make when in the hiring process?

AR: Talking too much is one of them, but not having an interview script is another. If you are interviewing five people and you ask five completely different sets of questions for the same job, there is no way to get a consistent read on your candidates. Follow a script and have the questions you are going to ask everybody.


HC: Do you advise folks to Google possible candidates?

AR: I would call this impression management, and there is a gray area here for employers as to whether or not it is legal to deny hiring somebody because of something you find online that may or may not be true. So, the law is still catching up. That said, almost everyone does it. I would say the best thing you can possibly do is to make sure you verify what your candidates tells you by doing two things—skills testing and order a background check. There is no better way to know. That includes having their former employment and education credentials verified by a third party and a criminal background check. In most cases, it will cost you less than $50. It is a $50 insurance policy. You have to do it.


HC: Let’s talk about when you have made a hiring mistake—do owners tend to wait too long to let someone go?

AR: The best possible result you can hope for is to get it right 80 percent of the time. Take some comfort that the best in the business are between 75 to 80 percent successful. In sales, that number is between 50 to 60 percent. What you should do is hire slow and fire fast, that is the cliché, but people do the opposite. It is not unlike the analogy for buying stocks—you tend to sell your winners too early and hold onto your losers hoping they will make a comeback. We do the same thing with people.


I like to quote Jim Collins here: “The moment you feel the need to tightly manage somebody, you have made a hiring mistake.” The moment you lose confidence that this person is not the person you thought you hired, you have probably made a mistake. When you confirm a pattern that is not working, have a structured conversation and have a performance conversation. Document it. That is step one in getting somebody out of the door in a humane and legally compliant fashion. What tends to happen in small businesses is it becomes very emotional. The business owner goes home frustrated, talks about it to everyone but the employee, and then one day, way too late, decides to let that person go, when really, he knew in 30 days it wasn’t a good fit.


HC: Working with 500 employees is very different than working with five people. What key advice do you have for a small business owner who is hiring for a smaller office or even the first few employees?

AR: It is often said that the first five hires define whether or not your company will succeed or fail. Those first hires? I call them “the utility players.” They can do just about anything cheerfully and be successful. Later, as you grow, you get into specialist skills. Hiring a specialist early on is not the way to go. Hire utility players with a good, “get it done” attitude.


You are going to spend more time with these employees than your spouse or your children. You spend most of your waking day with these folks. If nothing else, you have to like one another. This is where the culture fit comes in—it doesn’t matter if this person is the best on the planet at something if they are hard to work with. It just is not worth it. Ask yourself the question: “Would I fire the top performer if they are not a culture fit?” If the answer is no, at least you know that, but it is not ideal. If it is your first hire, and you are having disagreements and verbal confrontations that are not professional, move on.

PTvsFT_Body.jpgby Jen Hickey.




Whether you take on full- or part-time employees or a combination of both depends largely on the needs of your business and cash flow levels. Full-time employees tend to be more fully invested, but they also cost more in compensation and benefits. But part-timers tend to have higher turnover, which carry their own costs. Regardless of the type of employees you have, if they’re all treated as team players and rewarded for their efforts, then you will have a happier and more committed work force.




Definitions of full-time and part-time vary


While the Fair Labor Standards Act (FLSA) does not stipulate what’s full- vs. part-time employment, the U.S. Department of Labor has generally defined full-time as more than 35 hours or more per week and part time as less than 35 hours per week. But it has generally been left up to the employer to determine the number of hours that constitutes full and part time status at their individual place of business. However, beginning in 2014, the Patient Protection and Affordable Care Act (PPACA) (often referred to as ObamaCare) defines a full-time employee as an individual who works 30 hours or more per week or 130 hours per month. So, depending on the size of your business and whether you already offer health insurance to full-time employees, you may have to adjust the hours and/or status of your current employees and/or adjust the hiring practices of future employees.




Consider hiring the right candidate first, then figure out time commitment


Ira S. Wolfe has employed full- and part-time workers both while running a family dental practice from the late 1970s to the mid-1990s and as president of Success Performance Solutions, a provider of employment testing and applicant tracking software for small and medium sized businesses, since 1996.




“Hiring the most qualified person should be the top priority,” explains Wolfe. “Insisting on full-time or a set number of hours may preclude you from finding that person.” At his dental practice, Wolfe’s part-time hygienists typically included working mothers and students. As long as there were a set number of people in the office, he left it up to his employees to work out scheduling and coverage with each other. “I trusted my employees with a flexible work schedule and it worked,” notes Wolfe, who returned to the same arrangement in his subsequent company. Wolfe has one full- and one part-time employee at his consulting business, which went virtual in 2008 and now has employees in three states. “I’ve had very low turnover in my businesses,” Wolfe points out.




PTvsFT_PQ.jpgThe benefits question


While Wolfe’s part-time employees haven’t all received the same benefits as full-time employees, he has offered them benefits. “Part-time employees should not be treated as second-class citizens,” cautions Wolfe. Employees at his dental practice that worked a minimum of 1,000 hours annually were offered a retirement plan, and all part-timers are pro rated for holiday pay and vacation/sick days and offered performance and non-performance-based year-end bonuses. He further cautions against hiring part-time employees to save on health insurance and retirement benefits. “While it’s a cost, it could be a competitive advantage over businesses that don’t offer such benefits, as it’s a reason to stay,” he notes. According to a study by the Center for American Progress, it typically costs roughly 20 percent of a worker’s annual salary to find their replacement, which is often less than the added costs of health insurance. And depending on the industry and skill set required, it could end up costing a business even more in training time and lost production.




Of course, not every small business owner can afford to offer health or retirement plans to their employees. Leanne Carlson, senior consultant with LivingHR, which offers human resource services to small and medium-sized businesses, instead suggests adopting the concept of “total rewards,” which includes flexible scheduling, working remotely, incentive and wellness programs, and employee participation in decision making. “Such little-to-no cost benefits make employees feel valued.”




Tactics for bringing new hires on board effectively


Mitchell Weiss, adjunct professor of finance and board member of the University of Hartford’s Barney School of Business notes: “You should not bring on staff until you consistently have enough business to keep your employees busy.” Weiss, who is also a principal of M.D. Weiss LLC, a consulting firm to the financial services industry and small to mid-sized businesses, recommends streamlining processes before bringing on new staff. While small businesses tend to have flatter organizational structures, sometimes it’s just a matter of redistributing the work flow among current employees.




“Having ‘working’ managers and executives has a profound motivational effect on workplace culture,” Weiss points out. “If the demand is there, look to bring on someone part time with the possibility of taking on more hours or transitioning to full time if business picks up even more.




Run the numbers to understand the financial implications of hiring


Similarly, Carlson cautions against hiring full or part time without financial planning. “There are liability costs like worker’s compensation and unemployment and disability insurance to consider as well as compliance with regulations concerning record keeping and hiring practices,” notes Carlson. “You need to make sure you have enough cash flow to grow or at least break even.”




For his part, Wolfe follows a formula to help him determine whether he can bring on full- or part-time employee. “If I hire someone for $20,000, I need to generate $40,000 to break even at a 50-percent margin,” he explains. “While hiring should not be based entirely on numbers, there’s got to be a balance between staffing costs and revenue.” Your business will suffer if it tilts to heavily one way or the other.




Think about creative alternatives: contractors, freelancers, and trial periods


Dana Marlowe, principal partner at Silver Springs, Maryland-based Accessibilities Partners, a consulting service that helps government agencies and contractors to ensure compliance with disability laws, has taken a results-driven approach to staffing. “Rather than keeping within the confines of full-time and part-time, my business has had success with people defining their own status,” she explains. As the work is largely project based, Marlowe and her team can project how many full- and part-time employees and 1099s (independent contractors) will be needed. “All the contracts have been signed, so there’s no concern of any slowdown,” notes Marlowe. With long-term, multi-year contracts, they tend to bring on full-time help, depending on the skill set and nature of the work required, and independent freelancers for those shorter term projects if no one is available in house.




Because Accessibilities Partners follows a remote business model, they’ve been able to tap into an often overlooked pool of qualified workers. “Many of our employees who are technological testers and consultants are people with disabilities, which makes travel and communication difficult in a traditional office setting.” This has allowed the company to hire people from all over the country. “We believe in life/work balance,” says Marlowe. “As long as the work gets done on time and on budget, it doesn’t matter what time emails are sent.” This flexible scheduling allows her employees to attend to medical and family needs during “normal” business hours.




Chris King, managing partner of Jupiter, Florida-based Hometown Bridges, LLC, which offers in-class mobile sports education and nutrition programs, has followed a “try it before you buy it” approach to hiring since launching a side business two years ago. After a year of development and four months of testing his product, he brought on a 1099 subcontractor in September 2011. By year’s end, he had secured accounts with six schools. “If I wanted to take on more schools, I knew I needed more help to allow for that growth.” After 60 days, the subcontractor transitioned to full time. Meanwhile, King remained at his full-time job until his new venture was bringing in enough revenue to be viable. His full-time market manager now oversees anywhere from three to six part-time teachers working in 25 schools in Palm Beach County. King has also hired another full-time market manager to handle new accounts in another county and plans to expand into a third market by March 2013. “I will continue to bring on employees based on need and evaluate if I have the volume/finances to keep them on after their contracts are up.”




Not only did this save King money in terms of tax liabilities, it’s like a trial run to see if the person will be a good fit for the company. “It’s a built-in, no-stress exit strategy,” he explains. “While people like the idea of working with kids, not everyone has the knack for it.” King has let go a few 1099 employees because they weren’t interacting with the children naturally or picking up the curriculum. Additionally, one freelancer opted out after her contract period was up. “That’s exactly what I want to happen,” says King. “It’s the ultimate quality control.”




Disclaimer: The opinions expressed are solely those of the author and interviewees.  You should consult a qualified HR professional to assist you in developing and implementing sound personnel policies and practices.

Raises_Body.jpgby Robert Lerose.


Giving raises to employees has gotten more challenging over the past few years due to the dramatic upheavals in the overall economy. While there are some signs that conditions are improving and a recovery is underway, bumping up the salary of workers is still a complicated issue for some businesses. The easiest option is to simply postpone them, but is that the wisest action to take for the long-term health of your business? Here are three perspectives on how to think about the importance of employee raises.


Improves employee morale

Contrary to what you might think, raises are much more than simple financial transactions. Awarding pay increases can reverberate through an organization, pumping up spirits, and boosting productivity. "The first thing I tell business owners is that you need to keep morale up," says Rebecca "Kiki" Weingarten, a career and executive coach and co-founder of Atypical Coaching. "A raise will show that the employee is appreciated and that what they bring to the company is valuable."


This feeling is usually more acute in small businesses rather than large corporations, Weingarten notes, because owners are likely to interact with their employees more closely. "When you need a little extra effort, employees are going to be there for you because they feel that you've been there for them," Weingarten says. "These are the people who won't take off when they have a sniffle. It's amazing what a little good feeling will do."


Information and transparency about company policies are key to alleviating problems preemptively, Weingarten adds. A clear statement about how raises are determined can remove a lot of the questions employees secretly have and reduce their anxiety. Small business owners can give themselves wiggle room and relieve some of their own pressure, too. For example, the policy can state that yearly raises may be suspended due to a severe economic downturn or some other unforeseen calamity. The important thing is that employees know in advance what to expect.


"Think of it like a partnership," Weingarten says. "You have answered the question for them preemptively." Instead of stressing over their salary, employees will more likely channel that nervous energy into focusing on their work.


Encourages flexibility among workers

Clearly stated company policies on raises might work for some businesses, but not for all. Some small businesses have found success with a less formal, but surprisingly effective and personal way of handling pay increases. Case in point: Dinovite, a Kentucky-based manufacturer of all-natural pet products, founded in 2001 by Cindy Lukacevic and her husband, Ed.


Dinovite has 17 full-time employees, and the business is currently testing using temporary workers during peak periods. Full-timers are cross-trained to be able to handle different parts of the business—for example, a member of the marketing team may be pulled to work on the production line—and are expected to be flexible team players.


Raises_PQ.jpg"We hire rock stars who desire the best for Dinovite and come up with great ideas," Cindy says. "These are great people who take processes and make them better. We're asking for your brain and for you to give input. We look for people who are innovative and creative and enthusiastic. Those are the types of things we give raises for."


For example, when a key team member had to be replaced, Lukacevic knew who she wanted to move into that position—but she didn't want the employee giving up her existing responsibilities because she was doing such a good job. "So she kind of took on two hats and created this unique, eclectic type position. In return, she did get a raise," Cindy says. "She filled this huge hole, and it worked out really well for us."


Lukacevic and her husband set the pace at Dinovite, and they will quickly pitch in wherever and whenever the work needs to be done. Such flexibility makes them familiar with what's going on in the lives of their employees, and gives them the chance to intervene early in difficult situations. In one instance, an employee at the company was forced to take a second job because her family was splitting up. Lukacevic didn't want to see her work two jobs, so she gave her more money. "She's absolutely worth it. It filled a need in her life, and we were able to do it," Lukacevic admits.


For 2013, Dinovite is looking at implementing some kind of incentive program for employees. "When we're highly profitable, so is everybody," Lukacevic says.


Shows your appreciation in different ways

Like Dinovite, Paloma Clothing—a womens' clothing, jewelry, and accessories store in Portland, Oregon—doesn't have a formally stated policy on raises. But that doesn't drive employees away. In fact, it's just the opposite: employee retention has been at an all-time high for the past five years.


"We try to give employees what we call a three-percent cost-of-living raise every year when their annual review is up," says Mike Roach, co-owner of Paloma Clothing along with his wife. "We'll do bigger raises selectively where some employee has stepped up to greater responsibilities or given particularly outstanding performance. In the last six years, we've been largely preemptive by simply doing an annual review. Everybody knows when their review month is."


Roach emphasizes that it's important to give employees something to show your appreciation, even when times are rough. He was forced to put raises on hold during the worst of the recession in 2008–2009. In lieu of a cash bonus, he has given employees the equivalent of a gift certificate for store clothing and added extra vacation days to their allotment.


"Instead of thinking of yourself as the owner of the business, think of yourself as the coach of your employees," Roach suggests. "Recognize anything good that your employees do. That'll help them do more of it because they know you notice it."

Freelancers_Body.jpgby Robert Lerose.


Freelancers in the workplace are nothing new. Businesses have consistently relied on them under a variety of circumstances: to handle the overflow in a company's workload, to step in when key members of an organization take time off for vacation or maternity leave, or to provide a fresh perspective on a project. The game changer in this working relationship is technology. Today, thanks to the digital revolution, freelancers can specialize in many more services than a generation ago, and businesses can literally search the world for the best resources for their needs.


Still, even though the Internet has broadened the field for both sides, a measure of due diligence and open communication is recommended to forge a stable working relationship. We called on three experts from different realms of the freelance world to share their perspectives on working with outside service providers.


Get more done with a virtual assistant

A virtual assistant (VA) is generally someone who provides creative, technical, or administrative services from a remote, or offsite, location. Besides handling traditional chores such as transcribing and coordinating meeting schedules, today's VAs can give more hands-on support. For example, a VA can go through and prioritize your email before you wake up in the morning. They can write your blog posts, look after your Twitter and Facebook accounts, even update your website regularly.


Freelancers_PQ.jpg"They can do everything but bring your coffee," says Tawnya Sutherland, founder of VAnetworking, a social network for virtual assistants that she launched in 2003. "Once you work with them, you can outsource different things to clear up your schedule, so you can do things you love to do—whether it's marketing your product or producing more product, or whatever it is."


Evaluating a VA is no different than hiring a permanent, onsite employee, Sutherland says. Small businesses should check out the potential candidates’ websites, ask for references, and, of course, interview them—either over the phone or through webcam technology, such as Skype. Small business owners can also go through a network like Sutherland’s that lets them post requests on a job board.


A common mistake among small business owners is not maintaining clear, regular communications with their VAs. "If you're hiring them for five hours a month, you don't need a once a week meeting," Sutherland says. "But if you've got a fulltime VA, you need to be in contact with them, whether it's through texting, Skype, or a project management system."


The amount of contact is "a personal preference" that is hammered out between the VA and the client, according to Sutherland, depending on factors such as personality types, the number of work hours reserved, and the scope of the projects themselves. For example, hiring a VA to design a new website will likely require more contact than transcribing a recording.


Fees for virtual assistants are across the board, depending on their experience, type of services offered, and length of term. For example, you might be able to negotiate a discount rate for a VA who is on a monthly retainer. Other VAs offer package deals, such as writing a certain number of blog posts, editing and posting them, finding pictures for them, and handling comments—all for a fixed price.


"You're getting a full hour's work," Sutherland says. "If they get up to go to the washroom, they're not charging you for that time. What takes a secretary two to three hours to do with all the interruptions, a VA can do in an hour."


Distinguish your company with a graphic designer

Freelancers who provide creative services—such as copywriting or design—have always been prominent

in business, advertising, and marketing circles. Small businesses can find hidden benefits in working with them, such as getting an objective perspective on an inhouse project.


"It's good to have a fresh outlook," says Carrie Scherpelz, freelance graphic designer and sole proprietor of Design that gets results, based in Madison, Wisconsin. "[Creative freelancers] can help your business stand out and communicate well."


With a strong background in direct response, it's no surprise that Scherpelz is big on results when it comes to small businesses evaluating the work of freelance designers. For example, asking the designer how an ad performed or the number of responses that a brochure generated can help determine if they're right for your company.


Scherpelz collaborates closely with clients, especially new ones, to get a sense of what they want in a design. She'll give them samples to see what they like and what works for them, and then use those as a starting point before tackling an assignment.


"I don't believe in a big, glitzy presentation of three ideas that the client chooses from. Instead, I believe in rough sketches back and forth [to find] what they like. Then, I'll combine them in our second round into something. That way, it goes faster and you get a result that everyone's happy with."


For example, she recently submitted a wide range of logo roughs to a client, who told her by email that he didn't like any of them. Instead of replying by email, Scherpelz called the client and talked through the designs over the phone. During the call, the client realized that there was a logo that was close to what he wanted. Scherpelz added one word to the design and the client was satisfied. "It was kind of a mutual problem-solving exercise," she says. "It turned out there was even one in the first round of roughs that was very acceptable. But you have to get on the phone and say, 'What are you looking for? What are the specific things?' It can't just be through email."


Build your business with a bookkeeper

Like other outside service providers, freelance bookkeepers bring a fresh set of eyes that can help a business prosper beyond merely recordkeeping.


"As a business owner, you have so much going on in your head that it's really hard to see certain things in your financial setup that a freelancer can," says Susan Osborne, founder of SheBuildsABusiness, an online resource for solopreneurs.


She found that one of her small business clients was paying $50 a month for website hosting. Osborne created a new website for her and moved her to an $8-a-month hosting service. For another client who manufactures a diaper bag product, Osborne identified ways to increase her revenues and trim unnecessary costs. For example, she was able to cut her client's monthly cell phone bill from $200 to $160 by finding a plan with fewer bells and whistles.


"Like most small business owners, [my client was] so busy that she didn't have the time to look closely and think about these things," Osborne says. "But as the freelance bookkeeper, I do have the time. That's my job."


Whether your freelancer takes such an active role in your financial operations or not, it's imperative that you stay involved and refrain from turning over too much control. For example, business owners should still sign all checks and have the sole authority of moving money around from one account to another.


Osborne says that the accounting software can be handled in different ways. In most cases, the small business will supply the software—QuickBooks, she says, seems to be the preferred bookkeeping/accounting program—to the freelancer. In other cases, such as when the freelancer wants files stored in a cloud-based environment—which usually costs about $35 to $50 a month—some bookkeepers will work that into their fee and then handle paying for it themselves.

Many bookkeepers charge hourly rates ranging from $25 to $70. Freelancers who regularly handle a company's books can charge between $250 and $500 a month, according to Osborne. Business owners who want guidance beyond standard bookkeeping typically seek out a financial adviser or CPA, she says.


"Look at this relationship as a partnership or collaboration with another professional," Osborne says. "I approach it as how I can help them run their business better."


Where to find freelance help

In addition to the resources cited above, small business owners can also check out these sources of freelance help:


Elance: Businesses can post job requests for free, but they're charged a commission of between 6.75 percent and 8.75 percent of the project fee, payable upon approval of the work. Mostly for creative services and IT-related jobs.


Guru: Markets itself as providing technical, creative, and business specialists. Freelancers are charged both membership and transaction fees to be matched to the right business project. 


Freelancer: Bills itself as the largest outsourcing marketplace in the world with over 6 million service providers where freelancers bid on assignments.


oDesk: Lets you post jobs, in either a public or private forum, and interview freelancers for free, but charges a 10 percent commission on the fee for assigned projects.

CleaningHouse_Body.jpgby Heather Chaet.


Whether your office is in the corner of your basement or takes up three floors in a downtown high-rise, maintaining an organized space to conduct business is just as important to your bottom line as that marketing plan. Think about it: if you can't find that marketing plan under a pile of folders on your desk, how can you implement it? Even small organizational tweaks to your office can lead to big gains in business productivity, higher profits, and increased growth.  


Look at what doesn't work first

Before you buy new filing cabinets and white boards, figure out how you and your company work best by getting rid of what doesn't work. “Declutter your office leaving only the items you absolutely need. This can save you hundreds of dollars in unnecessary purchases and will
ultimately give you more space,” says certified professional organizer (CPO) Janet Bernstein of Janet Bernstein Organizers in Philadelphia, Pennsylvania. After you’ve decluttered, think about how you operate and stay organized on a daily basis—and how you don’t. Realize what kind of system will work best for you by examining how you think. “If you're very visual and tend to forget where things are once placed in 
a closed cabinet or drawer, then consider [equipping] your office with open 
shelves or cubbies. Everything can still be organized if items are
 appropriately stored and labeled,” says Bernstein,  “Investing the time to strategize what you really need and where things 
should go will pay huge dividends in time, money, and productivity.”


Zone and conquer

Whether it is your desk or the company storage closet, make sure everything has a “home.” Denise B. Lee, CPO and organizer coach
 who owns Clear Spaces in St. Louis, Missouri, suggests splitting your desk top into zones. “[Have] a corner for storing projects—that's where a vertical stacker or
file box goes, [Then, a] corner for the phone with a note pad next to it for jotting notes, and a corner for the open planner so you can see what your day holds,” explains Lee. The blotter, or space right in front of your chair, Lee adds, should be a sacred place reserved for your current priority. “Only the project you are
 working on can go there, and it can only hold one project at a time,” she adds.


Within your office’s storage areas and closets, divide shelves into smaller zones and label where everything should go, a small effort that will save you time and money. “Having 
a designated ‘home’ for every item will save you from re-buying multiples
 of the same. Imagine how much time you will save when you no 
longer need to frantically search for the stapler or the ink cartridge,” says Bernstein.


CleaningHouse_PQ.jpgPut information where you need it

You need information to complete current projects and to know what is coming next. It’s essential to have that timeline, goal, or project outline where you can access it easily. “A big white board that is within sight of the desk is a great place to list all projects with milestone and deadline dates,” says Lee. Melissa R. Monti, organizer and owner of ShipShape in Lancaster, Pennsylvania, helps her clients keep their projects accessible while on the go. “Have a ‘To Read’ portable file where everything you need 
to read goes. Keep it on or right by your desk [so] it’s easy to
 grab on the way out the door to a conference, a train commute, or a
doctor's appointment. It also keeps all the loose articles marked ‘to read’ from 
being scattered all over the desk,” Monti points out. With information at your finger tips and organized in a few central locations, owners and employees can stay focused on what’s important, maximizing their energy and time.


Keep it simple

If your filing system is too complicated, you won’t use it—and if that happens, then one or two files carelessly stacked on top of each other suddenly breed into a colony of paperwork scattered all over the floor. To combat this, Monti suggests color-coding. “Choose a color for each primary business function—red for PR, blue for
 accounting, green for HR, purple for training, and so on,” says Monti. Renee Kutner, chaos advisor and owner of Peace by Piece Organizing in 
Atlanta, Georgia, has another filing method mantra. “Sort all of your papers by verb; file them by noun,” instructs Kutner, “As long as you
still have an action to take with a particular piece of paper, define that
 paper based on what needs to be done (i.e. read, pay, call, etc.), not 
based on what it is (i.e. bill, invitation). Once you have taken the 
necessary actions, then file it away
 based on what it is so you can find it again later.” A key element to successful organization is making the system you choose a company-wide system. If everyone follows the same organizational mantra, a seamless flow of work is ensured in situations where someone takes over a project or transitions into a new role, saving time and resources.


Take the home out of home office

Kutner advises owners who work at home to separate the home from that office area, a strategy many small businesses in large, shared office spaces can use as well. “Even if it is a multi-purpose
 space, try to create a separate ‘work zone’ within the room. And
 then protect it. A home office that is allowed to fill up with kids' toys or other non-office related items can quickly
 become too distracting of an environment in which to effectively work,” Kutner notes, emphasizing every type of office space should be well-stocked. “When people don't have what they need in their offices, they end up
 getting up multiple times during the day to go retrieve items from other
 areas of the home or space. Each time leads to a potential distraction,” Kutner says. Distraction and wasted time translates to decreased focus and productivity, all of which can be avoided with solid organization.

Wellness_Body.jpgby Iris Dorbian.


One of the biggest health hazards is ignoring the mind-body connection. Stress and anxiety can exact a punishing toll on one’s health, leading to serious ailments. In the workplace, lowered employee morale and absenteeism can result. Although many small business owners are aware that their employees’ health is critical to productivity, few are doing anything about it.


According to a recent report commissioned by the National Small Business Association and Humana Inc., a heath insurance provider, 93 percent of employers say that employee health is important to the bottom line; however, only 22 percent of small firms offer wellness programs. The reason cited is a lack of confidence in their ability to implement such initiatives for employees.


It’s a dichotomy that has unsettling consequences. Consider this: According to the Bureau of Labor Statistics, unplanned absences among workers are costing American businesses an average of 2.8-million workdays each year, translating into a loss of $74 billion. In this vein, small business owners have a lot to gain by instituting best practices that can improve the health and wellness of employees, while increasing overall productivity and reducing health care costs. But how can every entrepreneur—even those who lack the financial resources to execute ongoing programs—encourage their staff to adopt a healthier lifestyle?


Wellness_PQ.jpgFoster healthier eating habits

Just like a guitar or a piano, your body is an instrument that needs to be maintained and fine-tuned on a regular basis. Outside of exercise, one of the best ways to achieve this is to eat a healthy, balanced diet, which includes daily intakes of protein, fruits and vegetables and avoidance of processed and deep fried foods.


Rosalie Moscoe, a Toronto-based nutritional consultant and stress relief expert who has worked with numerous small businesses, suggests having a “healthy eating” day.  “Each employee can bring in a healthy snack in the form of nuts, fruit, or homemade muffins with low sugar and whole grain flour,” she advises. “Or they can buy something from a health food store.  Keep in mind that sugar lowers immune function, so it’s best to avoid all sugars when you are sick.”


But you don’t need to wait for specific themed days. Stock up your work kitchen with all sorts of healthy food, ranging from yogurts to protein bars. Also, include blenders for employees to make smoothies and similar drinks using fresh fruit. Joel Gross, founder and CEO of Coalition Technologies, a Los Angeles and Seattle-based web design and marketing firm, adheres to this practice as routine.


“My employees are valuable assets and keeping them healthy and productive is a high priority,” he says. In addition to providing employees with an abundance of high-protein, healthy snacks, Gross also likes to keep multivitamin packs, Vitamin-C chews, zinc tablets and other nutritional supplements available and in the company kitchen.


Promote exercise and non-sedentary activities

Having a healthy and fit body is integral to maintaining good wellness habits and keeping stress at bay. Gross notes that small business owners can practice what they preach by offering free memberships to a local gym as a employee benefit or by encouraging their staff to partake in non-sedentary activities throughout the day, like an invigorating walk around a nearby park. (Gross does both.) Similarly, many health insurance plans now offer discounts to members who enroll in gym memberships


“I want to encourage [my employees] to get out, exercise and work off the stress that can build up working in an office,” Gross explains. Not all employees follow his advice, but, he notes, “I am constantly looking to enroll a greater number” to take advantage of the gym membership.


Punit Dhillon, CEO of OncoSec Medical, a two-year old San Diego-based biotech company that develops treatments for advanced-stage skin cancer, goes one step further: He keeps several “communal” bikes in his office to encourage his staff of 10 to use them during lunch. He also encourages them to take midday walks or runs, even going outside to play a game of frisbee.


Dhillon feels these are necessary supplements to what his company does. “Because of the program we’re working on, we’re trying to complement that with a positive environment, which comes down to not only building awareness of having a healthier lifestyle, but employing practices associated with it, like exercise and physical activity,” he explains.


Improve employee work/life balance

Very often absenteeism may be attributable to an employee having to handle responsibilities at home, which a stringent work schedule might not allow. Give your staff the option to work from home during those days when they feel their presence is urgently needed or create a schedule that’s more flexible. 


Initiate wellness seminars

Invite an expert from a local spa or wellness center to come to your workplace to share health-related tips. This can run the gamut from relieving stress and getting better sleep to boosting nutrition and improving time management. “These are all great topics to help boost immunity and morale,” says Moscoe, who is the author of Frazzled Hurried Woman! Your Stress Relief Guide to Thriving…Not Merely Surviving.


Defuse an intense work environment with laughter

This doesn’t mean you should use important meetings as a pretext to do stand-up, but if you can incorporate some levity into the work proceedings, then do it.


Lani Anderson, a Los Angeles-based holistic practitioner who has been working with small businesses for 10 years, cites a client of hers that always includes a humorous anecdote in their customer newsletters. “He and his staff share funny jokes and stories for inclusion,” she says. “Humor brings great health benefits and this team effort brings staff together, like a family, which is the way many in small businesses feel and it's healthy.”


Maintain cleanliness

Many small business employees work in close quarters, meaning infections like colds and the flu can often spread quickly. So, it’s important to keep high traffic areas in your workplace—especially shared surfaces like doorknobs, telephones, and other commonly-used items, as clean as possible as a preventive measure. Of course, a good way for this to happen is through the full participation of employees. But an owner should also take an assertive role here.


“Send expert health tips to your employees electronically and post reminders on message boards,” adds Moscoe. “ You won’t want to sound like their mothers, so try and keep it light and informative. Let your staff know that they should stay home when they are sick.”


Just because you have a small business doesn’t mean you can’t successfully inaugurate and implement a health and wellness program for staff on a budget. Whether it’s loading the kitchen with nutritious snacks or encouraging employees to take a work break with a walk around the block, these measures can be critical to boosting employee morale and immunity. Understanding the mind/body connection is critical to productivity and success. 

CustomerEruption_Body.jpgby Erin McDermott.

Kristen Carney has felt the wrath of an angry customer. It took up a full page, was single-spaced, and “a little bit of a rant.”


The customer had signed up for the free beta version of Cubit Planning, an online demographic-data tool from Carney’s business, which she co-founded in Austin, Texas. The site had been upfront that the tool would turn into a paid service once it left beta—a detail that apparently went unnoticed by this client once that shift came. But she still wanted to keep this customer.


“We were targeting a very niche audience,” Carney says. “There weren’t many folks that we were going after. So to have one of our exact customers—someone who we wanted to be a long-term customer—be unhappy with us about the switch to a paid tool, we had to show him that we would go out of our way to keep him happy.”


CustomerEruption_PQ.jpgSo Carney not only apologized, she even sent cookies as a peace offering, along with a letter that said she understood his frustration and an offer of a way to move forward. It was a gesture that resonated with the customer, who has continued to mention it even now, three years later, whenever they work on projects together.


“We got such a great reaction from him from that batch of cookies,” Carney says.


It’s a perennial issue for anyone in business: How to deal with a customer who’s upset. Whether in person, on the phone, or even online, these situations can be volatile. So, how can you ensure that you and your employees who deal with customers know how to react properly when a client explodes?


For a small business owner, getting this right is critical, says Susan Steinbrecher, a management consultant, executive coach in the Dallas/Fort Worth area, and author of Heart-Centered Leadership. The reason: Everyone on your staff is watching you for cues on what the appropriate response should be.


With less staff around, “everyone is watching how you handle the customer,” Steinbrecher notes. “Did you cuss them out? Did you call that person a loser, or ‘Can you believe that jerk?’ If you do that, it’s over. You’ve just given them full permission to treat everybody that way. Leaders don’t know half their impact. They are on stage at all times.”


So where to start for your small business?


The first step is listening, giving the customer undivided attention and hearing out their issue, showing empathy for the pain they experienced—even if you might disagree with them. Do not interrupt them, emphasize that you are there to help, and that you understand their frustration. Steinbrecher frames the situation in psychological terms.


“Every individual has two primary needs,” she explains. “One is ego and its personal needs. The other is the practical need. The ego is the need to feel valued, appreciated, cared about, listened to, empathized with, and involved. The practical side is ‘What do I need to get a problem solved.’”


In customer-service situations, early problems arise when the person representing the company cuts too quickly to practical matters and overlooks the importance of soothing a bruised ego, or what Steinbrecher calls “ignoring one side of the equation.” 


“When you try to get right to the point, ignoring all those ego needs, it creates all kinds of havoc,” she says.


From there, simply ask what would make the situation right. Again, by putting the customer in the “driver’s seat,” they feel in control and will often ask for less than what you would have offered.


For her clients, Steinbrecher has devised the “HELP” method, an easy-to-remember acronym that outlines the steps she says are necessary to follow when you’re faced with an unhappy customer. For staffers, it should be displayed prominently to encourage everyone to follow it:

H-Hear the customer out

E-Empathize and apologize in that order

L-Lead the customer to a resolution

P-Provide a responsible course of action

Of course, there is that small minority of customers for whom no answer will ever suffice, or whose ultimate aim is, yes, to get something for nothing. These disgruntled, vocal few are often the reason that businesses have to create these procedures in the first place.


And that’s its own delicate balance: how to know when to let go of that difficult customer. “While the vast majority of people are very reasonable, there are certain customers that, no matter what you do, you’ll never make them happy,” says Bruce Specter, a business development consultant based in the Reno/Lake Tahoe area. “Sometimes you have to be comfortable with firing customers.”


As a possible solution to having a system to handle these complaints, Specter points to software that businesses of all sizes are now using for this task. Once implemented, these systems can deliver information about the behavior of certain customers—for example, individuals who exacerbate complaints to justify asking for unwarranted upgrades or unreasonable discounts or freebies.


“Looking at the data, you might say ‘Man, this guy’s come back a few times, and he always wants something for free,’” Specter says. “At that point, that’s a bad customer and you’ve got to be able to just let them go, from that perspective.”


To illustrate his point, Specter cites an example from business author Patrick Lencioni’s recent book, The Advantage: Why Organizational Health Trumps Everything Else In Business, In one of its anecdotes, the book recounts a letter Southwest Airlines’ CEO Herb Kelleher received from an angry frequent flier. The customer was demanding that he fire a flight attendant who had joked about the possibility of a water landing during the safety demonstration, adding that she’d stop using the carrier, known for its culture of fun, if she wasn’t satisfied. Kelleher’s succinct response to the disgruntled consumer: “We’ll miss you.”


But aside from an occasional bump in the road, there’s hope with the majority of customers.


“Yes, there are going to be those outliers,” Steinbrecher says. “But most people, if you have heard them out, if you have empathized appropriately and apologized, and sincerely offered to make things right, they’ll come down enough and be more reasonable, even if they didn’t start out reasonable.”

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