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5 Posts authored by: Carol Roth

Carol Roth Headshot.pngWith unemployment holding steady and workforce participation rates historically low, retaining employees is top of mind for businesses of all sizes but particularly for small business owners.

 

Economic confidence ranks among the highest levels recorded in the last five years for small businesses. In fact, according to the Spring 2017 Bank of America Small Business Owner Report released today, a majority of entrepreneurs (52 percent) are confident that the national economy will improve over the next 12 months – up a staggering 21 percentage points from just six months ago (31 percent in fall 2016).

 

This increase in optimism, however, has yet to translate into positive movement on revenue expectations. This may explain why small business owners’ plans to hire have dipped, according to the Small Business Owner Report. Only 18 percent of small business owners plan to hire in the year ahead, down 7 percentage points from the fall 2016 report.

 

CLICK HERE TO READ MORE ARTICLES FROM SMALL BUSINESS EXPERT CAROL ROTH

 

Instead, this spring, more entrepreneurs say they are focused on retaining existing employees (73 percent). So, given this backdrop, how can your business make sure that you are retaining your best employees?  Here are some of my best tips:

 

Get buy-in on your mission.

Having something that the team is working for together, other than just their paycheck, makes employees feel more important and fulfilled. Make sure that you have communicated what your mission is and have gotten buy-in from your employees, so they know the big picture and feel good about doing the work.

 

Listen to them.

In almost every survey about what is important to employees, having their ideas, feedback and perspective heard ranks higher than compensation. When you welcome and act on employee ideas and suggestions, your employees become partners who recognize their value to the company as they work alongside you to realize shared goals.

 

RELATED ARTICLE: HOW TO REPLACE YOURSELF AS CEO OF YOUR SMALL BUSINESS

 

Make sure to listen to their feedback and acknowledge them as well – the value of these soft incentives is highly underrated and easy for small business owners to embrace.

 

71473407_s.jpgMake them heroes.

A job well done deserves praise and your employees never mind being called to your office to receive kudos. But, when employees receive your commendations at a company meeting or in front of a customer who benefited from their hard work, they clearly see their true value. Naturally, public praise helps inspire all employees but it also lets your customers recognize how the depth of your products and services helps them get the attention and consideration they deserve.

 

Give them flexibility.

These days, flexibility is almost priceless to employees in terms of a benefit, while not costing you dollars out of pocket. Flexibility could range from working remotely – including from home, working non-standard business hours (I have one employee who prefers to start the workday at noon and work into the evening), having a “get work done but not keeping track of hours” schedule and more.

 

If you can be flexible, you can add a lot of value to employees who won’t be able to find that valuable benefit elsewhere.

 

Give them new opportunities.

While big businesses need to put their employees in specific boxes and keep them there to get their allotted portion of the job done, small business owners have more flexibility to let their team members wear more hats. Employees can feel a sense of satisfaction and accomplishment if you allow them to be more involved in different stages of a project or the business overall. As their abilities grow from new experiences, their investment in the company’s interests will grow, as well.

 

Also, make sure to promote from within. When a key position opens up in your company, always look first to the members of the team that work hard for you every day. Granted, some positions may require very specific educational requirements not available in your organization, such as a degree in accounting.  But remember your staff already has a solid foundation and a deeper understanding of your company culture and how things work. You can’t teach loyalty and dedication, and these traits grow more when you reward staff with advancement.

 

Give a bonus for overall performance.

While it is important to reward individuals for their own accomplishments, don’t forget to keep them focused on the team and the big picture. If the company does well, allow them to participate in that success. This can be a cash bonus or even an outing to see a local sports team play. Having them incented on an individual and company level creates even more loyalty to your business and its efforts.

As a small business, your team is a critical part of your success, so make sure to implement these tips –  along with regularly checking in with your employees to make sure that they are happy so they stay and grow with you.

 

Click here to read the spring 2017 Bank of America Business Advantage Small Business Owner Report report.

 

 


 

About Carol Roth

Carol Roth is the creator of the Future File™ legacy planning system, “recovering” investment banker, billion-dollar dealmaker, investor, entrepreneur, national media personality and author of the New York Times bestselling book, The Entrepreneur Equation. She is a judge on the Mark Burnett-produced technology competition show, America’s Greatest Makers and TV host and contributor, including host of Microsoft’s Office Small Business Academy. She is also an advisor to companies ranging from startups to major multi-national corporations and has an action figure made in her own likeness.

 

Web: www.CarolRoth.com or Twitter: @CarolJSRoth.

You can read more articles from Carol Roth by clicking here

 

Bank of America, N.A. engages with Carol Roth to provide informational materials for your discussion or review purposes only. Carol Roth is a registered trademark, used pursuant to license. The third parties within articles are used under license from Carol Roth. Consult your financial, legal and accounting advisors, as neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice.

 

Bank of America, N.A. Member FDIC. ©2017 Bank of America Corporation

Carol Roth Headshot.pngAs a deal maker with a couple of billion dollars of completed deals, and at least hundreds of millions worth of deals that fell apart for some reason, I know firsthand that deals are a big business.

 

Given that business growth is often via new customers and that finding new customers is a big component of that, turning to your network can be a great source of small introductions and big deals.

 

If you want to enhance getting such referrals, or perhaps if you have a strong network to be monetized, you may want to formalize giving or getting finder’s fees. However, the structuring of finder’s fees is both an art and a science. Here are some things to keep in mind to make your referrals and finder fee initiatives more successful.

 

CLICK HERE TO READ MORE ARTICLES FROM SMALL BUSINESS EXPERT CAROL ROTH

 

What is the opportunity?

 

I am usually happy to pay a finder’s fee if it’s a business that I would not have been able to get to on my own and the nature of the finder’s relationship adds significant value to my business. I also request finder’s fees in the opposite capacity.

 

However, not every lead is worthy of a finder’s fee. If there isn’t a substantial pre-existing relationship with the lead (i.e., you don’t have a strong or long-term relationship) or if the introduction is more of a lukewarm lead (i.e., a non-exclusive introduction or one that the party being introduced has to compete substantially for over lengthy periods of time), then asking for a fee may not be appropriate. I also often don’t ask for a fee if the value of the customer or deal isn’t that substantial in size.

 

Also, if the person you are referring to or who gave you a particular lead is a contact that you trade leads with on a regular basis or someone who has brought business to you in the past, you may decide to forgo fees and instead just engage in doing your best to send each other business on a go-forward basis.

 

You further need to consider whether the person who is providing the lead is a finder or deal maker as a part of their businesses. If they regularly get compensated for being a finder or deal maker, this sets up more of a case to compensate that someone who does not usually get compensated in such capacity.

 

Additionally, if it’s a relationship where they won’t accept a finder’s fee or it’s not appropriate, consider sending a small token of your appreciation when you receive payment from your new client or customer, such as a gift card, as a way to acknowledge and appreciate the referral.

 

RELATED ARTICLE: WHY YOU NEED A BUSINESS PARTNER

 

What is your role?

 

The reality is that a deal usually has many steps, ranging from identifying many leads to contacting them to putting together materials to structuring and negotiating a deal. A typical “finder’s fee” means you hand-off the lead and you are done, so you are only providing partial value to the process. That being said, there are instances where it makes sense to check-in and see if you can provide some minor value or assistance.

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The bigger your role and the more value you add should be reflected on both sides.

 

Put it in writing

 

Being very clear about agreements upfront almost always serves both parties well. You can keep it simple, but be clear on role (if it’s just an introduction or if there is more work being done), whether the introduction covers one specific project or all projects over a period of time and how fees are calculated.

 

Calculating the finder’s fee

 

The question I get asked more than any is “what’s an appropriate finder’s fee?” My answer: “it depends.”

 

While the value of leads in many industries can span widely, there are benchmarks from 5-35% and higher. For a customer-based introduction, I typically do 10-20% of the net revenue (revenue minus any direct costs) that the provider receives if I am not involved at all or just minimally with some upfront strategy. Sometimes, I ask for a bit less if I have a strong pre-existing relationship, as well.

 

If it is a deal-based finder fee, I would typically ask for 10-20% of the fees an investment banker would charge for the transaction. So, if they charged a 5% fee, my fee would be 10-20% of that.

 

There are many that suggest using the “Lehman formula” as a benchmark. In my opinion, that formula is meant to determine the payment schedules for M&A business advisors for significant transactions and is not appropriate for a finder’s fee. You would only, as noted above, get a fraction of that for being the finder. As a side note, I also think that it’s generally a good idea to proceed with caution with anything named after a company that is no longer in business!

 

In addition to the percentage charged, you need to figure out what to base it off of and for what time period. For a customer-fee, as noted above, I based it off of the net revenue they receive, usually over just a couple of years, as it’s very cumbersome to keep track of that indefinitely, and while being a finder has value, it’s not invaluable, so to speak.

 

The bottom line is that both parties need to feel comfortable that the fee reflects the value of the referring person’s brand and is an appropriate amount for the receiving person to spend for what is, in effect, a sales lead.

 

So, whether you want to be paid as a finder or use them to grow your own business, be clear and thoughtful with the above advice for guidance – and remember there’s never a wrong time to be helpful to someone else.

 

About Carol Roth

Carol Roth is the creator of the Future File™ legacy planning system, “recovering” investment banker, billion-dollar dealmaker, investor, entrepreneur, national media personality and author of the New York Times bestselling book, The Entrepreneur Equation. She is a judge on the Mark Burnett-produced technology competition show, America’s Greatest Makers and TV host and contributor, including host of Microsoft’s Office Small Business Academy. She is also an advisor to companies ranging from startups to major multi-national corporations and has an action figure made in her own likeness. 

 

Web: www.CarolRoth.com or Twitter: @CarolJSRoth.

You can read more articles from Carol Roth by clicking here

 

Bank of America, N.A. engages with Carol Roth to provide informational materials for your discussion or review purposes only. Carol Roth] is a registered trademark, used pursuant to license. The third parties within articles are used under license from Carol Roth. Consult your financial, legal and accounting advisors, as neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice.

 

Bank of America, N.A. Member FDIC. ©2017 Bank of America Corporation

From the day that you first decided to start a small business, you have been the lifeblood behind every activity. You've done it all – making every decision and watching over every operation. But, what happens next?

 

Whether you want (and need) a vacation, fall ill, want to retire or maybe just find someone to take the business to the next level, you want to know that the business will be safe and prosper. You need to have confidence in someone else who can take on the mantle.

Carol Roth Headshot.png

Trusting someone else to take over for you is a necessity, even if it's one of the toughest aspects of small business ownership.

Here are six things you can do to make sure that everything gets done to your satisfaction when you can't be there.

1. Identify likely candidates

Do you have a second in command who is always there to lend you a hand in a pinch? That person may be the logical person to take the reins, but don't ignore some candidates that are less-obvious choices.

You might be impressed by less-visible employees who consistently make suggestions on efficiency and cost savings. Others may be going to night school on their own dime to learn business management. You might notice that team members turn to one person within their ranks for leadership. So, while one person who is gunning for the job may be the perfect choice, cast a wider net to make sure that you find the right new you.

Also, look outside the business to others who have been in similar industries, have strong management styles and share common values with you and your business.

Related article: 8 Different Types of Small Business Management Styles – What’s Yours?

2. Learn what you know

Don't expect to jump immediately into the training process. You've been doing the job for a long time, so chances are you take the details of your job for granted and may forget to mention them to a CEO-in-training.

Do you have a list of people to notify when you issue a new policy? If you change the color of a product that you purchase from your primary vendor, do you have to make sure that backup vendors can also accommodate the change in a pinch? Do you know of a small glitch in the production process that affects the delivery date you promise to customers?

There's a reason why they say the devil's in the details. Make sure that you know every one of them before you try to teach anyone to step into your shoes.

3. Do some hand-offs – and coach

You're no different than every small business owner who has an overabundance of work. Wouldn't it be nice to go home at 5 pm once in a while? You can accomplish this by handing off some of your responsibilities to the candidates you selected.

Whether you hand over bookkeeping tasks, managing human resource issues or even making more decisions, don't expect speed or perfection at the outset. In fact, don't expect to get home by 5pm right away either. Since you must initially take on the role of trainer, you absolutely need to resist the temptation to say "I can do it more quickly myself."

Be prepared to teach, supervise and answer countless questions. But, your efforts will help you gain more free time eventually — while identifying which candidates have the skills and aptitude as leaders.

Click here to learn more from our small business expert Carol Roth

4. Be a true mentor

Step-by-step training alone does not create head honchos. Your protégé needs confidence that can only be created through a full mentor relationship. You need to establish a friendship that encourages honest two-way communication.

Your candidate must be comfortable to readily express concerns about anything, including taking the top leadership role. You need to start the conversation to get the ball rolling. Telling your mentee stories about your own experiences making difficult decisions or handling tough customers is better than just asking if there are any questions or concerns.

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Also, communicate to other staff about why you have confidence in this person and why you believe that even if their style is different, they will be an ideal person to lead the company’s continued success.

5. Go away

You can't predict someone's abilities until you test them. While you probably shouldn't plan a six-month world tour right away, all of your mentoring efforts have certainly earned you a week on a beach sipping daiquiris. Don't be overly available for questions. If you can't leave your devices at home, at least leave them in your hotel room. Your protégé needs the opportunity to exercise decision-making muscles.

If you are bringing in an outside candidate, consider moving to an executive chairperson role so you still have some say, but the day-to-day rests firmly in the other person’s camp.

6. Don't expect a clone of yourself

The objective of replacing yourself is to ensure that your company will continue to thrive without you at the helm for a week, months or forever. Your replacement's role is to get the job done — not to get the job done your way. Every person has individual ways of reaching specific goals. If you prepare them properly, don't be surprised if you learn a few new tricks from them along the way.

About Carol Roth

Carol Roth is the creator of the Future File™ legacy planning system, “recovering” investment banker, billion-dollar dealmaker, investor, entrepreneur, national media personality and author of the New York Times bestselling book, The Entrepreneur Equation. She is a judge on the Mark Burnett-produced technology competition show, America’s Greatest Makers and TV host and contributor, including host of Microsoft’s Office Small Business Academy. She is also an advisor to companies ranging from startups to major multi-national corporations and has an action figure made in her own likeness. 

Web: www.CarolRoth.com or Twitter: @CarolJSRoth.

You can read more articles from Carol Roth by clicking here

Bank of America, N.A. engages with Carol Roth to provide informational materials for your discussion or review purposes only. Carol Roth is a registered trademark, used pursuant to license. The third parties within articles are used under license from Carol Roth. Consult your financial, legal and accounting advisors, as neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice.

Bank of America, N.A. Member FDIC.  ©2017 Bank of America Corporation

I am in a fortunate position to receive a lot of requests – both from people I know and those I have never met – to “be their mentor.” While I am always flattered that someone wants to learn from me, the cold ask is not a method I advocate for finding the mentorship you need.

 

Instead, follow these five steps:

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1.     Know what you are looking for and when

 

Finding mentors is not supposed to be like collecting baseball cards. You don’t just go after every high-profile business person you meet. Instead, think about what kind of information, connections and assistance will be helpful for you right now. This will likely change during the course of your business – a great mentor for when you are starting out will likely be different than the one when you are thriving. So, be really clear on what you need to help you find the best fit.

 

2.     Shoot low

 

Yes, everyone would love Sheryl Sandberg, Richard Branson and Warren Buffett as a mentor. But not only are they not likely the best fit for what you need, they are really busy and most likely have no connection to you.

 

Look to people in your network that have the relevant information you are seeking. You might find it is a peer who has walked that path before, or an immediate boss that’s most likely to add value to your professional development. 

 

3.     Keep it informal

 

True long-term mentoring comes out of growing a long-term relationship. So keep your sights on someone you know or have met. Then, instead of asking someone to “be your mentor,” which sounds very formal and possibly like a big obligation, make a more reasonable ask: “Do you have time to answer a few questions or grab coffee?”

 

Most people advocate dating before you get married. The same goes for mentors. As the relationship grows, it may resemble a mentor-mentee relationship, or you might just get a few valuable nuggets and move on.

 

4.     Check in and update

 

Carol Roth Headshot.png

Don’t expect someone who “mentors” you to chase you down. If someone provides you great information, connections or advice, keep them posted on your progress from time to time as you advance. Then, if it seems appropriate, you can seek additional counsel.

 

5.     Seek five-minute mentors

 

I personally have never had a permanent mentor that has guided or shaped my career. Rather, I have learned from a series of individuals of whom I asked questions or made connections along the way.

 

Don’t pressure yourself to just find that mythical one person who will take you under their wing and make you a billionaire. That’s on you. However, there are plenty of daily learning opportunities from people who have been successful (and have failed). Take the initiative to identify those learnings and build upon them.

 

About Carol Roth: Carol Roth is the creator of the Future File™ legacy planning system, “recovering” investment banker, billion-dollar dealmaker, investor, entrepreneur, national media personality and author of the New York Times bestselling book, The Entrepreneur Equation. She is a judge on the Mark Burnett-produced technology competition show, America’s Greatest Makers and TV host and contributor, including host of Microsoft’s Office Small Business Academy. She is also an advisor to companies ranging from startups to major multi-national corporations and has an action figure made in her own likeness. 

 

Web: www.CarolRoth.com or Twitter: @CarolJSRoth

 

Bank of America, N.A. engages with Carol Roth to provide informational materials for your discussion or review purposes only. Carol Roth is a registered trademark, used pursuant to license. The third parties within articles are used under license from Carol Roth. Consult your financial, legal and accounting advisors, as neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice.

Bank of America, N.A. Member FDIC.  ©2017 Bank of America Corporation

One of my favorite things to watch on TV, after sports, are food-related competition shows like those on the Food Network. Even though I don’t cook (unless you count the microwave), I love to watch the endless parade of amazing chefs and scrumptious food.

 

Surprisingly, I have found a lot of business takeaways from this engaging programming.  Here are a few important business lessons you can learn and apply in your own small business.

 

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Do One Thing Well: In virtually every Food Network competition, one competitor tries to show-off by preparing a food item “multiple ways.” Whether the main ingredient is steak, fish, chicken, shrimp or even apples, when I hear the contestant say they are going to serve it two or three ways, I cringe.  By spreading your focus amongst multiple dishes, none gets your full attention.  And in every single case, while one of the preparations turns out well, the others are a miss.  Had the contestant just focused efforts on one preparation, they would have helped, not hindered, their chances to win.

 

You can take that lesson and apply it directly to your business. Trying to do too many things means you are doing none well and quality will suffer.  So resist the temptation to add new products and services or to have each employee wear too many hats.  Instead, focus on one blow-away effort.  This proves a winning formula – on TV and in the business world – every time.

 

You Can Lose a Battle and Win a War: It’s an emotional challenge to be an entrepreneur.  You have days when you lose clients or potential clients, find out a potential investor is backing out, have an employee quit or some other struggle that makes your business endeavors seem futile.  But perseverance is critical to entrepreneurship and you see that clearly when watching food competitions.

 

In many shows, a contestant will fall down on a particular challenge yet still end up the overall winner. Stumbling in an early challenge of “Next Food Network Star” may not earn you the advantage you seek in the next round, but doing well enough puts you back in contention to be named the overall winner.

 

Click here to read more articles like this one.

 

Also, chefs that have appeared on these competition shows but didn’t win often come back as revered judges on future programs. The element of having been there and done that gives the chef credibility and notoriety they can leverage, even if they weren’t the winner.

 

Losing a battle doesn’t mean that you can’t win the war.  You need to get back up and try again because staying in the game is one of the main ingredients for success (pun entirely intended).

 

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Being Prepared Allows for Improvisation: A large percentage of the Food Network Shows, from Chopped to Cutthroat Kitchen, involved twists thrown into the mix to make the challenge more difficult for the participants and simultaneously, more exciting for the viewer watch. Those who are able to maintain grace under pressure and innovate in the face of adversity are the competitors that come away as winners.

 

The same thing applies for entrepreneurs. If you fail to prepare, you prepare to fail.

 

However, no matter how well prepared you are, there will be surprises along the way.  New products will take longer to develop than you expect. You will miss budgets or have a cash-flow issue. Your marketing promotion won’t produce the intended results or perhaps it will work too well and you struggle meeting demand. Regardless, you need to be calm in the face of chaos and learn to improvise.

 

If you prepare for what you can control, it’s easier to improvise when things inevitably go awry. And when they go haywire, don’t focus on the problems, focus on the potential solutions: fall back on your strengths and don’t fall to pieces.

 

As the food competition programs show, the ones who can’t stand the heat fail in the kitchen.

 

About Carol Roth: Carol Roth is the creator of the Future File™ legacy planning system, “recovering” investment banker, billion-dollar dealmaker, investor, entrepreneur, national media personality and author of the New York Times bestselling book, The Entrepreneur Equation. She is a judge on the Mark Burnett-produced technology competition show, America’s Greatest Makers and TV host and contributor, including host of Microsoft’s Office Small Business Academy. She is also an advisor to companies ranging from startups to major multi-national corporations and has an action figure made in her own likeness.

 

Web: www.CarolRoth.com or Twitter: @CarolJSRoth.

 

Bank of America, N.A. engages with Carol Roth to provide informational materials for your discussion or review purposes only. Carol Roth is a registered trademark, used pursuant to license. The third parties within articles are used under license from Carol Roth. Consult your financial, legal and accounting advisors, as neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice.

 

Bank of America, N.A. Member FDIC. ©2016 Bank of America Corporation

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