Rules to Successfully Bring Your Kids into the Family Business

Naturally, in bringing your kids into your family business, the key to long-term success is to do it the smart way. But how?

The most successful business owners are usually entrepreneurs who have accomplished it on their own.

However, all too often when they bring on family members, the businesses become too difficult to operate and they fail. There are many causes of failure – they’re all from bad management.

Just about all of the root causes range from poor decision-making and poor skills in communication — to the inability to manage conflict and lack of dedication by the younger family members.

To promote long-term success, here are 10 tips for hiring family members:

1. Have your children go to work for another company for five years.

Millennials need time to mature before they go to work for you. Rather than just be children of successful parents, they need to acquire confidence, develop work skills on their own, and to learn the important of good management.

That comes from learning how to perform, being punctual, and learning the value of a dollar by being held accountable.

2. Understand the psychological differences between you and your Millennial offspring.

Millennials see things differently than you. As a successful businessperson, your mindset has a different orientation.

Young people go to work only in order to live their lifestyles. Conversely, you’ve had to work countless long hours to build a successful business.

As a parent, you’re likely to view your kids’ attitude to be a lack of dedication to the family business.

3. Make certain your kids are compatible with their work assignments.

Not everyone is alike. Perhaps one of your children wants to work in the family business but isn’t goal-oriented.

Or perhaps a child is sales-minded but isn’t concerned about inventory controls or financial management.

Or worse, your child hasn’t done a personal assessment of strengths and weaknesses.

Ultimately, get training for them whenever necessary.

4. Motivate your children properly.

As employees, your children must be held accountable for their behavior and performance.

Otherwise, you risk having an unproductive employee who also negatively affects the morale of your team.

In essence, like non-family member employees, they need to know three things: A) what’s expected; B) how they’re doing; and C) what’s in it for them.

5. Ignore the temptation to communicate too informally.

Always remember that your children will think of themselves of being the hardest-working, productive employees.

That might be or not be the situation.

If you communicate too casually, you won’t be able to get strong results from children who operate under the wrong delusions.

Consider hiring an outside participant as a facilitator and to teach you, if you anticipate difficult conversations.

6. Make the right assumptions about your kids’ desires.

Not all children want to work in the family business. Find out what they want.

If they want to enter the business, that’s great. But be sure of their desires.

The process should be a like a non-family hire – a formal process, not casual or hasty.

7. Hire a family member based on potential or qualifications.

If a child has worked successfully elsewhere, it’s more likely your offspring will be successful working for you.

“Working hard is great, being lazy sometimes is great, but failed potential is the worst.”

-Campbell Scott

You’ll need a family member who can boast of achievements and valuable experiences. Hiring an undesirable person just because it’s family will only lead to disaster.

8. Pay family members based on the merit.

Surely, you love your children equally. However, don’t make the mistake of paying all family members the same wage if their contributions are not equal.

In all probability, each of your children has different aptitudes and capabilities. Pay them accordingly.

9. Consider hiring talented in-laws.

If any of your children marry a smart, capable person with common sense, don’t overlook the person. If such an in-law would like to work for you, consider each person on a case-by-case basis.

You might very well have hired a terrific employee, as well as promoting peace in the family, and perhaps even getting a positive contribution for your succession planning.

10. Don’t hesitate to fire incompetent family members.

If you’re saddled with an underperforming employee who just happens to be a family member, ask yourself an important question: “Would you keep such an employee who wasn’t a family member?”

Your answer should be, “No.”

If the family member is incompetent, your business will suffer from poor performance and staff-morale issues, too.

If you need help from a skilled outside participant to guide you, get it to minimize family squabbles.

From the Coach’s Corner, here are editor’s picks:

HR Trends: 12 Ideal Perks for Recruiting Top Millennials — Welcome to the new world of employee recruitment as Millennials are replacing Baby Boomers. Work-life balance is the No. 1 priority for Millennials – ages 18 to 33 – especially those who are parents. Here’s how to recruit around the trend.

Probation Meetings – HR Tactics for New Employee Success — Hiring employees is expensive. So it’s important to use tactics that will help insure success of new workers. That calls for probation meetings. Here are five proven tactics.

Tips to Manage Employees Who Fight Each Other to Win Favortism from You — Personality conflict isn’t the only reason workers fight among themselves. They also fight hoping for your approval — to get favored treatment from you. Either way — whatever the cause — rivalries among employees hinder your workplace morale and productivity.

Why Women Are Better Prepared than Men for Management — Many women are better prepared as managers because they have emotional intelligence — a desired characteristic for successful management. Here’s why.

5 Quick Management Tips to Motivate Your Employees — A major quandary for managers is to bring out the best in their employees. Every manager wants to do it, but it’s not always easy. What’s the reason? Usually, it’s because employees are disengaged – disconnected from their managers and companies. Here’s how to fix it.

“Working hard is great, being lazy sometimes is great, but failed potential is the worst.”

-Campbell Scott

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

Photo courtesy imagerymajestic at www.freedigitalphotos.net

12 Tips So You’re Less Likely to Fear an IRS Audit

The key to dealing with an IRS audit is to have done your homework. If you do all your homework, you don’t have to fear an audit.

Chances are you aren’t going to be audited. Only about 1 percent of tax returns are audited, according to published reports.

However, if you are contacted by the IRS regarding an audit, in many cases it’s just a simple request for documentation.

Yes, it’s true even bonafide deductions can spark an audit. Even if you’re selected for a field audit, relax. You have nothing to fear if you correctly file your return.

So you need to adhere to the basics starting with accuracy and documentation.

Tips to reduce your audit risk:

1. Honesty matters most in reporting income 

If you fail to report all your income, it’s the surest way to face an audit. So whether you get a W-2 or 1099 report everything.

As you probably know, the IRS gets copies of these forms. But always double-check the figures. In my very first on-air radio job as a 20-year-old, I learned a valuable lesson.

The station sent me a form indicating what it allegedly paid me, which I questioned. I had to threaten the company with legal action before it did the right thing.

That also means if you have a full-time job but take on a second moonlighting job where you didn’t get a W-2 or 1099, it’s easy to forget. So make note of the extra income and report it.

Additionally, don’t exaggerate or misstate your numbers.

2. Double-check all your numbers

If you report numbers with mathematical or typographical errors, the IRS will notice. Even with software programs, it’s easy to make typos.

3. Heavily, heavily document write-offs

Even if not required on small deductions, organize all your documentation for your donations. You aren’t required to report, for example, property donation of less than $250. But heavily document anyway.

The odds increase for an audit if you make a donation in five figures, it’s true that it’s OK to write it off. But document it.

4. Watch the EITC

If you’re low-income and claim the EITC, the earned income tax credit, you’re more likely to be audited than people who earn more money. Tax filers with no adjusted gross income are scrutinized because of fraud prevalent with those claiming the EITC.

Why? The IRS says about one-quarter of EITC payments is fake.

5. Due diligence in vehicle write-offs

Of course, you already realize you can write off business use of your car or truck. But if you only have one vehicle, the IRS will take a dim view if you try to deduct 100 percent business usage.

It’s impossible for you to use your only car for 100 percent business.

So keep mileage records of your trips for client meetings and other business activities.

6. Avoid filing amended returns

You have the right to file amended returns, if you fail to report credits or write-offs. You also minimize audits by getting your return right the first time.

It’s best to avoid filing amended returns. If you forget to include small deductions, it may not justify the risk from filing amended returns.

If you avoid an audit when you initially file your return, why risk an audit with an amended return? Why not let it go?

7. Pluses and minuses for electronic filing

The IRS prefers you file electronically. Indeed, most taxpayers do.

Statistically, published reports indicate electronic filings contain far fewer errors than paper returns, but that’s why paper returns increase your odds for an audit.

Senior citizens, especially, file paper returns. But they tend to avoid electronic identify theft.

8. If you’re self-employed, be careful about Schedule C losses

It’s common for startups to report losses. But if you’re not a new business and show profits in three out of five previous and start reporting losses, the IRS is inclined to consider your business as a hobby.

If so, you’re likely to lose your net loss in your original filing. This means you’ll be liable for taxes, interest and penalties.

9. Be careful if you work at home

The home-office deduction is only applicable for space you devote 100 percent to your business. Your family room where you watch television won’t fly with the IRS.

10. Be sure to only claim ordinary business expenses

The IRS will be comparing your expenses with other businesses. They must be considered ordinary and necessary.

A hint: You must be able to affirmatively answer this question: “For me to do my work, is this product or service necessary?”

11. Perfect numbers look suspicious

If your documentation is faulty and your business deductions are in round numbers, you’re likely to get more scrutiny.

The IRS knows round numbers are not common.

12. Make charitable donations proportionate to your income

You’re like to draw an audit if you claim a significant proportion of your income as charitable donations. Whatever you contribute, keep your receipts handy.

From the Coach’s Corner, related tips:

Tips on Understanding the Mindset of IRS Auditors — An IRS audit is enough to make you tense with cold sweat in the palms of your hands. More businesspeople have complained to me about the mean-spirited treatment at the hands of IRS agents than any other federal agency.

Keys to Protect Yourself from Skyrocketing Trend – Tax Identity Theft – Tax identity theft is increasingly victimizing Americans, according to the Internal Revenue Service. As many as 1.5 million Americans were hit by tax-refund fraud in 2013, according to IRS Special Agent Kenneth Hines in a 2014 published report.

11 Payroll and Tax Tips for Small Businesses — To stay competitive in this difficult marketplace, it’s vital to be proactive on your taxes.

Even Ordinary Folks Need 10 Best Strategies for Estate Planning — Updated March 27, 2015 It’s a mistake to think estate taxes only apply to the super rich. Estate taxes hurt ordinary folks. Estate taxes are especially problematic for farmers and small businesspeople, alike, who own their buildings and have capital tied up in equipment to grow crops or to produce products.

Tax Deductions for Small-Residential Property Landlords — As investments go, small residential property landlords enjoy the most tax benefits. In a down year, rental property tax deductions can make a big difference whether you enjoy profits or suffer losses.

“I’ve never really had a hobby, unless you count art, which the IRS once told me I had to declare as a hobby since I hadn’t made money with it.” 

-Laurie Anderson

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

Photo courtesy David Castillo Dominici at www.freedigitalphotos.net

Money – Your Net Worth Matters More than What You Earn

When it comes to finance, most business owners and other individuals strive to increase their wealth to have more opportunities. Ostensibly, for travel, hobbies or retirement.

The trouble with some, however, is that they focus on income and not their net worth. That means, of course, spending less than they earn.

Because people have a tendency to spend all their salaries, they stay stagnant financially.

Benefits of a high net worth

Some examples of why net worth is more important than a higher income:

— You aren’t taxed on net worth, but you are on annual income.

— You develop a positive big-picture outlook. You’re more likely to focus on building assets instead of just your day-to-day job.

— You’re more financially secure. This means your self worth improves because you’ll feel better.

— You tend to benefit from relationships with other high net-worth individuals.

So, it’s best to determine your net worth – a gauge of your financial standing so you know where you are to strategize for your goals.

Your net worth is a total of all your assets minus your liabilities.

For example and not to simplify, you total your assets – from the value of your house to your cash in the bank – then, you must subtract your debts – your mortgage, other loans and credit card balances.

How to determine your net worth:

Assets

1. Make sure you keep a secure file containing your financial assets and liabilities. Add to it as situations arise. Formally update it annually.
2. This will insure your financial advisor or spouse can easily access the information.
3. Be conservative in listing your biggest assets. Don’t over-estimate.
4. Typically, this means the values of your home and cars. If you own a business, estimate its value (even though it’s more complex).
5. Look at your latest statements of your assets such as checking accounts, savings accounts, CDs, brokerage and retirement accounts.
6. List your valuable personal items, worth $500 or more, such as jewelry, musical instruments or coin collections.
7. Total all the dollar amounts, which are your total assets.

“Your net worth to the world is usually determined by what remains after your bad habits are subtracted from your good ones.”

-Benjamin Franklin

Liabilities

1. List your large liabilities such as the balances of your home mortgage and car loans.
2. List your personal liabilities from debts such as credit cards or student loans.
3. Total all the balances. This is your total liabilities.

Calculating your net worth

1. To determine your net worth, subtract all the liabilities from the total assets.
2. Don’t panic if it’s a low or negative number. It’s just a starting point so you can start strategizing to improve your net worth.
3. Calculate your net worth each year. This will help you assess your progress in achieving your goals.

From the Coach’s Corner, here are related tips on finance:

7 Steps to Wealth and High Net Worth — Creating wealth and enjoying high net worth doesn’t result from pure luck. It takes a certain mindset and strong action. Here are seven proven steps.

Finance: 10 Year-End Tips for Entrepreneurs — If your business slows down in Q4, the holidays are a great to assess your year and plan for the New Year. Like wellness checkups with your doctor, it’s a good time to evaluate your financials.

4 Best Practices to Refinance Your Business Loan — Would you benefit by refinancing your small business loan to get a better interest rate and lower loan payments? Certainly, you would benefit from a lower interest rate and loan payments if you have cash flow issues. But there other matters to consider before refinancing your loan.

Dos and Don’ts for Writing a Top Business Plan — There are many valid reasons to write a business plan. They’re not necessarily to attract capital. Whatever your reasons, avoid writing a mediocre document. To ensure success, there are key essentials.

Drowning in Student-Loan Debt? How to Pay it Off in 1 Year — You’re not alone if you’re drowning in student-loan debt. The average college graduate in 2015 was saddled with student loans totaling $35,000, which takes 10 to 20 years to pay off. Here’s what you can do to stay afloat.

Finance Checklist for Strategic Planning, Growth — Strategic planning in finance for growth means avoiding trendy fads. Instead, it requires an ongoing down-to-earth approach in order to create value. Here are seven steps.

“Your net worth to the world is usually determined by what remains after your bad habits are subtracted from your good ones.”

-Benjamin Franklin

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

Photo courtesy Serge Bertasius Photography at www.freedigitalphotos.net

10 Best Tech Strategies for Stronger Financial Results

Businesses that use 10 digital best practices are achieving stronger financial results than those that don’t.

That’s according to a global survey of 2,000 executives by a network of consulting firms, PwC, www.pwc.com. The report is entitled, the 2015 Digital IQ^TM Survey.

“Everyone talks about digital, but few understand the specific leadership behaviors that drive performance,” said Chris Curran, PwC advisory principal and chief technologist.

“We are seeing signs this is changing, with leading digital practitioners looking to how today’s investments can improve tomorrow’s business results. This is a critical mindset, especially as digital technologies become more pervasive,” adds the consultant.

Ninety-nine percent of the ambitious companies anticipate immediate returns on their investments. The remaining 1 percent want to disrupt their own or other industries.

However, the companies are under pressure internally because of changing tech spending patterns and digital roles.

Even though CEO enthusiasm for digital investments is quite high, the report also says 73 percent must hasten their investment approaches to dominate their marketplaces and prevent internal disruption.

PwC interviews were equally divided among business and IT executives.

Increasingly, companies are investing in technology to drive immediate business value. Forty-five percent of respondents expect growth in revenue. Twenty-five percent want improved customer experiences and 12 percent want stronger profits.

The PwC report states businesses were 50 percent more likely to enjoy rapid revenue increases and twice as likely to do so if they used 10 strategies.

Here are PwC’s 10 strategies:

1. The CEO is a champion for digital.

Seventy-three percent of business and IT executives said that their CEO was a champion for digital, a significant increase over the fifty-seven percent who said they had a CEO champion in 2013.

2. The executives responsible for digital are involved in setting high-level business strategy.

CEOs may set the tone and vision for digital, but those responsible for operationalizing digital, often the CIO or CDO, are instrumental in setting high-level business strategy.

This is especially true in companies where digital leaders have their own P&Ls and are responsible for a significant share of the business.

3. Business-aligned digital strategy is agreed upon and shared at the C-level.

Organizations and leaders that are aligned are more likely to maximize investments and can better identify areas of overlap and resource gaps that could derail efforts.

4. Business and digital strategy are well communicated enterprise-wide.

Strategy isn’t complete without engagement by everyone in the organization.

Currently, 69 percent of companies say that business and digital strategy are shared enterprise-wide and last year that figure was 55 percent and in 2013 it was 50 percent.

5. Active engagement with external sources to gather new ideas for applying emerging technologies.

 Top-performing companies find digital inspiration everywhere, especially outside their organization. 

 Innovative companies are much more likely to evaluate many emerging technologies, characterizing their approach to adoption as one that’s purely technology driven (69 percent), in contrast to the rest of companies (54 percent). 

 They also look to a wide variety of sources to seed their idea pipeline, actively engaging with industry analysts (63 percent), customers (46 percent), and vendor ecosystems (44 percent) the most.

6. Digital enterprise investments are made primarily for competitive advantage.

An indicator of evolving roles, 68 percent of digital spending comes from budgets outside of IT’s budget, a significant increase from 47 percent the prior year.

Also, the executive responsible for digital investment continues to shift, with the CIO (27 percent) and the CDO (14 percent) sharing that job with the CEO (34 percent) and CFO (13 percent).

7. Effective utilization of all data captured to drive business value. 

Getting value out of data often means using it to guide strategic decisions like how to grow the business or whether to collaborate with competitors.

This remains a challenge for executives, citing specifically behavioral and skills barriers, such as understanding which data to use and how it benefits their role, nearly as much as issues with data quality or accuracy.

8. Proactive evaluation and planning for security and privacy risks in digital enterprise projects. 

As companies add new technologies, customers, partners, devices, and data, there are ever more interdependencies and risks to address. That’s the baseline today.

What’s different when it comes to Digital IQ is the level of proactivity required. Businesses need to consistently think about how their cybersecurity strategies can help build brand, competitive advantage, and shareholder value.

9. A single, multi-year digital enterprise roadmap that includes business capabilities and processes as well as digital and IT components. 

Progress has ebbed and flowed as digital has become more pervasive in the enterprise while at the same time also more fragmented.

Today, 53 percent of companies have a comprehensive roadmap that includes business capabilities and processes, as well as digital and IT components.

10. Consistent measurement of outcomes from digital technology investments. 

Consistency in measurement is also crucial. Businesses and their boards want to see the value they’re achieving from digital investments.

Top-performing companies lead lower performing ones here again (79 percent vs. 72 percent). Demonstrating this requires a combination of traditional metrics (like ROI) to track against growth goals, as well as newer ones for measuring more disruptive investments.

From the Coach’s Corner, here are related strategies:

By Adding Bells and Whistles, You Risk Losing Money with a Slower Site — At alarming rates, many top e-commerce Web sites risk losing sales because they’re too slow according to a study. Here are ways to accelerate the speed of your Web site.

Best Practices for CFOs to Stay Current in Technology — Just as every professional knows, CFOs also find it increasingly challenging to stay up-to-date on technology. Up-to-date technology means CFOs can better do their jobs. Here’s how.

Are You Up-to-Date in Managing Cyber Risk? Here’s How — A strange development is taking place. Businesspeople are increasingly concerned about risk management and data loss, but many are implementing the wrong solutions. Here’s what you can do.

Skyrocketing Cybercrime Calls for 8 Strategies to Manage 3rd Party Risks — Daily data breaches have become the norm in news headlines. We’re also hearing a lot about third-party risks being a chief culprit in cybercrime. Your business associates might be bigger risks for data breaches than you realize, too. Here’s why and what you can do.

Strategies for CEOs to Win Their Cyber Security Tug of War — The cyber security tug of war is never ending even though chief executive officers and board members now get the importance of protecting their companies’ information assets. They’ve learned to fear cyber-security threats because they could lose their jobs. If this is all true, why then are there incessant, worldwide cyber attacks?

“The real problem is not whether machines think but whether men do.”

-B. F. Skinner

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

Photo courtesy patrisyu at www.freedigitalphotos.net

HR – Do you Partner with IT for Top Online Recruiting?

If you’re talented in recruiting the best talent, talented applicants will appreciate your talent. That underscores the need to partner with information technology in online recruiting.

Given the importance of recruiting, it’s shocking to hear steady complaints from talented people about the ineffective online processes when they apply for a position.

Human resources departments are criticized nonstop about their poor practices in the online recruiting process. The problem is widespread. But nothing ever seems to get done.

If the application process is too difficult, a top salary isn’t always appealing to talented people. They must feel comfortable in four other ways.

They will apply to your company if they feel positive in their five critical perceptions:

— About the CEO and HR professionals

— Image of the company

— The utility of the job (what it will do for their careers)

— Convenience in applying

— Salary

If you have an inefficient process, there are multiple ramifications in the competition for talent: Poorly constructed processes aggravate applicants. Many of the best applicants avoid applying online. The images of the HR department and the image of the employer suffer.

Unfortunately, the online recruiting problems are rampant. So even though I’m a business-performance consultant focused on helping businesses alleviate uncertainty, this portal has scores of HR tips and dozens of career tips.

Not to be offensive, but the problems associated with online application have also prompted me to explain how to avoid applying for jobs online.

But if a job seeker is compelled to apply online, I’ve written six tips on how to shine in an online application.

At first blush, online recruiting would seem ideal for saving time and screening candidates. But organizations self destruct in the process. The most talented employees are tech-savvy, which is what they expect of their new employers.

The most talented employees are tech-savvy, which is what they expect of their new employers.

Five simple strategies for fixing your online recruiting:

1. Test to see if your system is user friendly

Try using your system, personally. Think like an applicant. Participate in the process.

Make certain your implementation is functioning well for the best application experience. Check to see if your instructions are clear; east-to-read and understand.

2. Evaluate your keywords

Sans a careful strategy on keywords, you risk screening out good candidates. The idea is to screen them in, not out.

3. Make sure your tracking system works

You must insist on accuracy and efficiency in your recruitment record-keeping.

Plus, it’s a turnoff to top applicants if they feel unappreciated or neglected. If you don’t appear to be courteous, you won’t attract courteous applicants. And you know what happens to your culture if you hire people who don’t have soft skills.

4. Respond with automated confirmations

You must alleviate any possible doubt. Let your applicants know their submissions were received and that they’ll receive consideration from you.

Provide a status report. Let applicants know if they’re still being considered, whether the job has been filled or if they’ll be considered for other positions and give a time frame of perhaps six months.

5. If your system fails, consider other options

If you can’t get your system to work well, go back to the old e-mail process. Ask your candidates to contact you via e-mail with a Word attachment.

Don’t risk losing good candidates. Read the cover letters and resumes, and respond appropriately. Top applicants will appreciate a personal touch.

Finally, if your current IT people can’t deliver a system to give you a competitive edge in recruiting, then do something about it. The difference between failure and success requires reflection to hire for the right IT competencies.

From the Coach’s Corner, here are related HR tips:

Critical HR Recruiting Strategies for Business Profit — By developing strategic recruiting plans, human resources professionals will make significant contributions to the bottom-line profit goals of their employers. So, it’s imperative to innovate in your recruiting processes and market your strategies to senior management and hiring managers.

Write Better Job Descriptions to Attract Best Talent – 16 Tips — To inspire the best candidates to apply for your opening, there are at least 16 strategies to incorporate in your job description.

Increase Profits by Hiring Talent with the Best Trait — Enthusiasm — You’ll increase your odds for profits with high-performing employees with the right culture — if you hire for the right personality trait – enthusiastic people. That’s right. Look for people who have the makeup to being committed and who will care for the welfare of your company. You’ll increase your chances for the strongest results.

HR Management: Think Like a Sales Pro to Recruit the Best Talent — One-size-fits-all approach to recruiting employees is not a strategy. You and your peers in human resources might be enamored with technology, but job candidates want more focus on the personal touch. That necessitates thinking like a sales professional.

Hiring Impact An Impact Person Starts with Screening Resumes — If you want to hire an impact person, your hiring process is really important. The place to start is using best practices in screening resumes.

“One of my greatest talents is recognizing talent in others and giving them the forum to shine.”

-Tory Burch

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

Photo courtesy of stockimages at www.freedigitalphotos.net

Avoid the 5 Biggest Mistakes SMEs Make in HR

If you manage the typical small or medium-size enterprise (SME), you’ve got your hands full just trying to stay profitable. So it’s imperative to be careful in dealing with your biggest expense – your employees.

“Often small and mid-sized business owners and managers don’t really know what they don’t know – and may unwittingly make mistakes in overtime, wage and hour regulations, discipline and discriminatory practices,” says Christine Pahl, human resources client consultant at FrankCrum.

FrankCrum (www.frankcrum.com) is a self-described national professional employer organization.

“Unfortunately, these mistakes can be costly as well as create distractions that keep the company from performing at its best,” she adds.

Amen. I couldn’t agree more.

She says many companies make these five salient mistakes:

Improperly classifying employees as exempt

This may result in non-exempt employees not receiving overtime pay they are entitled to.

Paying someone a “salary” does not automatically mean they are exempt and a mis-classification can violate laws regarding recordkeeping, minimum wage and overtime.

Any of these violations may result in a lawsuit, with employers frequently unable to justify the reasons for their actions, which leaves them without a defense to the lawsuit.

FMLA

Many employers are not aware they are a covered employer under the Family Medical Leave Act or what their obligations are to the employees who qualify for protection under this law.

Hiring practices

Although most employers know not to ask an applicant’s age, other questions to avoid include those about medical history, prior workers’ compensation injuries, criminal record, marital status, sexual orientation, and political or religious affiliations.

It’s important to remember that position descriptions and interview questions should focus on necessary position requirements.

Discriminatory practices

Review all aspects of employment, including hiring, promotion, pay, discipline, termination, training opportunities and more.  It’s not enough to focus on intentional or obvious discriminatory practices.

“The entrepreneur always searches for change, responds to it, and exploits it as an opportunity.”

-Peter Drucker

A proactive review of trends in these areas and the impact on employees may reveal unintentional practices that should be corrected.

In addition, employers should post an EEO statement and distribute a written anti-discrimination policy to be signed by employees and management, outlining the policy as well as redress and complaint procedures.

Corrective actions

FrankCrum uses the term “corrective action” rather than “progressive discipline,” because it keeps the focus on resolving problems and maintaining a successful relationship with the employee.

The earlier issues are dealt with and documented, the less likely it is that confusion about performance and expectations will lead to a claim.

“Business owners and managers need not become HR specialists,” says Ms. Pahl.  “But they should have knowledgeable advisers who can help them avoid HR problems.”

Again, agreed.

From the Coach’s Corner, here are related HR/management tips:

HR: Overcoming Tech Trends, Boomer Retirements — There are ominous implications for human resources departments — from the same tech trends that have empowered consumers to force businesses into the digital age.

HR Strategies for Addiction Recovery Plans — Your human resources program should include plans for employee addiction recovery. Why? Consider a study by the National Institute on Alcohol Abuse and Alcoholism.

Are You Guilty of Micromanaging? Here’s How to Stop — Micromanagement is a ramification of ignoring best practices in management. People who micromanage lose maximum efficiency, productivity and teamwork – in other words, optimal profitability.

Unpaid Interns: Safeguards to Avoid Legal Issues — Many students will work for an unpaid internship, if they can further their career prospects. They know they’ll benefit from training, business networking or getting a job with the companies once they graduate from college. But unpaid internships can be risky for a business. Here are the safeguards.

With Employees’ Help, 3 Strategies to Succeed with Your Strategic Plan — Have you developed your strategy? It’s important to proceed without engaging in self doubt. But you’re concerned about involving your employees? There are three closely related basics in working with your employees to get the job done.

Elevate Sales via 5 Best Practices in Pricing and HR Training — Sophistication in pricing by salespeople is an excellent driver to grow earnings rather than just looking for ways to cut costs. Instead of growing their profits with sophistication in pricing, many businesspeople miss growth opportunities when they mistakenly cut muscle – usually in human capital and branding. Here’s a better way.

“The entrepreneur always searches for change, responds to it, and exploits it as an opportunity.”

-Peter Drucker

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

Why Executives Emphasize Communication Training for Employees

Among human resources training priorities, employee communication is often now more important than skills, say many executives.

Two-thirds of executives responding to a survey say communication skills are most needed by certain employees.

That’s according to a 2014 study by AMA Enterprise, a division of the American Management Association.

“It appears that many companies are stepping up training and development for individuals, employees who aren’t necessarily considered high potentials or the equivalent, but who are essential to meeting business objectives,” said Jennifer Jones, Director at AMA Enterprise, which provides organizations with assessment, measurement, and tailored training solutions.

Feeling Less Creative? You’re Not Alone – What to Do

Is it an epidemic? Creative professionals increasingly admit to a decline in their effectiveness and children’s creativity has also waned, according to two studies.

Nearly 50 percent of creative-pro respondents in the 2013 “Free the Creative” study by iStock say their creativity has stagnated. The image company says that’s the stunning conclusion from a survey of more than 400 professionals from art directors to graphic designers in the U.S. and U.K.

Children’s creativity has also plummeted according to education Professor Kyung Hee Kim at the College of William and Mary. After she analyzed kids’ scores from the Torrance Tests of Creative Thinking in 2012, Dr. Kim says it’s a crisis.

Watch Professor Kim’s video:

iStock study

iStock’s study shows the culprits are lack of funding, inspiration and time.

Three key takeaways:

– 60 percent claim to have had “great ideas” but not enough support or time.

– 70 percent want more “creative time”

– 63 percent lack time for “creative reflection and inspiration”

“Our research raises questions around the state of creativity today in industries vital to the global economy,” said Ellen Desmarais, general manager at iStock. “When you consider that global revenues last year in the advertising industry alone were nearly half a trillion dollars, declining creativity is cause for alarm and should prompt an industry-wide discussion.”

Locations for creativity:

• 34 percent name their workplace as one of their top three locations for creativity
• 34 percent – during their commute
• 25 percent – the shower or bath
• 22 percent – exercise

Seventy-one percent say new technologies have helped them in their work.

Most often mentioned hobbies: Fifty percent listed photography while 30 percent mentioned writing, drawing or painting.

Children’s creativity

The level of children’s creativity started to decline in the 1980s, according to Professor Kim.

Symptoms include declines in the following:

• Energy
• Communication
• Humor
• Imagination
• Passion
• Perceptivity
• Inability to connect the dots
• Synthesizing

Addictive behaviors kill creativity

The professor lists the children’s addictions that prevent creativity:

• Drugs
• E-mails
• Facebook and other Web sites
• Video games

If the decline in creativity began in the 1980s, the studies’ findings shouldn’t be a surprise for creative professionals or anyone else under 50 years old.

It won’t get any easier. You must learn to adapt. Lose the addictive behaviors.

If you’re suffering from a decline in creativity, get away from the computer. Get exercise. Take walks. Go for a drive. Learn to meditate. Pay more attention to family and friends. Find hobbies unrelated to your work. Look around for someone less fortunate to help. Start a gratitude list for what is working well in your life and career.

Finally, to strengthen your creativity muscles, work on keeping an open mind. Practice the “principle of contrary action.”

In all that you do, do things differently each time, for example grocery shopping: Take different routes to the store. Park in a different area of the store’s parking lot. Use alternate entrances to the store. Go down a different aisle each time.

Yes, you’ll start adjusting your attitude and keeping an open mind, which will help you especially in innovation and marketing.

From the Coach’s Corner, here’s more  relevant information:

 7 Steps to Become Great at Thinking on Your Feet – Have you ever been at a loss for words? For example, when asked a question, have you been tongue tied in a sales presentation, while speaking at an event, in negotiations, during an interview or a staff meeting? 

Best Practices for New Women Entrepreneurs to Stay Focused – The keys for business women are to plan well, create the right balance, persevere and have the right support system. It isn’t commonly known, but women entrepreneurs inherently have stronger skills than men in key areas. 

Communication – You Can Train Yourself to Stop Stressing – It’s OK to be nervous before giving a speech or when you’re entering an important round of negotiations. Feeling pressure is one thing but allowing it to morph into stress and tension is another.  

Acting, Speaking Coach: How to Improve Communication with Others – Do you know when you marginalize others?   If you’re having communication problems with someone important in your career or life, chances are one or both of you will profit from tips in honest communication.  

Proof Positive: How Supportive Spouses Help in Work-Related Stress – First, it was the book, “The Millionaire Mind.” The book by Dr. Thomas J. Stanley revealed several traits of millionaires. One important statistic from his study of millionaires: They were successful largely thanks to a supportive spouse. 

“Adopting the right attitude can convert a negative stress into a positive one.”
-Hans Selye

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry. 

Q&A with Dr. Ben Carson – The Full Meal Deal with Solutions

Sept. 13, 2013 –

Naturally, Dr. Ben Carson is known as a uniquely soft-spoken retired neurosurgeon. His voluminous accomplishments include his pioneering in the separation of conjoined twins at the head.

But, of course, there’s more. A lot more.

With his gentle, low-key demeanor, he’s also known for his powerful insights on the issues facing the U.S. and the world. He has novel ideas on issues ranging from the economy and education to the Middle East.

The C-SPAN video of his criticism of President Obama’s dysfunctional policies at the National Prayer Breakfast — with the president sitting to his right — exploded all over the Internet.

So, it was an immense pleasure for me to interview Dr. Carson.

Dr. Carson was in Seattle with innovative Wisconsin Gov. Scott Walker – each received an award and addressed the 2013 annual dinner meeting of the Washington Policy Center (WPC), www.washingtonpolicy.org.

It was WPC’s largest-ever event – an overflow crowd at the Seattle Sheraton, which was also transmitted to hundreds of WPC supporters viewing in Spokane.

Dr. Carson was given WPC’s “Champion of Freedom Award” for his humanitarian efforts to advance the causes of “freedom, equality and justice; for his pioneering work as a doctor; and for his courage in speaking out in support of transparent and ethical leadership.”                     

He was also the 2008 Presidential Medal of Freedom recipient. Along with his pediatric neurosurgery and widespread acclaim, he is president of the Carson Scholars Fund – it’s given more than $5.7 million to thousands of scholars – 5,700+.

His demeanor on television is that of a down-to-earth, calm, and insightful intellectual. I wanted to see for myself. With coordination by WPC, Dr. Carson was made available to the press for 20 minutes, which is why I was able to sit down and ask him numerous questions.

Indeed, his in-person style and intellect mirrored his TV persona.

Here are edited excerpts of his answers to me:

Q: Dr. Carson, many Americans hope you run for president in 2016. Will you? 

A: I don’t have political ambitions. It’s like a deadly poppy field in the Wizard of Oz. This country does have many problems that need to be solved…the economy…education…Americans must come together.

I detest politics, to be honest with you. It’s a cesspool. And I don’t think I would fare well in that cesspool because I don’t believe in political correctness and I certainly don’t believe in dishonesty. If the right situation doesn’t evolve in 2016, if drafted, I’d have to consider it, but not now.

Q: We don’t hear or see much action on the nation’s $16-trillion deficit. It’s as though it’s off the radar screen. 

A: Now it’s closer to $17 trillion. Counting one number per second, it would take 539,000 years to reach 17 trillion. We’re on a high wire with no net. The United States is operating solely on faith and good credit. Economics is not brain surgery.

Q: At the National Prayer Breakfast – with Mr. Obama seated to your right and his head ostensibly bowed in embarrassment – using diplomacy and with surgical precision you diagnosed his unproductive policies. 

A: It surprised me to be invited as it was the second time they invited me to speak. I didn’t plan what I was going to say.

Q: It’s been well-documented about your difficult childhood. Who has inspired you? 

A: My mother, first of all. My mother refused to give up. She taught me the importance of a strong education and relationship with God. She helped me to see through hard work, perseverance and a faith in God, you can live your dreams.

Booker T. Washington. From slavery he became an educator, author and advisor to presidents. I learned it doesn’t matter where you’re from, it’s where you finish.

Thomas Jefferson. He said many wise things about government:

“Experience hath shewn, that even under the best forms of government those entrusted with power have, in time, and by slow operations, perverted it into tyranny.”

“A wise and frugal government, which shall restrain men from injuring one another, which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned…”

“…history convinces me that most bad government results from too much government.”

Q: In your career as a surgeon and now as a thought leader, how do you remain so calm in dealing with difficult subjects that anger other people? 

A: Actually, as a boy, I was angry. Once, another youngster angered me, and I had a knife and tried to stab him…I was more terrified as I recognized that I was trying to kill somebody over nothing. I realized at that moment that with a temper like that, my options were three: reform school, jail or the grave. So, I just locked myself up in the bathroom and I started praying and I said, “Lord, I can’t deal with this temper.”

Q: Your thoughts about education? 

A: A better educational system is crucial. More money won’t help. There have to be fundamental changes. It starts with fun in teaching children to love reading.  

Q: Your thoughts on ObamaCare? 

A: Healthcare has huge problems. There is waste and corruption. The costs are enormous. Changes are needed. For the majority of ObamaCare, I am down on it.

The key is to cut out the middleman and empower both doctor and patient with information about what things cost. Patients and doctors are unhappy with ObamaCare.

I’d argue it’s unconstitutional. The Supreme Court decision put the problem back on the voters who elected these politicians.

Q: Dr. Carson, what about the debate over Syria and the Middle East? 

A: With better policies four years ago, we’d be looking at a different Middle East. Chemical weapons are a serious problem. But one needs to be very careful – most of us don’t have any idea about the problems in the Middle East and the consequences. We must go slow.

In conclusion, Dr. Carson is the full-meal deal. Indeed, he’s extraordinary. This country needs him badly as president.

From the Coach’s Corner, for a perspective on Dr. Carson, here are some observations from my experience in covering other national figures:

Long before becoming a management consultant and business writer, in the 1970s I had a 20-year career in broadcast journalism and was fortunate to cover many big stories and political newsmakers.

They included Ronald Reagan and his wife, Nancy, on the campaign trail; President Gerald Ford after he was defeated for re-election; California Governor Jerry Brown in his first term; and the late Speaker of the House Tip O’Neill.

That was a time when politics had much more civility. When president, Messrs. Reagan and O’Neill debated over their differences. But at the end of the day they sat down over a beer and were cordial.

Candidly, after my personal angst from President Ford’s pardon of Richard Nixon following Watergate, I had a low opinion of him. However, later, I realized President Ford was right. America was faced with many severe problems and as he said the “the table has to be cleared.” A couple of years later when I broke a national story about his post-presidency plans in Rancho Mirage, California and met him socially at a press function in his honor, I was deeply impressed with his demeanor, which in my mind confirmed the caliber of his leadership.

Mr. Ford was grossly underrated. Years later, it would prompt me to write: Five Attributes of Leadership Are Needed Now 

My early sense of Mr. Reagan when he was governor of California was similar. But years after my misspent young adulthood, I realized the error of my thinking when Mr. Reagan began to speak about national issues in the mid 1970s.

So with these thoughts, I no longer wonder about Dr. Carson. He has a commonality with Messrs. Ford and Reagan.

P.S. You might also want to read: Key Differences between Leaders and Managers 

“The Roman Empire was very, very much like us. They lost their moral core, their sense of values in terms of who they were. And after all of those things converged together, they just went right down the tubes very quickly.” 

-Dr. Ben Carson

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

10 Strategies for Manufacturers to Increase Profits

Aug. 28, 2013 –


When it comes to revenue for capital-equipment manufacturers, the key pivotal factors are innovation and service levels.

It might be an obvious conclusion, but it’s confirmed by the IDC Manufacturing Insights’ 2013 white paper on the global capital equipment manufacturing industry.  

“There is little question that heavy equipment manufacturers, recognizing the trend of extended asset refresh cycles by the operators and owners of their products, are looking at services as a way to both bolster customer satisfaction and drive incremental high-gross-margin revenue,” said Simon Ellis, practice director for IDC manufacturing insights (www.idc.com).

“Indeed, not only will heavy equipment manufacturers invest in improving services delivery, but the balance in many companies will shift from ‘products and services’ to ‘products as service platforms,’” he added.

“Equipment manufacturers now realize that in order to have sustainable growth and reduced business risk, they must have a holistic service management and aftermarket strategy that is fully synchronized with manufacturing,” said Warren Smith, global industry director by software company Infor (www.infor.com). “No longer can manufacturing and after-sales service exist as islands, if customers are to receive the service and satisfaction they expect and demand.

“Manufacturers must incorporate service requirements right at the start of designing the product, as well as optimize the manufacturing and sales processes to ensure service excellence,” he explained. “The aftermarket is now the future growth market.”

He explained the trend.

“Integrating the ‘as-assembled configuration’ to the management of service parts and maintenance personnel, effective communication with field engineers, maintaining the ‘as-serviced’ status and accurate, timely billing for repairs are the new battleground for manufacturers,” he said.

“If a product is a platform for delivering services, then the technology that supports that product has to also support the services that follow,” Mr. Smith added. “The technology that helps increase the competitive edge in this new arena will need to be fast, agile and specialized for the equipment industry. It will need to span the entire lifecycle of the equipment, from manufacture to aftersales service, in one integrated solution.”

Key IDC Findings:

1. Globally, just 12 percent of capital equipment manufacturers expect a substantial increase in revenue over the next three years. A further 30 percent expect some increase, with 30 percent predicting stasis and 27 percent forecasting a decrease.
2. In EMEA, just 15 percent of respondents expect a substantial increase in sales volume over the next three years, compared to 9 percent in North America.
3. Equipment service is set to be a vital tactic in countering the current market volatility and highly cyclical nature of new equipment sales.
4. With 70 to 90 percent of the total lifetime cost of heavy equipment to be found in maintenance and repair, services offer not only high profit margins, but also predictable annual revenues that can protect against market volatility. In addition, a comprehensive aftermarket offering enables a deeper, continual relationship, increasing customer retention and loyalty.
5. While cash-flow dominates the business concerns of 69 percent of equipment manufacturers globally, 67 percent of respondents are concerned about their ability to use service excellence as a competitive differentiator — the same level of concern as their ability to recruit, train and retain a skilled workforce.
6. Regionally, the top business concern in North America is managing cash flow (75 percent), followed by the ability to deliver service as differentiator (62 percent) and recruiting and retaining talent (60 percent). By comparison, the top three business concerns in EMEA are recruiting and retaining talent (74 percent), the ability to deliver service as differentiator (73 percent) and managing cash flow (61 percent).
7. A holistic service-orientated product strategy is seen as the most critical improvement to attain service excellence, ahead of workforce training. A lack of top management commitment is seen as the main barrier.
8. Added-value services for existing products is favored over product service innovation, but equipment manufacturers remain hungry to develop growth by expanding into new markets and improving quality and reliability.
9. Market leaders who adopt a service-centric strategy, combining information, training and qualified personnel will capitalize on a wealth of developing opportunities. Accelerated investment in service excellence and the evolution from “products & services” to “service-centric” to “products as service platforms” is also expected. The ultimate objective is a balanced portfolio of services and products that delivers both consistent revenue and growth.
10. As part of this evolution, manufacturers will likely continue to invest in field service management, warehousing and inventory management, warranty and claims processing and procurement systems. This will be augmented by investment in mobile devices, machine-to-machine (M2M) communication, cloud-based information storage and delivery and analytic applications.

From the Coach’s Corner, here are related articles:

Why Manufacturing Jobs Are Beginning to Come Back to U.S. – Reshoring is underway. Forty percent of manufacturers have moved their operations back to America from China and India, according to an academic study sponsored by the Council of Supply Chain Management Professionals. 

Why Kaizen Philosophy Works in Lean Principles for Business and Public Sector – Lean thinking has become imperative for business and government. Budgets are strained, but pressure continues to mount for better customer service. The bottom-line: Both the private and public sectors need to save time and money while providing exemplary service – with existing resources.

Best-Practice Lessons to Protect Your Supply Chain from Natural Disasters – As a manufacturer, you know the importance of protecting your supply chain for your company’s future. So you might be interested in an academic study — lessons from the earthquake that resulted in a tsunamis and nuclear catastrophe in Japan. 

“Almost all quality improvement comes via simplification of design, manufacturing… layout, processes, and procedures.”

-Tom Peters

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

Photo courtesy of  khunaspix www.freedigitalphotos.net

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