Tuesday, August 30, 2011

Are You Smarter than a Fifth Grader Groundhog?

-- August 30, 2011

In preparing for Hurricane Irene, Karen and I unplugged the electronics, filled the bathtub with water, made sure our battery lanterns were operational, and all the other recommended checklist items.

In addition, we moved our pots of flowers and herbs from the railing on our deck to the floor of the deck underneath the roof overhang, so they wouldn’t be blown away.

Little did we realize that we in preparing for an upcoming contingency we had compromised a competitive strategy.

Say what?

I’m not talking about strategy as regards our competitors in the business world. I’m talking about a local competitor for our food supply: a big fat groundhog.

The “top of the railing strategy” had kept the remaining flowers and herbs out of reach of the omnivorous critter that had devoured our tomato plants. But in preparing for Hurricane Irene, we momentarily forgot about the fat pest who’d been eating our lunch. Until we walked outside after Irene had passed, only to find bare green stalks where the parsley had stood.

We quickly moved the pots back to the railings.

What does this have to do with your (and our) small businesses? It’s a reminder that taking your eye off your competitors or off the marketplace – even when it’s for an important task like preparing for a hurricane -- can result in someone else “eating your lunch.” Regardless of inside or back-office work you need to get done, make sure to scan the marketplace -- that external environment in which your business operates – to see what’s just around the corner and in your rear-view mirror.

Because the things you see in that mirror may be larger than they appear.

Steve Caccavo, founder of Constructive Business Solutions, draws on his years of entrepreneurial experience to provide "been there, done that" business advice to owners of small and midsize companies.  Copyright 2011 by Constructive Business Solutions, a division of Positive Employment Practices, Inc.

Sunday, August 14, 2011

Don't Do THIS with Employee Wages


August 14, 2011

Even before the IRS started developing algorithms to help catch employers who play fast and loose with withholding taxes and with employees classified as “independent contractors,” my very first business accountant gave me this piece of advice:

(1)  Paying off the books:  “Don’t let your employees’ tax issues with Uncle Sam become your issues.”

He went on to advise against paying people “off the books,” for a number of reasons:
  • when you eventually have to pay them on the books, they’ll be taking home less money each week, and will want you to raise their pay to make up for that.  And now, there’s a morale problem --- either your employee’s, or yours.
  •  if you fire someone you’ve been paying off the books, and they somehow get the idea they can apply for unemployment – you’ll start getting some tough questions regarding how much they were paid.  Government agencies are talking to each other more frequently than in the past (Labor Dept; IRS).
 (2)  Independent Contractors:  Employers who pay people as  “independent contractors” rather than as employees are taking an increasingly large risk:
  •  The IRS is now devoting more resources (and computer power) to sniff out employers who are misusing the independent contractor classification.  Penalties can be stiff, because these employers are not withholding taxes from independent contractors – taxes which must be forwarded to the state and federal government on a regular basis.
  •  If a faux independent contractor is injured on the job, guess who’s liable:  the employer.  And if that employer hasn’t been including the person’s wages in their worker’s compensation insurance premiums, that accident might be a non-insured event.  Meaning the employer could be held liable for medical costs, at the very least.  [By the way, make sure that real independent contractors and subcontractors who perform work for you carry their own worker’s compensation insurance].
 (3) Forcing employees to work “off the clock” (uncompensated); and not paying overtime when required:
            Even a "big box" chain store got into trouble for the first of these.  Is your legal department and “war chest” as big as theirs?  These practices are an invitation for a complaint to the Department of Labor or the EEOC – especially when you’ve terminated someone who is now angry both about being cheated and about losing their job.  All it takes is one complaint, and your company gets investigated and audited.

So: don't take shortcuts like these that can backfire and cost you a lot more than you even hoped you could save.

-- Steve Caccavo, Founder of Constructive Business Solutions™, draws on his years of entrepreneurial experience to provide “been there, done that” business advice to owners of small and mid-size companies.   © 2011 by Constructive Business Solutions™, a division of Positive Employment Practices, Inc.

Thursday, June 16, 2011

Do You Have an Authority Problem?

June 16, 2011

Let’s face it:  you may have started your business because you have an authority problem.

You may or may not have been the one who suffered from it. 

Maybe you were oblivious to authority figures as you were growing up – you just “marched to the beat of a different drummer.”  If so, you suffered the consequences.

Or perhaps you were the rebellious hellion – and are now experiencing as a parent what you dealt out as an adolescent. 

Many entrepreneurs solve their authority problem by becoming the authority:  “Ahh, I’m in control at last!”  Only to realize that they still have to submit to authority:  that impersonal, heartless reality whose rules they have to decode.  The Marketplace.

Political philosophies aside, that’s the ultimate accountability for the entrepreneur.

-- Steve Caccavo, Founder of Constructive Business Solutions™, draws on his years of entrepreneurial experience to provide “been there, done that” business advice to owners of small and mid-size companies.     © 2011 by Constructive Business Solutions™, a division of Positive Employment Practices, Inc.

Saturday, May 28, 2011

Sell Yourself Into Trouble


May 28, 2011

Are you a shoot-from-the-hip entrepreneur?  Then you’re gonna love this.

Sell yourself into trouble – I dare you!  Do whatever you have to do – get a sales trainer in to hone your sales skills.  Get some marketing help to blast the message through the social media.  When you see the orders start to pour in, don’t let up.

Never did this before?  You were afraid your company couldn’t keep up with the orders?  You were nervous about descending into chaos?

Hold those thoughts -- they make sense.  So while you’re beefing up your sales and marketing, take a close look at your operational capabilities.  Are you operating efficiently but at capacity?  Are your people dropping the ball time after time?  Too busy selling to fix the process?  

Get some outside assistance to provide an objective view and plan corrective action, someone to be your right arm as you focus a good portion of your time on the sales side.

And while you’re at it, do some cash flow projections to predict the effects of those sales increases, to make sure you’re not selling yourself out of business. 

Ok, so sell yourself into a challenge – but not into unforeseen trouble;  just look down the road to see what you have to do to support that turbo-charged sales and marketing campaign.  Think “business holistic.” 

-- Steve Caccavo, Founder of Constructive Business Solutions™, draws on his years of entrepreneurial experience to provide “been there, done that” business advice to owners of small and mid-size companies.   © 2011 by Constructive Business Solutions™, a division of Positive Employment Practices, Inc.

Thursday, March 17, 2011

Does Your Business Need a Workout?

I was working out at the gym today.  Out of necessity, I’ve been developing more of a system, seeking out the machines that will strengthen muscles to support my back and increase flexibility. 

And it’s been working.  But it took a painful six-week recovery from a severe muscle spasm in my back to focus my attention on a solution. 

Oh, I’d worked on my abdominals before (needed to support the back—not to impress anyone),.  Unfortunately, I had a history of hurting myself doing sit-ups and crunches on the floor at home, and so I tended to avoid that part of working out. 

But now I’ve discovered a really good “abs” machine at the gym.  And for me, the machine provides a more defined range of motion that yields better results.  Actually, I discovered a “family” of machines that will help me achieve my objectives.

I’ve got a system.

And then the parallel hit me.  OK:  having built a company and having advised many others, I know systems help a business run more smoothly.  Seems to help my body run more smoothly, too.

And then the second parallel:  pain is the impetus to change for both body and business.  In both cases, implementing or improving systems, processes, procedures can improve functionality – and reduce or eliminate pain. 

So:  does your business need a workout?

I don’t mean, “the process of a debtor’s meeting a loan commitment by satisfying altered repayment terms” (www.yourdictionary.com).

I mean:  does your business need a workout – a solution to what’s causing inconsistent product or service quality, backorders to your customers, chaos and rework that your customers may or may not see – but which affect your bottom line? 

The workout will involve building your management muscle:  designing and implementing better processes, improving communication with employees, vendors and business partners, and adopting a “build then maintain” mindset. 

Not sure what I mean?  Hey, let’s meet at the gym and talk about it.

 -- Steve Caccavo, Founder of Constructive Business Solutions™, draws on his years of entrepreneurial experience to help owners strengthen and grow their small and mid-size businesses. © 2011 by Constructive Business Solutions™, a division of Positive Employment Practices, Inc.

Friday, February 18, 2011

Two Peanuts Walking


Two peanuts were walking down the street.  One was a salted.

And that was the sole point of differentiation. 

What’s yours?  Our highly-competitive business environment challenges each of us to stand out from the crowd, to get our message through.

Are you the salted peanut whose outer coating is the only thing that separates you from your competitors? 

Or do you present and operate your business from your core, your center – not shooting from the hip, but using your values along with the knowledge you’ve obtained “in the field”?  Providing real benefit to your clients from what you’ve learned from both your successes and – the hard way – through your mistakes.

Are you being true to yourself and using that truth to reach the client who can benefit most from your service? Who is seeking that which you are passionate about providing?  Who is the perfect fit for you?

Are you authentic?

-- Steve Caccavo, Founder of Constructive Business Solutions™, draws on his years of entrepreneurial experience to help owners strengthen and grow their small and mid-size businesses. © 2011 by Constructive Business Solutions™, a division of Positive Employment Practices, Inc.

Sunday, January 30, 2011

Ignoring Your Plan Leads to Expensive Decisions


 “If you don’t know where you’re going, you might not get there.” – Yogi Berra

Running a business requires attention to detail – so much so, that it’s easy to be so trapped in the moment that you temporarily forget the context, the “big picture.”  When asked to make a decision, you react instead of consider.  And in that reactive state, your plan, your strategy – and often your budget – go right out the window.

Yes, you just bought that ____________ (choose one / name your weakness)
  •   advertising package in the local paper;
  • 2-week ski vacation in Kansas;  
  • a five-year extension on your copier lease, at 30% off if paid up-front  
 Would you have made that same decision if you’d given yourself some time to think about it and deciding whether or not the proposal was consistent with the goals you’d set for your company?

If you haven’t done so already, create a Vision for your company.  A Vision Statement is a description, or word-picture, of what you want your business to be like at some point in the future (click here for a sample Vision Statement).

Your Vision Statement should reflect the your goals and values you have set for your company.  It can include elements such as:
  •  your company in relation to the competition
  •  how your company is perceived in its industry
  • community involvement
  • what kind of a place is it to work at?
  • financial performance

Your Vision is a beacon in the darkness that helps you maintain direction.  From your Vision, develop your strategy:  the plan or method for getting your company from where it is now to what it is like as described in the Vision.

So how do you use this on a day-to-day basis? 

Formulate plans that will move the company towards the Vision. 

When issues arise that you hadn’t anticipated, be sure that decisions you make are both appropriate to the situation and consistent with your overall plan.  If you have to react, do your best to relate a proposed decision to the “big picture” – your plan, your Vision. 

Sometimes these decisions involve money.  Sometimes, the issue is how do you handle a problem with an employee or a customer.

Here’s an actual example of the owner of a small business who made an “off-plan” decision that was probably an expensive mistake (names have been changed, ….):

Jennifer was in the midst of her visit to the hair-stylist (the business owner). The owner was talking to Jennifer about her “market,” which she described as “upscale” and those wanting “organic dyes.”

In the middle of this description, a sales person for a local “Pennysaver” magazine walked in the door, and in a very short time had sold the owner $900 worth of advertising.

Was this an “on-plan” decision?  Did it make sense to spend $900 for advertising in a publication that was not targeting the “upscale” and “organic” market the owner had been describing? 

The good thing about having a plan is that it can help you decide which things to say “yes” to, and which things will get a “no.”  And having a reason for saying no can reduce or eliminate any feelings of discomfort that “rejecting” a sales pitch can engender.

From Vision to decision
So take charge of your future.  Develop your Vision statement.  Share it with your employees, so they understand where you want the company to go.  Develop and execute plans that will move you towards that Vision. 

And use your Vision and plan as a tool for making better decisions and avoiding expensive mistakes.

-- Steve Caccavo, Founder of Constructive Business Solutions™, draws on his years of entrepreneurial experience to help owners strengthen and grow their small and mid-size businesses. © 2011 by Constructive Business Solutions™, a division of Positive Employment Practices, Inc.