Steve's Blog: Be Constructive!

Are You Smarter than a Fifth Grader Groundhog?

2011-08-30T15:13:00.002-04:00

-- 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.

Don't Do THIS with Employee Wages

2011-08-14T16:45:00.001-04:00

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:

Both the IRS and the Labor Department have long lists of criteria that someone must meet to be considered a true independent contractor (IRS: http://www.irs.gov/pub/irs-pdf/p15a.pdf).

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.

Do You Have an Authority Problem?

2011-06-16T16:19:00.000-04:00

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.

Sell Yourself Into Trouble

2011-05-28T21:13:00.000-04:00

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.”

Does Your Business Need a Workout?

2011-03-17T16:46:00.002-04:00

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.

Two Peanuts Walking

2011-02-18T20:28:00.000-05:00

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?

Ignoring Your Plan Leads to Expensive Decisions

2011-01-30T13:59:00.000-05:00

“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.

10 Steps to Effective Hiring

2010-08-26T17:30:00.000-04:00

Nervous because you’re new to it – or because you have a history of making poor hiring decisions? Prepare, and use the 10-step system:

1. Job Description

Write a job description for each job position that defines the “essential functions” (core duties) of the job, the secondary responsibilities, and the skills and experience required and physical demands. An optional element is a section listing “evaluation criteria,” which can serve as a guide to both management and to the new employee. Good job descriptions can help in hiring, performance evaluations, and defense in Americans with Disabilities Act (ADA) lawsuits.

2. Design structured interviews

Write down a list of questions to ask -- and ask the same questions of each candidate for the same position. This will help you compare “apples to apples” and make the selection less subjective. Important: Do not ask questions (direct or indirect) regarding: age, marital status, children, religion, national origin, race, sexual orientation, disability or arrests (you may ask about convictions).

3. Place ads, job postings. Conduct phone screening.

4. Receive and review applications

5. Pre-employment testing

Be careful. Make sure any testing is valid (tests for what is designed to) and reliable (provides consistent results). Test supplier must certify that it is EEO-compliant. This should not be a “make or break” item – it is just part of the mix, and a basis for further questions.

6. “Work auditions” where appropriate

For some types of work, an on-the-job tryout for a limited time period can show how someone is likely to perform in a “real-life” setting, and also shows the applicant what a job really involves. You should pay the person, but it doesn’t have to be at the actual rate for the job, since it’s an “audition.”

7. Select final contenders

8. Check and document references for final contenders. Use a Reference Release Form.

Get written permission and a “release” from liability from the applicant. Always check references -- and record the results -- even if the best you can get is “name, rank and serial number.” Doing the best you can to check an applicant’s background--like motor vehicle reports for an employee whose job requires driving-- can be used to counter possible charges of “negligent hiring.”

9. Optional background check – for “final applicants”

ESPECIALLY for any “security-sensitive” position (access to accounting system, inventory, premises or homes of clients, etc.), conduct a criminal background check and, if relevant, a credit check. You must follow FCRA (Fair Credit Reporting Act) procedures, including a disclosure form that the applicant signs. You may also want to consider a pre-employment drug screen – both for purposes of establishing reliability AND as part of a safety program. Consult an attorney knowledgeable in this area to set up the proper procedures.

10. Offer of employment letter.

This documents employment arrangements discussed with the applicant, and helps avoid misunderstandings that can stem from “verbal-only” communication. Put an “expiration date” on the letter – a date by which the candidate must respond.

-- Steve Caccavo, President of Constructive Business Solutions™, draws on his years of entrepreneurial experience to help owners strengthen and grow their small and mid-size businesses In addition to business ownership experience, he is a certified Human Resources professional who has conducted employment practices audits at hundreds of companies in the NY Metro area.. © 2010 by Constructive Business Solutions™, a division of Positive Employment Practices, Inc.

How do You Eat An Elephant?

2010-08-18T16:27:00.000-04:00

Q: How do you eat an elephant?

A: One bite at a time

This question is one I ask of someone facing what seems like an overwhelming or impossible task. The answer invariably has a relaxing effect, letting the person open their mind to a solution comprised of many small but manageable steps. It draws them in, instilling resolve and belief that yes – they can deal with that “elephant in the room.”

What elephant are you trying to confront: starting a business? expanding a business from solopreneur stage to “employer” stage? re-energizing stagnant sales? finding a new market for your product or service? problems with employees? There’s always some “elephant” that’s confronting us: another mountain peak to climb, another river to cross.

You can do it. But you must take on that challenge in a way you can manage. Like learning a new riff on your guitar, slowly identify the basic elements (notes) and work out the sequence of steps (the melody) before slowly executing those steps (notes) in order. Practice them first before you have to go on stage and put yourself on the line.

Break down the big problem into a series of much smaller problems, so that you can solve the small ones, in sequence. When you finish, you’ll find you’ve solved the big one.

Break down that elephant into a series of small bites. Mmm…not so tough, after all.

Author’s Note: in writing this piece, I tried to find the source of the saying, but couldn’t. In searching, I stumbled across an interesting article on “elephant jokes” in Wikipedia:

http://en.wikipedia.org/wiki/Elephant_jokes. Remember that old one from childhood days: “Q: Why is a bluebird blue? A: So you can tell it apart from an elephant.”

-- 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. © 2010 by Constructive Business Solutions™, a division of Positive Employment Practices, Inc.

Turning Your Hobby into a Business

2010-06-07T15:20:00.000-04:00

I meet many people who have a dream of taking something they do for a hobby and creating a business out of it. Often, they have no idea of how to go about doing that – sometimes even after they’ve already started the business and find themselves floundering.

Earlier this Spring, Joe Connolly, business writer for the Wall Street Journal and creator of the Small Business Report on WCBS880 radio, asked me what advice I would give to people who dream of starting a business, since “so very few people seem to ever make a real business out of a personal interest."

I’ve done it twice. Here’s what happened with the more successful venture, a specialty baked goods company called The Well-Bred Loaf:

• We had tested the market by (A) initially selling at an outdoor market and (B) by developing some wholesale accounts (E.A.T., Balducci’s) before having to invest in a commercial space & equipment. So by the time we made the financial investment, we knew we had a business.
• The timing of all this – catching the upswing of what I call the “gourmet food boom” – enabled us to accelerate the growth of the business.
• But what differentiated Well-Bred Loaf from other home bakers of that era was that:
o We were well-organized in the business details as well as the sales, production and delivery of the products.
o We quickly developed effective “guerilla marketing” methods and provided good service to our direct customers – the store owners – as well as consistently-excellent products to the ultimate consumers.
o We identified and targeted those types of stores that offered strong “point-of-purchase” opportunities for our products.

The problem I often see is that while someone may have a dream, and even a good product, they have no evidence to indicate whether there is a market for it.
• Find a way to TEST – to try it out before you risk everything you’ve got. If you’re thinking about opening a retail store, you should first study the market for products similar to those you’re thinking of selling – BEFORE opening a store. And location, of course, is CRITICAL in retail.
• Are there people who want to buy it? What’s their “profile”?
• Can you produce the product at a price where you will make a profit and people will buy it?

And a final caution: if you’ve got a dollar and a dream – find out as much as possible what it’s like to run a business. A business is comprised of both the dream and the details of how to make the dream come true. And the details take up most of your time. DEFINITELY speak with others, try to get a realistic picture of what your life will be like (in the early days, I used to say, “There’s no life after Loaf”), and get advice and support from people with experience that could be critical to your success.

View information on Steve's presentations, including "Turning Your Hobby into a Business," at http://constructivebusiness.info/Presentations.aspx

-- 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. © 2010 by Constructive Business Solutions™, a division of Positive Employment Practices, Inc

The Three Biggest Mistakes Made by Owners of Growing Companies

2010-04-22T15:00:00.000-04:00

Mistake #1: the owner fails to grow with the business
• micromanages
• continues to use same way of staying in control that worked when the biz was smaller
• becomes a decision bottleneck

Mistake #2: failure to develop procedures & systems to help the company run smoothly as it grows
• owner shoots from the hip instead of planning & executing
• no long-term strategy
o frequent changes in direction –
o these lead to costly mistakes
• Lack of solid foundations: as Jimi Hendrix said, “Castles made of sand_fall in the sea_eventually.

Mistake #3: failure to understand the value of the company’s human assets
• “Top-down” management stifles initiative and innovation.
• Not understanding that many of the best employees are motivated by being a part of “making it happen.”

Getting it right the first time:
• “You must learn from the mistakes of others – you can’t possibly live long enough to make them all yourself” –Sam Levenson
• Get input from people outside the company – don’t rely only on your own perceptions
o Customers
o Suppliers
o Other business owners

See also: in this blog: Foundations; This Job Has No Dignity; Sharing the Sandbox
Listen to Joe Connolly's interview with Steve Caccavo on WCBS Radio
View information about Steve's presentations at http://constructivebusiness.info/Presentations.aspx

-- 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. © 2010 by Constructive Business Solutions™, a division of Positive Employment Practices, Inc.

“You must learn from the mistakes of others. You can’t possibly live long enough to make them all yourself.” --Sam Levenson

2010-04-14T14:46:00.000-04:00

4/14/2010:

As a kid, I loved to collect things: superhero comic books, baseball cards, and…acorns. Huge oak trees showered the schoolyard each fall with fat, brown, irresistible acorns. One day during recess, I followed an impulse and filled the pockets of my jeans. What was I thinking? Back in the classroom I sat down, and the acorns burst out of my bulging pockets, rattling across the wood floor. My face burned with embarrassment as the other kids laughed and the fearsome Miss Sampsel scowled.

Years later, as a business owner and employer, I realized that impulsive actions or decisions could have serious consequences. The “acorns” were now decisions like:

• We’ve landed a big account, and we really need the boost in sales. But the credit terms they want could put us in a cash squeeze. What do I do?
• A valued employee is lobbying for that new management position – but I think we need someone who already has a track record elsewhere. How do I handle this?
• Our Sales Manager is pushing for a distribution center in Chicago – over 700 miles away -- to service a chain of convenience stores. What questions do I need to ask -- and answer -- to make a good decision?

Sound familiar? Do you have “acorns” ready to burst out of your pockets?

If I’d had an Advisory Board -- a trusted group of business owners facing similar challenges, for instance – I could have gotten “real-world” advice that might have saved me a lot of time, money and trouble. Maybe I wouldn’t have had to make the same mistakes that others had already made and learned from !

Such groups – sometimes called “peer advisory” or “Mastermind” groups -- have been around for quite some time. But with cash being tight, the cost of membership was out of my reach -- so I relied on my own judgment even when I was on unfamiliar turf.

Today, as a business advisor to entrepreneurial companies, I often meet owners who need that real-world perspective. Yet the franchised advisory groups require a substantial financial commitment that can easily exceed $10,000 a year. And so the smaller companies – including yours? – don’t get the support they need.

Until now.

I started my first business in my home and grew it to a 120-employee manufacturing, marketing and distribution company. On selling that company in 1996, I started my consulting practice, Constructive Business Solutions™, specializing in owners of small and midsize companies who wanted to get to the next level.

Now, for that underserved small-business market, I’m organizing Constructive Business Mastermind Groups™ in the New York Metro area. Members provide feedback and business advice to each other in a confidential setting, aided by a trained facilitator with “been there, done that” experience.

Interested in learning from the mistakes – and successes – of other business owners? Tired of “going it alone” all the time?

The investment you make in your business through use of either professional advisors or peer advisory (Mastermind) groups will pay back through accelerated problem-solving and achievement of business goals.

Have some difficult situations to handle and want to see how others have done it?

Get in touch for more information about Constructive Business Mastermind Groups™ -- see if it’s a good fit for you.

On the web at: http://www.constructivebusiness.info/MastermindGroups.aspx
By e-mail: MastermindInfo@ConstructiveBusiness.info
By phone: (845) 634-0076

-- 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. © 2010 by Constructive Business Solutions™, a division of Positive Employment Practices, Inc.

Guest Blog: Losing a Client over $1

2010-02-25T16:53:00.000-05:00

by Karen Rosenberg Caccavo, MBA

February 25, 2010

One of the things I do for clients as their daily money manager is uncover and get rid of “hidden” fees that clients inevitably pay but shouldn’t.

I was recently reviewing a client’s checking account and saw that the insurance premium for his home and auto are being automatically taken out of his account in two separate payments each month. I called the broker and found out that for the “privilege” of having this done, a $1 service fee is added to each payment. When I asked why the monthly deduction wasn’t coming out as one payment for both policies, I was told, “The client has to ask us to do this.” When I pointed out that the client is on a fixed income and meets with his broker every year to review his account but would never know that this small money saving option was available, I was told “We don’t look at every client’s bill in detail.”

I asked for the change to be made to his billing immediately but was told that there would be a one month lag—the next payment was “only” 8 days away. When I got off the phone and conveyed the information to my client, he was angry. “I’ve been insured with this agency for 30 years,” he said, “But now I want to switch.” He insisted we submit a “broker of record” letter so he can change insurance agencies.

I can’t help but wonder how the broker is going to feel about losing a client after all of these years, not to a popular lizard, but over $1.

Karen Rosenberg Caccavo, MBA is a Daily Money Manager. She can be reached through her website, PersonalMoneyManger.net or LinkedIn, or by e-mail at: Karen “at” PersonalMoneyManager.net.

Foundations

2010-01-23T14:28:00.000-05:00

"If you have built castles in the air, your work need not be lost, that is where they should be. Now put foundations under them." -- Henry David Thoreau

“Castles made of sand melt into the sea, eventually.” – Jimi Hendrix

January 23, 2010 --

Over one hundred twenty years separate those two perspectives on the permanence – or impermanence – of human creations, dreams, relationships. The first was written by a contemplative rebel near a New England pond, and the other by a late 1960s guitar-burning, acid-dropping musical innovator. Yet the point both make is the same: you need to build your dream on solid foundations. You can play “catch-up” in the entrepreneurial “ready-fire-aim” tradition (says Thoreau), or you can fail to put in the foundations or systems that your dream (your business, perhaps?) needs to survive to maturity, and watch it slip into the sea, eventu-al-ly (sings Hendrix).

You need foundations – systems and procedures that support consistent quality in products or service – on which to grow a business that is sustainable. These foundations will support your growth as a business owner, which needs to evolve and change as the business grows.

The important thing to remember is that these foundations must be designed to support the business, not bind it like a straightjacket (see “Systematize, Don’t Bureaucratize”, Jan. 15, 2009). Flexibility and innovation are survival tools in an era of constant change. Even skyscrapers must be designed and built with some “give” to help survive the buffeting winds. So you must create a business environment that fosters new ideas – both yours and those of others in the organization (see Sharing the Sandbox, Dec. 15, 2008).

Brainstorm! Blue Sky! Mind Mapping! New product development! They should be ongoing processes in your organization. If you are B2B, ask customers what kinds of services would help improve their businesses or make their lives easier. Experiment. Not only will these help lead to new sales – they will provide the “juice” for your employees that makes them look forward to coming to work. Share the Sandbox.

"Education is when you read the fine print..."

2009-12-21T13:53:00.000-05:00

“Education is when you read the fine print. Experience is what you get when you don’t.” -- Pete Seeger

December 21, 2009—

I never thought I’d be quoting Pete Seeger in a business context. Maybe that’s because I knew of him from a prior lifetime, when I lived and breathed folk music. But truer words were never spoken, and I would guess that Pete learned this from unavoidable contact with the cutthroat side of the music business.

If you’re a business owner, it pays to pay attention to that fine print, whether it’s the “terms and conditions” printed on the back side of a purchase order form, or the insurance and indemnification provisions of a construction contract. I’m not an attorney, but I’ve worked with some great ones in areas that have included (but are “not limited to”) trademark infringement, labor & employment, and construction. As one attorney remarked, regarding extended negotiations on a five-million-dollar agreement, “a contract is like a battle plan. Hopefully, you don’t have to invoke its provisions, but if something goes wrong in the project, at least the rules of engagement have already been established.”

The “handshake” part of a business agreement IS important. The best-written contracts may be worthless if you’re dealing with a snake. But company owners sometimes suffer unanticipated consequences because they are too impatient to “read the fine print.” Instead, they focus only on the scope of work and the price and payment terms of the agreement, when they should negotiate the language that they view as “just boilerplate.”

Contracts are important in any industry, but in construction, the liability issues and how they are addressed in the “fine print” are especially important, since many construction projects have inherent risks of worker injury and of property damage. And if a business, by failing to read and negotiate the “fine print,” gets socked with more than its fair share of liability and costs from an accident, that business suffers financial consequences that include legal fees and higher insurance rates.

So take the time – and spend some up-front dollars – to review that fine print and to understand both the business and legal consequences of what’s in that contract.

-- Steve Caccavo, President of Constructive Business Solutions™, draws on his years of entrepreneurial experience to help owners strengthen and grow their small and mid-size businesses. © 2009 by Constructive Business Solutions™, a division of Positive Employment Practices, Inc.

"When You Get to the Fork in the Road, Take It ! " -- Yogi Berra

2009-07-22T17:52:00.000-04:00

Have you ever watched a cat move around a room? Unless El Gato is stalking a target (a bird, a mouse, an insect, a ball of yarn), he is wandering according to a constantly-changing set of instructions: first heading in one direction; then suddenly heading off in another for no apparent reason.

This behavior reflects the absence of “executive function” – a term for the “executive department” of our brains that makes decisions. Cats don’t have it. Some humans have lost it due to brain damage. And any observer of the business world will swear that there are company owners with this deficit, too: constantly changing directions and reacting to the stimulus of the moment rather than sailing a constant course.

In an earlier posting, I discussed the importance of a strategic vision in helping companies decide whether an unexpected “deal” is an opportunity or a distraction. But a strategic vision also helps a company which fork in the road to take to stay on track. The other fork might just get us irretrievably lost, taking us down the road to oblivion. A company without a strategic vision is often managed in a haphazard way: like a country without a Chief Executive.

As Yogi said: “If you don’t know where you’re going, you’re never going to get there.”

-- Steve Caccavo, President of Constructive Business Solutions™, draws on his years of entrepreneurial experience to help owners strengthen and grow their small and mid-size businesses. © 2009 by Constructive Business Solutions™, a division of Positive Employment Practices, Inc.

Opportunity or Distraction?

2009-05-29T17:14:00.000-04:00

Strategic planning can seem like something that only huge corporations need, with scores of "suits" sitting around a conference room table.

NOT !

You and I, as owners of small-to-mid size businesses, can benefit from a little planning, too. It's just that it's not an exercise that's capped off by a document that sits in a drawer, followed by "life as usual." It can be as simple as saying:

(1) What's my "vision" for the company-- what do I want it to look like "x" number of years down the road.

(2) How does that compare to what my company looks like now? That difference is called the "gap" -- and what I've just done once I've answered these two questions is called a "gap analysis."

(3) How do I bridge the gap? Or, "how do I get from here to there?"

That question is where you start planning that journey. How to do that could be a lengthy seminar. So I'm skipping to a question that many business owners fail to ask:

Is that "deal" I'm looking at an opportunity or a distraction?

The answer is: would chasing that "opportunity" pull us off-course & off-plan? Would the benefits of that opportunity be short-term and end up taking our sights off the target (the goal / the vision)?

Sometimes, the benefits of a deal that may temporarily take us off-course outweigh the distraction from the longer-term goal. But in other instances, that distraction may set us on an unanticipated path that, down the road, leaves us wondering: "How did we get into this quagmire?"

So when you're presented with the potential of an attractive deal that is outside of your normal scope of work, just ask: opportunity or distraction? Is it really as attractive as it seems?

This Job Has No Dignity!

2009-02-22T16:45:00.001-05:00

This Job Has No Dignity!

A Lesson Learned in Growing a Business

~ February 22, 2009 ~
Many years ago – and several lifetimes ago, it seems….

I must have been looking over his shoulder a little too closely – inspecting how well he had cleaned the 60-quart bowl for the bakery’s Hobart mixer. Gary turned around, glared at me, and in a voice strained with frustration, started jumping up and down, arms extended upward, yelling, “This job has no dignity! This job has no dignity! This job has no dignity!” he said, over and over.

Gary had a way of voicing his opinions very directly: he didn’t round off the sharp corners to soften his biting analysis of a situation. But it wasn’t hostile or personal, either, so we were able to laugh about it later.

And I “got” it. I learned a valuable lesson which has served me well ever since that day: that every person needs to feel a sense of dignity in their job, whether they are sweeping the floors or working with customers. That a business has to give each employee some “space” in which they can come up with new ideas, learn from their mistakes, and succeed in their job. That as a business owner, I needed to accept that my employees would probably not do everything exactly the way I did, but that this was OK. so long as they maintained reasonable standards of workmanship.

How does this translate to you, if you’re a business owner? The reason for hiring people is that you can’t do all the work yourself, if you want to grow your business. The more you grow the sales, the more you need to hire others to perform the day-to-day work necessary to providing products or services to your company’s customers. You literally won’t have the time to continue to “micro-manage” your people. Learn from my mistake before you de-motivate your people – why go through the same learning curve? You’ll be plenty busy reinventing your own job as the business grows. And you’ll need to hire good people and learn how to help them maximize their contributions to the business [See “Sharing the Sandbox”].

-- Steve Caccavo, President of Constructive Business Solutions™, draws on his years of entrepreneurial experience to help owners strengthen and grow their small and mid-size businesses. © 2009 by Constructive Business Solutions™, a division of Positive Employment Practices, Inc.

2009-01-05T16:03:00.000-05:00

Systematize – Don’t Bureaucratize !
~ a cautionary note for business owners ~

Have you ever known someone who swore that their business would NOT have the same frustrating “rules, procedures and systems” they experienced – and could not stand – at the job they had just quit?

Perhaps what they really meant, but couldn’t articulate, was that they were tired of following someone else’s agenda. Now it was their turn to determine the direction of the business (see Sharing the Sandbox).

I’ve met a few entrepreneurs who literally have told me they don’t want “policies and procedures” at their company because they went into business to get away from the “corporate” environment.

While these “ex-corporate rebels” are in the minority, many other owner-operated businesses suffer from either a lack of structure – poorly-defined procedures or systems -- or from failure to communicate the procedures and provide training to their employees.

The results: frustrated employees who have to re-do faulty work, and annoyed customers who may or may not give the company “one more chance” to get it right. The costs? Higher labor costs + loss of repeat sales = lower profits.

Oh yes – and the chaos
(like when half the staff goes on vacation at the same time due to inadequate procedure)

So if you’re a “corporate refugee,” just remember: there’s a reason for at least some of those “policies, procedures and systems.” A “system” or “procedure” is simply a blueprint for getting it right the first time, every time – AND for doing it more profitably:

“SYSTEM” = Save Yourself Significant Time, Energy & Money.

-- Steve Caccavo, President of Constructive Business Solutions™, draws on his years of entrepreneurial experience to help owners strengthen and grow their small and mid-size businesses. © 2009 by Constructive Business Solutions™, a division of Positive Employment Practices, Inc.

2008-12-23T14:09:00.000-05:00

“Waiter, there’s a fly in my Soup (Kitchen)”

Community Service in a time of Need
December 23, 2008

A pause from the world of business, from making a living, from challenges faced by friends, family members and self. A pause during this season of giving, of celebration of light to think about those whose struggles are so much greater than ours….

My wife, two daughters and I have been volunteering at a “feed the hungry” program for years now that is housed in Christ Episcopal Church in Suffern, N.Y. (Rockland County). Our girls were ages 8 & 4 when we started; they are 24 and 20 now, and they still help out when they’re home from college / grad school.

We’re part of a group of volunteers that originated in a Reform temple. We give volunteers from the Church a “breather” on Sundays so they can attend their services. That temple no longer exists, but the volunteers have stayed on with what we simply call the “Soup Kitchen.” Our commitment is reinforced both by a belief in “healing the world” and by the satisfaction in helping others.

The group – there’s no official name for it – has grown to include people of diverse religious affiliations – usually friends of volunteers. Families with young children become volunteers to give their children a positive experience in helping others. Same with Girl Scout troops. Some volunteers have moved out of the area; we have lost some others to medical challenges after they’ve participated for many years. And there are an amazing number of people who have been doing this as long – or longer – than has my family. ,

Some of our clients -- the people we feed -- have been “long-timers.” Some come for the conversation as well as the food. All of them are people who’ve faced challenges – often, not successfully. Over the years, the mix of people we serve has become somewhat younger, and we’re seeing some families with children, as well as a greater ethnic mix.

A “tip” for volunteer groups: If you’re involved with a similar program that involves scheduling of volunteers, we have an idea that might be helpful to you. Because all of us lead very busy lives, there have been a few instances in the past when a volunteer family didn’t show up. Not for lack of caring – just that their organizational skills failed them, and they didn’t calendar their scheduled date. Years ago, our youngest daughter, as a B’at Mitzvah project, set up an e-mail reminder system for the volunteers, and it worked well. When she was finished her project, she said, “Dad, it’s yours now.” And I’ve been doing it ever since. It works, and it’s a communication tool that reinforces a sense of community in our far-flung volunteer group.

Oh, and by the way – there are no flies in the very clean, well-furnished commercial kitchen at Christ Episcopal Church.

-- Steve Caccavo, President of Constructive Business Solutions™, draws on his years of entrepreneurial experience to help owners strengthen and grow their small and mid-size businesses. © 2009 by Constructive Business Solutions™, a division of Positive Employment Practices, Inc.

Sharing the Sandbox -- a Great Motivator

2008-12-15T14:53:00.000-05:00

Running a business is not just challenging, stressful and exhausting. It's a tremendous vehicle for creativity -- solving problems, creating new products or services, finding better ways to do things. Your business is a creative "sandbox" for you to play in.

Creativity isn't just for artists. In the business world, creativity needs both sides of the brain: the right side, for the ideas, and the left side for the discipline, patience and orientation to detail needed to implement the idea.
You've probably already discovered that you can't build your business all by yourself. What's worked for you ? I've seen owners stress themselves by keeping the creativity -- and the credit -- for themselves. This becomes increasingly difficult to do as a company grows.

I've owned a growing company -- The Well-Bred Loaf, Inc. -- a baked-goods manufacturer that grew from two people baking in a tiny apartment to a 120-person company producing delicious, all-natural cookies, brownies, blondies and cakes per year in a 40,000 square foot factory. Growth. Excitement. Creativity.
How did I do that? Not all by myself, certainly. I hired people who at the time had experience I lacked, and welcomed their ideas and input. In fact, what I found was this:

The best people to help you succeed are those people who are motivated by being a part of "making it happen."

And how do you, as an owner, help get them involved in making it happen ?
By sharing the sandbox -- listening to the ideas these "key" people provide, incorporating their recommendations into company decisions, and letting them share in the fun, in the satisfaction that they helped the company succeed.

-- Steve Caccavo, President of Constructive Business Solutions™, draws on his years of entrepreneurial experience to help owners strengthen and grow their small and mid-size businesses. © 2009, 2010 by Constructive Business Solutions™, a division of Positive Employment Practices, Inc.