/Managing People

Job creation is a False Idol. Start a Business Instead!

430_3145186“Job creation is a false idol. The future is about gigs and assets and art and an ever-shifting series of partnerships and projects.” – Seth Godin, The Forever Recession (and the Coming Revolution)

The U.S. national unemployment rate is hovering at around 9 percent. Millions of people are unemployed, underemployed, or unhappily employed. Millions of jobs have been destroyed by the ravages of the recent recession, and many of those jobs are unlikely to come back, even when the economy recovers, because the skills and capacities needed to do those jobs are no longer as much in demand by employers.

To give one highly visible example, the U.S. economy no longer needs as many construction workers and mortgage brokers and realtors as we did during the years of the housing boom. And many administrative “office jobs” have been outsourced or automated as digital technologies and globalization and productivity increases have made it possible to do more work with fewer full-time American employees. Continue reading “Job creation is a False Idol. Start a Business Instead!” »

Running a Business is a Matter of Trust (Part 1)

438_3383941Despite the complex interconnections and technical innovations of our modern global economy, most of our daily business transactions and interactions are ultimately based on something old and simple: trust.

Buyers trust sellers to sell them a quality product and to keep their promises. Sellers (especially B2B sellers) trust buyers to pay their bills.

Sure, we have contracts and lawyers and government regulations to ensure a fair playing field and protect everyone’s interests. And it’s prudent for every business owner to incorporate using LLC business structures or other corporate structures to protect our personal assets.

But once you start a business, you quickly learn that the biggest part of every business transaction is still a simple matter of trust between two people: I trust you to do what you said you would do, and you trust me to uphold my end of the deal. Continue reading “Running a Business is a Matter of Trust (Part 1)” »

Running a Business is a Matter of Trust (Part 2)

1093_4516806In part 1 of this series, we explored a few of the ways that small business owners can increase customers’ perception of trust in their businesses (and improve their small business marketing as a result).

Here are some additional ideas for how small businesses can build trust with customers:

  • Don’t punish everyone for one person’s mistake. Have you ever seen a restaurant or store with signs on the door saying: “CASH ONLY! NO CHECKS!” “RESTROOMS ARE FOR CUSTOMERS ONLY! NO LOITERING!” “ABSOLUTELY NO REFUNDS, ALL SALES ARE FINAL!” Here’s the problem with this approach: you’re treating all of your customers as “guilty until proven innocent.” Just because one customer bounced a check, or one customer lingered too long at the store restroom without buying anything, or one customer was painful to deal with in asking for a refund, now the store forces all of its customers to see these signs (and feel a little less trusted and a little less welcome). Rules are useful, but it’s more important to build trusting relationships with customers who feel comfortable buying from you, and who want to keep buying from you for the long term.
  • Preserve your company’s public reputation. Even if your business is great at serving customers and delivering an excellent product, you can still lose trust with customers by your public statements and actions. Restaurants can suffer a big drop in business from one bad visit from the health inspector, even if the food looks great on the diners’ plates. Poorly planned statements to the media, or hostile, inflammatory or misleading public comments on Facebook, Yelp or other online forums, can reflect badly on your company, even if your everyday customer experience is not directly involved. Be careful about who you authorize to serve as a spokesperson for your company. If you have multiple employees, create a media policy (including social media) to ensure that your employees do not try to speak on behalf of your company without authorization: you need a consistent voice to promote your company and answer questions from customers and others, with no confusion or misleading information (even if it’s being done with good intentions).
  • Hire and promote trustworthy people – no exceptions. People who play fast and loose with their ethics (business or personal) should not be allowed to represent your company. Listen to your intuition and “go with your gut” if you’re trying to decide whether a new hire is trustworthy. Listen to small talk and the stories people tell about their personal lives. If one of your employees boasts about getting a sweet deal on some new electronic equipment from their cousin who works at the store (“And the manager doesn’t even know about it!”), or brags about skimming some money off their tax bill (“The IRS will never know the difference!”), or writes on Facebook or Twitter about how annoying their customers are…well, those people are likely to shortchange or underdeliver for your company, as well. Deciding who to trust is one of the most important decisions for a business owner and manager to make. It’s not always easy, but if you get it right, hiring only the most trustworthy employees can save your company a huge amount of money and a priceless amount of value to your brand and reputation.

Continue reading “Running a Business is a Matter of Trust (Part 2)” »

Running a Business is a Matter of Trust (Part 1)

658_3465281Despite the complex interconnections and technical innovations of our modern global economy, most of our daily business transactions and interactions are ultimately based on something old and simple: trust.

Buyers trust sellers to sell them a quality product and to keep their promises. Sellers (especially B2B sellers) trust buyers to pay their bills.

Sure, we have contracts and lawyers and government regulations to ensure a fair playing field and protect everyone’s interests. And it’s prudent for every business owner to incorporate using LLC business structures or other corporate structures to protect our personal assets.

But once you start a business, you quickly learn that the biggest part of every business transaction is still a simple matter of trust between two people: I trust you to do what you said you would do, and you trust me to uphold my end of the deal.

Trustworthiness is one of the cheapest and most effective tools for small business marketing. When people trust you, they are more likely to buy from you – and to tell their friends to buy from you. Continue reading “Running a Business is a Matter of Trust (Part 1)” »

Know Your Tax Responsibilities

775_4571645There’s no way around it. When you open your own business, you’re going to have to become mighty familiar with taxes.

Of course, you’ll engage a qualified accountant (a CPA, preferably) to ensure your payroll is properly calculated, but it’s a good idea to at least know what taxes you’ll be liable for as you get ready to open for business. Particularly if you’re coming from a job where all of the taxes were tidily summarized on your weekly pay stub, it’s helpful to get an idea of just what all of those columns will mean to you as the boss.

Employer Identification Number

 

First and foremost, you will need to apply for an Employer Identification Number (EIN), also known as a Federal Tax Identification Number. Basically, this is like a social security number for your business. It is the unique number that identifies your company as a business entity. Without it, you won’t be able to open a business bank account or file tax returns. Continue reading “Know Your Tax Responsibilities” »

Leasing Commercial Business Space

964_4248817Many business owners prefer to rent space rather than make a huge investment in commercial real estate. Leasing is a particularly good option if you initially have limited space needs, but anticipate a future move based on expansion.

It is a good idea, however, consult an attorney to help you navigate the laws that govern commercial leasing, and to help you make the best decision for your needs.

Even if you rent space from someone you know well, be sure that your lease is in writing. A commercial lease is an extremely important agreement, and a handshake won’t be enough if you and the landlord disagree in the future.

In general, it’s a good idea to research the going rate for space in the neighborhood before you negotiate. The SBA also advises allowing the landlord to make the first offer, and asking for a lower rent than you think you can initially get.

Your lease should cover these essential points:

  1. The amount of the rent. The lease should also stipulate the amount and date of any escalations in the rent – these are generally based on such factors as cost of living indexes or real estate forecasts.
  2. The length of the lease, the date it begins, and the terms for renewal. You should carefully consider how long you want to commitment to the property. If you anticipate moving in the not-too-distant future, a shorter lease obviously makes sense. If you hope to remain in the same location, a longer lease will better suit your needs. The longer you stay, the better your chances for renegotiating the rent or other aspects of the lease.
  3. The specifics of what is included in the rent. Does it cover utilities and water, or will you pay for those items separately?
  4. Whether you will be responsible for paying any portion of the landlord’s property taxes, maintenance expenses, or insurance costs, and how such payments would be calculated.
  5. The amount of any required deposit, and whether a letter of credit will be accepted in lieu of cash.
  6. A description of the rental space, defining square footage, rights of access, available parking, and any other amenities.
  7. A detailed listing of any improvement the landlord will make before you take occupancy. Signing a longer lease may make the landlord more agreeable to making improvements or renovations.
  8. Any representations made to you by the landlord or leasing agent regarding such things as average utility costs, amount of foot traffic, compliance with Americans with Disabilities Act, etc.
  9. Affirmation that the space is properly zoned for your type of business.
  10. Whether you may sublet or assign the lease to another party, and under what conditions. This will be important if you want to move from the space at a later date.
  11. The conditions under which either you or the landlord can terminate the lease, and any potential consequences of doing so.

Continue reading “Leasing Commercial Business Space” »

The Perfect Balance

158_3162327While at lunch some years back, my friend reached into her purse that could double as an overnight bag, and extended a gift bag to me across the table. It wasn’t my birthday or any cause for a celebration. Separating the colorful tissue and ribbon, I peered inside and pulled out a pair of soft, fuzzy slippers.  I looked at her quizzically. “They’re your new work shoes!”  I had recently made the decision to quit my day job to focus on building my own business, strictly from home.

I remember our conversation that day oh so well.  I was already a side entrepreneur, but excited to pursue my desired career more extensively. And, I was equally excited that I was finally going to be able to stop juggling and get organized. The grocery shopping, the cleaning, the clutter, the laundry, the bills – all of those unending tasks that were always almost done, but always left unfinished.  I was finally going to be able to get everything done!

You can stop laughing now.

Working at home has proven to be the biggest juggling act of all. While I no longer pondered every morning what to wear to work, I did think about exactly how I was going to accomplish all of the things I see around me every day that need to get done. Seeing them was the problem.

When you’re working from a home office, it’s tough to ignore the dust on the desk and the bills piled off to the side.  It takes every ounce of self-restraint not to wipe down mirrors, countertops and sinks when taking a lunch or bathroom break. It’s hard not to answer the phone when my wonderful mom, who would do anything in the world for me, calls. “Hi honey. I know you’re working, but…..” That 20-minute phone conversation amounts to more time than that lost in my productivity.  Focus is difficult to maintain when you work in an environment with multiple distractions, and even more difficult to regain. Continue reading “The Perfect Balance” »

Small Business Record Keeping 101

763_3889995Whether you keep your own books or hire someone to do it for you, keeping track of your business income and expenses is a significant aspect of your job as a business owner. The type of records you keep depends on the type of business you own. If you are selling a product, lease office space, and deal with vendors, suppliers and individual customers, your system will be more in-depth than someone who works from a home office selling editing services, for example.

Any recordkeeping system should clearly show your income and expenses. Keep accurate records in ledgers and journals to show a summary of your business transactions. Your books must show your gross income, as well as your deductions and credits. For most small businesses, this information is reflected in the business checkbook. Continue reading “Small Business Record Keeping 101” »

By | November 30th, 2010|Managing People, Running A Small Business, Starting a Business, Taxes|0 Comments