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The Complete Small Business Owner's Guide to Managing Money, Time, and Talent
1. THE COMPLETE
SMALL BUSINESS
OWNER’S GUIDE
to managing money, time, and talent
Brought to you by
G0514
2. 2
TABLE OF CONTENTS
Intro 3
1. Money Management Tips for Small Business Owners 5
5 Things Every Business Should Have 6
Top Tech Tools for Small Business Success 7
2. Time Management Tips & Tools to Staying Sane and In Control 9
Getting Time Back on your Side 11
5 Mistakes Small Business Owners can Overcome 12
A Simple View of Delegation 14
3. Tips to Hiring Good People at the Right Time and Keeping Them 17
Defining What You Need 19
How to Afford to Pay for Employees or Services 21
When It’s Time to go All In For Top Talent 22
4. Recap 24
About eCapital 27
3. 3
INTRO
The words “struggling economy” sprinkle most news stories online and off when discussing the business climate and small business
landscape in general in the U.S. If you look beyond the headlines, however, there are modest signs of an economic recovery that should be
encouraging to you and other small business owners.
In a recent report by the Kauffman Foundation and LegalZoom the authors surveyed more
than 700 small business owners and discovered that despite conventional wisdom, growth is
real and happening. “The economy has moved in the past year—slowly, but trending upward,
and here and there we can start to see flashes of a recovery in acceleration.”
Particularly encouraging, the report added, was the growing availability of credit, with only
28 percent of respondents citing a lack of access to credit as a reason for their bumpy starts
in 2013 and into 2014; this compared to 45 percent of new business owners who named lack
of credit as their biggest obstacle in 2012. While the freeing up of credit and those willing to
lend money to small businesses is surely a positive sign in the years ahead, every company
leader suffers through fears related to finding money, making money, and saving money or
managing debt to cover any cash crunches (See the inset image from the Hiscox DNA of an
Entrepreneur Report for their Top 5). We provided some of this guidance on how to secure
money and increase cash flow quickly in our eCapital Cash Infusion Guide. As a refresher, here
are some of the options you have at your disposal, each with a wide range of pros and cons.
The Year Ahead: Biggest Fears
Base: All respondents
Government will not support
small businesses
I/We will not be able to
attract new customers
I/We will have to pass cost
increases on to customers
I/We do not have the financial
resources to keep my/our
business going
The rising cost of debt
• Use credit cards
• Ask for loans from family and friends
• Create an equity partnership
• Secure bank loans and Small Business Association (SBA) loans
• Slow-pay suppliers
• Hold back on paying payroll taxes
• Slow-pay employees
• Offer quick-pay discounts
• Pester for customers who pay you faster
• Factor invoices, also known as getting paid now for money you’re owed by a third party for a small fee
38%
35%
34%
31%
21%
The Hiscox DNA of an Entrepreneur Report 2013” page 6
4. 4
INTRO
This is by no means an exhaustive list, but you do have a financial toolbox at your disposal for surviving the cash crunch if that’s what you need
to do. That said, nobody starts a business to simply survive. You got into business to reduce your stress, call your own shots and become more
financially secure in the process. You want your company to be sustainable in the short and long term, with as few ups and downs as possible.
Thankfully, you’re not alone. People
have walked in your shoes and come out
the other side with either a life lesson or a
mistake they swear they’ll never repeat.
In the pages that follow on
money management tips, tools, and
time-savers, we’ll share some of that
advice so you can have it ready to apply
when opportunity strikes.
5. 5
1
MONEY
MANGEMENT TIPS
FOR SMALL
BUSINESS OWNERS
6. 6
MONEY MANGEMENT TIPS FOR SMALL BUSINESS OWNERS
From our experience, starting your information gathering with a well-defined
online search or posing questions in applicable online forums or groups in
places like Quora or LinkedIn can not only provide good guidance but also
grow your network of small business owners who are fighting through similar
problems.
Another advice filtering method is to look for patterns or commonalities in
the advice being shared. As it relates to managing your money, prevailing
wisdom on business success conveniently synchs up with the clients we
have who have been the most successful. All seem to have:
1. A business plan to help them stay focused, measure success, and
revisit the blueprint when new opportunities arise. There is some debate
on the value of a well-crafted plan versus jumping in with both feet, but
one thing all experts seem to agree on is the importance of a business
plan if you need to seek funding from a third-party like a bank or private
investor.
2. A marketing plan that details how you intend to put your business
plan into action. Nothing ensures a healthy, financially stable business
like a proven plan for turning prospects into customers and keeping
customers happy.
3. Cash on hand to weather shortfalls and plan for the future is critical,
according to Daniel Kehrer, founder & managing director of BizBest
Media Corp. “One of the biggest mistakes growing businesses make is
to run out of cash,” he said. “Having cash on hand is critical for staying
afloat and continuing to grow.”
What are some tactics you use to help
manage your cash flow?
Here’s what some
of your peers on
LinkedIn groups
had to say:
“In my experience the
only adequate financing
for a rapidly growing business is asset based, namely Factoring or
accounts receivable. Yes it is expensive but cash flow is essential for
growth. If your profit margin is strong enough then you can live with it
when demands require it. An invoice generated today can give you up
to 90% tomorrow.”
-William Bartus, Owner of Bartus Auction Mgt. Group
“Here are a few tips that might get you out of a jam. In the case of
a service business (much of my history), you may be able to 1) offer
a discount in exchange for faster payment 2) pay your staff overtime
to deliver faster and push up invoicing, thus payment 3) adjust work
schedules to move faster paying work through faster 4) temporary
help from your bank - they respond much better when you give them
good lead time. All of those options come with sacrifices but are
better options than running out of cash.”
-Blaine Bertsch, Founder of Dryrun.com
“Negotiate 60-90 days terms from your suppliers. Require payment
on delivery or before. Provide security to acquire low rate/long term
cash to have adequate operating cash. Ensure your life focus is on the
‘Create Side’ of Consume<>Create.”
-James Johnson, Strategic Partner at International Resource
Management Company
7. 7
MONEY MANGEMENT TIPS FOR SMALL BUSINESS OWNERS
4. A willingness to hire where you are weak. You can’t do it all. If you’re not a good salesperson, find one. If you hate administrative
tasks or managing people, delegate to someone you can trust to stay on top of it. But as you know, hiring good people on a budget is
easier said that done. Priority #1 if you ask Kehrer is hiring someone to manage your money if it’s not your strong suit.
5. At least a basic understanding of cash flow. While experts and owners alike seem to agree that hiring an accounting pro or
back office vendor to crunch numbers or manage accounts receivable and payables is a good move, the one bit of advice that was
also consistent was the suggestion to keep your own eyes on cash flow. After all, you’ll need a keen understanding of new business
opportunities in the pipeline, closed deals and their purchase terms, operating costs month-to-month, capital expenditures and any
seasonal fluctuations on the horizon so you can effectively meet payroll, pay vendors
and make purchases to grow the business.
While there is no single recipe for small business success, the ingredients above have
shown themselves to figure prominently in financially strong companies. Next up, is how
these companies leverage technology to keep costs low, and streamline operations to
achieve a quicker time to revenue.
Top Tech Tools for Small Business Success
We don’t have to tell you that competition is fierce. Not only are you faced with keeping
your name top of mind with prospects and customers, but you also need to out-think and
out-execute some of the biggest companies in the world to win consistent business. As a
result of these David vs. Goliath battles before you, many successful businesses have out-maneuvered
the competition big and small by investing in technology to simplify manual
tasks and reduce the need for headcount.
As an example, according to a recent study by the Small Business and Entrepreneur
Council, the small businesses that use mobile apps to help manage their operations are
saving more than 370 million of their own hours and over 725 million employee hours
annually. Based on the amount of employee hours saved and the average pay for small-business
employees, the study estimates that small firms surveyed are saving and average
of $275 per week, adding up to an average of over $14,000 per year.
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MONEY MANGEMENT TIPS FOR SMALL BUSINESS OWNERS
So, what are they doing and how can you do it too?
In addition to exploring the Google Apps universe for free or almost free tools for documents, email applications, and more, this list from
Forbes of 30 Terrific Tools for Small Businesses covers everything from affordable cloud storage to small business legal services.
And if that isn’t enough, Ilya Pozin, CEO of Open Me, as well as a columnist for Inc. and Forbes, suggested these “to boost your small
business.” Those still around today include:
1. Evernote 5. Expensify
2. Google Drive 6. Asana
3. Tripit 7. InDinero
4. LocalVox 8. Square
Suffice it to say, there is a veritable cornucopia of new technologies reportedly designed to address cost containment and business efficiency
concerns. You’ll also have no shortage of tax app advice headed your way prior to every year-end. (A good one, by the way from Business
News Daily is “11 Tax Solutions for Small Businesses.”) For this fact-finding mission and others, you just have to know what you’re looking for.
Your personal and professional network, as well as a comfort with asking questions of business owner peers in online forums, can be really
useful for finding the best apps and tools for the job at hand.
9. 9
2
TIME
MANGEMENT
TIPS & TOOLS
TO STAYING
SANE AND
IN CONTROL
10. 10
As a small business owner, your time is rarely your own. Recent studies indicate
that a majority of your time is spent in crisis management mode, fighting fires
across several work disciplines like human resources, IT, sales and marketing. If
that’s true for you, time is definitely not on your side at the moment, but it doesn’t
have to stay that way. If you want time to think, plan and guide your business
toward long-term success, it’s really as simple as:
• Organize & Prioritize
• Focus
• Delegate
But like exercise and eating right, being an unyielding manager of your own time
may be one of the most difficult things you tackle each day as a business owner.
In this chapter, we’ll share our research as well as the insights of other business
owners and experts on time management to shed light on the role time plays in
business sustainability. If we are successful, the words “I don’t have time” should
be followed by a slight pang of guilt and the review of the bullets above for
guidance.
Something on which owners and experts all seem to agree: You need to cut out or
minimize distractions, organize and prioritize your time and delegate non-revenue
generating tasks to someone else. In the remaining pages in this chapter, we will
share time management tips (known most recently as Productivity Hacks or Life
Hacking) and the software tools out there today that business owners just like you
swear by to keep themselves as peak performance levels for every minute they are
on the clock. If you have a favorite tip, tool or timesaving tale, share it with us and
we’ll pick our favorites to feature in upcoming blog posts.
“Time is really the only capital
that any human being has, and
the only thing he can’t afford to
lose.”
– Thomas Edison
“Time is at once the most
valuable and the most perishable
of all our possessions.”
– John Randolph
“The bad news is time flies. The
good news is you’re the pilot.”
– Michael Altshuler
TIME MANAGEMENT TIPS & TOOLS
11. 11
TIME MANAGEMENT TIPS & TOOLS
Getting time back on your side
As small business owner you spend more time working, on average, than
your big business counterparts by managing three to six job roles at any one
time. You are also working more hours and getting less sleep, according to a
2012 Manta wellness survey of 1,300 Small business Owners.
We’re also pretty sure you’ve noticed that there is a lot more to be distracted
by in the digital age. Reportedly, time, or the perceived lack of it, even has a
price you’re willing to pay to get it back – up to $500 per hour!
All that being the case, putting in more time to make up for distractions
isn’t the key to a happy life or a healthy business. In fact, Robert Craven,
a business development consultant, author and founder of The Directors’
Centre, tells business owners that logging more hours is neither a measure of
success nor a badge of honor to wear with pride.
“Some owners mistakenly believe that working long hours is the
key to success, when they should be working smarter not longer,”
he says. “Many owners … get bogged down in menial admin
tasks or spend their time doing what they want to do, rather than
what the business needs them to do – usually sell.”
Craven adds that social media diversions, procrastination on the tasks we
loathe and an unwillingness to delegate to skilled staff or vendors are some of your biggest time killers. He also points a finger sharply at high-effort/
low-reward customers as those to minimize time commitments to or avoid altogether.
“Concentrating your efforts on higher-value customers can generate more revenue and save you lots of time,” he said.
So… with these three to six jobs you’re supposedly juggling, high-maintenance customers and digital distractions killing your bottom line,
what is the perfect balance to strive for as an owner?
12. 12
There are many opinions on how to maximize your time, but a common misstep that
wastes it is being consumed by the immediate crisis at the expense of the future.
Small business owners – by the nature of their many hats, smaller hiring budgets and
take-charge demeanor – tend to focus on crises instead of their vision, according to
Jim Parrish, coordinator of the Florida Small Business Development Network. He adds
that many answer to the “squeaky wheel” regardless of its lack of impact on the future
financial balance of the company.
To overcome this Parrish recommends that every business owner take 15 to 20
minutes out of every day to sit down with his or her key advisers and ask, “What can
we do today to make more money than we did yesterday?”
“This, to me, is the biggest secret in being a successful entrepreneur,” he noted in
5 Mistakes Small Business Owners Can Overcome “having a clear sense of vision and
taking a regular amount of time daily to think about that vision.”
He also echoed the sentiments of owners and experts alike who touted the need to
prioritize duties based on importance, amount of time required to complete, and the
potential for delegation.
Raja Mahendran, an International Strategic Business Consultant based in Switzerland,
responded to our query on Quora by suggesting that business owners take that time
Parrish calls for at the beginning of the day when you are at your freshest and before
the distractions derail you.
“A small business owner’s time is often used up for the urgent and what must be done
today and very little time dedicated on strategies to grow the business for the future,”
he counsels. “One cannot find time to do the important one must allocate time for the
future and count it as spent by doing it first thing in the morning before starting the
business day.”
5 mistakes small
business owners
can overcome
According to Jim Parrish
1. Inability to hire, train, and
motivate staff
2. Inability to communicate
3. Avoiding the use of
professionals
4. Too much time spent on
the wrong things
5. Lack of trust
Read more by clicking here.
TIME MANAGEMENT TIPS & TOOLS
13. 13
Sound guidance, for sure, but what should you do if you don’t know where to start with organizing and prioritizing your time? Rest easy with
the knowledge that other people have had the same problem and plenty of resources exist at the speed of a Google search.
A framework to organize & prioritize your time
One framework on the organize-and-prioritize front worthy of your time and
attention is the Steven Covey-esque Four Quadrants of Time model by Derek
Lauber of Lightbox Leadership.
In these four quadrants, Lauber, a leadership coach and consultant to small
business owners & entrepreneurs, organizes his time by activities directly tied to
Break
profit potential (Accomplish Time); tackling administrative tasks that are vital but
Time
don’t contribute to the bottom line (Activity Time); the time used to completely
disconnect from business and recharge (Break Time); and Wasted Time, or the
Accomplish
time he describes as “time (during your workday) that you spend ‘taking a break’,
when really it is screwing off, procrastinating, chit-chatting, scrolling through
Time
Wasted
Time
Facebook and allowing your distractions to take hold.”
Lauber notes on his site that while his percentages (50/20/25/5, respectively) are
his goals rather than something infinitely achievable at all times for all businesses.
Activity
Regardless of the business, he says it serves as a way for him to “get clear and
Time
stay focused on producing results for my business.” You can learn more about
the process and detailed accountings of each quadrant here. What’s interesting
is that it points to the administrative tasks in Activity Time as ripe for delegation –
allowing you more time to accomplish things that drive revenue.
One application that caught our attention on time and how much we’re actually spending it on revenue-producing tasks versus administrative
or non-productive tasks is Rescue Time.
TIME MANAGEMENT TIPS & TOOLS
14. 14
TIME MANAGEMENT TIPS & TOOLS
Putting time under the microscope
RescueTime’s mission is to help you understand your daily
habits so you can focus and be more productive. The
software runs in the background of your computer and
mobile devices, noting where you spend your time and how
long you are there. Then, it spits out a detailed report on
what you did during a given day for you to measure against
your goal. What’s more, the application allows you to
micromanage your distractions on a dashboard by blocking
access to places you go when your mind wanders. Definitely
worth a look.
Another technique for honing focus with its fair share of
dedicated time management disciples is the Pomodoro
Technique. Central to the Pomodoro Technique is using a
timer to break down work into intervals of 20-25 minutes,
known as Pomodori or ‘tomatoes’ in Italian, separated by
short breaks. The method, common in the software design
industry, is based on the idea that frequent breaks can
improve mental agility. You can dive into Pomodoro here.
Do it or don’t – A simple view of delegation
You may be convinced that you’re a great multi-tasker, but the data says otherwise. In fact, a recent study on the issue from the University
of Utah Who Multi-Tasks and Why? Multi-Tasking Ability, Perceived Multi-Tasking Ability, Impulsivity, and Sensation Seeking says if you truly
feel that way you probably have less of a skill at managing many things at once and more of a debilitating lack of focus. Sure, there are harsh
realities that come with owning a business. You don’t have unlimited budget or access to top talent that permit you to readily hire out all the
things you hate doing and only focus on the things you like or are good at all day, every day.
A recent article by the payment processor Paychex offered up these as top excuses for not delegating:
• “I can’t afford to hire another person. I’m saving money by doing it myself.”
15. 15
• “If I want something done right, I’ll just do it myself.”
• “I don’t have the time to train someone because I’m swamped.”
• “I like to oversee things from start to finish to make sure it’s done right.”
• “I wouldn’t know where to start. Who would I give these responsibilities to?”
• “Things would be easier if I could just clone myself.”
Despite those realities and their excuses, however, a personal and professional inventory
on what you want to do versus what you are good at and what the business needs is a
great place to start.
Adds The Directors’ Centre’s Craven:
“People who build up a business from scratch often find it hard to let go, but they risk
not contributing as much value as they could – as well as working in the business rather
than on it. They need time to step back, consider the big picture and plan the best
way forward. Introducing better systems and processes, as well as making full use of
technology and other people can free up a lot of time for owners.”
The Paychex post How to Delegate Effectively: An Essential, Yet Overlooked Process
in Growing a Small Business delivers key questions to ask yourself as a business owner
about your business, its future and its current or future employees, before relinquishing a
task to someone else. The most important thing, the article says, is to write it all down.
“Putting everything to paper can help put things in perspective. Often business owners
or managers may not even realize how much time they are spending in an ‘employee’
role rather than a managerial mindset. And while it may make sense for a business owner
or manager to jump in and take over the role of an employee who is no longer with the
company for financial reasons—how long do they plan on doing it for?”
Delegate Accounts
Receivables for cash now
with factoring
How
FACTORING WORKS
You sell your invoices to a factor
The factor advances up to 90% of the
invoice in 24 hours
The factor collects the full invoice
amount from the debtor
You receive the remaining amount,
minus a small factoring fee
1 YOU
2
FACTOR
FACTOR
3
YOU
FACTOR
4
DEBTOR
YOU FACTOR
Want to learn more? Give us a ring. 800.705.1500
eCapital.com
TIME MANAGEMENT TIPS & TOOLS
16. 16
TIME MANAGEMENT TIPS & TOOLS
One popular target is taking administrative and accounting-based tasks off the owner’s plate and in the hands of professionals onsite or offsite
so he or she can refocus attention on something that is more owner-worthy. Melinda F. Emerson, known to many as
@SmallBizLady on Twitter is one of America’s leading small business experts -- and a successful entrepreneur in her own right.
She says every small business owner should outsource these five tasks right now to “avoid the things you hate and probably aren’t any good
at” so you can get on with the business of closing business.
1. Bookkeeping
2. Payroll
3. Social media outreach
4. Administrative support
5. Marketing
“If you outsource two or three of these functions, the consultant will pay for itself in no time,” Emerson noted in this post. “Do your research,
check their references and ask for referrals from fellow small business owners before hiring anyone. Once you start outsourcing a few non-critical
tasks in your small business, you’ll wonder why it took you so long to do it.”
Suffice it to say you can and you need to manage your time better to have a shot at a healthy life and a successful business. We hope this
section on Time Management Tips and Tools gives you the fuel you need to battle distractions and stay focused on the business end of your
business.
Below are other resources on time management and productivity we discovered during our research that could come in handy for you in
the days, weeks months and years ahead. If you need help with securing the money you’ve already earned now, be sure to reach out to a
representative at eCapital at 800.705.1500 or contact us here, to learn more about factoring and other services we provide to help your
business.
Click the links below for more Pro Tips and Tools on Time Management:
• Blog post: Productivity Hacks: 60+ Influencers on How to Work Smarter
• Harvard Business Review’s 10 Must Reads on Managing Yourself
• Top Free Picks: Task Lists and To-Do Managers
• 5+1 Ways to Delegate Effectively Without Micromanaging
• National Federation of Independent Business (NFIB) Organization & Time Management Resources
17. 17
3
TIPS TO HIRING
GOOD PEOPLE
AT THE RIGHT
TIME AND
KEEPING THEM
18. 18
TALENT MANAGEMENT TIPS & TOOLS
In the previous chapter, we made the case for delegating duties as a way to keep you and other small business owners focused on building a
strong company. The idea of bringing in help sounds like a no-brainer, but financial limits, the time it takes to establish trust with people and
the cost of making a bad hiring decision hovering between $25,000 - $50,000 certainly doesn’t make it an easy decision.
But again, this isn’t unchartered territory. According to the Small Business Administration, businesses with 1-500 employees currently employ
half of the U.S. workforce. You should take comfort in those numbers that hiring employees or sharing the load with high-caliber business
vendors is a sign of a positive growth. Small business owners who suggested to us that successful
staffing or outsourcing requires a process for when to hire, outsource or do it yourself.
In this chapter, we’ll reveal answers to these questions from the people who lived through the
growing pains and pulled through with a healthier business as a result.
Laura Vanderkam, a frequent contributor to Fast Company and author of “What Most Successful
People Do Before Breakfast,” and “168 Hours. You Have More Time Than You Think” suggests
that knowing when to hire someone versus toughing it out yourself boils down to these five things
(amended a bit for those of you going it alone):
1. Sales are growing like crazy
2. You’re deep in the weeds
3. (You or) your people are swamped
4. (You or) your people don’t have the skills for the job
5. You smell opportunity (to grab market share from competitors)
19. 19
In an article she wrote for CBS News “5 Signs It’s Time to Hire,” Vanderkam quotes
Rich Arzaga of California-based Cornerstone Wealth Management, who realized he was
spending 80% of his time on operational work, and the rest on what he was actually
good at and enjoyed doing. He made a decision to take a few hours each week finding
new clients, so he could pay the salary of an operations person to balance out those
numbers.
Adam and Matthew Toren, self-described ‘serial entrepreneurs’ and the authors of
“Small Business BIG Vision: Lessons on How to Dominate Your Market from Self-Made
Entrepreneurs Who Did it Right say that “when you wish you had more time to work
on building your business, rather than simply maintaining it, you have a very good
indication that it’s time to bring in help.”
It’s a tough first step, but once you’re willing to loosen the reins a bit and bring in a
person or team of people to help you, experience tells us you’ll already start to breathe
a little easier. Once the decision to act is made, experts suggest that your next hurdles
to clear (in descending order) are: Identify what your business needs, find the right
person for the job, pay him/her/them well and keep the person or team performing at
their best so you can perform at yours.
Defining what you need
While not every small business is a start-up in the Silicon Valley sense of the word,
this recent article from Tech Republic shared some jewels about what a business owner
should do to determine business needs. One thing the article notes is that small
business owners, supporters of the company and the people already on the team
should “always be recruiting” so the company has known pool of top talent to pull from
when the need arises.
The When,
What, Who &
How of Bringing
in Help
Ask yourself these questions when you’re
considering hiring for your company:
• When should I hire
or outsource a task?
• What does my
business need that I
or someone onboard
now can’t do?
• Who is the ideal
candidate or business
partner?
• How can I find,
convince and keep top
talent?
TALENT MANAGEMENT TIPS & TOOLS
20. 20
TALENT MANAGEMENT TIPS & TOOLS
“To maximize your time, train and enable leaders within your organization to recruit
for their own team members,” suggests Katie Hughes, director of talent at VC firm
Draper Fisher Jurvetson.
“Referral programs, function-specific recruiting teams and consistent feedback
metrics are cost-efficient ways I’ve seen founders offset recruiting responsibilities by
empowering their employees.”
In the case of most small businesses without a defined technical discipline in-house
like IT support or finance and accounting, the person ideal for a small business is a
creative problem solver who gets things done.
“Everyone must deliver,” CEO and founder of Superfish, Adi Pinhas told the
publication. “No exceptions. Founders should not be impressed with people with
amazing titles (engineers, marketers or managers) nor from the big name company
that they are coming from. Founders need to make sure that the candidates are
‘doers’.”
When you need to hire specialized talent, it would also be wise to see what you
have in house or who in your professional network knows someone they can
recommend before combing job boards, paying a staffing service or doing a blind
online search for a vendor to help. As for when is the right time to hire a specialist,
most experts say you’ll know when you get there, but that finance, accounting and legal services – whether you hire internally or outsource it –
should be done at the start of any business.
Another recommendation on when to hire comes from The Solutions Playbook: Top 25 Small-Business Challenges, the authors suggest, as an
example, that a good benchmark for bringing on an IT services company is when the business grows to 50 employees.
This playbook created by FedEx for Entrepreneur.com is jam-packed with guidance on how to start, market, run, grow, sustain and staff a
business.
21. 21
TALENT MANAGEMENT TIPS & TOOLS
How to Afford to Pay for Employees or Services
After you’ve honed your focus on what your business needs in terms of talent or
services support, the next task at hand is to figure out how to pay these doers and
specialists a fair wage or other benefits that keep them happy and motivated.
Many small business owners begin this process the same way they solve other
challenges, as they come up, project-by-project or critical need by critical need. As a
result, most usually owners start their foray into staffing by sourcing contractors, temp
workers, interns or outsourcing jobs to service providers or agencies to keep their
overhead low. After all, employees often request health benefits, office space, and
higher salaries that most emerging businesses can’t afford. Having a contract-based
workforce or outsource partners takes the high upfront costs out of the mix and
allows the business to move a project or projects forward to book revenue.
It’s a common approach, but Kevin Hartz, CEO and co-founder of San Francisco-based
event-promotion service Eventbrite, told the authors of the FedEx Playbook
that it comes at the price of building a culture of loyal, dedicated and invested
employees who buy into the owner’s mission and passion.
“To 1099 people (i.e. use a vendor or freelance talent) means you don’t value them
as owners and partners in the business,” says Hartz. “You 1099 service providers like
consulting shops, not the team members you want to work hard for you and help you
build the next great thing.”
One way to get around the 1099 employee issue – and potentially nab yourself top-end talent when you have budget – is work with a
sourcing firm that specializes in part-time placements. Laura Smoliar, a global entrepreneur and writer for publications such as Inc., details in
How to Hire People You Can’t Afford not only some of the businesses that specialize in sourcing executive or technical talent part time, but
the other benefits, such as having these companies manage the taxes and paperwork of your employees.
“When managed well, the flexible workforce approach is a win-win for the small business and their staff,” she says. “It allows small businesses
to remain competitive, and allows high-value contributors to do the work they love. What’s not to like?”
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Other great resources
to help you find and
keep good people at
your company:
• Hire & Retain Employees - Small
Business Administration
• Small Business Hiring Guide |
Monster.com
• Talent Magnetism: How to Build
a Workplace That Attracts and
Keeps the Best
• Roberta Matuson’s Blog
• Workforce Magazine Online –
Topics
• 12 Books Every Leader Should
Read: Updated – Post in Bob
Sutton’s blog in ‘Work Matters’
• Good Boss, Bad Boss: How to
Be the Best...and Learn from the
Worst
TALENT MANAGEMENT TIPS & TOOLS
When it’s Time to Go All-In for Top Talent
Once you have a crew of reliable contractors and agencies helping you keep things
moving it may be the right time to start thinking bigger. If you’re trying to get away
from tasks you hate, aren’t good at or are pulling you away from revenue-oriented
tasks, hiring people in-house to help you realize your dream allows you do delegate
and focus. The challenge lies in being able to find and hire the people you want.
Staffing experts, small business associations and creative bosses offer a mix of
company ownership through profit-based incentive programs to bump up take-home
pay when the business can afford it, and a chance to work non-traditional hours from
wherever an employee chooses to work.
Other ways to attract top talent – in some cases away from larger companies or
competitors – is to give prospective employees what they desperately want along
with as much money you can afford to pay. In most cases, that means actually getting
to know your employees – or hiring someone who really cares about human relations
– to have an inside track on what motivates your people as much as or more than a
paycheck.
Sometimes a good mission, with a business truly serving an unfulfilled market need
and a promise to “change the world” is all it takes to get corporate-weary workers to
join you. A non-corporate environment with an open floor plan, a foosball table and
other work/play amenities can go a long way.
Another great resource for attracting and keeping the best and brightest is Roberta
Matuson, a Fortune 500 consultant known as “The Talent Maximizer.” In her book,
“Talent Magnetism: How to Build a Workplace That Attracts and Keeps the Best,”
Matuson shares her blueprint and “new rules of workplace attraction and retention,
helping you and your organization develop irresistible talent magnetism.”
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What struck us as equally sound advice in an “in-your-face–style” comes from Verne
Harnish CEO of the executive education firm, Gazelles Inc. In his Fortune piece
How to attract and keep motivated employees, he delivers his top 5 with some straight talk:
1. Crank up your marketing engine
“At a growing company, your marketing team shouldn’t focus only on attracting
customers. You need to get onto the radar screen of your ideal, target employees,
too. The key is to sell your vision and to stop worrying if you can’t pay top dollar.”
2. Don’t hire clones
Time after time when I visit companies, I see a bunch of employees who dress,
sound, and think the same way as the CEO. Your team should be more like the
motley crew in a heist movie – experts who excel in different areas and bring
unique perspectives, not a bunch of interchangeable generalists.”
3. Create an environment where great people thrive
“Instead of worrying about how to motivate your most talented employees,
focus on keeping the stupid stuff out of their way. Ask them at your daily or weekly
meetings what roadblocks they’re hitting and clear them, so they get their most
important work done. Leaders should focus on stomping out inefficient processes
and bad management practices if they want to keep talented employees
engaged.”
Harnish encourages leaders to Interview, rate and score candidates based not just on the
responsibilities you need them to fill, but also the outcomes you need them to achieve.
He recommends a scorecard and method based on the book Who by Geoff Smart, co-creator
of the Topgrading hiring system.
Ask these
questions and
hold yourself
to a process for
when and how
to hire
• When should I hire?
• What roles should I hire
for or outsource?
• Who is the ideal candidate
or service provider?
• How do I find, finance,
and keep top talent?
talent?
TALENT MANAGEMENT TIPS & TOOLS
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MONEY, TIME, AND TALENT MANAGEMENT RECAP
As we suggested earlier, we are convinced that the numbers don’t lie. You are a big deal. Your business and other small businesses in the U.S.
and around the world are the innovators and change agents that bring new ideas, processes and promises of a better life to market. We also
know that if you are successful in managing your cash flow, your time and your talent, we will also continue to be a successful company.
What we learned from this exploration of the mind and in the decisions of a small business owner is you’re working too hard, on too many
things at once, and being pulled in to too many non-revenue producing tasks.
We set to share what your peers and other small business consultants say help redirect your focus and get you the help that you need to grow
your business. What we learned is that despite the myriad tasks, details and other things that drive you crazy, you can boil it down to three
things small business owners need to manage well to be successful.
1. Money
Small business owners in the eCapital family and others we contacted noted that growth-oriented money management
strategies required:
a. A business plan to help them stay focused and measure success
b. A marketing plan that details how you intend to put your business plan into action
c. Cash on hand to weather shortfalls and plan for the future
d. A willingness to hire where you are weak
e. At least a basic understanding of cash flow (FYI: Profit does not necessarily equal cash flow)
2. Time
Get time back on your side by only focusing on revenue producing tasks, and delegate to the experts:
a. Minimize distractions
b. Organize and prioritize time
3. Talent
Delegating equals hiring top talent and building a process for when, why, how and who to hire when you are ready to pass the
baton. If you’re ready to hire, the advice of Verne Harnish ring particularly strong:
a. Crank up your marketing engine to be attractive to new hires
b. Don’t hire people like yourself, but people you need
c. Create an environment where great people thrive
Have a question? Need some advice? Give us a ring. 800.705.1500
26. 26
MONEY, TIME, AND TALENT MANAGEMENT RECAP
This is what our successful small business owners are doing to grow and thrive, but we know this isn’t the only way to build and maintain a
strong company. Share what you’ve learned and we will make sure your voice is heard.
We hope you find this eBook truly useful now and in years to come for overcoming challenges and meeting your goal of maintaining a healthy
business and a rewarding career at the helm.
WANT TO CONTINUE THE CONVERSATION?
CONNECT WITH US!
@eCapitalUpdates
eCapital.com | 800.705.1500
Have a question? Need some advice? Give us a ring. 800.705.1500
27. 27
ABOUT eCAPITAL
At eCapital, we know the needs of small businesses. We work them every day to help improve cash flow, position them for growth, and drive
new revenue through our invoice factoring services. This eBook imparts some of the knowledge we’ve gained over decades of helping our small
business clients manage their accounts receivable and improve their cash flow.
It’s as simple as that. This is our passion. The reason we exist.
Learn more about us at eCapital.com or by calling 800.705.1500.
Have a question? Need some advice? Give us a ring. 800.705.1500