What do you do to protect your employees. Not only protect them physically, but protect the employees who really make your business run. Many employers do not understand that without their employees they do not have much. And, if you depend on yourself to do everything, your business will never reach it's potential and you will burn out. Good employees are hard to find and really hard to keep.
First of all, protect them by making sure that they know they are doing well. Be encouraging and positive especially about the business and how they fit in. If they are doing well, make sure their evaluations show that WITHOUT giving the highest grades on everything which would indicate they are perfect in every way and not even I am that perfect. If you can give them a raise. Does not have to be huge but give them something. I am an advocate of several smaller raises throughout the year rather than one larger raise (or not raise) at the end of the year. I am also in favor of performance bonuses rather than contracted bonuses (a la Merrill Lynch). As a matter of fact, I would take the bonus pool in its entirety and whack off some for managers and divide the rest up equally over all employees which would get everyone the same bonus at Christmas. If you cannot give them any money, tell them and tell them why! Be up front. It may cost you an employee or two, but if they are going to leave you might as well find out now.
The employees that are doing bad show know that. Besides just being told they are doing bad and in what areas they are doing bad, you should come up with an improvement plan with attainable steps to accomplish that can be monitored and a determination of what will happen if they accomplish the goals and what will happen if they do not. If they accomplish the goals, you have created a good employee, if they do not, send them out the door. Do what you say and say what you do. No BS. Seriously. If they are not doing it, do not hesitate to terminate them.
Physical protection int he workplace is serious business these days and during these economic times. Where I live a woman was killed recently at the counter where she worked as a clerk. A guy came in and shot her for no apparent reason other than to rob her of the $28 in the cash register. Amazing! If you are located in a bad area or if you handle a lot of money OR if you have disgruntled employees who make threats, make sure you have some security in place and procedures in place on what to do in case of emergency. Train you employees on what to do in case of emergency. That might be one of the most boring things I do as a consultant, but I have been in situations where it was extremely important.
So think about it and take action. What do you think?
Wednesday, April 29, 2009
Saturday, April 25, 2009
What about the tax code?
I guess now that the stimulus plan is semi-implemented, your employees are much better off with the reduction in their employee withholding. Right? Probably wrong! Although getting anything may be better than nothing, I suppose. It might be too little too late or too little for not long enough. As an employer, you should be outraged by our tax structure and tax code anyway.
I have always been in favor of a flat tax. !0% for everyone and all businesses. You make a dollar, you pay a dime. You make a million, you pay one hundred thousand, etc. There would be no deductions at all. I could live with deductions for mortgage interest and contributions/donations to certain organizations like churches, Goodwill, Red Cross, and many local charities provided it did not exceed say 20% of their gross income. If my calculations are correct, there would be a surplus especially with the reduction in costs at the IRS and CPA's and tax attorneys.
HOWEVER, the more I hear about Mike Huckabee's proposed "Fair Tax", the more I like it. It would be a consumption tax paid the same by everyone. Some have called it a National Sales Tax for lack of a better term. It might eliminate the IRS and provide the basis for everyone to participate equally. Under Governor Huckabee's plan, there would be deductions for charitable contributions and mortgage interest, but little, if anything, else. If you buy a new Chrysler 300M, you pay the same tax as for new computer or new sofa. I am not sure, but under his plan food might be treated differently as well. Overall, it is a good idea. Then you and your employees can determine what they will do with all their money because they would know what the tax ramifications are upfront!
What do you think?
I have always been in favor of a flat tax. !0% for everyone and all businesses. You make a dollar, you pay a dime. You make a million, you pay one hundred thousand, etc. There would be no deductions at all. I could live with deductions for mortgage interest and contributions/donations to certain organizations like churches, Goodwill, Red Cross, and many local charities provided it did not exceed say 20% of their gross income. If my calculations are correct, there would be a surplus especially with the reduction in costs at the IRS and CPA's and tax attorneys.
HOWEVER, the more I hear about Mike Huckabee's proposed "Fair Tax", the more I like it. It would be a consumption tax paid the same by everyone. Some have called it a National Sales Tax for lack of a better term. It might eliminate the IRS and provide the basis for everyone to participate equally. Under Governor Huckabee's plan, there would be deductions for charitable contributions and mortgage interest, but little, if anything, else. If you buy a new Chrysler 300M, you pay the same tax as for new computer or new sofa. I am not sure, but under his plan food might be treated differently as well. Overall, it is a good idea. Then you and your employees can determine what they will do with all their money because they would know what the tax ramifications are upfront!
What do you think?
Monday, April 13, 2009
Some more thoughts on getting money.
If you cannot get money from your bank and the amount you need is just to small for the big guys like General Electric Capital, Barclay's Capital, ITT, etc., then you might consider one of the following:
1. Borrow the money from yourself. Yes, borrow, do not give. However, if you do this write up a note with an interest rate that is competitive with current rates and make payments. If you get into trouble and cannot pay, then don't. I have written into clients notes the provision that the client can be late a certain amount of times per year. If you really get into trouble, you can write off the note, It is very hard to write off un-documented "loans" so do it right!
2. What about relatives. Not unless you ABSOLUTELY have to. Then if you do, remember to document the loan with a note and lien (if applicable) and make payments. Do NOT take your relatives last dime. If they can afford to loose it all, okay. Otherwise, it is not worth. Honest. I have been there and done that and it is very difficult.
3. Take on a partner or sell stock. Certainly if you have a family owned business, do this as a last resort and NEVER, I SAID NEVER, give up a controlling interest. Go out of business first. Now having said that, if you have already given up control or there are many shareholders already, then go ahead. You just have to remember that when you give up controlling interest you give up your right to do whatever you want and you can be called into scrutiny for your actions as the CEO, President, etc. If you just own a sole proprietorship, then taking on a Partner can be a real pain or a real benefit depending on the how well you work with others after having to not "report to" or get opinions from anyone else. It can be really tough, so be careful You may have to do it if all else fails.
4. Sell the business. In today's market that is tough because everyone is expecting to get a bargain and even if your business has been steady or good but needs to grow, the bottom fishers are out in droves. Be careful. The other side of the coin is that if you can find someone who really wants to buy and you do not care to keep the company (especially if you do not have any heirs), then sell out, quit or close up shop and work again for someone else or retire.
5. Lastly, go to a Venture Capitalist. They all talk like they are here to save the day. Few, if any, of them are. If they like your business, then be prepared to give up 60-90% even if their adds say "keep majority ownership, we want to be minority partners". That is not true. After reviewing your business, they will tell you how bad it is and why they need to own it all. If they say that, hold your ground because if it is good enough for them to want to do for a large ownership position, they see something worth keeping. So should you!
Call me if I can help! What do you think?
1. Borrow the money from yourself. Yes, borrow, do not give. However, if you do this write up a note with an interest rate that is competitive with current rates and make payments. If you get into trouble and cannot pay, then don't. I have written into clients notes the provision that the client can be late a certain amount of times per year. If you really get into trouble, you can write off the note, It is very hard to write off un-documented "loans" so do it right!
2. What about relatives. Not unless you ABSOLUTELY have to. Then if you do, remember to document the loan with a note and lien (if applicable) and make payments. Do NOT take your relatives last dime. If they can afford to loose it all, okay. Otherwise, it is not worth. Honest. I have been there and done that and it is very difficult.
3. Take on a partner or sell stock. Certainly if you have a family owned business, do this as a last resort and NEVER, I SAID NEVER, give up a controlling interest. Go out of business first. Now having said that, if you have already given up control or there are many shareholders already, then go ahead. You just have to remember that when you give up controlling interest you give up your right to do whatever you want and you can be called into scrutiny for your actions as the CEO, President, etc. If you just own a sole proprietorship, then taking on a Partner can be a real pain or a real benefit depending on the how well you work with others after having to not "report to" or get opinions from anyone else. It can be really tough, so be careful You may have to do it if all else fails.
4. Sell the business. In today's market that is tough because everyone is expecting to get a bargain and even if your business has been steady or good but needs to grow, the bottom fishers are out in droves. Be careful. The other side of the coin is that if you can find someone who really wants to buy and you do not care to keep the company (especially if you do not have any heirs), then sell out, quit or close up shop and work again for someone else or retire.
5. Lastly, go to a Venture Capitalist. They all talk like they are here to save the day. Few, if any, of them are. If they like your business, then be prepared to give up 60-90% even if their adds say "keep majority ownership, we want to be minority partners". That is not true. After reviewing your business, they will tell you how bad it is and why they need to own it all. If they say that, hold your ground because if it is good enough for them to want to do for a large ownership position, they see something worth keeping. So should you!
Call me if I can help! What do you think?
Monday, April 6, 2009
Are you the next GM/Chrysler?
Recently the government fired the GM CEO. Appalling! What Obama and his cronies will say is that they were protecting the taxpayers money that they loaned to these giant auto makers. BS! (That means baloney sandwich and it is now being taught in Finishing Schools instead of what you thought it meant! I do not want to bend to the Obama level and use those words.) What is happening is Obama is planning his next re-election bid and trying to garner brownie points if he says this. He hasn't yet, that I have heard, but he will.
Whose fault is it that government is involved with these businesses to such an extent? Is it government? Is the it the companies? Is it the CEO's. How does this effect small business?
1. It is the businesses themselves fault to the largest extent. They should have never gone to the government with their hat in hand or should I say their hat in their private jets! By borrowing from the government with President Obama at the helm, they were asking for trouble and they got it. Obama has no business acumen at all and his team is a group of government trained and funded nincompoops. I bet that Obama's first comment when looking at a P&L or Balance Sheet would be "huh!" and his cronies, who cannot do their taxes properly and were too sophisticated to hire someone and when they did hire someone they lied to them, can easily criticize GM and Chrysler because they have NO STAKE IN THEIR success. Supposedly, they are protecting our money. BS! THEIR ONLY OBJECTIVE IS TO IMPROVE THEIR POLITICAL STATUS!! There is a lesson, do not borrow from the government, die first! Who is the smartest of them all right now? FORD! Yes Ford Motor. They did not take any money, they have cut back, their CEO (through his board not the government) took and 30% pay decrease and they are doing find! FINE! Did you hear me, FINE!
2. They should have handled it themselves. I bet they thought that since Chrysler was bailed out years ago when Lee Iaccoca had government come to their aide. The difference is that Chrysler was in trouble but still viable. These guys are not viable any more and should have filed for bankruptcy under the provisions of Chapter 11. Under the provisions of Chapter 11 they would continue to operate inside the auspices of the court and all contracts and agreements would be subject to renegotiation and/or restructuring. The objective of Chapter 11 is to come out of it reorganized and ready to operate again. I have been involved in several bankruptcy situations in companies. Sometimes they made it out and are healthier and sometimes they did not and were liquidated. Either way, it is better than government intervention.
3. Sure the CEO's are partly to blame but they can only get paid what they get paid with the approval of their Board of Directors. Inside the Board of Directors, what they got paid probably had to get past a Compensation Committee of the Board and the Executive Committee of the Board and they by the full Board So are the Boards at fault! Yes they are. Are they at fault for the greed? Yes! Too many Boards are full of buddies and friends. Should some of those be on the Boards? Sure. But the Boards should contain a majority of none company people who understand business. Not necessarily the car business, but business so they can ask questions and demand answers. No one in a company should be above scrutiny, nobody!
4. From a small business perspective, how does this affect you. It effects everyone! The trickle down effect of government intervention, corporate greed and loosing track of your objective can be massive. Too many small businesses, and especially family owned businesses, do not have regular Board meetings, do not have outside Directors and have taken their eyes off the fact that without their employees they would not have much unless you are a 1 person business. Now is the time for small business to take notice of what you have. If the government has its way, they will be telling you next how you can run your business because they are putting "stimulus" money into your business. Make a decision right now. Do you want that kind of oversight?
I do not think we can have the Obama Affect for very long. It is going to demolish the Free Enterprise systems and Socialize everything we stand for and why? Because they know how to lead us better than we can lead ourselves. Not me!! What do you think?
Whose fault is it that government is involved with these businesses to such an extent? Is it government? Is the it the companies? Is it the CEO's. How does this effect small business?
1. It is the businesses themselves fault to the largest extent. They should have never gone to the government with their hat in hand or should I say their hat in their private jets! By borrowing from the government with President Obama at the helm, they were asking for trouble and they got it. Obama has no business acumen at all and his team is a group of government trained and funded nincompoops. I bet that Obama's first comment when looking at a P&L or Balance Sheet would be "huh!" and his cronies, who cannot do their taxes properly and were too sophisticated to hire someone and when they did hire someone they lied to them, can easily criticize GM and Chrysler because they have NO STAKE IN THEIR success. Supposedly, they are protecting our money. BS! THEIR ONLY OBJECTIVE IS TO IMPROVE THEIR POLITICAL STATUS!! There is a lesson, do not borrow from the government, die first! Who is the smartest of them all right now? FORD! Yes Ford Motor. They did not take any money, they have cut back, their CEO (through his board not the government) took and 30% pay decrease and they are doing find! FINE! Did you hear me, FINE!
2. They should have handled it themselves. I bet they thought that since Chrysler was bailed out years ago when Lee Iaccoca had government come to their aide. The difference is that Chrysler was in trouble but still viable. These guys are not viable any more and should have filed for bankruptcy under the provisions of Chapter 11. Under the provisions of Chapter 11 they would continue to operate inside the auspices of the court and all contracts and agreements would be subject to renegotiation and/or restructuring. The objective of Chapter 11 is to come out of it reorganized and ready to operate again. I have been involved in several bankruptcy situations in companies. Sometimes they made it out and are healthier and sometimes they did not and were liquidated. Either way, it is better than government intervention.
3. Sure the CEO's are partly to blame but they can only get paid what they get paid with the approval of their Board of Directors. Inside the Board of Directors, what they got paid probably had to get past a Compensation Committee of the Board and the Executive Committee of the Board and they by the full Board So are the Boards at fault! Yes they are. Are they at fault for the greed? Yes! Too many Boards are full of buddies and friends. Should some of those be on the Boards? Sure. But the Boards should contain a majority of none company people who understand business. Not necessarily the car business, but business so they can ask questions and demand answers. No one in a company should be above scrutiny, nobody!
4. From a small business perspective, how does this affect you. It effects everyone! The trickle down effect of government intervention, corporate greed and loosing track of your objective can be massive. Too many small businesses, and especially family owned businesses, do not have regular Board meetings, do not have outside Directors and have taken their eyes off the fact that without their employees they would not have much unless you are a 1 person business. Now is the time for small business to take notice of what you have. If the government has its way, they will be telling you next how you can run your business because they are putting "stimulus" money into your business. Make a decision right now. Do you want that kind of oversight?
I do not think we can have the Obama Affect for very long. It is going to demolish the Free Enterprise systems and Socialize everything we stand for and why? Because they know how to lead us better than we can lead ourselves. Not me!! What do you think?
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