Tag Archive | "small business"

A 10-Step Recruiting Primer for Hiring Managers

Over the past 30 years or so I’ve discovered that the best hiring managers take personal responsibility for hiring the best people. However, many have the uncanny ability to snatch defeat from the jaws of victory just when a hot prospect becomes interested. This is when they often trip on their own feet or put one where it shouldn’t be, reported Inc.

Closing the deal begins by understanding the critical role hiring managers play in the recruiting process, from opening the job requisition to negotiating the final offer. The following steps are essential for any hiring manager who wants to improve his or her ability to attract and hire the best talent on the market.

10 Hiring Manager Rules for Recruiting:

1. Don’t oversell, overbuy!
Recruiting a top person is not about the recruiter or hiring managers selling the job. It is about presenting enough career-oriented information that the formerly passive candidate sells you. Most of the remaining ideas help you pull this off.

2. Create the career gap.
The career gap is the difference in what the person will be learning, doing and becoming in your job in comparison to what the person is now doing. In term of job stretch and job growth this gap needs to be about 20% in order for the job to be considered a career move. If you haven’t created a performance-based job description, the size of the gap will be questionable.

3. Conduct a broad-based Performance-based Interview to demonstrate that you have high standards.
The best candidates expect an in-depth interview that addresses all of their strengths and all of your needs. Aside from assessing competency, it demonstrates to the candidate that you have high hiring standards. Being superficial, intuitive, overly technical or making attempts at one-upmanship are a sure way to get a critical review on Glassdoor.com. The most significant accomplishment question is the foundation of a world-class Performance-based Interview.

4. Use the push and pull to explain the job and get the candidate to sell you.
Asking the most significant accomplishment question is a great way to compare a candidate’s past performance to real job needs. By describing the importance of the accomplishment as a preface to this question, you’ll get the candidate excited. This is the pull-toward technique. Raising concern about the size of the career gap will get the candidate to attempt to convince you of his or her ability. This is the push-away technique.

5. Demonstrate strong management and leaderships skills.
The best people are looking for managers who are potential mentors, those who have a track record of hiring and developing other strong people and are also on a fast-paced career track. Highlight these capabilities as part of the recruiting process.

6. Let the candidate meet other strong people.
The best way to prove to a strong candidate that the hiring manager can hire and develop strong people is to have the candidate meet some of them.

7. Create supply and demand.
End the interview telling the candidate that she or he is one of a few very promising candidates. If you leave it neutral the person will think about why he or she doesn’t want the job, maximizing the negatives and minimizing the positives. If left somewhat positive, the candidate will do the opposite.

8. Invest extra time in the process.
Hiring the best people is not a transaction. It takes extra time for a top person–especially one who’s not looking–to see an opening as a possible career move. Spending extra time with the person will also help cement the relationship. The hiring manager should expect to spend a minimum of three to five hours in at least two to three meetings with a person for any critical position.

9. Never make an offer that won’t be accepted.
Test every aspect of the offer before formalizing it. These tests take the form of the question, “Would you be open to consider an offer if we could put a package together that made sense?” Some other test questions include, “When could you start if we could address the benefit program?” or “How does this position compare to others you’re considering?”

10. Make the offer an event.
Don’t delegate the offer to someone in the corporate recruiting department. Hiring a top person is like winning the basketball lottery, so go out of your way to welcome the candidate. Breakfast or lunch in person is the minimum. When you hand the person the signed offer ask if he or she is ready to accept it. If the person says anything other than, “Absolutely,” don’t give the person the offer. Go back to step No. 9 instead. If the person says “I have to think about it,” you’ll need to start over and go back to step No. 1.

While sourcing and interviewing are important, hiring the top person is what counts. Too many hiring managers lose sight of this end game. Some never even see it. These steps will help clarify it for every manager who wants to hire the best people possible.

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5 Small Business Takeaways From Sony’s Hack

Small businesses may not be the prime target for a hack on the scale of the recent attack on Sony Pictures, but that doesn’t mean it can’t happen. A data breach can happen to any-sized company, and for the small ones it can be catastrophic, reported Fox Business.

“It’s a huge deal,” says Ted Devine, the CEO of Insureon, an insurance company focused on small businesses. “Sixty-percent of small businesses that are hacked go out of business within six months.”

In November, hackers infiltrated Sony Pictures Entertainment’s computer network and started releasing details about movies as well as embarrassing emails from the bigwigs at the entertainment company. An investigation launched by the FBI revealed North Korea was behind the attack, which preceded the company’s release of “The Interview,” a satire about North Korea’s leader.

Sony is making headlines this month, but it’s not the first and won’t be the last digital attack on a company. In fact, according to Credit Union National Association, in 2014 there have been more than 744 data security breaches, marking a nearly 25% increase from 2013.

While your business may not be the target of another country, it could be the bullseye for a disgruntle employee, an upset customer or just the luck of the draw, which is why security experts say you can learn a lot from Sony’s nightmare. From encrypting all digital communications to spending the money for insurance, here’s advice.

Encrypt, encrypt, encrypt

One of the reasons the Sony hack was so devastating for the company is because a lot of their data wasn’t encrypted, which means once the bad guy is in the system its happy hunting.

“You don’t leave hundreds of emails unencrypted,” says Devine. “What Sony did not do was kind of staggering.” Security experts say to encrypt any sensitive data, particularly if you save your passwords on your computer. “If the data was encrypted the hacker couldn’t do anything with it,” notes Devine.

Install security software and keep it updated

For most of us, running a business is more than a 24/7 job, so spending time to install let alone keep security software updated can be challenging. But doing nothing can be a lot more costly, which is why security experts say you have to stay on top of your network, which means making sure you have a firewall installed, any patches that come out are updated and that you have protections in place against spam, spyware and any other malicious code a hacker may throw your way. Devine says it’s even worthwhile to hire an outside party to run a penetration test on your system once or twice a year to see if they can get into the system in the same way a hacker would.

Assume your employees aren’t careful online

Hack attacks have become much more sophisticated and often the bad guys use social engineering to target employees within a company. While you can tell employees how to be careful, you can’t guarantee it, which is why Dave Aitel, CEO of security company Immunity says to always assume you’re employees will fall for phishing and other online scams and plan accordingly. For instance, Aitel says you can consider using thin client machines that don’t have local storage, segmenting the network so an attack in one area won’t spread across the entire system and use browsers like Chrome or Firefox that have security plugins such as adblockers.

Embrace ephemeral messaging

As the Sony executives are quickly learning, you can’t take back what you say in an email, text, post or Tweet, which is why some security experts say businesses of all sizes should embrace the idea of ephemeral messaging or mobile-to-mobile messaging that disappears automatically once the message has been viewed.

“In light of what’s happened, we’ve once again been reminded that our digital communications, whether over email, mobile or wherever, are not safe and can easily be used against us,” says Brad Brooks, founder and CEO of TigerText www.tigertext.com, an app that lets co-workers text securely. “It’s been reported that Hollywood execs are turning to phone calls as a result of what’s happened, but why go back in time? Enterprise organizations should be using ephemeral messaging to take control over the lifespan of a conversation.” While many of the ephemeral apps are geared toward consumers like the popular SnapChat, small business owners can also employ them. If your communications are all via email, it’s a good idea to have a policy on the books about deleting it after a week, month or six months.

Consider taking out cyber insurance

Rewind a few years ago and most experts would scoff at the notion that small business owners needed insurance to protect against cyber-attacks, but a lot has changed. It doesn’t help that small business owners are more vulnerable to an attack because often they don’t have the IT staff to monitor and protect their systems.

“Every single small business that deals with customer data in some form should have cyber insurance,” says Devine. “Around 44% of small businesses have been hacked in the last two years. This is a major issue and an opportunity to protect yourself.”

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7 Types of Insurance You Need to Protect Your Business

From the day an entrepreneur starts a business, he exposes himself to certain risks. Even before the first employee is hired, a business is at risk, making it important to have the right insurance in place. One lawsuit or catastrophic event could be enough to wipe out a small business before it even has a chance to get off the ground, reported Entrepreneur.

Fortunately, businesses have access to a wide range of insurance types to protect them against these dangers. Here are some insurance types that a business must have in place as soon as possible.

1. Professional liability insurance.
Professional liability insurance, also known as errors and omissions (E&O) insurance, covers a business against negligence claims due to harm that results from mistakes or failure to perform. There is no one-size-fits-all policy for professional liability insurance. Each industry has its own set of concerns that will be addressed in a customized policy written for a business.

2. Property insurance.
Whether a business owns or leases its space, property insurance is a must. This insurance covers equipment, signage, inventory and furniture in the event of a fire, storm or theft. However, mass-destruction events like floods and earthquakes are generally not covered under standard property insurance policies. If your area is prone to these issues, check with your insurer to price a separate policy.

3. Workers’ compensation insurance.
Once the first employee has been hired, workers’ compensation insurance should be added to a business’s insurance policy. This will cover medical treatment, disability and death benefits in the event an employee is injured or dies as a result of his work with that business. Even if employees are performing seemingly low-risk work, slip-and-fall injuries or medical conditions such as carpal tunnel syndrome could result in a pricey claim.

4. Home-based businesses.
Many professionals begin their small businesses in their own homes. Unfortunately, homeowner’s policies don’t cover home-based businesses in the way commercial property insurance does. If you’re operating your business out of your home, ask your insurer for additional insurance to cover your equipment and inventory in the event of a problem.

5. Product liability insurance.
If your business manufactures products for sale on the general market, product liability insurance is a must. Even a business that takes every measure possible to make sure its products are safe can find itself named in a lawsuit due to damages caused by one of its products. Product liability insurance works to protect a business in such a case, with coverage available to be tailored specifically to a specific type of product.

6. Vehicle insurance.
If company vehicles will be used, those vehicles should be fully insured to protect businesses against liability if an accident should occur. At the very least, businesses should insure against third-party injury, but comprehensive insurance will cover that vehicle in an accident, as well. If employees are using their own cars for business, their own personal insurance will cover them in the event of an accident. One major exception to this is if they are delivering goods or services for a fee. This includes delivery personnel.

7. Business interruption insurance.
If a disaster or catastrophic event does occur, a business’s operations will likely be interrupted. During this time, your business will suffer from lost income due to your staff’s inability to work in the office, manufacture products or make sales calls. This type of insurance is especially applicable to companies that require a physical location to do business, such as retail stores. Business interruption insurance compensates a business for its lost income during these events.

By having the right insurance in place, a business can avoid a major financial loss due to a lawsuit or catastrophic event. Check with your insurer to find out what forms of insurance are advised for your type of business and put those plans in place as soon as possible.

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The Cybersecurity Myths That Small Companies Still Believe

High-profile breaches at Target (TGT), Home Depot (HD), and JPMorgan Chase (JPM) have put cybersecurity on the agenda for companies large and small. But despite the ongoing media commentary and “best practices” memos, consultant Adam Epstein of Third Creek Advisors notes that board members of small-cap companies and those considering or preparing initial public offerings are still befuddled by persistent myths on this topic, reported Bloomberg.

The confused companies include many in Silicon Valley, where one would expect to find more tech savvy, he says. I asked Epstein, the author of a how-to book for corporate boards, to bang out a primer on what directors think they know about cyber threats but really don’t. Herewith, his free advice:

1. Cyber breaches are preventable. No, they’re not. Breaches are a matter of when, not if. As security guru Tom Ridge recently noted in my interview with him in Directorship >magazine, your networks have likely already been breached. If Fortune 50 companies with nine-digit annual cybersecurity budgets can’t prevent breaches, neither can you. Effective cybersecurity is more about identifying corporate “crown jewels,” making it as difficult as possible for them to leave the building, and having a thoughtful plan for post-breach resilience.

2. The IT team is on it. No, probably not. Boardroom cybersecurity oversight generally consists of inviting the head of IT to make a periodic presentation on the company’s firewalls and antivirus software. Lacking security experts, most boards collectively exhale on hearing the IT update. Unfortunately, cybersecurity is only partially an IT issue. It’s also a matter of corporate culture, employee training, and physical security. You need to worry about disgruntled employees and your supply chain, not to mention that little company you just acquired. That’s way beyond IT.

3. Cyber theft is about credit cards. In the past several months, I’ve consulted with several boards whose members said that because their businesses don’t store or process credit card data, this area isn’t a cause for concern. Wrong. Cyber thieves have disparate goals, ranging from semi-benign mayhem, to espionage, to misappropriation, to terrorism. Credit card information is certainly a target, but so is personal info, intellectual property, strategy memos, customer lists, and other nonpublic information.

4. Always disclose cyber incursions immediately. While it’s admirable to want to get out in front of breach incidents and voluntarily disclose them, this can sometimes put a board at a disadvantage. Consider the Target breach, where the size and nature of the crisis expanded substantively with each press release. Malware can morph after being detected and wreak further havoc. It’s often unlikely that the first information received by the board about a breach will be accurate and comprehensive, so exercise caution not to complicate a crisis by voluntarily misrepresenting it.

5. No worries, we’ve got insurance for this. A lot of so-called cyber coverage results from a three-page application that barely addresses the quality and extent of your company’s computer-network architecture, physical and data security protocols, and corporate risk culture. The resulting coverage usually comes up short. Scores of cyber policies exclude more than they cover. Make sure the policy is underwritten after extensive, informed security assessments of your company—not just a standardized form sent via e-mail.

Good luck. You’ll need that, too.

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Why Parenthood Is Great for Productivity

Parenthood seems to require average men and women to spontaneously develop superhuman capabilities–such as the ability to act like a normal person on only a couple hours of sleep, reported Inc.

And while it’s intuitive to think that this hyperactive state can be distracting and detrimental to a person’s professional pursuits, the opposite can be true, suggests a recent study.

The Federal Reserve Bank of St. Louis looked at the productivity of men and women with and without families over the course of 30 years. After analyzing data from 10,000 individuals, the study’s authors concluded that men and women with two or more children are more productive over the course of a career than those with one or no children.

How about that?

In order to measure work productivity, researchers chose to look at academia, a field where achievements are more quantifiable than in others.

“For most other highly skilled professionals, such as managers, engineers, surgeons, top officials, and so on, comparable productivity measures are either not available or not recorded,” the researchers explained.

Then to carry out their research, they looked specifically at economists’ publication records in conjunction with their answers from an anonymous survey.

The researchers found that the effect of parenthood on women’s and men’s productivity was different–namely in the way it affected mothers of young children. These mothers saw an initial loss in productivity.

However, over an entire career, “mothers of at least two children are, on average, more productive than mothers of only one child, and mothers in general are more productive than childless women,” the authors wrote.

Of course, the study has limitations. Most notably, it looks at a group of highly educated individuals who likely have the resources to plan their families carefully, wrote The New York Times’s KJ Dell’Antonia. Plus academics usually enjoy more flexible work schedules than most men and women their age in other fields.

But perhaps that’s where the lesson lies.

“What the study does, though, is reinforce the idea that flexibility, however it’s possible within a given workplace, can lead to more productivity, not less,” Dell’Antonia said.

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What Small Business Owners Think About Income Tax

October 15 marked the end of the extension period to file personal income tax returns and pay up for last year, reported Fox Business. So in our online poll last week we asked small business owners, “How do you feel about the income taxes you pay?”

Seven of 10 of our respondents said, “We pay too much for what we get.” Since tax payments deplete working capital, it follows that small business owners think about paying taxes the way they do other capital outlays: “What did I get for my money?”

Regardless of when you settled up with the government, if a small business owner pays more taxes beyond scheduled remittance it’s at once good news, bad news and compounded bad news.

It’s good news because paying more taxes usually means you were profitable. Congratulations. The bad news is the cash you remit to Uncle Sam reduces precious working capital. The compounded bad news is most small businesses are S Corps and LLCs, which pass profits through to their owners as taxable income. That number is added to salary and distributions, and all are taxed at the personal rate. But it gets worse. Small business profit is often phantom income: taxable income without cash to pay the tax.

According to the Tax Policy Center, income tax paid by individuals and businesses in 2007 amounted to 10.8% of GDP. After the financial crisis tax receipts dropped to 7.4% of the economy in 2010. By 2013 the tax to GDP ratio had risen to 9.5%, or $1.6 Trillion. These numbers tell us: 1) Americans pay a lot of taxes; 2) Economic growth = tax receipts grow.

With so much revenue potential when taxpayers and businesses thrive, one would think the government would try to create a favorable environment for those who hire and make payrolls. Unfortunately, much of our tax dollars feed a bureaucracy that’s particularly good at one thing: regulating business.

Research by Wayne Crews of the Competitive Enterprise Institute estimates annual regulatory compliance costs businesses $1.88 Trillion. At 11% of GDP, that’s $280 Billion more than tax receipts. Again, it gets worse: Crews says small businesses pay double per employee per year for regulatory compliance than big businesses. For small business, regulation compliance is a parasitic stealth tax.

Alas, small business owners know when they pay income tax, part of their return on investment includes funding an overgrown and growing regulatory state that can cost them more than taxes, but is almost impossible to budget for.

Write this on a rock …

High taxes and over-regulation are government’s foot on the neck of small business.

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