JoAnn Laing's Blog - All About Small Business

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All About Small Business
Updated: 16 min 32 sec ago

Firing

Mon, 11/04/2024 - 12:19

Firing people is one of the most difficult tasks managers face. However, keeping the right people on the team and removing the unproductive person(s) is a critical role of a good manager or business owner.

While a disruptive employee can create various problems in a business, from theft, adding to poor morale, to damaging the firm’s reputation, the individual’s release must be handled with care.  In a small company with fewer people, termination is a noticeable event that creates both a temporary void and uncertainty.

First, lay out a framework for deciding whether the employee can be coached to be a better performer or needs to be terminated.

  • You should coach a poor-performing employee when they put in genuine effort but lack specific technical skills, have a few specific weaknesses but many strengths, are eager to learn, even if they lack the skill sets needed, embody the business’s culture, and are not jerks.
  • If someone is the former, your goal as business manager/owner is to provide coaching and mentorship; there is potential for the employee to perform better. However, having an employee who is the latter would indicate the worker needs to be removed from the team.
    • First, define what is not working with the employee and put it in writing.  Then, you need to have a well-articulated reason for firing the employee.

    Here are some things to ensure the employee termination process is legal and fair.

    In today’s litigious world, it is essential to have documentation (emails, deliverables created, on why someone is being terminated so they cannot file a claim of discrimination or wrongful termination. 

    Be careful to avoid discrimination or any claim of discrimination. Remember, it is illegal to fire an employee because of their race, color, religion, sex, national origin, age, disability, genetic information, or other protected characteristics. 

    Avoid wrongful termination.  If an employee thinks they were wrongfully terminated, they can file a claim with the appropriate federal or state agency and, in some cases, file a lawsuit.  This will cost the business time and money, perhaps reputation and other employee morale.

    Photo by Kampus Production

    • Document the firing process by setting up a formal termination process in advance that is consistently used and carefully documented at every step. This includes conversations regarding performance and giving the employee a chance to do better. Make sure your reasons for termination are legal.

    Have an initial honest, open discussion with the employee to raise the red flag about what is not working. Provide examples of the problems, clarify any issues, and discuss how to solve them. This step is critical so the employee is not surprised if they are terminated.

    Put the employee on a documented and measurable Performance Improvement Plan (PIP). Then, have regular check-ins to share whether performance is improving as defined in the PIP. 

    • If the employee is still not performing, identify how you will fill the gap from the person’s role so there will not be a business disruption.  The departing person may have responsibilities that need to be accounted for, so you will need to ask other people on the team to cover their role and monitor the person’s email account until a replacement is hired or the duties are finally redistributed.

    Photo by August de Richelieu

    • Coordinate with HR and Legal to proceed with the paperwork for the firing, including, but not limited to, any legal letters, the employee’s final paycheck and expense check(s), and perhaps severance, depending on our business policies and finances.
    • Also, plan the firing for a time and day of the week that is less disruptive to your business schedule. Some recommend terminating first thing in the morning, ideally before others arrive for the day. Consider having a third person, such as your HR leader, in the room observing the firing.
    • Be direct and compassionate during a private meeting. Inform the employee of the decision and clearly state the reason for termination. Keep the meeting brief, factual, and respectful.

    Your conversation with the departing employee should be simple and to the point; do not say, “I’m sorry.”  You need to start with the news as soon as you sit down. Say something like, “We need to have a difficult conversation. Unfortunately, things aren’t working out here, and today will be your last day at the company.” 

    If the employee argues, do not engage. Rather, end the argument quickly. Say something like, “Unfortunately, this decision is already finalized, so it won’t be productive to go back and forth on it right now.”  Have a box of tissues and treat the employee like a human.

    Provide the next steps along with documentation that the departing employee can later read.  Outline the following steps, including details on final pay, benefits, and company property to return.  If applicable, offer assistance such as references or career counseling. Be available for follow-up questions.

    Image by Freepik

    • Now that the hard meeting is completed help the terminated employee physically transition out.  You can offer to help them gather things from their desk as well. You may need to answer some questions about transitioning work or unemployment benefits.  It is essential to stay with the departing employee until they leave the building to ensure no technology is touched, business materials and equipment remain behind, etc.  Then, you should walk them out, shake their hand, genuinely thank them for their efforts, and wish them the best for finding something new.
    • Communicate effectively with other employees so the firing doesn’t negatively impact morale. Keep it brief and have a plan for covering the departing employee’s work, as discussed above. Focus on moving the business forward. 
    • Consider your hiring practices moving forward. What needs to be changed to minimize future firings and/or make the firing event go more smoothly?

    Please share any processes or tactics that you have found to be effective in managing a firing.

    Utilities Costs Are Important

    Sat, 10/05/2024 - 12:19

    Utilities costs seldom enter in planning efforts by small businesses either considering moving or starting a new enterprise.  Often, businesses in one location for years allow their utilities costs to grow without yearly reviews until they are a significant budget item. 

    Small business utilities are the expenses a business incurs for the services that are required to run it, such as electricity, gas, water, sewage, waste management, and telecommunication services.  

    Utilities are expected to rise in the future so it is important to plan ahead to cover these essential expenses. 

    Here are some things to consider about small business utilities:  

    • Cost: the average cost of utilities for a small business is around $2.14 per square foot per month. However, this cost can vary depending on many factors, such as the size of the space, the age of the appliances, the climate, and the building’s energy efficiency.  More specifically, 

    Electricity: The average price of electricity for small businesses in the U.S. is 12.76 cents per kilowatt-hour (kWh). However, electricity rates can vary by provider, plan, and location.  States with the lowest cost of electricity include: 

    The states with the lowest electricity costs are generally in the central and northwest regions of the US.  Some of the states with the lowest electricity rates include: North Dakota (7.41 cents per kWh), Nebraska (9.85 cents per kWh), Louisiana, Idaho, Utah, Wyoming, Iowa, Idaho, and Oklahoma. Hawaii has the highest average electricity rate in the US. 

    Gas: readily available supply lowers the cost of natural gas. 

    States with the lowest cost of natural gas include Texas, Oklahoma, Louisiana, and North Dakota; these states are major natural gas producers.  The state with the highest price of natural gas is Hawaii ($28.4 per thousand cubic feet). 

    Water: factors that affect water costs include: local water supply infrastructure, treatment costs, state regulations, population density, proximity to water and abundancy, and energy costs.   

    Vermont and Wisconsin have the lowest cost for water with average water costs at $18.  While West Virginia has the highest cost for water. 

    Sewage: wastewater treatment costs have increased by about 4% each year for the past 12 years. Wastewater bills are usually higher than water bills because of the complexities of wastewater treatment. 

    Illinois has the lowest average monthly sewer bill in the United States, at $74.97. This may be due to the state’s wastewater management systems or regulations.  

    Waste management: the costs of industrial waste management and commercial garbage disposal can vary widely based on your business location and the way you manage your contracts. 

    Connecticut is the top-ranked state for waste management, with Minnesota and Washington also ranking highly.  These states are known for their waste management policies, and many are also leaders in recycling and Pay-As-You-Throw programs. 

    Telecommunication services: communications tax laws can be complex and vary by state, even for states that don’t have a statewide sales tax.  This is due to the many agencies, rates, fees, and surcharges involved.  

    Delaware, Nevada, and Idaho are among the states with the lowest wireless taxes in the United States. 

    • Energy efficiency: businesses can save money on energy bills by choosing a plan that’s tailored to their energy usage.  They can also consider using zone heating, insulating the business, and using programmable thermostats.  
    • Payment: it is important to pay utility bills promptly, as the utility provider could shut off the service if the bill isn’t paid.  
    • Credit: new businesses or businesses with poor credit may need to pay a deposit to set up electricity. Some providers may also allow a letter of good credit, recent utility bills, or a personal credit check.  

    Review your businesses utilities before the New Year to ensure you are being cost and energy efficient. 

    Executing A Growth Plan

    Sun, 09/08/2024 - 16:43

    All small businesses want to grow profitably.  Many develop excellent growth plans.

    “Designed by Freepik”

    While there are many individuals and businesses that plan, growth only becomes a reality when you execute on the growth plan.

    Yes, this seems obvious, but many good plans never get off the ground or fully realized.

    Realize no plan goes unchanged; it morphs along the way as time passes plus conditions and assumptions change.

    Further, no plan gets executed with the commitment of top management and the resources to effectuate it.

    Let’s talk about how to execute an effective growth plan.

    “Designed by Freepik”

    First, beware of common pitfalls, they include:

    • Poor communication of strategic objectives
    • Lack of employee buy-in
    • Ineffective risk management
    • Impatience for results

    Some keys to successful strategy execution include:

    1. A Strategic Plan Requires Total Commitment

    All hands including decision-makers and stakeholders should agree on the strategic plan.  Changing the plan requires communicating the critical reasons for the changes.  Ensure you and your colleagues start on the same page in the planning process, then stay aligned through execution.

    2. Align Jobs to Strategy

    Often, employees’ roles aren’t designed with strategy in mind.  Assess whether business’s jobs are designed for successful strategy execution.

    “Designed by Freepik”

    3. Communicate Clearly to Empower Employees

    All aspect of the plan and its execution must be communicated early and often throughout the process, plus listen to responses.  Strategy execution depends on your organization’s daily tasks and decisions as well as company’s broader strategic goals, but how their individual responsibilities make achieving them possible.  When employees are part of the process, they become committed to its success.

    4. Performance Monitoring and Measurement

    KPIs (key performance indicators) play an important role in strategy execution which relies on continually assessing progress toward goals.  A numeric goal serves as a clear measure of success for you and your team to regularly track and monitor performance, plus assess if any changes need to be made based on that progress.

    5. Innovation Balanced By Control

    Innovation is a positive tool employed within the growth plan.  Don’t let innovation efforts derail the execution of your strategy.  Consider what pieces of the strategy are non-negotiable.  Answering questions like these upfront can allow for clarity during execution.

    “Designed by Freepik”

    Also, remember that a stagnant organization has no room for growth.  Encourage employees to brainstorm, experiment, and take calculated risks with strategic initiatives in mind.

    Please share what has worked in your business when executing a growth strategy.

    Promotional Products

    Fri, 08/02/2024 - 15:12

    Whether it is on a desk, work wall, locker, car dashboard, or refrigerator door, almost three out of every four workers have a promotional product at or near their work space.  While many people receive them as promotional items, many are given as a token of employer’s appreciation.

    Since their initial appearance in the second half of the 20th century, promotional items have been an important part of American culture (other cultures as well).  As methods evolved that enabled long-lasting impressions, which were printed on more and more materials, so did the promotion industry.  While calendars were a leading promotional item, they were soon overtaken by beer hall trays, glassware, signs, and in the last century pens, pencils, and paper pads, then came technology related items such as connection cords, mouse pads, cellphone holders, light sabers, etc.

    A byproduct of promotional materials is the positive impact distribution of these items makes externally and internally.

    With customers, vendors and partners who are given promotional gifts, they will remember you as they see and/or use your firm’s logo or gift.  Plus you get free advertising as the recipient uses the product.

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    Promotional products improve employee morale, loyalty, and have other benefits.  A recent study of 5,000 employees by Quality Logo Products provided some insight into these aspects of promotional activity.

    • Employees who receive promotional products stay at their companies for 1.5 years longer than those who don’t.
    • Workers expect gifts from employers during their onboarding process, work anniversaries, and holidays.
    • Apparel is the most popular gift, with sweatshirts, jackets, and t-shirts snagging the top 3 spots.
    • 73% of workers said getting company promotional products contributes to a sense of belonging/pride within the company.
    • People who receive company promotional products feel more positively about their company.

    Gift-giving is often a way of showing someone you care about them, and that stands true for promotional gifts from companies as well. Whether someone is just joining a company in an entry-level position or has spent years working there and is now at a senior level, gifts from an employer can go a long way to show appreciation for the people you work with every day.

    When it comes to promoting your company, it is imperative you remember your employees as well as customers. Share with us your favorite promotional product.