You have heard the tale since childhood, and if you heeded it, you learned one of the greatest business strategies while you were still in the nursery. The Tortoise and the Hare have a race, and even though the hare is a much faster animal, the steadiness of the tortoise prevails and he crosses the finish line first.
This principle was exemplified in the life of NCAA basketball coach and lecturer John Wooden, winner of ten national championships, who counted among his favorite maxims, "Be quick, but don't hurry." He was known for putting his most consistent players into the game.
Consistency is a trait that is easy to find among the success stories of all varieties. Michelangelo painted the ceiling and altar wall of the Sistine chapel with it. The Pilgrims survived where other settlements had failed because of it. Edison found an improved light bulb filament with it. Lincoln ended the Civil War with it. Walt Disney built an entertainment empire with it.
Since consistency and dependability are essential for building a base of repeat customers, keeping an even-keeled workplace is important for your bottom line. For that reason alone there is a need to train your employees to be consistent. But perhaps an even better reason is that maintaining a steady workplace environment will eliminate a lot of employee drama. In Aesop's fable, the Hare boasted of never having lost a race and the Tortoise was ridiculed for being slow-moving. The verbal hype may not have directly affected the outcome, but it did create an unpleasant atmosphere at the starting line.
The Character Training Institute, Inc., in their book, Achieving True Success, offers a list of "I will's" that promote consistency.
I will...
• make the most of my spare time
• keep trying until I succeed
• keep my work area neat
• complete all that I am expected to do
• keep my word
• be careful what I promise
• pull my share of the load
Putting these into practice will greatly reduce the gyration of workplace highs and lows. When everyone is keeping their word and pulling their share of the load, then you begin to see that the race is not between your employees; they are all running on the same relay team. The race is against your business competitors, and you will consistently emerge as the victorious tortoise.
Showing posts with label Entrepreneur. Show all posts
Showing posts with label Entrepreneur. Show all posts
Wednesday, July 7, 2010
Monday, June 7, 2010
Using Variable Incentives
When you hear "Variable Incentive," do you think "Sales Department?" In the past, variable incentives have often been reserved for commissioned salespeople. Employers used them because it reduced the risk of having to pay for little or no results. At the same time, well structured incentives would motivate the salesman to make a little extra effort.
For the past couple years, most employees placed more importance on financial stability and preferred the predictability of a steady base pay. But as the economy moves ahead in the early stages of recovery, employers may find a win-win situation by adding a new twist to the old concept of offering variable incentives.
The big differences this time around are that variable incentives certainly don't have to be limited to sales departments, and they don't always have to be paid in the form of dollars. Every department has departmental goals. Providing incentives to reach those goals can improve retention rates and heighten employee motivation.
Offering variable incentives has been used effectively since ancient times. It may have had a different label then, but the idea behind rewarding each person according to what he has done capitalizes on human nature: Incentives become their own motivators. Variable incentives harness this trait in a way that allows an employer to use his payroll dollars more effectively.
How is that done in practical terms? You begin by identifying goals that you want to encourage. A PEO can often help with this. Some examples might be company-wide bonuses for profitability, on-time attendance awards, completion of extra training, meeting personal goals determined during evaluations, client satisfaction, on-schedule meeting of deadlines, or any other goal that is important to your business. Because many of these goals overlap, an employee can benefit from multiple incentives. The end result is expectant, motivated employees.
For the past couple years, most employees placed more importance on financial stability and preferred the predictability of a steady base pay. But as the economy moves ahead in the early stages of recovery, employers may find a win-win situation by adding a new twist to the old concept of offering variable incentives.
The big differences this time around are that variable incentives certainly don't have to be limited to sales departments, and they don't always have to be paid in the form of dollars. Every department has departmental goals. Providing incentives to reach those goals can improve retention rates and heighten employee motivation.
Offering variable incentives has been used effectively since ancient times. It may have had a different label then, but the idea behind rewarding each person according to what he has done capitalizes on human nature: Incentives become their own motivators. Variable incentives harness this trait in a way that allows an employer to use his payroll dollars more effectively.
How is that done in practical terms? You begin by identifying goals that you want to encourage. A PEO can often help with this. Some examples might be company-wide bonuses for profitability, on-time attendance awards, completion of extra training, meeting personal goals determined during evaluations, client satisfaction, on-schedule meeting of deadlines, or any other goal that is important to your business. Because many of these goals overlap, an employee can benefit from multiple incentives. The end result is expectant, motivated employees.
Friday, May 28, 2010
Does your Relocation Policy Need a Transfer of Ideas?
In these economic times, it is pretty common for the regular guy on the street to know someone who has had to relocate to keep or find a job—it might even be himself. But most people don't think very often about the other side of the coin, the side that business owners and company managers cannot avoid: needing to relocate employees.
There have always been business cycles, and relocation plans have been around for millennia, just ask a nomadic tribesman. The nomads, however, could pack up their yurts and take their houses with them. Today's businesses have their problems complicated by a reeling housing market.
Weichert Relocation Resources Inc., a company that specializes in relocation and assignment management, has seen some early signs for optimism in 2010. For one thing, there has been a drop in the rate at which companies have had to add or increase their loss-on-sale assistance. A year ago, 40% of companies surveyed were having to ante up or improve their existing relocation packages, but fewer businesses find that necessary now.
The number of companies that had given their employees added incentives to sell their existing homes quickly have dropped, as have the number that increased coverage for temporary living assistance. At the same time, companies are weighing more closely which employees will be transferred and are instituting tiered benefit packages for those who are relocated. In a nutshell, 90% of the companies in the Weichert survey had changed their policies in response to the recessionary business environment.
The most frequent changes were made as a response to the real-estate market, and not about internal company affairs. These changes put more restrictions on employees who wanted to take advantage of relocation assistance, such as requiring that transferees work with a qualified real-estate broker and make list-price reductions when advised.
Ellie Sullivan, director of consulting at Weichert, says that one of the most effective changes made by companies comes in their improvement of the pre-decision process. Many companies had no pre-decision rubrics at all before the most recent recession. Now, 65% of the companies surveyed are offering pre-decision counseling. Potential transferees receive counseling on the new location and home sale issues. Giving an employee more information before a transfer is a "done deal" saves costs for a company by reducing the number of transfers that don't work out after the fact. Lina Paskevicius, consulting manager at Cartus Global Consulting, believes that putting more time into the pre-decision assessments is becoming "the new normal."
It can be hard for a company to persuade employees to move during a volatile economy, but new and updated approaches and policies can result in better all-round results.
There have always been business cycles, and relocation plans have been around for millennia, just ask a nomadic tribesman. The nomads, however, could pack up their yurts and take their houses with them. Today's businesses have their problems complicated by a reeling housing market.
Weichert Relocation Resources Inc., a company that specializes in relocation and assignment management, has seen some early signs for optimism in 2010. For one thing, there has been a drop in the rate at which companies have had to add or increase their loss-on-sale assistance. A year ago, 40% of companies surveyed were having to ante up or improve their existing relocation packages, but fewer businesses find that necessary now.
The number of companies that had given their employees added incentives to sell their existing homes quickly have dropped, as have the number that increased coverage for temporary living assistance. At the same time, companies are weighing more closely which employees will be transferred and are instituting tiered benefit packages for those who are relocated. In a nutshell, 90% of the companies in the Weichert survey had changed their policies in response to the recessionary business environment.
The most frequent changes were made as a response to the real-estate market, and not about internal company affairs. These changes put more restrictions on employees who wanted to take advantage of relocation assistance, such as requiring that transferees work with a qualified real-estate broker and make list-price reductions when advised.
Ellie Sullivan, director of consulting at Weichert, says that one of the most effective changes made by companies comes in their improvement of the pre-decision process. Many companies had no pre-decision rubrics at all before the most recent recession. Now, 65% of the companies surveyed are offering pre-decision counseling. Potential transferees receive counseling on the new location and home sale issues. Giving an employee more information before a transfer is a "done deal" saves costs for a company by reducing the number of transfers that don't work out after the fact. Lina Paskevicius, consulting manager at Cartus Global Consulting, believes that putting more time into the pre-decision assessments is becoming "the new normal."
It can be hard for a company to persuade employees to move during a volatile economy, but new and updated approaches and policies can result in better all-round results.
Monday, May 24, 2010
Employment Law - When it Pays to Outsource
Employment law takes account of nearly every area of the employer/employee relationship. The only exceptions are related to collective bargaining. That leaves many areas like workers’ compensation, minimum wage regulations, employment discrimination, workplace safety, whistleblower protections, and unemployment compensation in the list of topics covered by employment law. For the small businessman, that is a lot to deal with. Unfortunately, this is one of those times when the old adage, "what you don't know can't hurt you" will probably let you down sooner or later.
To complicate things further, it's not just one set of laws the business owner has to deal with, there are regulations at both the federal and the state levels and many localities add on a few more of their own. Instead of ignorance being bliss, it is a snare for lawsuits, fines, and penalties.
Some examples:
• The Family Medical Leave Act (FMLA) To quote the US Department of Labor, "FMLA provides certain employees with up to 12 weeks of unpaid, job-protected leave per year. It also requires that their group health benefits be maintained during the leave." Having an employee take family medical leave involves record keeping and paperwork, some of which is supposed to remain confidential.
• The Fair Labor Standards Act (FLSA) This law regulates the standards for the basic minimum wage and overtime pay, and regulates the hours that a minor is allowed to work. That's more recordkeeping and more paperwork tracking the hours worked and the wages paid.
• The Immigration and Nationality Act (INA) Quoting the US Department of Labor again, "INA sets forth the conditions for the temporary and permanent employment of aliens in the United States and includes provisions that address employment eligibility and employment verification." You might need forms for application for H-1B and H-1B1 Non-immigrants (form ETA-9035), the Application for Permanent Employment Certification (form ETA-9089), the Application for Alien Employment Certification (form ETA-750A), and Part B of this application: Statement of Qualifications of the Alien (form ETA-750B), and the Application for Alien Employment Certification for Agricultural services (form ETA-790). Employers certified for H-2A contracts must keep records of a worker's hours.
Small business owners who find it more profitable to work on their company than to fill out forms will like the services of a PEO. Helping employers stay in compliance with employment law is only one of the services a PEO can give.
To complicate things further, it's not just one set of laws the business owner has to deal with, there are regulations at both the federal and the state levels and many localities add on a few more of their own. Instead of ignorance being bliss, it is a snare for lawsuits, fines, and penalties.
Some examples:
• The Family Medical Leave Act (FMLA) To quote the US Department of Labor, "FMLA provides certain employees with up to 12 weeks of unpaid, job-protected leave per year. It also requires that their group health benefits be maintained during the leave." Having an employee take family medical leave involves record keeping and paperwork, some of which is supposed to remain confidential.
• The Fair Labor Standards Act (FLSA) This law regulates the standards for the basic minimum wage and overtime pay, and regulates the hours that a minor is allowed to work. That's more recordkeeping and more paperwork tracking the hours worked and the wages paid.
• The Immigration and Nationality Act (INA) Quoting the US Department of Labor again, "INA sets forth the conditions for the temporary and permanent employment of aliens in the United States and includes provisions that address employment eligibility and employment verification." You might need forms for application for H-1B and H-1B1 Non-immigrants (form ETA-9035), the Application for Permanent Employment Certification (form ETA-9089), the Application for Alien Employment Certification (form ETA-750A), and Part B of this application: Statement of Qualifications of the Alien (form ETA-750B), and the Application for Alien Employment Certification for Agricultural services (form ETA-790). Employers certified for H-2A contracts must keep records of a worker's hours.
Small business owners who find it more profitable to work on their company than to fill out forms will like the services of a PEO. Helping employers stay in compliance with employment law is only one of the services a PEO can give.
Monday, May 17, 2010
Listening is Not a Multi-tasking Activity
Listening is not a multi-tasking activity—unless you're an auctioneer. Multi-tasking works then because the auctioneer stays alert for short specific signals. Attentive listening requires a considerable amount of focus, and attentive listeners will excel in making the other person feel heard. Bidders at an auction always know when they have been heard because the price goes up, but auction house tactics can hurt a business.
Hopefully you learned the first key to being an attentive listener when you were in kindergarten. Don't interrupt. What you may not have learned then is that interrupting entails more than speaking out of turn. Eye rolling, yawning, and staring out the window are interruptions that show you are not actively listening.
The second key to know is that people rarely cut to the chase. Most people like to set the stage before they begin to make their point. Let them talk; you will learn quite a bit of the subtext from listening to how they frame their story.
A third and crucial key is that responding with platitudes or grinding criticism will make you look like a jerk. When someone has just shared a concern, don't brush them off. They want the respect of being understood. It's human nature to not be so forthcoming in the future when you weren't heard in the past. You need your employees to have confidence in you, and attentive listening builds trust.
How to Hear What a Ditz is Really Saying—or trying to
It can be tough to have to listen to scatterbrained and eccentric persons. It can be tougher to know what they mean. Here are some tips for checking to see if what you heard is the same as what they think they said.
• Recap by stating a question. If Mary just spent three minutes talking about toner, dry cleaning her sweater, missed deadlines, and a broken doohickey, recap with, "You'd like me to call someone to run maintenance on the copy machine, right?
• Say it back. Summarize your understanding of the situation and see if they agree.
• Say it another way. If possible, find a simile or metaphor that fits the situation. If the complaint was about too much work and too little help, say, "So, am I to understand that you feel like the Little Red Hen?"
These responses help you to generate useful feedback and to avoid potentially costly misunderstandings.
Hopefully you learned the first key to being an attentive listener when you were in kindergarten. Don't interrupt. What you may not have learned then is that interrupting entails more than speaking out of turn. Eye rolling, yawning, and staring out the window are interruptions that show you are not actively listening.
The second key to know is that people rarely cut to the chase. Most people like to set the stage before they begin to make their point. Let them talk; you will learn quite a bit of the subtext from listening to how they frame their story.
A third and crucial key is that responding with platitudes or grinding criticism will make you look like a jerk. When someone has just shared a concern, don't brush them off. They want the respect of being understood. It's human nature to not be so forthcoming in the future when you weren't heard in the past. You need your employees to have confidence in you, and attentive listening builds trust.
How to Hear What a Ditz is Really Saying—or trying to
It can be tough to have to listen to scatterbrained and eccentric persons. It can be tougher to know what they mean. Here are some tips for checking to see if what you heard is the same as what they think they said.
• Recap by stating a question. If Mary just spent three minutes talking about toner, dry cleaning her sweater, missed deadlines, and a broken doohickey, recap with, "You'd like me to call someone to run maintenance on the copy machine, right?
• Say it back. Summarize your understanding of the situation and see if they agree.
• Say it another way. If possible, find a simile or metaphor that fits the situation. If the complaint was about too much work and too little help, say, "So, am I to understand that you feel like the Little Red Hen?"
These responses help you to generate useful feedback and to avoid potentially costly misunderstandings.
Wednesday, May 12, 2010
Bullying - It's not just a playground thing
The Workplace Bullying Institute—yes, it really exists, and despite its name, it is actually anti-bullying—commissioned a study that found that 37 percent of the U.S. workforce have experienced bullying at work at least once in their life. With numbers that high, bullying is far more widespread an issue in the workplace than sexual harassment. While most organizations have policies to deal with sexual harassment, only a scant minority have policies in place to deal with bullying.
Momentum is building to pass laws and regulations to deal with bullying if employers won't police themselves. Unchecked workplace bullying creates so much discontent and stress with its accompanying feelings of disengagement by the victim that it would be in an employer's best economic interest to develop a policy without waiting to be forced into it by a law. With statistics available that show bullying eventually results in economic losses, it at first seems surprising that more companies have not come out with anti-bullying policies.
At least part of the problem is that there are different kinds of bullies. A law might help a worker have legal recourse with aggressive bullies, but what about the backstabbing and manipulative bullies? The bottom line is that onsite employers and managers need to be nipping bullying tendencies in the bud and not waiting until problems spiral so far out of control that the legislature attempts to do their job for them.
Here are some suggestions on how to get started:
Since manipulative behaviors are accompanied by a lack of respect for others, make "Respect" one of your company's core values. Train managers in the character of respect and take a few minutes to teach about respect at all employee meetings.
Management needs to be aware of bullies. That means realizing that manipulative behaviors don't have to display anger or overt threats; passive aggressive bullies exist. It means taking every report seriously and not excusing it without first investigating.
When bullying behaviors are reported, investigate and look for patterns. Take a friendly face-to-face approach with the accused bully. Do they seem real and transparent or not? Do comments from other co-workers tend to fall along the same lines?
Train the entire staff in conflict resolution. It's a skill all employees can benefit from, not just upper management.
Conduct exit interviews when employees leave. You'll get some of your most candid appraisals from exit interviews.
Momentum is building to pass laws and regulations to deal with bullying if employers won't police themselves. Unchecked workplace bullying creates so much discontent and stress with its accompanying feelings of disengagement by the victim that it would be in an employer's best economic interest to develop a policy without waiting to be forced into it by a law. With statistics available that show bullying eventually results in economic losses, it at first seems surprising that more companies have not come out with anti-bullying policies.
At least part of the problem is that there are different kinds of bullies. A law might help a worker have legal recourse with aggressive bullies, but what about the backstabbing and manipulative bullies? The bottom line is that onsite employers and managers need to be nipping bullying tendencies in the bud and not waiting until problems spiral so far out of control that the legislature attempts to do their job for them.
Here are some suggestions on how to get started:
Since manipulative behaviors are accompanied by a lack of respect for others, make "Respect" one of your company's core values. Train managers in the character of respect and take a few minutes to teach about respect at all employee meetings.
Management needs to be aware of bullies. That means realizing that manipulative behaviors don't have to display anger or overt threats; passive aggressive bullies exist. It means taking every report seriously and not excusing it without first investigating.
When bullying behaviors are reported, investigate and look for patterns. Take a friendly face-to-face approach with the accused bully. Do they seem real and transparent or not? Do comments from other co-workers tend to fall along the same lines?
Train the entire staff in conflict resolution. It's a skill all employees can benefit from, not just upper management.
Conduct exit interviews when employees leave. You'll get some of your most candid appraisals from exit interviews.
Tuesday, May 4, 2010
Creating Fully Engaged Employees
In the Gallup Management Journal, Curt Coffman uses a clever acronym for disengaged employees; he calls them "cave dwellers." CAVE stands for "Consistently Against Virtually Everything." Whimsical as that may be, disengaged employees are a troubling reality that can be costly for a small business.
Recent slippage in the economy has exacerbated the problem. Fears of job loss or unwanted transfer, postponed or lower-than-expected raises, and reductions in hours or assignments are all linked to the economy, and are all likely to have negative effects on commitment to the job. For many small businesses, employee disengagement is like being hit with a double whammy; in an economy where efficiency and productivity are needed the most, businesses are experiencing higher turnover rates and insecure leadership.
The good news is that there are simple, inexpensive ways to turn the tide and help get employees more actively engaged in their work. The keys are clearer communications and stronger relationships.
• Ask for Input
The employee who is working "in the trenches" often knows the lowdown on ways to improve or streamline operating procedures, but if they have disengaged with a "nobody hears me" attitude, the business is poorer because of it. Asking for input and allowing employees to be heard takes only a few minutes a week, but it boosts morale, and when an employee does have a good idea, it can boost the bottom line as well.
• Have a Purpose on Purpose
You probably told new hires about the purpose of the company during the interview process—when they had a hundred other thoughts swirling in their minds, but do your employees still remember that purpose in the here and now? Employees need reminders. Something as simple as a pep talk to refocus on your company's purpose will help people feel like they belong as part of the team. Slogans and banners posted in employee break areas also help to keep your business goals spotlighted.
• Communicate
Remember Show and Tell times from grade school? Those were designed to practice and build good communication skills. Keeping your employees invested in their work calls for a grownup business version of clear communication. Show them with action and tell them with words that you are a trustworthy leader. Managers who build sturdy, confident relationships with the people they manage will build a sturdy business. A good manager can answer an employee's questions with assurance.
• Recognize Efforts
Good workers often feel unappreciated. Big successes usually get recognition, but it's recognition of the effort, not the success, that boosts employee engagement. Very few people are able to be like Thomas Edison who, after repeated failures, was able to optimistically say, "I found 586 ways that won't work!" There are several variations of that quote and Edison probably said it more than once. A good boss will repeatedly encourage optimism in his employees too.
It's primarily the boss's responsibility to come out of his cave, build relationships, establish communication, and keep his employees engaged and ready-to-work.
Recent slippage in the economy has exacerbated the problem. Fears of job loss or unwanted transfer, postponed or lower-than-expected raises, and reductions in hours or assignments are all linked to the economy, and are all likely to have negative effects on commitment to the job. For many small businesses, employee disengagement is like being hit with a double whammy; in an economy where efficiency and productivity are needed the most, businesses are experiencing higher turnover rates and insecure leadership.
The good news is that there are simple, inexpensive ways to turn the tide and help get employees more actively engaged in their work. The keys are clearer communications and stronger relationships.
• Ask for Input
The employee who is working "in the trenches" often knows the lowdown on ways to improve or streamline operating procedures, but if they have disengaged with a "nobody hears me" attitude, the business is poorer because of it. Asking for input and allowing employees to be heard takes only a few minutes a week, but it boosts morale, and when an employee does have a good idea, it can boost the bottom line as well.
• Have a Purpose on Purpose
You probably told new hires about the purpose of the company during the interview process—when they had a hundred other thoughts swirling in their minds, but do your employees still remember that purpose in the here and now? Employees need reminders. Something as simple as a pep talk to refocus on your company's purpose will help people feel like they belong as part of the team. Slogans and banners posted in employee break areas also help to keep your business goals spotlighted.
• Communicate
Remember Show and Tell times from grade school? Those were designed to practice and build good communication skills. Keeping your employees invested in their work calls for a grownup business version of clear communication. Show them with action and tell them with words that you are a trustworthy leader. Managers who build sturdy, confident relationships with the people they manage will build a sturdy business. A good manager can answer an employee's questions with assurance.
• Recognize Efforts
Good workers often feel unappreciated. Big successes usually get recognition, but it's recognition of the effort, not the success, that boosts employee engagement. Very few people are able to be like Thomas Edison who, after repeated failures, was able to optimistically say, "I found 586 ways that won't work!" There are several variations of that quote and Edison probably said it more than once. A good boss will repeatedly encourage optimism in his employees too.
It's primarily the boss's responsibility to come out of his cave, build relationships, establish communication, and keep his employees engaged and ready-to-work.
Thursday, April 15, 2010
Starting a Business in the Right Frame of Mind
What is the difference between an entrepreneur and a business owner?
That is not a riddle that will regale your friends. If you were looking for a snappy answer like, 'A business owner is a slave to his business and an entrepreneur is in the business of turning his employees into slaves,' then keep looking. The joke was only half-right. A few business owners might be a slave to their business, but the true distinction is a person's mindset.
Some people try to set up a business by the book. They educate themselves about the service or product. They find the financing. They doggedly dot their i's and cross their t's. They hustle for clients. But without the entrepreneurial mindset, they struggle.
Let's look at a hypothetical illustration:
Sam likes his work, he even excels at it. He has a knack for doing what he does and gets paid a respectable $69K a year for doing it. What Sam doesn't like so much is his boss. When a big project comes through, his boss expects Sam to work extra hours without extra compensation and then takes all the glory for himself. Sam's mindset becomes, "I don't need this; I can start my own company and pay myself for my work." So he does. He snags a few clients from his current accounts, finds several more though his connections, hires a couple of professionals to join him and trains them the way he wants. Things start off fine enough, but after awhile a few cracks develop. Some of the customers are late in making payments and Sam is now having to handle those collections himself. He is also having to do the bulk of new sales because he doesn't trust his employees to close a deal. He hires new employees to get some relief, but is so busy trying to stop new cracks that he never seems to find time to train them thoroughly. In short, he is being spread too thin. Swamped beneath all the income, outgo, ordering, shipping, receiving, filing, reporting and processing, Sam is one unhappy business owner. He never latched on to an entrepreneurial mindset.
How would an entrepreneurial frame-of-mind have managed things differently?
Sam may own the business now, but he never stopped working for his company; he still works for a company, just a different one. An entrepreneur will work on his company, building it with structured systems the way a mason would build with bricks. Instead of doing the essential but assignable tasks himself, he'd have spent more time training his employees how to do those tasks. Instead of micromanaging his employees, he'd trust them to be responsible tor handling the routine aspects of the business. Instead of working harder for more hours, the entrepreneurial approach is to look for ways to work more efficiently. The entrepreneurial mindset is open to seeking help, whereas Sam's attitude was to do it "all by myself."
Ownership is having a set of legal documents on file. Entrepreneurship is a lifestyle. The entrepreneurial lifestyle orders the day such that time is the treasured commodity and money is a tool. The entrepreneur understands that the old saying Time is money is often a fallacy. Sometimes money can be used to buy more time.
One means that many entrepreneurs have used to buy more time is by selecting a professional employer organization (PEO) company to handle some of the administrative burdens. A start-up business may find it's better to contract with a PEO to handle the preparation of the payroll, to administer benefits plans, and to reduce other legal liabilities.
That is not a riddle that will regale your friends. If you were looking for a snappy answer like, 'A business owner is a slave to his business and an entrepreneur is in the business of turning his employees into slaves,' then keep looking. The joke was only half-right. A few business owners might be a slave to their business, but the true distinction is a person's mindset.
Some people try to set up a business by the book. They educate themselves about the service or product. They find the financing. They doggedly dot their i's and cross their t's. They hustle for clients. But without the entrepreneurial mindset, they struggle.
Let's look at a hypothetical illustration:
Sam likes his work, he even excels at it. He has a knack for doing what he does and gets paid a respectable $69K a year for doing it. What Sam doesn't like so much is his boss. When a big project comes through, his boss expects Sam to work extra hours without extra compensation and then takes all the glory for himself. Sam's mindset becomes, "I don't need this; I can start my own company and pay myself for my work." So he does. He snags a few clients from his current accounts, finds several more though his connections, hires a couple of professionals to join him and trains them the way he wants. Things start off fine enough, but after awhile a few cracks develop. Some of the customers are late in making payments and Sam is now having to handle those collections himself. He is also having to do the bulk of new sales because he doesn't trust his employees to close a deal. He hires new employees to get some relief, but is so busy trying to stop new cracks that he never seems to find time to train them thoroughly. In short, he is being spread too thin. Swamped beneath all the income, outgo, ordering, shipping, receiving, filing, reporting and processing, Sam is one unhappy business owner. He never latched on to an entrepreneurial mindset.
How would an entrepreneurial frame-of-mind have managed things differently?
Sam may own the business now, but he never stopped working for his company; he still works for a company, just a different one. An entrepreneur will work on his company, building it with structured systems the way a mason would build with bricks. Instead of doing the essential but assignable tasks himself, he'd have spent more time training his employees how to do those tasks. Instead of micromanaging his employees, he'd trust them to be responsible tor handling the routine aspects of the business. Instead of working harder for more hours, the entrepreneurial approach is to look for ways to work more efficiently. The entrepreneurial mindset is open to seeking help, whereas Sam's attitude was to do it "all by myself."
Ownership is having a set of legal documents on file. Entrepreneurship is a lifestyle. The entrepreneurial lifestyle orders the day such that time is the treasured commodity and money is a tool. The entrepreneur understands that the old saying Time is money is often a fallacy. Sometimes money can be used to buy more time.
One means that many entrepreneurs have used to buy more time is by selecting a professional employer organization (PEO) company to handle some of the administrative burdens. A start-up business may find it's better to contract with a PEO to handle the preparation of the payroll, to administer benefits plans, and to reduce other legal liabilities.
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