The Leading Edge - Taking Care of Business
One of the biggest challenges faced by small business owners is hiring good employees. Hiring the right person will make an owner's life easier, free up their time, save and/or make the company more money and help the company grow. The wrong employee, of course, can be a total nightmare.
So, how do you ensure you make the right choice when employing someone, whether it's your first employee or someone who will have to fit into your existing team?
Here are some basic tips to help you hire the right employee by identifying the importance of "fit" in matching a prospective employee's knowledge, skills and abilities with the expectations of the job and dynamics of the company and the current team.
Before even placing a job ad, consider what it is you want this person to do and what hard and soft skills they will need as a minimum. Hard skills are those specific proficiencies required to do the job. It is usually easy to identify if a candidate has these skills. Although, bear in mind, you may be able to train someone in these skills if they are otherwise the right fit.
Soft skills in many ways are more important as they include behavioral patterns - that is the way people interrelate with others. Typical soft skills might include: the ability to communicate well; an open and friendly nature; the ability to use initiative; and being a team player.
Think about what hard and soft skills you need your employee to have for the specific position you are hiring for and list them. For instance, if you are hiring a backroom techie they might not need to have an outgoing personality while someone dealing directly with customers requires excellent communications skills.
In today's world, as a business owner, you can expect to be interviewed by candidates as much as you interview them. Millennials especially are keen to ensure the company is a good fit for them.
Here are a few key things you might want to consider to ensure a successful interview:
Give applicants plenty of notice to prepare. This will also give you time to prepare.Ensure you know exactly what the job will entail; preferably pull together a job description (key roles and responsibilities).Be able to talk about what makes the job interesting and challenging and what career growth it offers. And, what skills and strengths the right person will need.Consider what you want to tell the applicant about your company; its history, products and services, potential growth. Also, why it's a great place to work.Review the candidate's resume and make notes on a separate sheet.Prepare your interview questions.Organize an appropriate private space for the interview and ensure no interruptions or distractions.Consider what questions an applicant might ask you, and prepare answers. Common questions will be around pay, benefits, hours, bonuses, dress code etc.Remember, there is legislation surrounding what you can and cannot ask candidates. For more information on this check out the following Canadian Human Rights Commission publication:English: https://goo.gl/ZYzbLRFrench: https://goo.gl/5Iwgg4
When preparing questions remember the journalist's rule of always asking open-ended questions such as:
What skills and qualifications would you bring to this job?Tell me about a time when you...had to deal with an angry customerwere required to reprioritize your work, based on a last minute requesthad to think outside‐of‐the‐box in order to solve a problemhad to make an unpopular decisiontook initiative to accomplish a project at work
Is there anything preventing you from meeting the commitments and/or requirements of this job?Why did you apply for this job?Why do you want to work for this company?What do you know about the company?What do you know about the position?If I were to contact one of your references, what would they say is your greatest strengths/challenges/weakness?What are your career goals?What do/did you enjoy most/least about your previous/current job?
It's great to be able to call an applicant and offer them the job, but it will be good for your reputation if you contact those that were shortlisted and let them know why they didn't make it this time. This will allow you to keep the lines of communication open if a position comes up in the future. And, remember that in some cases an unsuccessful candidate can also be a potential customer.
If you followed the advice in this article, and after you next interview you can answer yes to the following questions, you are on your way to hiring right!
set the stage for the interview?greet candidates in a welcoming manner?focus on asking open‐ended questions?avoid illegal questions?ask behavioural questions?thank the candidate for their time?let the candidate know what to expect from the rest of the process?
Finally, hiring right involves a solid, well-thought-out process, not hiring someone you personally like, or who thinks like you. Avoid hiring a clone; hire the right person for the specific job you are hiring for. A little up front planning will save you months of trouble in the long run.
Understanding Financial Statements
Many entrepreneurs start a business because they have a passion for a product, or a service, or perhaps because they want to be their own boss. Others may be pushed into it for one reason or another; maybe they were laid off, or couldn't find a job which used their specific skills where they live, or they simply saw a gap in the market - an opportunity.
This means that to many business owners the financial accounting side of the business has been somewhat of a mystery - something best left to their accountant. But knowing a little about a few of the basic financial statements and tools used in business is important and can help you protect your business and its hard-earned dollars.
Here is a short overview of three basic, but vitally important, financial documents every business owner should at least have a passing acquaintance with.
This is a financial statement that shows you the assets of your businesses, the liabilities and your equity (and that of any shareholders you might have). It's a snapshot of a specific moment in time. This moment is usually your year end, but it can be done quarterly. It is sometimes referred to as a Statement of Financial Position.
What does it tell you?
What you own, owe and what has been invested. Basically this comes down to a simple formula of Assets = Liabilities + Shareholder's Equity. And yes, the two figures always balance.
Why is it important?
It provides you with a snapshot in time of your company's financial situation - its health. Knowing what you own and owe is vital to starting to plan for the next year, or next phase of your business.
This document also assists current and potential investors, and bankers to understand your company's financial situation and how their money might be used. It provides an insight into what future return might be expected. For instance, investors particularly look for businesses with good cash assets as this indicates a company that is likely to continue to grow and be successful.
The income statement is sometimes called a profit and loss statement, which in some ways explains better what it actually is. This document shows all revenue coming into the company and all costs of doing business, both fixed and variable, and then shows whether over a set period of time the company has made or lost money.
What does it tell you?
The income statement shows the profitability of the company by showing revenues and expenses during a specified period of time. This can be over any period and can be done monthly, quarterly and annually. It is compiled from the figures in the company's books and put into this concise document.
In short it provides you with three things:
Total revenuesTotal expensesNet income
Why is it important?
It provides an accurate picture for management of how the company is doing in terms of profitability over a period of time. It is a document that bankers and investors are keen to see when looking at lending money to, or investing in, your company. As a company owner it allows you to better identify what your costs are, identify possible cost reductions, calculate your profit margins, and provide information which will help you predict your cash flow over the next period.
Cash Flow Statement
The cash flow statement records the amount of cash and cash equivalents entering and leaving your company over a specified period of time. It is also known as a statement of cash flows. A cash flow statement is prepared on the accrual basis of accounting which means that not all cash recorded will have been collected, nor expenses paid.
What does it tell you?
This document indicates what cash will be flowing into your business over the specified period and what will be flowing out. It will tell you whether you are looking at a positive or negative cash situation. The cash flow statement focuses on operational, investment and financing activities that create and use cash.
Why is it important?
The cash flow statement is important because it provides information about not just what has happened, but what will be happening during the prescribed period. It allows banks and investors to see where your income is coming from and what you are spending money on, and identify trends in your business.
There is an old saying that "cash is king" and this document shows you whether your company is, or will be, in a cash flow positive or negative situation during the period it covers. It is vital that your company has sufficient cash (or the ability to raise it) to pay its bills. A company can be making a good profit on paper but still fail, if it doesn't have enough cash to satisfy its creditors.
This article provides only a brief overview; we urge you to learn more about these three important financial documents and understand their nuances (perhaps ask your accountant to explain them fully) so you can use them to ensure your business continues to enjoy a secure financial footing.
Coach's Corner - Time to Reboot?
Do you sometimes find yourself feeling unproductive or that things seem to be on autopilot and you don't have the energy to take back control?
In the ebbs and flows of life there are times when we feel like we're in a slump. Sometimes, we have had our energy sapped due to illness and sometimes it may be a subconscious change in our routines. It seems that we have gotten out of our rhythm and lost some of the good habits that were part of our more productive and energetic periods.
If we recognize that we are at a point where both productivity and energy are low and this seems to have been dragging on for too long, then maybe it's time to reboot. By definition, reboot simply means an act or instance of making a change in order to establish a new beginning.
Once you have determined this is the case and you wish to reboot, it may be helpful to consider the following questions. First, try to think of when you last felt most productive and energetic. What did that time look like? What were your routines or habits at that time? What were you doing that is different from today?
For each of us there may be a variety of factors that contributed to those feelings. A few examples of why you were in a better space may come to mind. Regular exercise, meditation, work-life balance, keeping up with friends and family, healthy eating, and taking breaks at work may be some of the things that you've not kept up with as part of your daily or weekly routine. It is up to you to determine what is missing now that contributed to that positive time.
The second part of the equation is to figure out how to get some or all of those good habits back in your life to help you recreate those positive feelings of productivity and energy. What will your new routine look like? How will it fit into your schedule? When will you start? If the answer as to when you will start is at some point in the future, then you may need to ask yourself the question, what is stopping you from starting now (or at least tomorrow)? It's about not procrastinating, or as Nike sums it up succinctly - Just Do It.
So when you feel the need of a reboot, whether it's due to lack of energy, productivity, or simply feeling you're in a slump of sorts, it's useful to look back on your life and find when you last felt productive and energetic. You'll be surprised at how quickly your feelings shift once you have taken the initiative. It's about building upon your past successes to create a better present and future.
Paul Abra, Certified Executive Coach, Motivated Coaching