Goal-setting:
1. Decide on your big goals. Do you want to have more money in your bank account? Take a five-star vacation? If you're having trouble putting your finger on it, ask the people who know you best. Brainstorming with your significant other, family members, and friends can help shake loose your own thoughts.
2. Share those goals with other people. Telling friends and family members about your plans will help you stick to them. But you don't necessarily have to share your goals with people you know. At 43things.com, strangers list goals such as "save 20 percent of what I earn" or "identify 100 things that make me happy (besides money)." The website MyLifeList.org can also help; after you make a list of your goals, you can share them with others and give and receive encouragement.
3. Do a little every day. Take small steps toward your big goals every day, even if it means spending 60 seconds checking out a relevant website before bed. If you want to launch a small business, for example, small steps can include purchasing your website name, interviewing Web designers, and reading a book or two on being an entrepreneur. The most successful savers profiled in Generation Earn started by automatically saving a small percentage of their income; Nicole Mladic, a 31-year-old communications director in Chicago, couldn't afford to put away a big chunk of her salary when she was in her mid-20s, so she started saving 2 percent. A few months later, she raised it to 3 percent, then to 4 percent, and eventually she reached her goal of 10 percent. Today, her net worth is more than $90,000.
4. Take time to reflect. Look back on 2010. What were your personal money highs and lows? What mistakes did you make and what challenges did you face? What financial decisions are you most proud of?
Spending:
5. Get rid of junk mail. The website catalogchoice.org lets retailers know which customers no longer want to receive their mail. Participating companies agree to stop sending any more catalogs within three months. Signing up with 41pounds.org halts junk mail. The Direct Marketing Association (the-dma.org) will let its members know when people sign up to stop receiving direct-mail marketing offers. Junk mail piles up over time, so these fixes can really make a difference in the long run. The Environmental Protection Agency estimates that Americans receive four million tons of junk mail each year, almost half of which is never even opened. In addition to saving paper, you'll prevent yourself from spending needlessly by avoiding the temptations on those glossy pages.
6. Stop receiving E-mail sales alerts from your favorite retailers. Electronic junk mail might not carry the same environmental impact, but it can still convince you to spend money on items you don't need. Unsubscribe to retailer alerts to avoid the temptation.
7. Negotiate one big-ticket item each month. Often, big-box stories and department stores offer some wiggle room on their posted prices, especially when competitors offer a product for less. Before making any significant purchases, especially electronics, comparison shop and be prepared to ask the store clerk if their company can give you a better deal.
8. Get familiar with comparison and coupon websites. Websites such as PriceGrabber.com, BradsDeals.com, and Dealnews.com can help you pay less for items you buy often as well as splurges. Get in the habit of checking these sites before buying anything online or shopping in stores.
9. Budget by the year. Research shows that budgeting by the year instead of the month makes it easier to stay within your spending limits. That's partly because when we create an annual budget, we remember to take into account occasional expenses such as gifts.
10. Keep a spending diary. Even if you just track every dollar you spend for two weeks, it will open your eyes to where your money goes and what you could cut back on. You might not realize that you spend $100 a week on lunches, or that your taxi-cab habit is eating up half of your discretionary income.
11. Take advantage of your bank's free tools. Banks are increasingly offering easy ways of tracking your spending online. If your bank offers a free tool, use it to see where your money is going and where you can cut back.
Security:
12. Check up on your insurance. Do you have the auto insurance, renters insurance, and life insurance that you need? According to Allstate insurance, 2 in 3 renters skip insurance altogether, even though most people could benefit from the protection and it's relatively cheap. Life insurance is another awkward topic since no one wants to talk about death. But many people are under-insured, which puts their families at risk. Review the insurance that you have and decide whether you have the right amount.
13. Write a will. Consider working with a professional to make sure your assets will go where you want them to upon death; if you have any minor children, appointing a guardian is essential. At the very least, explore some of the online sites that allow people to write their own wills, such as buildawill.com and legacywriter.com, if you have a simple situation. (Financial experts say most people benefit from working with a professional.)
14. Protect your privacy. Whenever someone asks for your Social Security number, question if it's necessary to share it. Never give it to a solicitor on the telephone or in an E-mail, and if you ever notice a suspicious charge on your credit card, follow up with your card company—it could be the first sign of identity theft.
Saving:
15. Write down how much money you want to save by the end of the year. As with your other goals, the simple act of writing it down will help keep that goal at the top of your mind throughout the year.
16. Become a better cook. Sometimes you have to spend money to save money. Nowhere is that truer than in the kitchen, where investing in a few key pieces of hardware can help you cook better, faster, and cheaper. And anything that makes your food taste better and gets it on the table quickly can lessen the temptation to order budget-busting take-out. Consider investing in a slow cooker to make meals even easier.
17. Reduce your utility bills. Making sure your home is properly insulated can save you money on heating and cooling costs. Using a programmable thermostat so that the temperature automatically rises (in the summer) and falls (in the winter) when no one is home during the day can yield annual savings of about 30 percent. While some 25 million households own programmable thermostats, only half actually use them.
18. Use less energy. Small changes, like closing doors to unused rooms or turning off the air conditioner during the day, can make a serious dent in utility bills. So can unplugging appliances, turning off lights, and shutting down computers at night. Even televisions can use power when they're turned off, so unplugging them when they're not in use saves energy. A $30 power strip, called the Smart Strip, automatically cuts power to devices that don't need it when they're off, such as a DVD player, while maintaining power to those that do, such as a cable box.
19. Use fewer products. Instead of lathering up with soap, shaving cream, shower gel, and body scrub, Diane MacEachern, author of Big Green Purse, suggests cutting back to just a handful of products. "Put everything you use in one day on the counter and it will blow your mind. Pick a day where you just brush your teeth and your hair and forget about the rest," she says. In addition to creating less waste, the change will lower your monthly drugstore bills, because you won't be buying all of those unnecessary lotions and creams. You can save up to $200 a year.
20. Start making cleaning supplies from scratch. Even Martha Stewart endorses this technique. A bowl of vinegar or simmering lemon rinds can absorb smells just as well as manufactured air freshener. Scrubs made of baking soda and water make kitchens sparkle just like chemical-laden cleaners. The Internet contains hundreds of do-it-yourself recipes; Jennifer Taggart's thesmartmama.com can get you started.
21. Find inspiration online. There are hundreds of personal finance blogs and websites; find the ones that speak to you and visit them regularly to help keep you on track. Popular options include Wise Bread, The Simple Dollar, and Centsible Life.
22. Give yourself a stress test. How vulnerable are you to sudden job loss or unexpected expenses? Do you have an emergency fund? If not, start building one. You should have at least three months' worth of living expenses in your bank account.
23. Work with family members. Sometimes, family members can help each other save more money by working together. Adult children are increasingly living with their parents, for example, but this arrangement doesn't have to be a burden if the adult children contribute to household costs or pay rent. You can also help out by gardening, doing housework, or sharing your computer skills.
Investing:
24. Decide what type of investor you want to be. If you're like most people, you probably want to skip stock-picking and put your money in low-cost index funds instead. Create a diversified portfolio, with longer-term savings in more aggressive investments (such as an index fund that tracks the S&P 500) and shorter-term savings in safer spots such as money market funds.
25. Begin investing today. Waiting to start a retirement account until you feel like you can afford it might mean that you can never retire. Don't put off opening a 401(k) account if your employer offers it, even if you start by contributing just 2 percent of your salary. Soon, you can raise that percentage to 4 percent, and eventually to 10 percent or higher. For extra motivation, plug your numbers into a retirement calculator on Bankrate.com, and see how much you need to fund your golden years—it's probably much more than $1 million.
26. Ignore the market (for the most part). Focusing too much on the ups and downs of the market just causes stress. When the market's plunging, instead focus on your hobbies, family, and getting outside. Avoid cable television news, which often treats every dip in the market like a major crash. If your investments are well-diversified, you've done all you can.
Debt:
27. Pay off your expensive debt, even student loans. Student loans that carry a 5 or 6 percent interest rate (or higher) are costing you much more than your savings can earn in this current low-interest rate environment. Paying off a chunk of your student loans will immediately start saving you more money than you could if you continue to make those slow-and-steady monthly payments. Of course, not everyone has the cash to pay off a large portion of their loans, and it will probably take five-plus years after graduation to get to the point when you can even consider it. But once you have a healthy bank account, don't wait too long to start paying off big chunks of those more-expensive student loans.
28. Choose the best credit card for you. If you pay your balance off each month, you should have a card that gives you rewards points. If you carry debt, just focus on getting the card with the lowest interest rate. Most people have multiple cards that aren't suited to their needs. Pick the one that fits you best and stop using the other ones. Don't close them, though, because that can hurt your credit score.
29. Improve your credit score. The easiest way to do this is by making steady, on-time payments every month and otherwise keeping your accounts in good standing. Get your free credit report once a year at annualcreditreport.com to check for any mistakes (and fix them).
30. Make a plan for paying off high-interest rate debt. If you carry any credit card debt, auto loans, or high-interest student loans, it's time to come up with a plan for paying them off. With interest rates on savings account so low, it often makes more sense to unload your expensive debt rather than continuing to make interest payments.
Retirement:
31. Run some numbers. Most people fail to calculate exactly how much they're on track to save, or how much they'll need, in retirement. Check out the retirement calculators available through your financial institution (Fidelity, T.D. Ameritrade, Transamerica, and T. Rowe Price have them, among others) or use free calculators from Bankrate.com. Experiment with different rates of returns, inflation rates, tax rates, and lifetime expectancy, since no one can predict those factors with any accuracy.
32. Ramp up your retirement savings by a few percentage points. Those calculations might convince you that you need to start saving more. To keep anxiety (and a major budget crunch) at bay, increase your savings in small increments. Start by upping your retirement account contribution 2 percent, and see if you can add another 2 percent in six months. Most people need to save about 15 percent of their salaries to be on track for a healthy retirement.
33. Consider opening up new tax-advantaged accounts. Make sure you know what tax-advantaged accounts are available to you. If you're currently not working, you might be eligible for a spousal IRA or Roth IRA. If you work full-time and have access to a 401(k), make sure you're taking full advantage of it. If your employer offers the relatively new Roth 401(k), which lets workers invest post-tax dollars into an account that will not be taxed again in the future, you might want to consider doing so.
34. Rebalance your retirement investments. If your investments have been battered by the stock market swings—and whose hasn't—it might be time to rebalance. For a quick evaluation, subtract your age from 100. That's roughly the percentage of your funds you should have in stocks, with the rest in more conservative investments such as bonds. If you're 40, that means you should have about 60 percent in stocks and 40 percent on bonds.
35. Check in with the Social Security Administration. Every year, wage earners receive a statement from the Social Security Administration, which provides a useful estimate of your future monthly benefits. It will help you determine how much you'll need to supplement with your own savings.
Earning:
36. Invest in your career—even when you're being frugal everywhere else. Investing in a career coach or development course can help you snag a promotion, get "unstuck" from a career rut, or transition into your dream job. The price of one-on-one coaching typically starts at about $200 an hour, but less formal advice can come from meeting with more experienced colleagues over lunch or coffee.
37. Start earning extra money on the side. Many people don't realize they have valuable skills that other people are willing to pay for, such as a second language or even craft skills. To get ideas for how to earn extra money, check out the services section on Craigslist and see what people are advertising—editing, gardening, and event planning. Earning just a few hundred dollars a month can help get you back on your feet, plus you'll get valuable job experience and the possible start of a successful small business that you can continue to grow.
38. Launch your own business. Have you always dreamed of being your own boss? Make this the year you start taking small steps toward that goal. Decide what you can sell, buy your website address, and consider taking on a few clients.
39. Use social media tools to boost your career. Making connections on Twitter, Facebook, and LinkedIn can enhance your overall profile in your field and strengthen connections that will come in handy when you're job-hunting. Many people err by not fleshing out their profile information on their social network accounts; start by adding more information about yourself, along with a photo.
40. Develop a back-up plan. In today's economy, no job is 100-percent secure. Create a list of steps you would take if you were to lose your job, even though you hope never to have to use it. Having a Plan B can give you peace of mind as well as a practical "to-do" list if you ever face the shock of an unexpected job loss.
41. Schedule creative time for yourself. Boost your productivity with scheduled downtime, in which you give yourself the freedom to brainstorm about new ideas and possibilities for yourself and your career. Todd Henry, founder of the Accidental Creative, suggests blocking out a regular time period and reading material that you wouldn't normally look at, such as an engineering magazine or copy of Vogue.
42. Consider asking for a raise. If it's been a while since you've seen an increase in your paycheck, it might be a good time to make an argument to your boss for why you deserve a raise. Put the reasons in writing and run the request by a friend to make sure it's as strong as possible. Of course, if your industry or company is experiencing especially difficult times, you might want to put that request on hold until business picks up again.
43. Free up your time and energy by outsourcing chores. Think of money spent on a cleaning service or grocery delivery as an investment in your career, because these things free up more time (and energy) for you to focus on your day (or night) job.
Giving:
44. Talk with parents and siblings about any support you expect to give to them. Giving doesn't relate only to charities; many people also support their aging parents and needy siblings. Make sure you understand what your parents or siblings expect from you, if anything, and that you can afford to provide them the support that they need. If you can't, talk with them about your limits and potential nonmonetary ways that you can assist them.
45. Choose a cause that you believe in. Many of us give haphazardly throughout the year, donating $30 for a friend's walkathon and $100 at a school auction. Instead, put some thought into the causes you'd like to support this year. Read a book or two to further educate yourself. For example, if you believe in ending world water shortages, then you might want to read When the Rivers Run Dry: Water—The Defining Crisis of the Twenty-first Century. If your passion is addressing poverty, then you might want to check out When Helping Hurts: Alleviating Poverty Without Hurting the Poor. . .and Yourself. Then, figure out what you can do to help
46. Learn everything you can about your chosen cause. Bill Gates shared this advice for would-be philanthropists with the New York Times: "The key thing is to pick a cause, whether it's crops or diseases or great high schools ... Pick one, and get some more in-depth knowledge" by traveling, reading, or volunteering. Studying up on your cause doesn't need to cost much money, but it will make you a more informed—and more effective—giver.
47. Look for free ways to give, too. Giving blood, signing up to be an organ donor, or donating the gently used books and clothes in your home can be just as helpful as monetary gifts. Your time, of course, is one of the most valuable things you can give, along with any special skills, such as computer expertise, to charities in need of such assistance.
48. Give better gifts. Surveys show that most Americans say they want to spend less and give more meaningful presents. When birthdays or other events come up, think about how you can give an experience, such as an afternoon at a museum or conversation over tea, instead of things.
49. Clean out your closet. Not only will you have a more organized space for the new year, but you probably have some valuable items—books, CDs, and games—that charities could make good use of. See what you have that you're ready to give away, then look up local charities in need. Be sure to retain a record of what you give for next year's taxes.
50. Join forces with friends. By forming a giving circle, a group of friends can pool their money for a good cause. The number of giving circles has doubled to at least 800 over the past four years, and the trend is partly frugality-driven. Combining money and time makes it easier to research charities more extensively, check up on how the funds are being used, and garner enough power as donors that charities make an effort to reach out to you. A representative might visit your donor circle one night to explain the programs, or invite you to participate in some of the charity's activities. To find a giving circle that already exists in your area, visit givingcircles.org.
http://money.usnews.com/money/personal-finance/articles/2010/12/27/50-ways-to-improve-your-finances-in-2011
1/12/11
7 Easy Ways to Save Hundreds of Dollars
1. Review Insurance Policies
If you haven't done this in a while, you should. Chances are your insurance rates have gone up and there are less expensive options out there. Taking the time to review your insurance policies and shop around for replacements can save you a large sum of money. This is also a good time to adjust your insurance coverage based on your current needs reflecting what you need now, not what you needed three years ago. Take a close look at the coverage you have for auto, homeowners, and life insurance. Get free insurance quotes from several places and ask your current insurer about discounts, then pick the best one for your situation.
2. Unplug Your Appliances
Your appliances and other electronic devices consume electricity even when they are off -- especially, newer devices that just go into the standby mode as opposed to being off. One of the simplest ways to lower electricity bill is to unplug these devices when they're not in use. Take a look around your home, and you'll probably find at least a few things you can unplug. The usual culprits are chargers, computers, digital clocks, TVs, DVD players, cable boxes, microwaves, and stereo systems. To keep it simple, you can plug them into a power strip and turn the strip off when they are not in use.
3. Reassess Your Phone Setup
Do you still have a dedicated telephone line for your home and a cell phone for each family member? May be you could get rid of the home phone. If not you could consider alternative options such as a cable phone, or VoIP. Perhaps your cell phone contract expired and you could shop around for a more cost effective alternative, e.g., prepaid cell phones, a family plan, or a less expensive plan. Regardless of what you choose, consider all the extras carefully because they could add up to a sizable sum.
4. Eat At Home and Pack Your Breakfast and Lunch
This one takes a bit of a discipline, but it could save you quite a bit of money. Eating out is expensive. I am not talking only about the occasional nice dinners, your routine breakfasts and lunches could easily add up to $10 or more per day -- that's nearly $300 a month! To save money, my wife and I pack our lunches and breakfasts. For breakfast, we make toasts and coffee from home, and for lunch, we cook extra portions for dinner and pack the "left over" for the following day.
5. Tune Up Your Car and Check Your Tires
By keeping your car tuned up and your tires properly inflated, you can save quite a bit of money on gas. If you drive a lot, the saving could be substantial. Moreover, a well maintained car is safer and could save you from expensive emergency roadside assistant costs, and may be even medical expenses. But regardless of your car condition, always be prepared for car breakdown and deal with roadside emergencies.
6. Seal Windows and Doors
Winter is here. Even if you've been slacking off, it's not too late to do something about it now. Poorly sealed windows and doors can cost you a lot of money on heating and cooling costs. By simply sealing air leaks throughout your house, especially around your windows and doors, could reduce your heating bill significantly. In addition, you could leverage other techniques, such as lowering your temperature setting by a few degrees and/or replace your old thermostat with a programmable one that only warms up the house when you are around.
7. Pay Down Your Debt
Now that you saved a whole bunch of money using strategies outlined above, you could supercharge your saving by paying down your debt. If you have several debts to choose from, focus on the one with the highest interest rate first. Interest rates on credit cards usually run into the double digit. Even if you managed to pay off just a $1,000 extra, you'd be saving more than a hundred dollars over the course of the year. If you are serious about paying down your debt, check out the debt snowball debt payment method.
http://finance.yahoo.com/banking-budgeting/article/111748/easy-ways-to-save-hundreds
If you haven't done this in a while, you should. Chances are your insurance rates have gone up and there are less expensive options out there. Taking the time to review your insurance policies and shop around for replacements can save you a large sum of money. This is also a good time to adjust your insurance coverage based on your current needs reflecting what you need now, not what you needed three years ago. Take a close look at the coverage you have for auto, homeowners, and life insurance. Get free insurance quotes from several places and ask your current insurer about discounts, then pick the best one for your situation.
2. Unplug Your Appliances
Your appliances and other electronic devices consume electricity even when they are off -- especially, newer devices that just go into the standby mode as opposed to being off. One of the simplest ways to lower electricity bill is to unplug these devices when they're not in use. Take a look around your home, and you'll probably find at least a few things you can unplug. The usual culprits are chargers, computers, digital clocks, TVs, DVD players, cable boxes, microwaves, and stereo systems. To keep it simple, you can plug them into a power strip and turn the strip off when they are not in use.
3. Reassess Your Phone Setup
Do you still have a dedicated telephone line for your home and a cell phone for each family member? May be you could get rid of the home phone. If not you could consider alternative options such as a cable phone, or VoIP. Perhaps your cell phone contract expired and you could shop around for a more cost effective alternative, e.g., prepaid cell phones, a family plan, or a less expensive plan. Regardless of what you choose, consider all the extras carefully because they could add up to a sizable sum.
4. Eat At Home and Pack Your Breakfast and Lunch
This one takes a bit of a discipline, but it could save you quite a bit of money. Eating out is expensive. I am not talking only about the occasional nice dinners, your routine breakfasts and lunches could easily add up to $10 or more per day -- that's nearly $300 a month! To save money, my wife and I pack our lunches and breakfasts. For breakfast, we make toasts and coffee from home, and for lunch, we cook extra portions for dinner and pack the "left over" for the following day.
5. Tune Up Your Car and Check Your Tires
By keeping your car tuned up and your tires properly inflated, you can save quite a bit of money on gas. If you drive a lot, the saving could be substantial. Moreover, a well maintained car is safer and could save you from expensive emergency roadside assistant costs, and may be even medical expenses. But regardless of your car condition, always be prepared for car breakdown and deal with roadside emergencies.
6. Seal Windows and Doors
Winter is here. Even if you've been slacking off, it's not too late to do something about it now. Poorly sealed windows and doors can cost you a lot of money on heating and cooling costs. By simply sealing air leaks throughout your house, especially around your windows and doors, could reduce your heating bill significantly. In addition, you could leverage other techniques, such as lowering your temperature setting by a few degrees and/or replace your old thermostat with a programmable one that only warms up the house when you are around.
7. Pay Down Your Debt
Now that you saved a whole bunch of money using strategies outlined above, you could supercharge your saving by paying down your debt. If you have several debts to choose from, focus on the one with the highest interest rate first. Interest rates on credit cards usually run into the double digit. Even if you managed to pay off just a $1,000 extra, you'd be saving more than a hundred dollars over the course of the year. If you are serious about paying down your debt, check out the debt snowball debt payment method.
http://finance.yahoo.com/banking-budgeting/article/111748/easy-ways-to-save-hundreds
1/6/11
Five Tips for Managing Your To-Do List .
Is your to-do list long enough to wallpaper your office?
If you're like most entrepreneurs, you have a lengthy to-do list that never seems doable—no matter how many hours you work. But there's a reason you're not ticking off items, or maximizing results when you do. You've likely organized your task list by deadlines, and you're cranking away on the most pressing items first. A better, smarter approach is to prioritize your list by what matters most.
As such, there are only two types of tasks that should really matter to entrepreneurs. The first can broadly be described as "whatever makes money in the near future," such as writing proposals, returning prospect calls, and calling your credit card company to negotiate a better interest rate. The second is "whatever will make customers happy."
People feel compelled to finish tasks just because they are on the to-do list, especially if a deadline looms. But what good is crossing off an item on your to-do list if it doesn't make you money or thrill your customers?
A consistent flow of cash is the lifeblood of your business. If you can make money in the next 30 days by knocking off an item on your list, then make that item a priority. Same goes for any task that will win you ecstatic customers, who might reward you with repeat business or rave about you to potential customers. Everything else? Not so much.
Here's how to turn your to-do list into a productive, money-making machine:
1. Maintain a paper task list. As much as you love your fancy productivity software, keeping your to-do list on a computer can cause you to go off on a tangent or get caught up in color-coding or grouping tasks. More importantly, every program I've ever used emphasizes due dates and percentages complete, which isn't our focus. So get out the good old yellow legal pad and start at the top.
2. Create two columns: one labeled, "TYPE" and one labeled, "TASK." In the "TASK" column, write down everything you need to get done.
3. In the "TYPE" column, write a dollar sign next to each task that, when completed, you are confident would bring in money in the next 30 days. Then, put a smiley face next to any items that, when finished, will make your customers happy. Now, you have a short list of the really important tasks, a list you can manage, a list that will have an immediate, positive impact on your business.
4. Start ticking off items with dollar signs and smiley faces. When you dive into a new task, highlight it. This way, if you get distracted by the phone, or email, or your 537 Facebook friends, you can instantly get back on track by going to the highlighted task. When you complete a task, cross it off your list and go on to the next dollar sign or smiley face.
5. As you move through your day, new to-do items will come up. Write them down as soon as they come to mind so you can get back to your task at hand without worrying about remembering fleeting thoughts, or getting sidetracked contemplating how to complete that task. Then, at the end of your day, review your new to-do list items and, if applicable, add a dollar sign or smiley face.
This simple approach is the most effective productivity strategy I have ever followed. Sure enough, it consistently improves my business because I am bringing in money and making my customers pleased. If cash is flowing and the customers are happy, who cares if I never get around to the other tasks?
This year, make a resolution: Never sacrifice what is important for the sake of what is urgent
http://online.wsj.com/article/SB10001424052748704723104576062231197795222.html
If you're like most entrepreneurs, you have a lengthy to-do list that never seems doable—no matter how many hours you work. But there's a reason you're not ticking off items, or maximizing results when you do. You've likely organized your task list by deadlines, and you're cranking away on the most pressing items first. A better, smarter approach is to prioritize your list by what matters most.
As such, there are only two types of tasks that should really matter to entrepreneurs. The first can broadly be described as "whatever makes money in the near future," such as writing proposals, returning prospect calls, and calling your credit card company to negotiate a better interest rate. The second is "whatever will make customers happy."
People feel compelled to finish tasks just because they are on the to-do list, especially if a deadline looms. But what good is crossing off an item on your to-do list if it doesn't make you money or thrill your customers?
A consistent flow of cash is the lifeblood of your business. If you can make money in the next 30 days by knocking off an item on your list, then make that item a priority. Same goes for any task that will win you ecstatic customers, who might reward you with repeat business or rave about you to potential customers. Everything else? Not so much.
Here's how to turn your to-do list into a productive, money-making machine:
1. Maintain a paper task list. As much as you love your fancy productivity software, keeping your to-do list on a computer can cause you to go off on a tangent or get caught up in color-coding or grouping tasks. More importantly, every program I've ever used emphasizes due dates and percentages complete, which isn't our focus. So get out the good old yellow legal pad and start at the top.
2. Create two columns: one labeled, "TYPE" and one labeled, "TASK." In the "TASK" column, write down everything you need to get done.
3. In the "TYPE" column, write a dollar sign next to each task that, when completed, you are confident would bring in money in the next 30 days. Then, put a smiley face next to any items that, when finished, will make your customers happy. Now, you have a short list of the really important tasks, a list you can manage, a list that will have an immediate, positive impact on your business.
4. Start ticking off items with dollar signs and smiley faces. When you dive into a new task, highlight it. This way, if you get distracted by the phone, or email, or your 537 Facebook friends, you can instantly get back on track by going to the highlighted task. When you complete a task, cross it off your list and go on to the next dollar sign or smiley face.
5. As you move through your day, new to-do items will come up. Write them down as soon as they come to mind so you can get back to your task at hand without worrying about remembering fleeting thoughts, or getting sidetracked contemplating how to complete that task. Then, at the end of your day, review your new to-do list items and, if applicable, add a dollar sign or smiley face.
This simple approach is the most effective productivity strategy I have ever followed. Sure enough, it consistently improves my business because I am bringing in money and making my customers pleased. If cash is flowing and the customers are happy, who cares if I never get around to the other tasks?
This year, make a resolution: Never sacrifice what is important for the sake of what is urgent
http://online.wsj.com/article/SB10001424052748704723104576062231197795222.html
1/4/11
How You Can Beat the Machines
Online trading using discount brokerage websites has made it a lot easier for people to buy stocks. But lately, stock investors feel like they've been tossed into a scene from Terminator 2 -- and it's not at all clear whether lowly human traders will be able to emerge victorious over the machines.
Fortunately, though, you have some strategies you can use to fight back. There are several fail-safe ways to make sure you don't fall prey to the automated shenanigans that have increasingly plagued the financial markets in recent years.
Trading at the speed of light
You don't have to be terribly old to remember the days when online trading wasn't available. In order to buy or sell a stock, you actually had to talk to a human broker, which made the full-service brokerage commission rates that industry leaders Morgan Stanley (NYSE: MS) or Goldman Sachs (NYSE: GS) charged seem much more reasonable in hindsight. Full-service brokers would, in turn, relay your trade to another actual person -- typically another brokerage employee -- on the trading floor, who would combine your order with those of many other brokerage clients to make trades with other traders at the stock exchange. You'd have to wait patiently as details of your final trade execution made their way back through the chain to your broker.
Now, buying stock is as simple as pushing a button. One way that brokers try to distinguish themselves is through superior stock execution; E*TRADE Financial (Nasdaq: ETFC), for instance, boasts a two-second trade execution guarantee for some market orders on stocks within the S&P 500, as well as exchange-traded funds. If it takes longer for E*TRADE to get your trade completed, they'll waive their commission fee on that transaction. TD AMERITRADE (Nasdaq: AMTD) has a similar provision for certain trades.
But technology has also introduced some scary practices. High-frequency trading, in which automated orders are placed at split-second intervals in an attempt to take advantage of momentary inefficiencies in the financial markets, has forced the traditional stock exchanges NYSE Euronext (NYSE: NYX) and Nasdaq OMX (Nasdaq: NDAQ) to adapt to competition from upstart trading platforms that cater to electronic trading. CME Group (NYSE: CME) has made a huge investment in technology that allows electronic traders to place their computers close to the CME's own computers, which manage futures and options markets for a variety of different financial products. The practices have been blamed for last year's Flash Crash and other past market disruptions.
Slow it down
Regulation of high-frequency trading may come in the future. But regardless of whether that happens, or what form future regulation takes, you should still prepare to defend yourself against those practices.
Here are three things you can do to minimize any negative impact from high-frequency trading:
•Trade less. With commission costs on the decline, the temptation to trade more frequently has never been greater. But if high-frequency traders are eating up a small fraction of your money every time you buy or sell a stock, the obvious solution is to minimize the number of transactions you make. Long-term buy-and-hold strategies cause the least damage from market-based frictional costs.
•Stick with liquid stocks and ETFs. During the Flash Crash, the vast majority of securities that were affected the most had relatively low average daily volume. Illiquid stocks and ETFs are especially vulnerable to automated strategies, because relatively small orders can move the markets violently. So when possible, choose investments with high trading volumes -- and when you do want shares of a lightly-traded stock or ETF, be sure to use limit orders to protect yourself from unexpected swings.
•Don't trust price swings. It's entirely possible that artificial trading algorithms will create price movements that wouldn't have occurred otherwise. It's essential that you recognize those movements for what they are, rather than mistakenly assuming that they have some connection to the fundamentals of the stock's underlying business. You can't just trade by intuition anymore; only if you have a firm grasp of the intrinsic value of a company you invest in will you know when a stock's price movements are being manipulated by unusual trading activity.
Don't let the machines win
It's scary to go up against computers trading millions of shares per second. But if you stick to your guns, you can still invest well against the best computer algorithms. By focusing on the long-term prospects for great stocks, you'll find the only way to win against the machines: refusing to play the game by their rules.
http://www.fool.com/investing/brokerage/2011/01/04/how-you-can-beat-the-machines.aspx
Fortunately, though, you have some strategies you can use to fight back. There are several fail-safe ways to make sure you don't fall prey to the automated shenanigans that have increasingly plagued the financial markets in recent years.
Trading at the speed of light
You don't have to be terribly old to remember the days when online trading wasn't available. In order to buy or sell a stock, you actually had to talk to a human broker, which made the full-service brokerage commission rates that industry leaders Morgan Stanley (NYSE: MS) or Goldman Sachs (NYSE: GS) charged seem much more reasonable in hindsight. Full-service brokers would, in turn, relay your trade to another actual person -- typically another brokerage employee -- on the trading floor, who would combine your order with those of many other brokerage clients to make trades with other traders at the stock exchange. You'd have to wait patiently as details of your final trade execution made their way back through the chain to your broker.
Now, buying stock is as simple as pushing a button. One way that brokers try to distinguish themselves is through superior stock execution; E*TRADE Financial (Nasdaq: ETFC), for instance, boasts a two-second trade execution guarantee for some market orders on stocks within the S&P 500, as well as exchange-traded funds. If it takes longer for E*TRADE to get your trade completed, they'll waive their commission fee on that transaction. TD AMERITRADE (Nasdaq: AMTD) has a similar provision for certain trades.
But technology has also introduced some scary practices. High-frequency trading, in which automated orders are placed at split-second intervals in an attempt to take advantage of momentary inefficiencies in the financial markets, has forced the traditional stock exchanges NYSE Euronext (NYSE: NYX) and Nasdaq OMX (Nasdaq: NDAQ) to adapt to competition from upstart trading platforms that cater to electronic trading. CME Group (NYSE: CME) has made a huge investment in technology that allows electronic traders to place their computers close to the CME's own computers, which manage futures and options markets for a variety of different financial products. The practices have been blamed for last year's Flash Crash and other past market disruptions.
Slow it down
Regulation of high-frequency trading may come in the future. But regardless of whether that happens, or what form future regulation takes, you should still prepare to defend yourself against those practices.
Here are three things you can do to minimize any negative impact from high-frequency trading:
•Trade less. With commission costs on the decline, the temptation to trade more frequently has never been greater. But if high-frequency traders are eating up a small fraction of your money every time you buy or sell a stock, the obvious solution is to minimize the number of transactions you make. Long-term buy-and-hold strategies cause the least damage from market-based frictional costs.
•Stick with liquid stocks and ETFs. During the Flash Crash, the vast majority of securities that were affected the most had relatively low average daily volume. Illiquid stocks and ETFs are especially vulnerable to automated strategies, because relatively small orders can move the markets violently. So when possible, choose investments with high trading volumes -- and when you do want shares of a lightly-traded stock or ETF, be sure to use limit orders to protect yourself from unexpected swings.
•Don't trust price swings. It's entirely possible that artificial trading algorithms will create price movements that wouldn't have occurred otherwise. It's essential that you recognize those movements for what they are, rather than mistakenly assuming that they have some connection to the fundamentals of the stock's underlying business. You can't just trade by intuition anymore; only if you have a firm grasp of the intrinsic value of a company you invest in will you know when a stock's price movements are being manipulated by unusual trading activity.
Don't let the machines win
It's scary to go up against computers trading millions of shares per second. But if you stick to your guns, you can still invest well against the best computer algorithms. By focusing on the long-term prospects for great stocks, you'll find the only way to win against the machines: refusing to play the game by their rules.
http://www.fool.com/investing/brokerage/2011/01/04/how-you-can-beat-the-machines.aspx
How to Encourage Your Customers to Do Good
Looking to build community support, respect from your customers, and favor in the marketplace? Try nurturing some generosity.
How can a company raise good will in its community? There are plenty of responses: donate products to those in need; volunteer employee time to community programs; sponsor a charity by giving money. All good options, but all also do little to address the final target of any philanthropy campaign: your customers.
Having customers do good, more so than implementing internally, can actually build favor in the marketplace. A 2010 Cone Cause Evolution Study found that 83 percent of Americans wished more of the products, services, and retailers they use would support good causes. And 80 percent of consumers would switch to a brand that supports a cause when price and quality are equal.
On top of the visible marketing value, engaging customers in philanthropy also costs very little once you find the right charities and non-profits. Read on to find out what to do, where to turn, and how helping your customers to do good can, in turn, help you.
Encouraging Customers to Do Good: Tap Customers as a Resource
The No. 1 place to teach customers about opportunities and encourage them to give is in the store—at the register, on the checkout line, and through sponsorships. This type of cause marketing, often referred to as a point-of-sale approach, taps your stream of face-to-face interaction with customers for a social purpose.
"Our greatest resource is our access to our guests," says Laura Trust, co-president of Finagle A Bagel, a bagel retailer and wholesaler based in Boston. "If you have a few thousand people walking through your door every day, it generates a fair amount of return for a company my size."
For Finagle A Bagel, the return came from simple coin canisters flanking the registers of their nine retail locations in New England. Customers donated leftover or loose change to research and programs at the Boston Medical Center. The change started to add up little by little and, in 18 months, the company was able to write a check for $25,000 to the hospital. "It's amazing how much change you can collect from your guests," Trust says.
Making the effort to collect change or post pinup icons behind the register may seem fruitless, painstaking, or at worst, invasive. But as we see with examples like Finagle A Bagel, the money does pile up over time. Moreover, it will propel your business into a pillar of altruism within the community. "The response from customers has been wonderful," Trust says. "People want to be charitable and are by nature, particularly when you're a local company and they know the money is going towards a local organization."
Encouraging Customers to Do Good: Align With Partner Organizations
A partnership like the one between Finagle A Bagel and Boston Medical Center illustrates just how the process should work—as a partnership. Bigger non-profits want bigger checks—something small business can't readily serve up—and are often less attuned to the needs of the community. As the Cone survey revealed, consumers were more inclined to give when it had a tangible impact in their local communities.
Joe Waters, the director of cause marketing at the Boston Medical Center, has cultivated relationships with a number of Boston-area business owners like Trust. Despite being the number five hospital in Boston, BMC and its cause-marketing raise huge sums due to the dedication from small businesses, Waters says. He knows it might take a little longer and require a little extra legwork, but these businesses and their customers represent the voice of the local philanthropic community.
Waters' website, SelfishGiving.com, features such companies that encourage customers to make huge differences for the hospital. A favorite of his is Ocean State Job Lot, a 95-store clothing retailer in New England, which has eclipsed $1 million in donations since 2004. "These folks aren't Walmart, they’re not Target, they're not Starbucks, and they've raised a lot of money," Waters says.
Partnerships on the local, small business level typically require more creativity—and patience—than simply signing over a check to a charity. The biggest payoff comes when you align values and collaborate to produce visible results for customers.
Encouraging Customers to Do Good: Gain Exposure Online—Technology and Social Media
Waters, as host of the leading site on cause marketing, keeps a close watch on the latest online and technological innovations in the space. He says social services like Foursquare and technology like QR codes may revolutionize in-store philanthropy in the future.
That such strategies haven't yet been fully realized doesn't come as a surprise. Most businesses are still trying to figure out how to monetize them. But Waters envisages a time where a customer can walk into a store, check-in through a location service, and view offers to support charities or make donations. Small spurts of success have already taken hold through CauseWorld and Foursquare Check-In For Charity campaigns at this year's SXSW Festival. Likewise, with QR codes, customers can gain more access to the causes they are supporting.
"The big complaint about cause marketing is that people go up to the register and it's very transactional: you give a dollar, and you don't know what you're giving to," Waters says. "Here's an opportunity where you can go into a store, you pick up a product, you can scan the QR code on the bottom with your iPhone and actually see the village in Africa that you are helping."
In a similar vein, companies are starting to leverage social media outlets to promote donation campaigns or volunteer programs. American Eagle, for example, has partnered with SCVNGR, a mobile game company, to engage customers in challenges to raise cash for Big Brothers Big Sisters. Such campaigns align the brand with the increasingly socially conscious views of its customers and spread all-around beneficence for the organization.
Social media coupled with de rigueur corporate social responsibility (CSR) have made the Web rife with opportunities to engage customer activism. You can embed donation widgets on your site; you can organize Tweetup or Meetup volunteer groups; or you can spread compassion through blog posts or content on humanitarian projects.
Even online retailers, lacking the face-to-face advantage of brick and mortars, can get into the mix by allowing customers to make donations to the charities of their choice. One such service, iGive.com, partners with more than 800 online retailers and 44,000 non-profits. And eBay's Giving Works program has raised close to $200 million for charities over the globe.
Encouraging Customers to Do Good: Hit the Ground Running
As we've seen, checkout donations, pinup donations and the like have a tremendous benefit for retail brands. But what about non-retail? How do you get your customers or clients to do good if there's less of an element of physical transaction?
That's where exposure through social media and volunteer events become crucial. Savvy companies are starting to break down the traditional stigma between employee and customer, rather attempting to bridge the values of each.
"The direction all business is moving is toward a deeper level of customer engagement in the community," says Lisa Guyon, executive director of Building Impact, a non-profit that connects building tenants with volunteer opportunities in Boston. "It's finding that intersection with customers between your products, your service, and the community and they issues that they care about."
Volunteering employees through a program such as Building Impact marks only the first step in stimulating customer action. To reach the next level, Guyon says, you have to then promote that good will to your customers and encourage participation through social media.
Of course, you also want customers to feel like they are doing good simply by buying your products or using your services. This doesn't require the company be built around a socially conscious model. Zipcar, for example, displays its social concern by hosting toy drives and environmental responsibility events. It's important to target causes that mold to your company's mission and product categories.
"Think about where you and your client overlap and find out matters to them," Guyon says. "It has to be really organic. It has to exist naturally within the products you sell, make sense for company, and resonate with the customers."
http://www.inc.com/guides/12/2010/how-to-encourage-your-customers-to-do-good.html
How can a company raise good will in its community? There are plenty of responses: donate products to those in need; volunteer employee time to community programs; sponsor a charity by giving money. All good options, but all also do little to address the final target of any philanthropy campaign: your customers.
Having customers do good, more so than implementing internally, can actually build favor in the marketplace. A 2010 Cone Cause Evolution Study found that 83 percent of Americans wished more of the products, services, and retailers they use would support good causes. And 80 percent of consumers would switch to a brand that supports a cause when price and quality are equal.
On top of the visible marketing value, engaging customers in philanthropy also costs very little once you find the right charities and non-profits. Read on to find out what to do, where to turn, and how helping your customers to do good can, in turn, help you.
Encouraging Customers to Do Good: Tap Customers as a Resource
The No. 1 place to teach customers about opportunities and encourage them to give is in the store—at the register, on the checkout line, and through sponsorships. This type of cause marketing, often referred to as a point-of-sale approach, taps your stream of face-to-face interaction with customers for a social purpose.
"Our greatest resource is our access to our guests," says Laura Trust, co-president of Finagle A Bagel, a bagel retailer and wholesaler based in Boston. "If you have a few thousand people walking through your door every day, it generates a fair amount of return for a company my size."
For Finagle A Bagel, the return came from simple coin canisters flanking the registers of their nine retail locations in New England. Customers donated leftover or loose change to research and programs at the Boston Medical Center. The change started to add up little by little and, in 18 months, the company was able to write a check for $25,000 to the hospital. "It's amazing how much change you can collect from your guests," Trust says.
Making the effort to collect change or post pinup icons behind the register may seem fruitless, painstaking, or at worst, invasive. But as we see with examples like Finagle A Bagel, the money does pile up over time. Moreover, it will propel your business into a pillar of altruism within the community. "The response from customers has been wonderful," Trust says. "People want to be charitable and are by nature, particularly when you're a local company and they know the money is going towards a local organization."
Encouraging Customers to Do Good: Align With Partner Organizations
A partnership like the one between Finagle A Bagel and Boston Medical Center illustrates just how the process should work—as a partnership. Bigger non-profits want bigger checks—something small business can't readily serve up—and are often less attuned to the needs of the community. As the Cone survey revealed, consumers were more inclined to give when it had a tangible impact in their local communities.
Joe Waters, the director of cause marketing at the Boston Medical Center, has cultivated relationships with a number of Boston-area business owners like Trust. Despite being the number five hospital in Boston, BMC and its cause-marketing raise huge sums due to the dedication from small businesses, Waters says. He knows it might take a little longer and require a little extra legwork, but these businesses and their customers represent the voice of the local philanthropic community.
Waters' website, SelfishGiving.com, features such companies that encourage customers to make huge differences for the hospital. A favorite of his is Ocean State Job Lot, a 95-store clothing retailer in New England, which has eclipsed $1 million in donations since 2004. "These folks aren't Walmart, they’re not Target, they're not Starbucks, and they've raised a lot of money," Waters says.
Partnerships on the local, small business level typically require more creativity—and patience—than simply signing over a check to a charity. The biggest payoff comes when you align values and collaborate to produce visible results for customers.
Encouraging Customers to Do Good: Gain Exposure Online—Technology and Social Media
Waters, as host of the leading site on cause marketing, keeps a close watch on the latest online and technological innovations in the space. He says social services like Foursquare and technology like QR codes may revolutionize in-store philanthropy in the future.
That such strategies haven't yet been fully realized doesn't come as a surprise. Most businesses are still trying to figure out how to monetize them. But Waters envisages a time where a customer can walk into a store, check-in through a location service, and view offers to support charities or make donations. Small spurts of success have already taken hold through CauseWorld and Foursquare Check-In For Charity campaigns at this year's SXSW Festival. Likewise, with QR codes, customers can gain more access to the causes they are supporting.
"The big complaint about cause marketing is that people go up to the register and it's very transactional: you give a dollar, and you don't know what you're giving to," Waters says. "Here's an opportunity where you can go into a store, you pick up a product, you can scan the QR code on the bottom with your iPhone and actually see the village in Africa that you are helping."
In a similar vein, companies are starting to leverage social media outlets to promote donation campaigns or volunteer programs. American Eagle, for example, has partnered with SCVNGR, a mobile game company, to engage customers in challenges to raise cash for Big Brothers Big Sisters. Such campaigns align the brand with the increasingly socially conscious views of its customers and spread all-around beneficence for the organization.
Social media coupled with de rigueur corporate social responsibility (CSR) have made the Web rife with opportunities to engage customer activism. You can embed donation widgets on your site; you can organize Tweetup or Meetup volunteer groups; or you can spread compassion through blog posts or content on humanitarian projects.
Even online retailers, lacking the face-to-face advantage of brick and mortars, can get into the mix by allowing customers to make donations to the charities of their choice. One such service, iGive.com, partners with more than 800 online retailers and 44,000 non-profits. And eBay's Giving Works program has raised close to $200 million for charities over the globe.
Encouraging Customers to Do Good: Hit the Ground Running
As we've seen, checkout donations, pinup donations and the like have a tremendous benefit for retail brands. But what about non-retail? How do you get your customers or clients to do good if there's less of an element of physical transaction?
That's where exposure through social media and volunteer events become crucial. Savvy companies are starting to break down the traditional stigma between employee and customer, rather attempting to bridge the values of each.
"The direction all business is moving is toward a deeper level of customer engagement in the community," says Lisa Guyon, executive director of Building Impact, a non-profit that connects building tenants with volunteer opportunities in Boston. "It's finding that intersection with customers between your products, your service, and the community and they issues that they care about."
Volunteering employees through a program such as Building Impact marks only the first step in stimulating customer action. To reach the next level, Guyon says, you have to then promote that good will to your customers and encourage participation through social media.
Of course, you also want customers to feel like they are doing good simply by buying your products or using your services. This doesn't require the company be built around a socially conscious model. Zipcar, for example, displays its social concern by hosting toy drives and environmental responsibility events. It's important to target causes that mold to your company's mission and product categories.
"Think about where you and your client overlap and find out matters to them," Guyon says. "It has to be really organic. It has to exist naturally within the products you sell, make sense for company, and resonate with the customers."
http://www.inc.com/guides/12/2010/how-to-encourage-your-customers-to-do-good.html
The Happy Marriage Is the ‘Me’ Marriage
A lasting marriage does not always signal a happy marriage. Plenty of miserable couples have stayed together for children, religion or other practical reasons.
But for many couples, it’s just not enough to stay together. They want a relationship that is meaningful and satisfying. In short, they want a sustainable marriage.
“The things that make a marriage last have more to do with communication skills, mental health, social support, stress — those are the things that allow it to last or not,” says Arthur Aron, a psychology professor who directs the Interpersonal Relationships Laboratory at the State University of New York at Stony Brook. “But those things don’t necessarily make it meaningful or enjoyable or sustaining to the individual.”
The notion that the best marriages are those that bring satisfaction to the individual may seem counterintuitive. After all, isn’t marriage supposed to be about putting the relationship first?
Not anymore. For centuries, marriage was viewed as an economic and social institution, and the emotional and intellectual needs of the spouses were secondary to the survival of the marriage itself. But in modern relationships, people are looking for a partnership, and they want partners who make their lives more interesting.
Caryl Rusbult, a researcher at Vrije University in Amsterdam who died last January, called it the “Michelangelo effect,” referring to the manner in which close partners “sculpt” each other in ways that help each of them attain valued goals.
Dr. Aron and Gary W. Lewandowski Jr., a professor at Monmouth University in New Jersey, have studied how individuals use a relationship to accumulate knowledge and experiences, a process called “self-expansion.” Research shows that the more self-expansion people experience from their partner, the more committed and satisfied they are in the relationship.
To measure this, Dr. Lewandowski developed a series of questions for couples: How much has being with your partner resulted in your learning new things? How much has knowing your partner made you a better person? (Take the full quiz measuring self-expansion.)
While the notion of self-expansion may sound inherently self-serving, it can lead to stronger, more sustainable relationships, Dr. Lewandowski says.
“If you’re seeking self-growth and obtain it from your partner, then that puts your partner in a pretty important position,” he explains. “And being able to help your partner’s self-expansion would be pretty pleasing to yourself.”
The concept explains why people are delighted when dates treat them to new experiences, like a weekend away. But self-expansion isn’t just about exotic experiences. Individuals experience personal growth through their partners in big and small ways. It happens when they introduce new friends, or casually talk about a new restaurant or a fascinating story in the news.
The effect of self-expansion is particularly pronounced when people first fall in love. In research at the University of California at Santa Cruz, 325 undergraduate students were given questionnaires five times over 10 weeks. They were asked, “Who are you today?” and given three minutes to describe themselves. They were also asked about recent experiences, including whether they had fallen in love.
After students reported falling in love, they used more varied words in their self-descriptions. The new relationships had literally broadened the way they looked at themselves.
“You go from being a stranger to including this person in the self, so you suddenly have all of these social roles and identities you didn’t have before,” explains Dr. Aron, who co-authored the research. “When people fall in love that happens rapidly, and it’s very exhilarating.”
Over time, the personal gains from lasting relationships are often subtle. Having a partner who is funny or creative adds something new to someone who isn’t. A partner who is an active community volunteer creates new social opportunities for a spouse who spends long hours at work.
Additional research suggests that spouses eventually adopt the traits of the other — and become slower to distinguish differences between them, or slower to remember which skills belong to which spouse.
In experiments by Dr. Aron, participants rated themselves and their partners on a variety of traits, like “ambitious” or “artistic.” A week later, the subjects returned to the lab and were shown the list of traits and asked to indicate which ones described them.
People responded the quickest to traits that were true of both them and their partner. When the trait described only one person, the answer came more slowly. The delay was measured in milliseconds, but nonetheless suggested that when individuals were particularly close to someone, their brains were slower to distinguish between their traits and those of their spouses.
“It’s easy to answer those questions if you’re both the same,” Dr. Lewandowski explains. “But if it’s just true of you and not of me, then I have to sort it out. It happens very quickly, but I have to ask myself, ‘Is that me or is that you?’ ”
It’s not that these couples lost themselves in the marriage; instead, they grew in it. Activities, traits and behaviors that had not been part of their identity before the relationship were now an essential part of how they experienced life.
All of this can be highly predictive for a couple’s long-term happiness. One scale designed by Dr. Aron and colleagues depicts seven pairs of circles. The first set is side by side. With each new set, the circles begin to overlap until they are nearly on top of one another. Couples choose the set of circles that best represents their relationship. In a 2009 report in the journal Psychological Science, people bored in their marriages were more likely to choose the more separate circles. Partners involved in novel and interesting experiences together were more likely to pick one of the overlapping circles and less likely to report boredom. “People have a fundamental motivation to improve the self and add to who they are as a person,” Dr. Lewandowski says. “If your partner is helping you become a better person, you become happier and more satisfied in the relationship.”
http://www.nytimes.com/2011/01/02/weekinreview/02parkerpope.html
But for many couples, it’s just not enough to stay together. They want a relationship that is meaningful and satisfying. In short, they want a sustainable marriage.
“The things that make a marriage last have more to do with communication skills, mental health, social support, stress — those are the things that allow it to last or not,” says Arthur Aron, a psychology professor who directs the Interpersonal Relationships Laboratory at the State University of New York at Stony Brook. “But those things don’t necessarily make it meaningful or enjoyable or sustaining to the individual.”
The notion that the best marriages are those that bring satisfaction to the individual may seem counterintuitive. After all, isn’t marriage supposed to be about putting the relationship first?
Not anymore. For centuries, marriage was viewed as an economic and social institution, and the emotional and intellectual needs of the spouses were secondary to the survival of the marriage itself. But in modern relationships, people are looking for a partnership, and they want partners who make their lives more interesting.
Caryl Rusbult, a researcher at Vrije University in Amsterdam who died last January, called it the “Michelangelo effect,” referring to the manner in which close partners “sculpt” each other in ways that help each of them attain valued goals.
Dr. Aron and Gary W. Lewandowski Jr., a professor at Monmouth University in New Jersey, have studied how individuals use a relationship to accumulate knowledge and experiences, a process called “self-expansion.” Research shows that the more self-expansion people experience from their partner, the more committed and satisfied they are in the relationship.
To measure this, Dr. Lewandowski developed a series of questions for couples: How much has being with your partner resulted in your learning new things? How much has knowing your partner made you a better person? (Take the full quiz measuring self-expansion.)
While the notion of self-expansion may sound inherently self-serving, it can lead to stronger, more sustainable relationships, Dr. Lewandowski says.
“If you’re seeking self-growth and obtain it from your partner, then that puts your partner in a pretty important position,” he explains. “And being able to help your partner’s self-expansion would be pretty pleasing to yourself.”
The concept explains why people are delighted when dates treat them to new experiences, like a weekend away. But self-expansion isn’t just about exotic experiences. Individuals experience personal growth through their partners in big and small ways. It happens when they introduce new friends, or casually talk about a new restaurant or a fascinating story in the news.
The effect of self-expansion is particularly pronounced when people first fall in love. In research at the University of California at Santa Cruz, 325 undergraduate students were given questionnaires five times over 10 weeks. They were asked, “Who are you today?” and given three minutes to describe themselves. They were also asked about recent experiences, including whether they had fallen in love.
After students reported falling in love, they used more varied words in their self-descriptions. The new relationships had literally broadened the way they looked at themselves.
“You go from being a stranger to including this person in the self, so you suddenly have all of these social roles and identities you didn’t have before,” explains Dr. Aron, who co-authored the research. “When people fall in love that happens rapidly, and it’s very exhilarating.”
Over time, the personal gains from lasting relationships are often subtle. Having a partner who is funny or creative adds something new to someone who isn’t. A partner who is an active community volunteer creates new social opportunities for a spouse who spends long hours at work.
Additional research suggests that spouses eventually adopt the traits of the other — and become slower to distinguish differences between them, or slower to remember which skills belong to which spouse.
In experiments by Dr. Aron, participants rated themselves and their partners on a variety of traits, like “ambitious” or “artistic.” A week later, the subjects returned to the lab and were shown the list of traits and asked to indicate which ones described them.
People responded the quickest to traits that were true of both them and their partner. When the trait described only one person, the answer came more slowly. The delay was measured in milliseconds, but nonetheless suggested that when individuals were particularly close to someone, their brains were slower to distinguish between their traits and those of their spouses.
“It’s easy to answer those questions if you’re both the same,” Dr. Lewandowski explains. “But if it’s just true of you and not of me, then I have to sort it out. It happens very quickly, but I have to ask myself, ‘Is that me or is that you?’ ”
It’s not that these couples lost themselves in the marriage; instead, they grew in it. Activities, traits and behaviors that had not been part of their identity before the relationship were now an essential part of how they experienced life.
All of this can be highly predictive for a couple’s long-term happiness. One scale designed by Dr. Aron and colleagues depicts seven pairs of circles. The first set is side by side. With each new set, the circles begin to overlap until they are nearly on top of one another. Couples choose the set of circles that best represents their relationship. In a 2009 report in the journal Psychological Science, people bored in their marriages were more likely to choose the more separate circles. Partners involved in novel and interesting experiences together were more likely to pick one of the overlapping circles and less likely to report boredom. “People have a fundamental motivation to improve the self and add to who they are as a person,” Dr. Lewandowski says. “If your partner is helping you become a better person, you become happier and more satisfied in the relationship.”
http://www.nytimes.com/2011/01/02/weekinreview/02parkerpope.html
12/15/10
How to Perform a Break-Even Analysis
How many units of stuff—say, how many ham sandwiches, iPhone apps, or hours of consulting services—must you sell in order to cover your costs?
A break-even analysis is a key part of any good business plan. It can also be helpful even before you decide to write a business plan, when you're trying to figure out if an idea is worth pursuing. Long after your company is up and running, it can remain helpful as a way to figure out the best pricing structure for your products.
It sounds complicated, but it's not. Basically, a break-even analysis lets you know how many units of stuff—say, how many ham sandwiches, iPhone apps, or hours of consulting services—you must sell in order to cover your costs.
You'll need several basic pieces of information:
• Fixed costs per month
• Variable costs per unit
• Average price per unit
Performing a Break-Even Analysis: Fixed Costs
Fixed costs are ones like rent and administrative payroll that don't change much from month to month, regardless of how many units you sell. SCORE lists many common fixed costs.
"Be sure to include everything," says Jerry Chautin, a volunteer SCORE business mentor in Atlanta and Sarasota, Florida. "People forget about things like deposits or contingency funds, which can add up to a sizable amount."
If you're creating a business from scratch, don't rely on guesswork to estimate your costs. Chautin suggests asking the utility company for the past year of bills for your location. Call an insurance broker for a real quote for your particular business. Check with trade associations or web sites such as www.bizstats.com for information on average costs in your particular industry.
Performing a Break-Even Analysis: Variable Costs
Variable costs are ones like inventory, shipping and sales commissions that rise or fall with your sales volume. As with fixed costs, talk to trade associations, vendors and even other business owners in your field to come up with the most accurate estimate.
"Look up the financials of public companies in your industry: 10-Ks, which are annual disclosures, or 10-Qs, which are quarterly," Chautin says. "Even though those companies are much larger, you can size it down. The ratios are not going to be that far off."
Performing a Break-Even Analysis: Pricing
This is the trickiest of your three pieces of data, since you're able to choose exactly where to set your prices. Start by looking at your competition, and how they price their products. You can also do informal focus groups to see what people might be willing to pay for your wares or services.
"You can look at pricing many different ways," says Gwendolyn Wright, a small business coach with The Wright Consultants in San Francisco. "How's your competition pricing it? Do you want to be at the midpoint, higher end, or lower end? I see people pricing earrings at three times what their competitors are charging. Why would anyone buy that?"
You'll also need to consider your costs when setting prices. If you spend $2 on meat and condiments to produce a hamburger, you'll obviously need to price it at more than $2. But how much more—$4? $5? $7? That's where a break-even analysis can come in handy.
Performing a Break-Even Analysis: The Formula
Once you've got your cost data and a target price, plug them in to this formula:
BEQ = Fixed costs / (Average price per unit – average cost per unit)
This will tell you your break-even quantity (BEQ), the number of units you need to sell to cover your costs. Any sales above that are pure profit. Anything below means you're losing money.
Here's an example. Suppose you're turning a jewelry-making hobby into a business. You have $1,000 per month of fixed costs (studio rent, utilities, equipment, etc.). Your variable costs for each necklace are $50 for materials and labor. You'd like to charge $70 per necklace, since that's what similar pieces are selling for.
BEQ = $1000 / ($70 – $50) = $1000 / $20 = 50
That means you'd need to sell 50 necklaces a month at $70 each in order to break even.
Use your break-even formula to compare different pricing strategies. For instance, if you raised the price to $80, you'd only need to sell 33 necklaces—but it might be harder to attract buyers.
On the other hand, if you lowered the price to $60, you'd attract bargain shoppers—but would need to sell 100 necklaces to break even.
The break-even formula can help you compare different cost structures as well as prices. For instance, suppose you used less expensive materials in your necklaces and pared the unit cost down to $45. The formula tells you that you'd have to sell just 66 necklaces at $60 to break even.
You can use a basic Excel spreadsheet to run different break-even scenarios, or download one of many break-even templates available online.
http://www.inc.com/guides/2010/12/how-to-perform-a-break-even-analysis.html
A break-even analysis is a key part of any good business plan. It can also be helpful even before you decide to write a business plan, when you're trying to figure out if an idea is worth pursuing. Long after your company is up and running, it can remain helpful as a way to figure out the best pricing structure for your products.
It sounds complicated, but it's not. Basically, a break-even analysis lets you know how many units of stuff—say, how many ham sandwiches, iPhone apps, or hours of consulting services—you must sell in order to cover your costs.
You'll need several basic pieces of information:
• Fixed costs per month
• Variable costs per unit
• Average price per unit
Performing a Break-Even Analysis: Fixed Costs
Fixed costs are ones like rent and administrative payroll that don't change much from month to month, regardless of how many units you sell. SCORE lists many common fixed costs.
"Be sure to include everything," says Jerry Chautin, a volunteer SCORE business mentor in Atlanta and Sarasota, Florida. "People forget about things like deposits or contingency funds, which can add up to a sizable amount."
If you're creating a business from scratch, don't rely on guesswork to estimate your costs. Chautin suggests asking the utility company for the past year of bills for your location. Call an insurance broker for a real quote for your particular business. Check with trade associations or web sites such as www.bizstats.com for information on average costs in your particular industry.
Performing a Break-Even Analysis: Variable Costs
Variable costs are ones like inventory, shipping and sales commissions that rise or fall with your sales volume. As with fixed costs, talk to trade associations, vendors and even other business owners in your field to come up with the most accurate estimate.
"Look up the financials of public companies in your industry: 10-Ks, which are annual disclosures, or 10-Qs, which are quarterly," Chautin says. "Even though those companies are much larger, you can size it down. The ratios are not going to be that far off."
Performing a Break-Even Analysis: Pricing
This is the trickiest of your three pieces of data, since you're able to choose exactly where to set your prices. Start by looking at your competition, and how they price their products. You can also do informal focus groups to see what people might be willing to pay for your wares or services.
"You can look at pricing many different ways," says Gwendolyn Wright, a small business coach with The Wright Consultants in San Francisco. "How's your competition pricing it? Do you want to be at the midpoint, higher end, or lower end? I see people pricing earrings at three times what their competitors are charging. Why would anyone buy that?"
You'll also need to consider your costs when setting prices. If you spend $2 on meat and condiments to produce a hamburger, you'll obviously need to price it at more than $2. But how much more—$4? $5? $7? That's where a break-even analysis can come in handy.
Performing a Break-Even Analysis: The Formula
Once you've got your cost data and a target price, plug them in to this formula:
BEQ = Fixed costs / (Average price per unit – average cost per unit)
This will tell you your break-even quantity (BEQ), the number of units you need to sell to cover your costs. Any sales above that are pure profit. Anything below means you're losing money.
Here's an example. Suppose you're turning a jewelry-making hobby into a business. You have $1,000 per month of fixed costs (studio rent, utilities, equipment, etc.). Your variable costs for each necklace are $50 for materials and labor. You'd like to charge $70 per necklace, since that's what similar pieces are selling for.
BEQ = $1000 / ($70 – $50) = $1000 / $20 = 50
That means you'd need to sell 50 necklaces a month at $70 each in order to break even.
Use your break-even formula to compare different pricing strategies. For instance, if you raised the price to $80, you'd only need to sell 33 necklaces—but it might be harder to attract buyers.
On the other hand, if you lowered the price to $60, you'd attract bargain shoppers—but would need to sell 100 necklaces to break even.
The break-even formula can help you compare different cost structures as well as prices. For instance, suppose you used less expensive materials in your necklaces and pared the unit cost down to $45. The formula tells you that you'd have to sell just 66 necklaces at $60 to break even.
You can use a basic Excel spreadsheet to run different break-even scenarios, or download one of many break-even templates available online.
http://www.inc.com/guides/2010/12/how-to-perform-a-break-even-analysis.html
How to Get Employees to Care as Much as You Do
Ken Blanchard, author of The One Minute Manager, explains how Southwest Airlines sold workers on its business mission.
To build a valuable company you can walk away from—whether by selling it or just to leave for a vacation—requires that you figure out how to get your employees to care as much as you do.
For advice on the matter, I spoke with Ken Blanchard, whose books, including Raving Fans and The One Minute Manager, have sold more than 13 million copies worldwide.
Blanchard, who is about to release a book about Southwest Airlines with president emeritus Colleen Barrett, started our conversation by explaining how Southwest gets employees to care:
Blanchard: Southwest has posted a profit in each of the last 37 years—a time when the entire airline industry in the United States has posted a net loss. They have a truly special culture.
A friend of mine recently flew Southwest and told me about a flight attendant who came on the PA system to explain that the crew were tired and didn’t have the energy to come through the aisles to pass around the peanuts. Instead, she explained that she would leave a pile of peanut packages loose at the front of the plane and that when the plane takes off, she went on, the peanuts will start sliding down the aisle and passengers could reach out and grab a pack for themselves.
True to her word, the plane began to taxi, gather speed and, as the front wheels came off the ground, the peanuts started to slide to the rear of the plane. The cabin erupted in laughter as virtually everyone inside appreciated the flight attendant’s touch of humor.
There was one person who took offense to the stunt and wrote a letter to complain about the breach in safety protocol.
Normally when the head of an airline gets a complaint letter, someone in their office sends the obligatory form letter back explaining that they will look into the matter and include a coupon for an upcoming flight.
Barrett wrote a letter that simply said, “We’ll miss you.”
The implication is clear: at Southwest, one of their values is to operate with a sense of humor, and Barrett was not going to reprimand or criticize an employee for living the Southwest culture.
Warrillow: I think most CEOs would have tried to win the customer back.
Blanchard: Maybe, but at Southwest, they consider their first, and most important, customer the people who work at Southwest. The second most important customer group is the people who fly in their planes, and the third most important group are the shareholders.
Warrillow: Is getting employees to care really that simple?
Blanchard: It starts with making employees your most important customer, but you must also have a compelling vision. At Southwest, they’re on a mission to democratize air travel. When they first started, the only people who could fly were relatively wealthy businesspeople, and Herb Kelleher‘s vision was to offer everyone the chance to visit a friend or relative during a happy and a sad time. That’s a vision employees can get excited about.
If you ask a Southwest employee what business they’re in, they’ll tell you they are in the customer service business and they happen to fly airplanes.
Warrillow: What else did Barrett do to get her employees motivated to serve customers?
Blanchard: Southwest employees’ behavior is guided by four operating values. Firstly, safety is at the top of the list for obvious reasons. Second is to operate with a “warrior's spirit,” which is to say if you are going to do something, do it better than anyone else. Southwest can turn around a plane in 10 minutes—better than anyone else—because everyone pitches in; even the captain helps pick up trash to turn the plane around faster. Their third value is to operate with a fun-loving spirit, which explains stunts like the flight attendant with the unique peanut distribution strategy. Their fourth value is to have a “servant’s heart.”
Warrillow: What exactly does it mean to have a “servant’s heart”?
Blanchard: The typical organization is a pyramid with the boss at the top and a group of employees underneath. At Southwest, they flip the pyramid over so that the boss is there to help the leadership team succeed, and in turn, the leaders are there to help the front line succeed. It is exactly the opposite of most other companies.
Max De Pree, former CEO and chairman of Herman Miller, used to say his job was similar to that of a 3rd grade teacher: just keep saying the vision and values over and over again.
At my company, we have 300 employees spread across offices all over the world, and I send them all a voicemail each morning with a message from me about why our work is important and a reminder about one of our values. I call myself our company’s “chief spiritual officer.”
http://www.inc.com/articles/2010/12/ken-blanchard-on-getting-employees-to-care.html
To build a valuable company you can walk away from—whether by selling it or just to leave for a vacation—requires that you figure out how to get your employees to care as much as you do.
For advice on the matter, I spoke with Ken Blanchard, whose books, including Raving Fans and The One Minute Manager, have sold more than 13 million copies worldwide.
Blanchard, who is about to release a book about Southwest Airlines with president emeritus Colleen Barrett, started our conversation by explaining how Southwest gets employees to care:
Blanchard: Southwest has posted a profit in each of the last 37 years—a time when the entire airline industry in the United States has posted a net loss. They have a truly special culture.
A friend of mine recently flew Southwest and told me about a flight attendant who came on the PA system to explain that the crew were tired and didn’t have the energy to come through the aisles to pass around the peanuts. Instead, she explained that she would leave a pile of peanut packages loose at the front of the plane and that when the plane takes off, she went on, the peanuts will start sliding down the aisle and passengers could reach out and grab a pack for themselves.
True to her word, the plane began to taxi, gather speed and, as the front wheels came off the ground, the peanuts started to slide to the rear of the plane. The cabin erupted in laughter as virtually everyone inside appreciated the flight attendant’s touch of humor.
There was one person who took offense to the stunt and wrote a letter to complain about the breach in safety protocol.
Normally when the head of an airline gets a complaint letter, someone in their office sends the obligatory form letter back explaining that they will look into the matter and include a coupon for an upcoming flight.
Barrett wrote a letter that simply said, “We’ll miss you.”
The implication is clear: at Southwest, one of their values is to operate with a sense of humor, and Barrett was not going to reprimand or criticize an employee for living the Southwest culture.
Warrillow: I think most CEOs would have tried to win the customer back.
Blanchard: Maybe, but at Southwest, they consider their first, and most important, customer the people who work at Southwest. The second most important customer group is the people who fly in their planes, and the third most important group are the shareholders.
Warrillow: Is getting employees to care really that simple?
Blanchard: It starts with making employees your most important customer, but you must also have a compelling vision. At Southwest, they’re on a mission to democratize air travel. When they first started, the only people who could fly were relatively wealthy businesspeople, and Herb Kelleher‘s vision was to offer everyone the chance to visit a friend or relative during a happy and a sad time. That’s a vision employees can get excited about.
If you ask a Southwest employee what business they’re in, they’ll tell you they are in the customer service business and they happen to fly airplanes.
Warrillow: What else did Barrett do to get her employees motivated to serve customers?
Blanchard: Southwest employees’ behavior is guided by four operating values. Firstly, safety is at the top of the list for obvious reasons. Second is to operate with a “warrior's spirit,” which is to say if you are going to do something, do it better than anyone else. Southwest can turn around a plane in 10 minutes—better than anyone else—because everyone pitches in; even the captain helps pick up trash to turn the plane around faster. Their third value is to operate with a fun-loving spirit, which explains stunts like the flight attendant with the unique peanut distribution strategy. Their fourth value is to have a “servant’s heart.”
Warrillow: What exactly does it mean to have a “servant’s heart”?
Blanchard: The typical organization is a pyramid with the boss at the top and a group of employees underneath. At Southwest, they flip the pyramid over so that the boss is there to help the leadership team succeed, and in turn, the leaders are there to help the front line succeed. It is exactly the opposite of most other companies.
Max De Pree, former CEO and chairman of Herman Miller, used to say his job was similar to that of a 3rd grade teacher: just keep saying the vision and values over and over again.
At my company, we have 300 employees spread across offices all over the world, and I send them all a voicemail each morning with a message from me about why our work is important and a reminder about one of our values. I call myself our company’s “chief spiritual officer.”
http://www.inc.com/articles/2010/12/ken-blanchard-on-getting-employees-to-care.html
12/14/10
How to Get Feedback From Employees
That suggestions box? Ditch it in favor of savvier methods for getting workers to open up.
No employee wants to be just a faceless cog. No matter how big or small your organization is, employees who don't feel like they have a voice can drain the oxygen out of other employees, lower productivity rates, and even cause increased turnover. Employees who feel voiceless are more likely to be a drag on the day-to-day mood around the office.
Like a good therapy session, giving workers of all levels a chance to express their thoughts on the direction of the company has the opposite effect: Show your employees you're interested in their opinions and they'll be more likely take a personal stake in the business. They'll go from feeling like they're working for the man to feeling like they're a part of the team.
"We don't recruit engaged employees. Engaged employees are created," says Lisa Wojtkowiak, client relationship manager with the Opinion Research Corporation, part of Infogroup. "It's our job to engage our employees from Day One."
In the old days, soliciting feedback from your employees meant putting a box marked "suggestions" next to the water cooler. Now, smart companies realize that, as they become more reliant on a knowledge-based economy, they need to engage their employees on a much more detailed level.
Getting Employee Feedback: The Issues to Target
Every method of gathering employee feedback depends on what challenges you need to address as a business. Consider: Is your employee base growing or downsizing? Are you preparing for a merger or staying level?
Professionals in the industry of employee research say offering general feedback opportunities are important — open-office policies or meeting with managers — but specific targeting of issues can help guide your company through difficult times.
Common questions managers seek input on include: how engaged are my employees? How satisfied are they working for the company? What is the communication like with management? Do they have the right tools to do the job? How secure do they feel in the job?
You can also use a survey to find out the demographics of your work force, such as age and gender, and to look for reasons for high turnover.
"You don't do business without employees," says Howard Deutsch, CEO of Quantisoft, a survey and consulting company based in Monroe Township, New Jersey. "Those who are highly engaged or motivated will be better at their job."
Gerry McDonough, CEO of LeadFirst, a Charlotte, North Carolina-based partner of data collection firm WorldAPP, that provides survey design and employee engagement consulting, says asking about the culture of the organization is important. The culture is "upstream" of issues like employee satisfaction and engagement, meaning the answers workers give about their coworkers and the general office environment often directly affect their job satisfaction.
The culture questions can affect your core mission statement too: is it a set of values your employees support?
Getting Employee Feedback: Conducting Employee Surveys
Conducting a full-scale employee survey is still the most recommended method for gaining actionable employee feedback. Professionals recommend doing surveys on a regular basis, but say you shouldn't do it any more often than once a year because employees could lose interest if pressed for feedback too often.
Although it's recommended to tailor the specific questions to your company's current issues, though a common thred that most surveys seek to discover is how connected the employee feels to the company. Most surveys will inquire as to the whether the employee has a good work-life balance, whether they are proud to work for the organization and how much effort they put into their work. Questions can also be tailored to find out how long the employee plans to stay with the company or what their feelings are about health and safety issues.
"We have a lot of clients, and every single questionnaire is different," Wojtkowiak says.
Professionals say a mix of quantitative questions — asking employees to rate their satisfaction on a five-point scale, for instance — should be mixed with open-ended questions to gain a mix of anecdotal and statistical information.
As for length, experts say a survey with between 35 and 55 questions is the ideal length, and it should take no more than 15 to 25 minutes to complete.
"You want to make sure you have enough information so you can make good judgments based on good data," Wojtkowiak says.
If you want to conduct an employee survey more than once a year, she recommends trying a six-month "pulse" survey, a short four-to-10 questions of inquiry, usually based around measuring the impact of changes made based on feedback during the larger customer survey.
Companies should allow time for employees to complete the survey on the clock. It also helps to do the survey when the calendar is more likely to be clear: Avoiding the holidays or even your company's open enrollment period helps workers focus on their feedback.
Getting Employee Feedback: Using Other Methods of Information Gathering
Just because a comment box is one of the oldest forms of employee feedback doesn't mean it might not be useful for your business. Although it feels a little cold, and, frankly, antique, Wojtkowiak says keeping a suggestion box is an easy way to let employees know you're interested in their opinion outside annual surveys. Town hall-style meetings and other group events that place management in front of workers are also becoming popular with companies. Or, consider an online portal where employees can send an anonymous note or post. Employee feedback can also be worked in from Day One. Wojtkowiak says successful organizations incorporate the need for employee feedback options and open communications in their training programs.
"If you're retaining your most valuable staff, you're really taking those best practices from those highly engaged employees and applying them down the road," she says.
•Anonymity. If employees can be assured their responses won't lead to any retribution, they are much more likely to give honest answers, Deutsch says.
•Proving access. Online surveys are considered the most efficient, but you'll need to make sure everyone in the company has access to a computer. This can be done by setting up a dedicated computer station in the human resources office or by scheduling time for certain workers to use a computer terminal.
•Encouragement from management. A successful push for employee engagement has to be believable. That's why experts say if you really want to hear from your employees, you should have your top bosses encourage feedback on a regular basis or send out reminders. "The response rate really depends on how much senior management gets behind the project," says Josh Greenberg, president of AlphaMeasure, a research firm based in Boulder, Colorado, that has worked for Little Debbie snacks and the Canadian Red Cross.
•Incentives. While experts discourage companies from offering direct incentives to individual employees who participate in feedback opportunities, other methods are available. Greenberg says some businesses will offer a raffle prize for something like an iPod nano. Others will offer to donate money to a charity if their surveys reach a certain response rate.
Getting Employee Feedback: Using the Feedback
The worst thing for a company is to go to great lengths to solicit employee feedback, and then do nothing with it.
"If you're going to collect all this data and then not close the loop back to the employees it almost makes sense not to do the survey," Greenberg says. "It's important to let them know that they've been heard."
This can be achieved by sharing at least some of the results with the whole organization and setting benchmarks for improvement. Some companies will set up a goals monitoring system either online or on an office white board tracking efforts at reaching those goals so employees can be reminded of the progress.
Gerry McDonough, of LeadFirst, recommends companies split feedback into two categories: the broad issues that need to be addressed on a corporate or high management level and the narrow issues that can be addressed at a departmental or division level.
The shorter "pulse" surveys can also be conducted throughout the year to gauge progress. Wojtkowiak says matching the results to the hierarchy of your organization is important, to differentiate between the engagement of employees in an office in Kentucky versus one in Iowa.
"Don't put everybody in the same bucket," she says.
http://www.inc.com/guides/2010/08/how-to-get-feedback-from-employees.html
No employee wants to be just a faceless cog. No matter how big or small your organization is, employees who don't feel like they have a voice can drain the oxygen out of other employees, lower productivity rates, and even cause increased turnover. Employees who feel voiceless are more likely to be a drag on the day-to-day mood around the office.
Like a good therapy session, giving workers of all levels a chance to express their thoughts on the direction of the company has the opposite effect: Show your employees you're interested in their opinions and they'll be more likely take a personal stake in the business. They'll go from feeling like they're working for the man to feeling like they're a part of the team.
"We don't recruit engaged employees. Engaged employees are created," says Lisa Wojtkowiak, client relationship manager with the Opinion Research Corporation, part of Infogroup. "It's our job to engage our employees from Day One."
In the old days, soliciting feedback from your employees meant putting a box marked "suggestions" next to the water cooler. Now, smart companies realize that, as they become more reliant on a knowledge-based economy, they need to engage their employees on a much more detailed level.
Getting Employee Feedback: The Issues to Target
Every method of gathering employee feedback depends on what challenges you need to address as a business. Consider: Is your employee base growing or downsizing? Are you preparing for a merger or staying level?
Professionals in the industry of employee research say offering general feedback opportunities are important — open-office policies or meeting with managers — but specific targeting of issues can help guide your company through difficult times.
Common questions managers seek input on include: how engaged are my employees? How satisfied are they working for the company? What is the communication like with management? Do they have the right tools to do the job? How secure do they feel in the job?
You can also use a survey to find out the demographics of your work force, such as age and gender, and to look for reasons for high turnover.
"You don't do business without employees," says Howard Deutsch, CEO of Quantisoft, a survey and consulting company based in Monroe Township, New Jersey. "Those who are highly engaged or motivated will be better at their job."
Gerry McDonough, CEO of LeadFirst, a Charlotte, North Carolina-based partner of data collection firm WorldAPP, that provides survey design and employee engagement consulting, says asking about the culture of the organization is important. The culture is "upstream" of issues like employee satisfaction and engagement, meaning the answers workers give about their coworkers and the general office environment often directly affect their job satisfaction.
The culture questions can affect your core mission statement too: is it a set of values your employees support?
Getting Employee Feedback: Conducting Employee Surveys
Conducting a full-scale employee survey is still the most recommended method for gaining actionable employee feedback. Professionals recommend doing surveys on a regular basis, but say you shouldn't do it any more often than once a year because employees could lose interest if pressed for feedback too often.
Although it's recommended to tailor the specific questions to your company's current issues, though a common thred that most surveys seek to discover is how connected the employee feels to the company. Most surveys will inquire as to the whether the employee has a good work-life balance, whether they are proud to work for the organization and how much effort they put into their work. Questions can also be tailored to find out how long the employee plans to stay with the company or what their feelings are about health and safety issues.
"We have a lot of clients, and every single questionnaire is different," Wojtkowiak says.
Professionals say a mix of quantitative questions — asking employees to rate their satisfaction on a five-point scale, for instance — should be mixed with open-ended questions to gain a mix of anecdotal and statistical information.
As for length, experts say a survey with between 35 and 55 questions is the ideal length, and it should take no more than 15 to 25 minutes to complete.
"You want to make sure you have enough information so you can make good judgments based on good data," Wojtkowiak says.
If you want to conduct an employee survey more than once a year, she recommends trying a six-month "pulse" survey, a short four-to-10 questions of inquiry, usually based around measuring the impact of changes made based on feedback during the larger customer survey.
Companies should allow time for employees to complete the survey on the clock. It also helps to do the survey when the calendar is more likely to be clear: Avoiding the holidays or even your company's open enrollment period helps workers focus on their feedback.
Getting Employee Feedback: Using Other Methods of Information Gathering
Just because a comment box is one of the oldest forms of employee feedback doesn't mean it might not be useful for your business. Although it feels a little cold, and, frankly, antique, Wojtkowiak says keeping a suggestion box is an easy way to let employees know you're interested in their opinion outside annual surveys. Town hall-style meetings and other group events that place management in front of workers are also becoming popular with companies. Or, consider an online portal where employees can send an anonymous note or post. Employee feedback can also be worked in from Day One. Wojtkowiak says successful organizations incorporate the need for employee feedback options and open communications in their training programs.
"If you're retaining your most valuable staff, you're really taking those best practices from those highly engaged employees and applying them down the road," she says.
Getting Employee Feedback: Ensuring Participation
Typically employee surveys get a 70 to 90 percent response rate, but experts recommend several ways to ensure strong participation.•Anonymity. If employees can be assured their responses won't lead to any retribution, they are much more likely to give honest answers, Deutsch says.
•Proving access. Online surveys are considered the most efficient, but you'll need to make sure everyone in the company has access to a computer. This can be done by setting up a dedicated computer station in the human resources office or by scheduling time for certain workers to use a computer terminal.
•Encouragement from management. A successful push for employee engagement has to be believable. That's why experts say if you really want to hear from your employees, you should have your top bosses encourage feedback on a regular basis or send out reminders. "The response rate really depends on how much senior management gets behind the project," says Josh Greenberg, president of AlphaMeasure, a research firm based in Boulder, Colorado, that has worked for Little Debbie snacks and the Canadian Red Cross.
•Incentives. While experts discourage companies from offering direct incentives to individual employees who participate in feedback opportunities, other methods are available. Greenberg says some businesses will offer a raffle prize for something like an iPod nano. Others will offer to donate money to a charity if their surveys reach a certain response rate.
Getting Employee Feedback: Using the Feedback
The worst thing for a company is to go to great lengths to solicit employee feedback, and then do nothing with it.
"If you're going to collect all this data and then not close the loop back to the employees it almost makes sense not to do the survey," Greenberg says. "It's important to let them know that they've been heard."
This can be achieved by sharing at least some of the results with the whole organization and setting benchmarks for improvement. Some companies will set up a goals monitoring system either online or on an office white board tracking efforts at reaching those goals so employees can be reminded of the progress.
Gerry McDonough, of LeadFirst, recommends companies split feedback into two categories: the broad issues that need to be addressed on a corporate or high management level and the narrow issues that can be addressed at a departmental or division level.
The shorter "pulse" surveys can also be conducted throughout the year to gauge progress. Wojtkowiak says matching the results to the hierarchy of your organization is important, to differentiate between the engagement of employees in an office in Kentucky versus one in Iowa.
"Don't put everybody in the same bucket," she says.
http://www.inc.com/guides/2010/08/how-to-get-feedback-from-employees.html
How to Promote From Within
Establish a company culture that nurtures talent and promotes high-performing employees on the basis of merit.
Many people in the workforce have experienced the feeling of being stuck in the same position far longer than the proclivity of their interests and ambitions. This often leads to a general feeling of angst regarding their job, causing employees to seek out another company for more challenging prospects. Consequently, this works against business owners who will lose a high-performing employee in the process. Instead of watching as their talent pool slowly dwindles, employers are better off establishing a company culture of promoting from within.
"It's important for companies to promote from within. Otherwise, there's no career path for the people there and it forces [employees] to constantly be job hunting because they know they're not going anywhere in that company," says Penelope Trunk, founder of Brazen Careerist, a networking hub for young professionals.
While leadership development programs are great for identifying existing talent within your ranks, it's also a good idea for business owners to establish an overall company culture of promoting from within. The following will provide steps, examples, and advice for advancing your high-performing employees into positions within the company that are commensurate with their talent.
How to Promote From Within: Hire Right the First Time Around
Craigslist may be cheap and tempting, but it's not necessarily the best way to go if your long-term goal is to promote from within.
"Spend the necessary amount of money on recruiting because you're stuck with who you're recruiting if you promote from within," says Trunk.
Headhunters, established networking events, online networks, and word of mouth recommendations can lead to reputable prospects in lieu of blind ad posting. However, no matter what method you choose to line up an employee, their performance is ultimately what matters most. Luke Holden, co-owner of Luke's Lobster, shifted several of his employees that began in food preparation positions into managerial positions over the course of the company's first year, including his general managers and director of catering and special events. "We haven't necessarily gone in the direction of finding someone that has a ton of previous experience, but rather hiring good, smart people that want to learn and achieve."
Ooshma Garg, formerly of Anapata and founder and CEO of Gooble, an online marketplace for home cooked food, has implemented an eight to ten week trial-to-hire strategy. "When I meet someone who I think will be a great fit for our company, I'll meet with them and if we decide that we want to try out this relationship, we'll set a certain project for them with a completion date that is typically eight to ten weeks away (our trial periods are always eight to ten weeks) and a set deliverable," she says. The deliverable will be a metric and will vary depending on the position. "For instance, if I were to hire someone on the marketing end or the sales end, I would say, 'this metric is that in eight to ten weeks, you'll bring 250 new chefs to the Gobble network,'" Garg explains. For a more technical position, the metric may be for a developer to improve upon or to create a program within the Gobble infrastructure. During the trial period, Gooble provides class credit for candidates who are students, and a stipend for those who are not.
"When I haven't followed this method, I can definitely see the difference, see the problems that occur when you put someone into a role without having worked with them before and without having developed them from day one," says Garg.
Once you have the right people onboard, how can you make sure that your employees move up accordingly?
How to Promote From Within: Make Your Employees Take Risks
Trial and error is a great learning process for everyone, and your employees aren't exempt from occasional failure. However, it's how they handle new tasks that will show you what they're made of, and if they have the potential to take on an increasing number of responsibilities. Advises Trunk, "sometimes when you're training someone to be promoted, you should give them work that they've never done before, and they'll mess it up. But the company culture has to respect that people who are learning mess up, and that's okay as long as they're learning."
How should a manager go about allowing an employee to botch a task? Trunk states that if you're managing an employee closely, you should be able to identify the exact area the employee will miscalculate. "If you know where they're going to fail, you can catch them before they do any damage," says Trunk. "You can say, 'well, you did this wrong and here's the thing that you should ask next time.'" She says that a good manager can manage all failure so that it's a learning experience.
In this case, a manager can decide indendently how much time they want to invest in helping the employee during the trial and error process. Based on the needs of the company, a manager may want to continue training an employee or, after a sufficient period, opt to promote someone else or hire an external candidate. At that point "it's a cost benefit analysis," says Trunk.
How to Promote From Within: If An Employee Wants More Responsibility, Give it to Them
Natalie Reinert started out as a merchandise hostess at Walt Disney World Resort in 2005. Desiring more responsbility, she took matters into her own hands. "I went to my leadership and told them I would like to move up, and they agreed I could do that," she says. Six months later, she became a coordinator. After informing her area leader that leadership (the lingo for management at Disney) was her ultimate goal, Reinert was assigned a mentor from the leadership casting team. She was then given a breadth of challenging tasks that included tracking the financial data in her assigned store, working with other departments to determine shelf inventory, and creating an efficient system to track customer orders. Leading up to her leadership assessment, "I mock interviewed with at least a dozen managers from across the park who volunteered their time to work with me," says Reinert. She became a retail guest service manager in 2008.
However, some people have remained in entry-level positions through their entire time with Disney, lacking the initiative to advance into positions that require additional levels of responsibility. Disney is a large conglomerate organization that requires an abundance of personnel. However, smaller companies or businesses in general that want to make sure their staff is working to the fullest extent of its potential can choose to adopt an "up or out" policy.
"An up or out culture tends to make people higher performers," says Trunk. "If I start seeing that [my employees are] not going to grow at my company, I try to counsel them about what they should be doing and where they would grow. Really, any good manager shouldn't have to fire someone. They should be making it totally clear that this isn't the right job for them and that person should want to leave anyway. The term is called counseling out as opposed to promoting from within."
Garg takes a different approach with respect to challenging her employees. She requires that they create a specific set of goals for themselves prior to being hired. During her initial meeting with a prospective employee prior to the commencement of their trial-to-hire period, she gives them a survey in which they are required to list three goals that they would like to achieve during their working relationship with Gobble, which do not have to relate directly to the position for which they are being hired. "What do they want to learn about? Do they want to learn how start-ups get customers? Do they want to learn about how start-ups do accounting? It doesn't necessarily have to relate to their role, but I want to make sure that they're developing themselves personally as well as professionally," she says. Those goals are later reassessed every quarter, along with performance evaluations as per their duties with Gobble. Garg credits this method for allowing her staff to visualize their goals. "I think that's helped people achieve their goals and, thus, take on more responsibilites almost consistently every three months," she says. "I am promoting them by using their own goals and their own chosen deliverables."
How to Promote From Within: Value the Teaching Experience
Managers are referred to leaders at Disney "because it's about finding talent and teaching," says Reinert. "A big part of your job is teaching."
When Reinert first notified her superiors that she desired to advance into the position of coordinator, the company provided her with a binder filled with information, including the classes that she could take through Disney University and other management in various Disney support offices that she should meet with in order to better understand the chain of command.
"The only way to get someone to the next level is to have very strong coaching and very strong mentoring. If you don't reward people for good mentoring, then people aren't going to get the mentoring they need to be promoted," states Trunk.
For a smaller businesses, it is essential that management offer creative and cost-effective ways for employees to reap the benefits of on the job education. Presently, Gobble employs between five to ten people, which includes full-time and part-time workers, as well as interns. Garg has adopted an inclusive culture within her start-up so that employees can both learn and grow simultaneously.
"As much as I can, I leave meetings and events open that I am invited to for our employees to attend. So, if I'm meeting with an investor and an employee's personal goal is to one day start their own company or to understand how founders communicate or how founders fundraise, I will do my best to try and include them in one or more meetings that investors may consent to," she explains.
Garg is well aware of the apprehension that some of her associates may feel when it comes to including their staff in the intimate details of company operations, but she has found that many of those fears are misdirected. "Some founders might be afraid that involving employees in so many events or meetings may encourage them to leave or find other job opportunities or find other interests," she says. "But what I find is that it absolutely increases their loyalty to you and to the company because they understand that you care about them and not just their work."
How to Promote From Within: Be Open and Encourage Feedback
Do your employees feel comfortable talking to you? This may be a great indicator of your company's future success when it comes to promoting from within. Managers should be open to evaluation in the same way they allow their employees to be evaluated.
"I think it's important to consistently get feedback from your teammates; constantly culling your teammates to ask how their job is going, how you're doing your job, how you can do it better, the good things you're doing, constantly getting 360 feedback," says Holden.
Stacey Thomson, public relations manager at Disney Institute, the external training division for all of the Walt Disney Companies, believes that companies should institute open door policies that extend to both private and professional matters. "If you truly have that open door policy, then they're going to feel comfortable coming to you and saying, you know, 'I saw this position posted in XYZ division of the company and I'd really like to put my name in the hat for that,'" she says.
As with family, a close knit team may not be able to imagine the loss of high-performing employees that have become essential to the fabric of their department. However, Thomson stresses that, although those employees may be doing a great job, your best bet is to promote them into a position where they can do a better one.
"In reality, those employees will probably leave on their own if you don't encourage them."
http://www.inc.com/guides/2010/12/how-to-promote-from-within.html
Many people in the workforce have experienced the feeling of being stuck in the same position far longer than the proclivity of their interests and ambitions. This often leads to a general feeling of angst regarding their job, causing employees to seek out another company for more challenging prospects. Consequently, this works against business owners who will lose a high-performing employee in the process. Instead of watching as their talent pool slowly dwindles, employers are better off establishing a company culture of promoting from within.
"It's important for companies to promote from within. Otherwise, there's no career path for the people there and it forces [employees] to constantly be job hunting because they know they're not going anywhere in that company," says Penelope Trunk, founder of Brazen Careerist, a networking hub for young professionals.
While leadership development programs are great for identifying existing talent within your ranks, it's also a good idea for business owners to establish an overall company culture of promoting from within. The following will provide steps, examples, and advice for advancing your high-performing employees into positions within the company that are commensurate with their talent.
How to Promote From Within: Hire Right the First Time Around
Craigslist may be cheap and tempting, but it's not necessarily the best way to go if your long-term goal is to promote from within.
"Spend the necessary amount of money on recruiting because you're stuck with who you're recruiting if you promote from within," says Trunk.
Headhunters, established networking events, online networks, and word of mouth recommendations can lead to reputable prospects in lieu of blind ad posting. However, no matter what method you choose to line up an employee, their performance is ultimately what matters most. Luke Holden, co-owner of Luke's Lobster, shifted several of his employees that began in food preparation positions into managerial positions over the course of the company's first year, including his general managers and director of catering and special events. "We haven't necessarily gone in the direction of finding someone that has a ton of previous experience, but rather hiring good, smart people that want to learn and achieve."
Ooshma Garg, formerly of Anapata and founder and CEO of Gooble, an online marketplace for home cooked food, has implemented an eight to ten week trial-to-hire strategy. "When I meet someone who I think will be a great fit for our company, I'll meet with them and if we decide that we want to try out this relationship, we'll set a certain project for them with a completion date that is typically eight to ten weeks away (our trial periods are always eight to ten weeks) and a set deliverable," she says. The deliverable will be a metric and will vary depending on the position. "For instance, if I were to hire someone on the marketing end or the sales end, I would say, 'this metric is that in eight to ten weeks, you'll bring 250 new chefs to the Gobble network,'" Garg explains. For a more technical position, the metric may be for a developer to improve upon or to create a program within the Gobble infrastructure. During the trial period, Gooble provides class credit for candidates who are students, and a stipend for those who are not.
"When I haven't followed this method, I can definitely see the difference, see the problems that occur when you put someone into a role without having worked with them before and without having developed them from day one," says Garg.
Once you have the right people onboard, how can you make sure that your employees move up accordingly?
How to Promote From Within: Make Your Employees Take Risks
Trial and error is a great learning process for everyone, and your employees aren't exempt from occasional failure. However, it's how they handle new tasks that will show you what they're made of, and if they have the potential to take on an increasing number of responsibilities. Advises Trunk, "sometimes when you're training someone to be promoted, you should give them work that they've never done before, and they'll mess it up. But the company culture has to respect that people who are learning mess up, and that's okay as long as they're learning."
How should a manager go about allowing an employee to botch a task? Trunk states that if you're managing an employee closely, you should be able to identify the exact area the employee will miscalculate. "If you know where they're going to fail, you can catch them before they do any damage," says Trunk. "You can say, 'well, you did this wrong and here's the thing that you should ask next time.'" She says that a good manager can manage all failure so that it's a learning experience.
In this case, a manager can decide indendently how much time they want to invest in helping the employee during the trial and error process. Based on the needs of the company, a manager may want to continue training an employee or, after a sufficient period, opt to promote someone else or hire an external candidate. At that point "it's a cost benefit analysis," says Trunk.
How to Promote From Within: If An Employee Wants More Responsibility, Give it to Them
Natalie Reinert started out as a merchandise hostess at Walt Disney World Resort in 2005. Desiring more responsbility, she took matters into her own hands. "I went to my leadership and told them I would like to move up, and they agreed I could do that," she says. Six months later, she became a coordinator. After informing her area leader that leadership (the lingo for management at Disney) was her ultimate goal, Reinert was assigned a mentor from the leadership casting team. She was then given a breadth of challenging tasks that included tracking the financial data in her assigned store, working with other departments to determine shelf inventory, and creating an efficient system to track customer orders. Leading up to her leadership assessment, "I mock interviewed with at least a dozen managers from across the park who volunteered their time to work with me," says Reinert. She became a retail guest service manager in 2008.
However, some people have remained in entry-level positions through their entire time with Disney, lacking the initiative to advance into positions that require additional levels of responsibility. Disney is a large conglomerate organization that requires an abundance of personnel. However, smaller companies or businesses in general that want to make sure their staff is working to the fullest extent of its potential can choose to adopt an "up or out" policy.
"An up or out culture tends to make people higher performers," says Trunk. "If I start seeing that [my employees are] not going to grow at my company, I try to counsel them about what they should be doing and where they would grow. Really, any good manager shouldn't have to fire someone. They should be making it totally clear that this isn't the right job for them and that person should want to leave anyway. The term is called counseling out as opposed to promoting from within."
Garg takes a different approach with respect to challenging her employees. She requires that they create a specific set of goals for themselves prior to being hired. During her initial meeting with a prospective employee prior to the commencement of their trial-to-hire period, she gives them a survey in which they are required to list three goals that they would like to achieve during their working relationship with Gobble, which do not have to relate directly to the position for which they are being hired. "What do they want to learn about? Do they want to learn how start-ups get customers? Do they want to learn about how start-ups do accounting? It doesn't necessarily have to relate to their role, but I want to make sure that they're developing themselves personally as well as professionally," she says. Those goals are later reassessed every quarter, along with performance evaluations as per their duties with Gobble. Garg credits this method for allowing her staff to visualize their goals. "I think that's helped people achieve their goals and, thus, take on more responsibilites almost consistently every three months," she says. "I am promoting them by using their own goals and their own chosen deliverables."
How to Promote From Within: Value the Teaching Experience
Managers are referred to leaders at Disney "because it's about finding talent and teaching," says Reinert. "A big part of your job is teaching."
When Reinert first notified her superiors that she desired to advance into the position of coordinator, the company provided her with a binder filled with information, including the classes that she could take through Disney University and other management in various Disney support offices that she should meet with in order to better understand the chain of command.
"The only way to get someone to the next level is to have very strong coaching and very strong mentoring. If you don't reward people for good mentoring, then people aren't going to get the mentoring they need to be promoted," states Trunk.
For a smaller businesses, it is essential that management offer creative and cost-effective ways for employees to reap the benefits of on the job education. Presently, Gobble employs between five to ten people, which includes full-time and part-time workers, as well as interns. Garg has adopted an inclusive culture within her start-up so that employees can both learn and grow simultaneously.
"As much as I can, I leave meetings and events open that I am invited to for our employees to attend. So, if I'm meeting with an investor and an employee's personal goal is to one day start their own company or to understand how founders communicate or how founders fundraise, I will do my best to try and include them in one or more meetings that investors may consent to," she explains.
Garg is well aware of the apprehension that some of her associates may feel when it comes to including their staff in the intimate details of company operations, but she has found that many of those fears are misdirected. "Some founders might be afraid that involving employees in so many events or meetings may encourage them to leave or find other job opportunities or find other interests," she says. "But what I find is that it absolutely increases their loyalty to you and to the company because they understand that you care about them and not just their work."
How to Promote From Within: Be Open and Encourage Feedback
Do your employees feel comfortable talking to you? This may be a great indicator of your company's future success when it comes to promoting from within. Managers should be open to evaluation in the same way they allow their employees to be evaluated.
"I think it's important to consistently get feedback from your teammates; constantly culling your teammates to ask how their job is going, how you're doing your job, how you can do it better, the good things you're doing, constantly getting 360 feedback," says Holden.
Stacey Thomson, public relations manager at Disney Institute, the external training division for all of the Walt Disney Companies, believes that companies should institute open door policies that extend to both private and professional matters. "If you truly have that open door policy, then they're going to feel comfortable coming to you and saying, you know, 'I saw this position posted in XYZ division of the company and I'd really like to put my name in the hat for that,'" she says.
As with family, a close knit team may not be able to imagine the loss of high-performing employees that have become essential to the fabric of their department. However, Thomson stresses that, although those employees may be doing a great job, your best bet is to promote them into a position where they can do a better one.
"In reality, those employees will probably leave on their own if you don't encourage them."
http://www.inc.com/guides/2010/12/how-to-promote-from-within.html
12/8/10
10 ways to make sure your clients pay you
One of the biggest issues consultants face is getting paid. Most clients don’t realize that you don’t get paid if they don’t pay. And because there are plenty of those types of clients out there, getting paid can be a challenge. Luckily, there are also plenty of ways to help ensure that you will get paid for the work you do. Let’s take a look at 10 ways you can help yourself out.
1: Bill often
The last thing clients want is one huge bill at the end of the year. They would rather pay small chunks frequently. To that end, you might consider offering maintenance contracts where you give clients a certain number of hours per month for a set fee. They pay the fee, they get the work. But if they don’t want such a deal, make sure you are not holding onto invoices and then sending them an envelope filled with bills that could have been paid in smaller, more manageable, increments. Clients will be much more willing to submit payment for smaller bills.
2: Bill quickly
As soon as you are done with your work, bill it. The work (and your success) will be fresh in the mind of the client. If they see a bill the day of or the day after, they will be much more likely to pay it (and pay it quickly) because the work you did is still clear in their mind. This also helps the client to know that you are on top of things. If you wait a week or two, you might have to refresh their memory. Or worse, they may take the later invoice as a sign that a later payment is an okay practice with your business.
3: Bill professionally
Do not send your bill in a handwritten note or as an email. Your bill should be on a professional letterhead and/or attached as a PDF to an email. The more professional your correspondence is, the more seriously you will be taken. The more seriously you are taken, the more likely it is that your clients will submit payment. If you are serious about what you do, you’ll want to put some effort into branding your company across the board — and that includes billing.
4: Bill consistently
We see this all the time. People submit invoices for inconsistent amounts. One month you’re charging X for a network drop and the next, you’re charging Y for that same job. This will put clients in an awkward position of not knowing what to expect every time you do work for them. Make sure your pricing is consistent. And make sure your clients are aware of your pricing up front. If the client knows what they are getting into, they will have fewer objections when they see those bills.
5: Keep meticulous records
If you keep poor records, you will have trouble keeping track of who has paid, who has not paid, and what exactly each client has paid for. You should be using software (such as QuickBooks) to keep track of your records. With a sound solution, you will be able to quickly and professionally show records of what has happened with a client, should someone have a problem with a bill. If you’re trying to juggle your books with a spreadsheet and a Word document (and a few post it notes), your consultancy life will be insane.
6: Do good work and do it efficiently
The better and more efficient your work is, the more likely you are to be paid. If your work is slow or ineffective, your clients will have trouble ponying up the cash to cover a job that should have taken less time. This also goes for doing effective work. If you constantly have to return to repair something you should have repaired the first time around, your clients are going to hesitate to pay (and they will be less than likely to refer other clients to you).
7: Accept all forms of payment
This should go without saying, but if you only take cash and checks, you might find you have some clients who won’t hire you or won’t pay you as quickly. Accepting credit cards (and even forms of payment like PayPal) will go a long way toward getting you paid faster. Of course, you’ll take a fractional hit on your costs due to processing fees, but these fees are minimal when you’re actually getting paid.
8: Require deposits for larger jobs
If you’re about to take on a large job, you should require a percentage of the final cost for the job up front. Although this won’t ensure the client makes good on the remainder, it will at least give you a portion of the payment before you start your work. This will also show your clients your dedication to the job. Also note that if you quote a client a certain price and that price changes at any point, it is your duty to report the change to the client as soon as possible.
9: Do not work with repeat offenders
We’ve all seen them — clients who either do not pay or pay very late. Why do you want to go through the hassle of having to hassle these clients to get them to pay? You don’t want this headache, so don’t take jobs from them. Yes, it is tempting — especially when you are first starting out or when times are hard. But those clients who don’t pay (or pay very late) are doing nothing but taking valuable resources from you. Instead, work with reliable clients who will pay and pay in a timely fashion.
10: Have an attorney at the ready
Although we all hope it doesn’t come to legal action, it can. There are those clients who simply refuse to pay. Sometimes, just a letter from an attorney is enough to light a fire under their seats. But when just a letter isn’t enough, it might be time to send in the hounds. Once you have had to do this with a client, consider that client to fall under tip # 9.
Walking the line
Getting paid is a tricky business. There is a fine line between being professional and being a pest. Your clients will, for the most part, be in business to make money, not spend it. So when you have trouble collecting your fees, you must exercise care and concern toward future business. Always consider those clients as a long-term investment and not a one-time payment.
12/1/10
What to Consider When Giving a Holiday Bonus
'Tis the holiday season, and for businesses that means considering how to indulge employees with vacation time, holiday parties and, the most loaded perk, holiday bonuses.
Holiday bonuses are a longtime tradition for industries like finance — think the big Wall Street firms that get Christmas bonuses the size of annual salaries — and the National Labor Relations Board has allowed unionized workers to make holiday bonuses a contractual obligation. But small businesses operate in a nebulous realm of personal discretion, where owners set their own precedent for holiday extras.
Owners can establish gifts around the holidays as an act of goodwill or as part of employees' pay package, says Harry Dannenberg, chairman of the New York City chapter of SCORE, a national nonprofit organization that offers small business counseling and advice. "It's such a personal issue that there's not a precedent for it," he says. "Different industries have different attitudes about it. If you're a mom-and-pop operation and you're part of a business family, you might have a more generous approach to the holidays than if you run a chain."
In a survey last December, Challenger, Gray & Christmas, an outplacement consulting firm, found that 64 percent of employers planned to give holiday bonuses, up from 54 percent in 2008, when most industries were strained by a bad economy. Greater economic conditions certainly play into whether to give a holiday bonus, Dannenberg says, but it's good form to show employees appreciation for a successful year. "If I had a good year and people worked very hard for me, I might make a statement of how grateful we all are by presenting them with a nice gift," he says. "But it's very individual, especially with small businesses, and how you relate to the people who work for you."
This year's holiday bonus will set the precedent for subsequent years', so structuring bonuses to be affordable yet considerate is key.
How to Structure a Holiday Bonus: Decide its Purpose
What role will a holiday bonus play in your overall, yearlong pay scheme? Is it a substitute for a year-end bonus? Is it a substantial contribution to annual pay? Or is it a token of holiday spirit?
If a business already pays a year-end bonus, a holiday bonus becomes more of a gift of appreciation than part of employees' annual pay and benefits package, Dannenberg says. "If you're in a business where you get year-end bonuses, usually Christmas becomes far less of a significant issue," he says. "If you're a clerk in the store and the owner wants to spread a little cheer and give some money, give families turkeys, it becomes a small thank-you. A big thank-you is a raise or a year-end bonus."
Ben Hemminger, CEO of Fashionphile, a Beverly Hills company that sells second-hand luxury handbags, says he gives a year-end bonus around the holidays. The family-owned business has 11 employees, mostly part-timers, and the full-time employees "are all related to me," he says. Full-timers get a $500 check — taxes deducted and all — around the last week of December, and part-timers receive a $100 cash card. "There's probably a more intriguing way to do it," he says, "but everybody would rather have the money than something worth the money."
Dannenberg agrees that token thank-yous like cash cards belong at the general employee level, not the management level. "It should be given to employees who provide a service in a business," he says. "In something like auto repair or retail, it becomes more of a gesture of recognition of service."
How to Structure a Holiday Bonus: Budgeting the Bonus
Holiday bonuses meant as tokens of appreciation don't belong in a business plan, Dannenberg says. Rather, he suggests looking at revenue from the first 10 months of the year to decide how to approach bonuses each holiday season. "Say it was a good year, I made money, therefore, on the strength of that performance, I can give 'x,'" he says. But use generosity in moderation, Dannenberg warned. Being too generous in a good year could make for an embarrassing downgrade in a bad year.
Six-year-old Fashionphile spends a few thousand dollars on year-end bonuses and year-end gifts for its part-time employees, but Hemminger says everyone understands the bonus is a small token. "No one gets paid a whole lot to begin with, so it's not like we have high expectations," he says.
Start-up businesses should do some footwork before deciding how to approach bonuses, Dannenberg says. "The issue becomes what is the precedent," he says. "If I were starting a new business, I would go around and chat with other similar merchants to see what they do. Get a feel for how other people make that evaluation and judgment."
How to Structure a Holiday Bonus: Cash versus Gift
If a holiday bonus isn't an established part of annual pay, a gift is just as meaningful as a little cash — sometimes more so if the cash gift is going to be small. "You give someone a really small amount, it's insulting," Dannenberg says. "But give them a nice bottle of wine and something that costs $10, it's nice. With a nice note, it's an expression of thanks, a matter of holiday spirit and cheer."
Hemminger says he's considering giving employees gift cards for the three restaurants they go to for lunch every day — a tax-free and useful gift, he says.
Blurb, a San Francisco publishing company where authors design their books online, during the holidays fields orders from businesses making books for their employees as holiday gifts. The employer designs the book from size and shape to content — photos or photos and text. Square books start at around $13.
When Dannenberg owned a chain of six retail stores, around the holidays he would give employees a big basket filled with fruit and a turkey. "They grew to look forward to it and enjoy it," he says, adding, "I would stay away from giving money at Christmas because of the potential cost.
"I'd go with a nice box of candy and a bottle of wine, something that you can have uniformity that everyone can enjoy."
So as you decide how to handle the holidays, keep in mind that whether it's cash or wine, to employees, it's your appreciation for their service that counts.
http://www.inc.com/guides/2010/11/what-to-consider-when-giving-a-holiday-bonus.html
How to Get What Your Business Is Worth
If you have ever promised your child a treat in return for good behavior, you know all about negotiating leverage.
When selling an attractive business, you also have leverage—up to the point that you sign a letter of intent (LOI), which almost always includes a “no shop” clause, forcing you to terminate discussions with other potential buyers while your newfound “fiancé” does due diligence before handing over the check.
After you sign the LOI, the balance of power in the negotiation swings heavily in favor of the buyers, who can then take their time investigating your company. At this point, there is little you can do.
Yet, with each passing day, you will likely become more psychologically committed to selling your business. Savvy buyers know this and often drag out diligence for months, ultimately manufacturing things to justify lowering their offer price or demanding better terms.
With your leverage diminished and other suitors sidelined, you are then left with the unattractive options of either accepting the inferior terms or walking away.
Peter Lehrman, the founder and CEO of AxialMarket, an online marketplace serving buyers and sellers of private businesses, describes a situation he witnessed first-hand:
“The company was a distributor and installer of telecom equipment to businesses and commercial real estate developers. The owner had built a nice business with recurring contracts driving $15 million in revenue and nearly $2 million in pre-tax profit. The owner made the mistake of approaching buyers haphazardly with the help of his accountant and lawyer. The most attractive acquirer insisted on exclusivity while they did some due diligence, which dragged on for many months, with the acquirer asking for concessions and delaying the process. The business owner had given up all his leverage and hadn’t developed a set of alternative buyers. Finally, the deal fell apart.”
Lehrman recommends seven things you can do prior to signing an LOI to minimize the chances of your deal dragging on for months and becoming watered down:
1. Make sure your customer contracts have “successor” clauses.
Try to have customers sign long-term, standardized contracts that include a clause stating that the obligations of the contracts survive any change in ownership of your company. Have your lawyer wordsmith the details.
2. Nurture and prepare a group of 10 to 15 “reference-able” customers.
Acquirers will want to ask your customers why they do business with you and not your competitors. Cultivate a group of customers to act as references before you sign the LOI.
3. Ensure your management team is all on the same page.
During due diligence, acquirers will want to run “isolation” interviews, during which they speak with your managers without you in the room. They are trying to understand if your company is pulling in the same direction and to identify any dissension or incoherence among your ranks.
4. Make sure you have audited financials.
An acquirer will have more confidence in your numbers and will perceive less risk if your books are audited by a recognized accounting firm.
5. Disclose the risks up front.
Every company has some risk factors. Disclose any legal or accounting hiccups before you sign the LOI. For example, don’t wait until after you have signed an LOI to let the potential buyer know that a former employee is suing you for wrongful dismissal.
6. Negotiate down the due diligence period.
Most acquirers will ask for a period of 60 or 90 days to complete their due diligence. You may be able to negotiate this down to 45 days—perhaps even 30 with some financial buyers—so include in your negotiations with the buyer a discussion on the length of diligence. At the very least, you’ll alert the acquirer to the fact that you’re not willing to see the diligence drag out past the agreed-to close date.
7. Make it clear there are others at the table.
Clearly but respectfully communicate that there are a number of interested parties at the table. Explain that, while you think the acquirer’s offer is the strongest and you intend to honor the “no shop” agreement, there are other interested parties and that those relationships will be rekindled in the event the buyer starts to negotiate in bad faith.
Taking all seven steps will help you protect the value of your business as the balance of power in the negotiation to sell your company swings from you to the buyer.
http://www.inc.com/guides/2010/11/how-to-get-what-your-business-is-worth.html
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