10 TIPS for DEALING WITH EMPLOYEES EFFECTIVELY

Posted on November 12, 2012 by Jean

There are only so many hours that you can work – so you need employees to help make the business successful.

 

Key Learning – “Hire for attitude, train for skills.” 

 

It’s great to hire experienced people who can hit the deck running.  But, all the experience in the world doesn’t compensate for a bad attitude.

 

Here are “10” tips – excerpted from an article I wrote for the Worcester Business Journal.  Click on this link to read the article:  http://www.wbjournal.com/apps/pbcs.dll/article?AID=/20081013/PRINTEDITION/310139986/0/FRONTPAGE

 

10.  Hire carefully

 

Look for a “good fit” including positive attitude, values and work ethic.

 

9.  Establish workplace standards

Communicate expectations; employees cannot read your mind.

 

8.  Provide training

 

Model desired behavior; provide training for specific skills.

 

7.  Recognize & Reward high performing employees

 

Smart business practices include recognizing and rewarding employees who are doing a great job.  Recognition is an inexpensive way to reinforce the behaviors that make the company successful.  Reward and retain key employees by using carefully planned “incentive compensation.”   

 

6.  Weed out weak performers

 

Tolerating poor performers lowers the standards for all employees and drains overall productivity.

 

5.  Invite employees’ input
Good place to work?  Ask employees what’s working well. 

What needs improvement?

 

4.  Communicate, communicate, communicate

 

Keep employees informed to reduce gossip and speculation.

 

3.  Deal with problems
Don’t let problems fester.  Deal with the issues sooner rather than later.

 

2.  Develop strong systems
Ensure backup and cross training.  Do not allow a few key employees to hold you hostage.

 

1.  Treat employees consistently

An employee handbook is a good way to clearly establish company policies and reduce your risk of legal complaints.

 

I am always learning – so I welcome your insights re employees. 

Posted in Business Practices, Employment, Uncategorized | Tagged | 1 Comment

Startup Learnings – Systems, Cash Flow & Recordkeeping

Posted on September 14, 2012 by Jean

Growing your business requires handling more work. Systems are critical to handling the work and the people in a predictable and consistent manner. Just like sidewalks and highways make cities function better, systems are the infrastructure for business growth.

Many business owners spend all their time working IN the business, attending to the multitude of details and issues, getting lost in the trees. They need to take time out from the day-to-day, to work ON the business. This is like stepping back from the trees in order to see the forest.

Such perspective is needed to enable the business to grow and prosper.

Learning 1. “Put systems in place.”

Learning 2. “Watch cash carefully.”

Learning 3. “Get the recordkeeping under control.”

Putting systems in place enables you to delegate work and ensure a consistent way of handling customers and transactions. Systems make it possible to handle more work, more efficiently. Without systems, you waste a great deal of time re-inventing the wheel. For example, in our business http://www.country-dogs.com, we needed checklists for opening and closing, consistent ways of booking appointments, conducting assessments, and processing customer transactions.

Cash flow is critical to survival. Look for ways to accelerate receipt of payment such as requiring deposits, invoicing promptly, accepting credit cards and following up promptly with all customers who are slow to pay. Prioritize spending – and, of course, delay non-critical spending.

Get the recordkeeping under control. Haphazard recordkeeping drains time and energy and prevents you from having a clear picture of what is going on in your business. Hiring a bookkeeper could be your best investment. The financial and operational data of a business are a gold mine for information about how to develop your business if you take the time to examine the information.

With systems in place, you can work ON what makes the
business successful – such as marketing to attract good paying customers.

Do you have a “systems tip” to share that helped your business be more successful?

Posted in Business Practices, Business Systems, Uncategorized | Tagged | 1 Comment

Startup Learnings — Leases, Bloody Leases

Posted on August 15, 2012 by Jean

Leases are important legal documents and usually are very one-sided in favor of the Landlord.

Landlord problems are the last thing you need when you are trying to get a business going.  It’s a big distraction – and even though we had a carefully worded lease, we still had to find creative ways to solve the problems that arose when the Landlord did not live up to his end of the agreement.  

Learning 1 – Pay attention to the fine print in the lease.  Tenants need a carefully worded lease that clearly defines the Landlord’s responsibilities and includes a “repair and deduct provision.”

Learning 2 – Check out the Landlord’s reputation.  Does the building look well cared for?  In a multi-tenant building, it’s a big problem if the Landlord doesn’t keep the building in compliance with local fire and safety requirements.

Checking out the Landlord’s reputation is always a good first step. But, as properties change hands in difficult financial times, you can find yourself with unexpected problems.  That’s where creative problem solving comes in.

Background:

It used to be that commercial landlords had most of the power and relied on “independent covenants” to force tenants to pay rent under almost all circumstances.  In Massachusetts, the Supreme Judicial Court has adopted the doctrine of “mutually dependent covenants” – meaning that the tenants have substantially greater power in the event that the landlord fails to fulfill lease obligations. 

If you have “repair and deduct” provisions in your lease, you can take care of repairs within your space and deduct the expense from your rent.  If you don’t have that language, you can be in a real bind and have to pay rent even though the Landlord is not performing his obligations and your business is seriously disrupted as a result.

Our situation:

We used the repair and deduct provision to take care of the Landlord’s work that was not done in our unit.  We still have a dispute about rent credits due – but we got done what needed to get done so that we could open for business.

The bigger problem was that the Landlord did not repair the building’s fire security system – which prevented us from obtaining an “Occupancy Permit” even though our unit was in full compliance.  This caused delay and disruption, – a long story.  This kind of situation can happen in any building if the Landlord has cash flow problems and can’t afford to pay for repairs required by law and the terms of the lease.  As a result of this failure by the Landlord, we could have been prevented from opening or forced to shut down.

What were our options?

(1)  Sue the Landlord?  Litigation is costly and disruptive to business and is seldom a good choice for an early stage company.

(2)  Pay for building repair ourselves?  Not financially feasible. 

(3)  Join forces with other tenants in the building?  Not an option in this case.

(4)  Withhold rent and place the funds in escrow pending completion of the repair/receipt of permit?

(5)  Terminate the lease & move? – Not realistic given time and cost to set up.

We opted for #4 – and carefully documented all the issues.  The Landlord fumed and fussed about our withholding rent – but finally stepped up and did the work.  Once the problem was fixed and the Occupancy Permit obtained, we authorized release of the escrowed rent funds.

Fortunately, our situation resolved favorably.  I have heard many bad landlord stories such as the Landlord failing to repair the leaking roof or repair elevators for multi-story buildings.

Do you have a landlord story to share?

 

 

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Entrepreneurial Sabbatical — Dog Daycare & Pet Boutique

Posted on July 24, 2012 by Jean

I have not been posting for the past six months because I have been on an “Entrepreneurial  Sabbatical”.

Over the years, my practice as a business attorney has grown and provided many great opportunities to help clients solve business problems.  But like all businesses, there comes a time to recharge and strategically re-connect with the rapidly changing business world.

To advise clients effectively, I need to be up to date on BOTH the changes in the law, and the real world challenges that business owners’ face.

My  first hand experience as a business owner has always served me well.   It has been eighteen years since I co-founded my first company – Tables to Teapots in Acton.  That company is still going strong.  I just met the third owner, and was delighted to see that many of the systems we implemented are still being used successfully.

So, I decided to do it again.  This time around, it’s a dog daycare and pet themed retail shop.

It’s designed to solve a problem that I personally experience of finding a good place for my dogs to go – for exercise, training and overnights, and for quality gifts for my friends who have pets.  My business partner, Karen Newsham, has been in the home pet sitting business for years and we decided to join forces.

Here’s the announcement of our opening.

http://www.telegram.com/article/20120601/COULTER01/106019827/0/SEARCH

Please  check us out on-line at www.country-dogs.com or stop by if you are in the Bolton, Ma area.

In conclusion, my “entrepreneurial sabbatical” has recharged my batteries.  I have an updated perspective on the real challenges that business owners face and can advise clients based on my first-hand experience in finding practical solutions.

In upcoming blog posts, I will share more detailed stories from the start up and our creative approach to problem solving.

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Internet Piracy – Alternatives to SOPA & PIPA?

Posted on February 15, 2012 by Jean

 

 The Stop Online Piracy Act (SOPA) and Protect IP Act (PIPA) have stalled – because of widespread opposition from internet companies – including Google, Wikipedia, etc.

It’s a complex debate:  http://www.pcworld.com/article/248298/sopa_and_pipa_just_the_facts.html

Laws change slowly and lag behind technology advances.  Using laws to block technology advances that build on the state of the art of the internet is not a good idea. 

Intellectual property creators need to be compensated for their works.  Allowing copycats to freely use intellectual property created by others, without compensation, is also not a good idea.

So, what can you do to protect your business and intellectual property from copycats?

I recommend a combination of legal and business strategies.

Legal strategies include registering copyrights and using contracts to protect your “rights.”  Under current copyright law, you can recover statutory damages and attorney fees for unauthorized use.  http://en.wikipedia.org/wiki/Statutory_damages_for_copyright_infringement

Registering your copyright is a good business practice, and a prerequisite to enforcement.  For smaller companies, enforcing your rights through the legal system is, unfortunately, very slow, time consuming and expensive – and favors the deep pockets of big corporations.

Smaller businesses need to be creative and combine business and legal strategies. 

So, in addition to taking advantage of legal protections by registering copyrights and using contracts, it is important to anticipate copying.  Who is likely to use your work?  Will your clients bring your training program in-house and not pay you?  Will other professionals in your field find your work a useful building block for their work?  Is there a way to use contractual terms to compensate for unauthorized uses?  You can use Web tools, online forums and feedback loops and provide terms for people to use your work.

 I am always interested in learning from others —  Please post a comment to let me know what you’ve done to protect your work/intellectual property from copycats?

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One New Year’s Resolution – to improve your business

Posted on January 2, 2012 by Jean

Keep it simple – just fix one recurring problem! 

It’s that time of year – to make New Year’s resolutions. 

Can you remember what your resolutions were last year?  Did you implement them? 

This year, I suggest that you keep it simple and just make one resolution.  Write it down and put it in a visible place on your desk.

As you review the overall performance of your business for the year, ask yourself what problems recurred.

Common recurring problems are:  accounting-related; employee-related; out of scope projects; late delivery; last minute cancellations, …

If you eliminate recurring problems, you free up energy to improve your business. 

Will you let me know what recurring problem you decide to fix?

Please post a comment.  Thanks!

 

 

Posted in Uncategorized | 1 Comment

Google Books – – What is “Fair Use” in the digital age?

Posted on November 13, 2011 by Jean

Google Books (http://www.books.google.com) provides access to digitized copies of books.  Google scans and indexes the books, making them searchable online.  This greatly enhances access to information – from anywhere on the planet. 

Is this “copyright infringement” or “fair use” in the digital age?

The lawsuit against Google has been winding its way through the courts since 2005.

In March 2011, a proposed settlement was rejected by Federal Judge Chin, apparently because of the number of parties that objected to the terms of the settlement, the fact that it was an “opt-out” (rather than an “opt-in”) settlement and included a “forward looking business model” that benefited Google.  For a readable explanation of the situation, see: “A Guide For the Perplexed Part IV: The Rejection of the Google Books Settlement” by Jonathan Bond http://www.arl.org/bm~doc/guideiv-final-1.pdf

While the Court and the parties SLOWLY ponder what’s next, the rest of us have to continue to do business. 

So here’s a quick recap about the current state of copyright:

Copyright protects the way an author expresses him/herself, not the ideas expressed. 

“Fair use” is when you can use copyright protected material (such as text, photographs, illustrations, videos) without payment or permission.  Penalties for copyright infringement are severe.  http://www.researchcopyright.com/article-penalties-for-copyright-infringement.php

With all the information available online, it’s important to understand what you can use without fear of copyright infringement claims.

 (1)  If in “public domain” – you can use the content freely. 

Determining what is in the public domain can be difficult.  http://www.smartfast.com/blog/?s=public+domain

 (2)  If in “copyright” – you can use within the “fair use” doctrine.

Determining what use is “fair use” is complicated. http://www.smartfast.com/blog/what-is-fair-use

(3)  Scan & Snippet display – displaying a small portion of the text, or image.  This is the approach that Google uses – and it has not yet been decided by the Court whether this is “fair use.”

 (4)  Linking – The linking strategy described below seems to fit within the fair use criteria as understood in the U.S.

This link is to updated Fair Use Guidelines for Educators – Code of Best Practices for Fair Use for Online Video, prepared by the Center for Social Media –http://www.centerforsocialmedia.org/fair-use/related-materials/codes/code-best-practices-fair-use-media-literacy-education

(5)  Creative Commons License – use is allowed as defined by the copyright owner – so you have to check the requirements for each work used.  http://creativecommons.org/

 (6)  Open source – access to software allowed consistent with guidelines.  http://en.wikipedia.org/wiki/Open-source_software

Yes, it is complicated!

 

Until there is further clarification of copyright law from the Courts or the Congress, here’s what I recommend:

  •  If you use a copyright work without permission, I recommend documenting the rationale for why your use is “fair” – you’ll want to quote accurately and briefly, cite the source, and add value by building on – not just copying, but commenting on or criticizing the work.
  • If you use content under a license, check the license terms carefully.
  • If your use is extensive, it’s wise to get permission from the copyright owner, in writing.

 

If you found this useful, please post a comment.

Posted in Business Practices, Copyright, Intellectual Property, Legal, Uncategorized | Tagged , | Leave a comment

WEBSITES – 5 Legal Tips

Posted on October 19, 2011 by Jean

Websites get stale and out of date. Laws and regulations change. If you haven’t updated your Website in the past 12 months, it’s time for a review.
 

1.  Jurisdiction Statement?
 
The Internet makes access to Websites possible from anywhere on the planet. You want to make it clear that your Website is governed by the laws of your selected state. This way, you are less likely to find yourself being sued for violating the laws of some other place.
 
For example, my Website says, “This Website shall be governed by and construed in accordance with the laws of Massachusetts, USA, without regard to its choice of law rules.” http://www.smartfast.com/pages/juris.html
 
2.  Disclaimer?
 
Does your site have a disclaimer? You want to make it clear that people should not rely upon the information without seeking specific advice or checking in for an update. You may want to specify that prices and terms are subject to change.
 
For example: my Website says “The information provided on this Web site is intended as a general overview and should not be relied upon as legal advice.”
 
3.  Copyright notice?
 
Is there a Copyright notice on your Website? While the Copyright notice is not required by law, it is a good business practice to use it to make it clear that you are claiming Copyright protection for the contents of your Website. Copying is rampant on the Internet and if you’ve invested substantial time and effort in developing your Website, it makes sense to put people on notice that you are claiming Copyright protection. For example, my Website says “Copyright © 2000-2011 Jean D. Sifleet, Esq. All Rights Reserved.”
 
It’s even better to register the Copyright – but that’s a topic for another e-newsletter. If you would like more information about registering your Copyright, click here http://www.smartfast.com/blog/faqs-copyright to read my article.
 
4.  Content created by someone else?
 
Is there any Copyright-protected content (created by someone else) on your Website? If your Website has any music, images, quotes or even articles published about your business, you may need to confirm that you have the right to use the content created by other people. The general rule is:   Give credit to the source, “link” – don’t copy and embed.
 
5.  Privacy Policy?
 
Privacy is a growing concern for many people. Government regulations are increasing. For example, there are strict rules about the use of personally identifiable information.
 
My Website says: “Smart Fast® has a firm commitment to protecting the privacy of the information collected on the Web site. The information collected on the site is not shared with nor available for use by the Website host and the site has security measures in place to protect the loss, misuse and alteration of the information under its control. We do not disclose information that you may give us to any outside parties, unless required by law. If you have any questions about this privacy statement, the practices of this site, or your dealings with Smartfast.com, please contact Jean Sifleet.” http://www.smartfast.com/pages/privacy.html
 
In conclusion, your Website is a key component of your overall business. It’s easy to assume that everything is OK. Is it? Take the time to review your Website and ensure that you are up to date and making the best possible use of this powerful business tool.

If you found this information useful, please post a comment.  Thanks!

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Sweat Equity

Posted on September 18, 2011 by Jean

In the start up of a business, it’s common for some people to contribute money and others to contribute time and effort with “an understanding” that they will share in the future success of the business.  Sometimes “equity earn-ins” are used as a way for employees to earn an ownership percentage by forgoing some compensation.

Sweat equity has elements of both “ownership” and “compensation” – which are related but distinct concepts that frequently get mixed together.

 Ownership means owning a portion of the stock of a corporation or a percentage of the membership of a limited liability company (LLC).  Ownership can be defined in many ways – such as voting and non-voting.  Owners expect to share in the future success of the business.  For “sweat equity” or “earn-in” situations, LLCs provide more flexibility than corporate structures.   The rights and responsibilities of owners need to be clearly defined in a written agreement.

Compensation is payment for services performed and should be designed to reward the behaviors that make the business successful.  Compensation plans can be designed to include incentives, such as bonuses and profit sharing.  Equity (ownership) can be an element of an incentive compensation plan.

Sweat equity for “employees”

Sweat equity for “employees” is usually compensation for “below-market wages” for services performed.  In this case, you can calculate the value of the sweat equity based on market rates.

First you determine the market rate: How much would you pay an engineer to design a prototype?  How much would you pay a market research professional to conduct a survey? 

The difference between current compensation and market rate compensation gives you the uncompensated “sweat.”   With this information, you can quantify the amount of sweat equity – but that’s only part of it!  Then you have to decide how it will be compensated – through deferred compensation, profit sharing, percentage of ownership, or a combination of methods.

Sweat equity for “partners”

Sweat equity for “partners” (owners) is much more complicated to calculate.  While it is easy to quantify the dollars invested in the business, contributions of intangibles such as “know how” and customer contacts are more difficult to value.  Even more difficult is determining the “value” of individual work efforts in different areas related to developing the business – such as IT, Engineering, Sales or Marketing.  Sales milestones are one approach, but that doesn’t work for all situations.

While it sounds nice to say you’re “partners” – and you’ll work things out as you go along – there can be problems!  People have selective memories and there can be misunderstandings.  What happens if participants stop performing or there is a falling out within the team?  You don’t want to find out later that your “partners” had different assumptions.

If you’re considering a sweat equity arrangement -

Whether you’re investing “money” or you’re investing “sweat,” it’s really critical to have a clear written agreement about how the “equity” is earned and what ownership means. 

For the best results, “sweat equity” and “earn-in” plans should be carefully crafted to ensure that the goals of the participants are aligned with the goals of the business.  The plan needs to include a clear valuation methodology, definition of participant responsibilities and restrictions on ownership transfer and buy-back provisions. 

In conclusion, “sweat equity” and “earn-ins” can be a great way to get a business started and provide incentives to employees.  But, in my experience, if the parties can’t get to an agreement early on about how the “sweat” equity will be earned and ownership allocated, it’s a warning of problems ahead.

Posted in Business Practices, Business Systems, contracts, Employment, Sweat Equity, Uncategorized | Tagged , , , , , | Leave a comment

Social Media – Goals & Guidelines for Business and Personal Use

Posted on September 13, 2011 by Jean

Social Media (blogs, Facebook, Twitter, LinkedIn, etc) are used by individuals and companies – and really blur the lines between what’s business and what’s personal. 

In the workplace, employers set the standards for conduct and acceptable speech.

Outside the workplace, employees are free to say and do what they wish (within the boundaries of the law).

With Social Media, personal conduct quickly becomes public and can spill over into the workplace with negative implications to an employer.

Smart companies provide guidelines to employees about what is and is not acceptable in their personal use.

But first, what are your business goals for Social Media?

What can you/your company gain from using Social Media?

Social Media is rapidly changing the way we get information.  It’s a new skill – and we all have to adapt to the rapidly changing marketplace.  While you can’t manipulate and control the social mediums, you can articulate goals and guidelines for usage.

Used strategically, Social Media can help companies gain visibility and insights from dialogues with customers.  For example, independent customer reviews are proving to be highly influential in customer business decisions.  You can learn a lot from these reviews.

Business goals should drive your policy for usage of Social Media. 

When you know what you are trying to accomplish,  you can define guidelines for employee use of Social Media – both in the workplace and personally.

Some key points to keep in mind:

1.  It’s public.

While privacy settings offer some security, there are enough examples of security breaches to warrant caution.  Don’t put anything on-line that would be embarrassing to a prospective employer or customer.

 

2. Respect confidential information.

Be cautious about disclosing confidential, proprietary or trade secret information – and do not discuss company strategies, financials, or product developments.

 

  1. Respect Copyright and Fair Use.

Don’t copy.  If you quote or cite sources, link to the reference if possible.

 

  1. Add value.

On-line dialogues are enriched by multiple perspectives.  When criticizing, commenting or sharing insights, strive to verify facts and provide reasons to support your opinions.

 

  1. Be authentic.

If you are expressing your own opinion, be clear that it is your personal opinion and not that of your employer.

 

  1. Misuse can result in termination of employment.

Comments or conduct that reflects negatively of the employer can be grounds for termination.

 

NOTE:  It’s important to remember that employers cannot forbid all employee criticism.  Under the NLRA (National Labor Relations Act), even nonunion employers cannot prohibit employees from discussing the “terms and conditions of their employment.”  For more information:  http://en.wikipedia.org/wiki/National_Labor_Relations_Act

 

Bottom line, your Social Media Policy needs to reflect your business goals and should be reviewed by a knowledgeable business attorney.

 

How do you use Social Media in your business? 

Please post a comment on my blog …  Thanks.

Posted in Business Practices, Employment, Innovation, Intellectual Property, Legal, Social Media, The Cloud, Uncategorized, Web-based services | Tagged , , , | 1 Comment