Monthly Archives: November 2017

How Do You Figure Out Your Bonus Pool & How Do You Set Your Selling Price?

November 30, 2017Uncategorizeddirty-secrets-of-small

In This Episode

In tonight’s episode we continued our discussion from last week on figuring out how much to give your employees for Christmas bonuses and we also started in on a new topic for how to set your selling price.

Since the last show we’ve pulled together a simple spreadsheet to help guide you through how to calculate the bonus pool. Click here to get the spreadsheet. Jack also addressed how to decide who gets what part of the pool in terms of a discretionary bonus. Don’t focus on being equitable, but instead focus on your feel for how well each member of your team contributed to the company’s success this year. Don’t over complicate things with formulas.

Click Here to Get The Bonus Calculator Spreadsheet

We also started to discuss how to set your selling price. Unfortunately most small business owners rely too heavily on what their competitors are charging when it comes to setting their selling price. That’s a good piece of information to have but shouldn’t be the sole criterion to setting your selling price. If it is, then you will be on a going out of business curve. Someone will always be willing to go out of business faster than you and undercut your prices as well.

We encourage our business owner clients to instead focus on the true costs of your business when looking to set their selling price. It’s one of the most strategic things you do as a business owner and can lead to great success or failure in your business. Don’t fall into the habit of always using price as the weapon to win customers. We’ll get into it in more detail next week for how to go about setting your selling price.

People, Companies and Resources We Mentioned in the Show

Austin Powers International Man of Mystery (http://www.imdb.com/title/tt0118655/), Michael Myers
Dodgeball the Movie (http://www.imdb.com/title/tt0364725/) with Vince Vaughn and Average Joe’s

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How Do You Calculate and Figure Out If You Can Afford Those Year-End Bonuses?

November 27, 2017Uncategorizeddirty-secrets-of-small

In This Episode

At this time of year, it’s always great to take some time and reflect on the blessings we each have in our lives and give thanks. Jack and I are truly blessed to be business coaches and work with some truly fantastic small business owners. We are also blessed to have a business partnership that has lasted for 15 years with very little discord!

It’s also that time of year when business owners (and their teams) start thinking about year end bonuses. The employees think about how big the bonuses will be and the owners will be wondering how can they pay for all those year end bonuses. There is no magic wand or simple formula to follow, but in tonight’s show we walked through an example for how to calculate a bonus pool for your team. A key part of this calculation is to account for things that don’t impact profit but do impact cash flow and can often make it painful to afford paying these bonuses.

With a client we had this week, we were going through some calculations and it turns out that there was no money to pay bonuses, but after a lot of discussion he said he still wanted to find a way to pay some bonuses. So we walked through how he could communicate his decision to his team. At the end of the day, it’s key to explain your thinking to your team because they may not like it, but they will certainly understand it better and in the end respect you.

In tonight’s show we addressed many of these items and shared some of the guidance we provided for our clients. Let us know if you’re wrestling with any of these questions, tweet at us @MaximumVP.

People, Companies and Resources We Mentioned in the Show

National Lampoon’s Christmas Vacation, Clark Griswold, Cousin Eddie

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How Hard is it to Start or Acquire a Business?

November 17, 2017Uncategorizeddirty-secrets-of-small

In This Episode

You know it’s pretty easy to start a company. In fact in tonight’s show we talk about how we can set up a company tomorrow to do anything, whether it be sell hamburgers or pizza. The challenge with running a company is making money vs. losing money.

Unfortunately most folks who get into business don’t understand business. When we talk about business, one of the biggest things is understanding how to make a profit. Without profits, a business will only last until you run out of money. Again, losing money isn’t hard.

There are several trends leading to fewer companies starting in the U.S. Lots of folks have been spooked away from starting a business so instead they start to consider taking the route of acquiring a company instead. There are lots of places to get ideas or find companies to acquire. Start with sources like the Inc. 500 list (or Inc. 5000) or your local newspaper’s business opportunities section. Don’t let money, or the lack of money get in the way of buying a company. What if someone gave you the company?

Get out of your own way and get yourself into business. In tonight’s show we provide you a lot of ideas, perspective, and inspiration! That includes folks who already own a company. Once you step out on your own, you will find out just how good you are. And you likely won’t be able to work for someone else.

People, Companies and Resources We Mentioned in the Show

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How Do I Find & Retain Good People?

November 9, 2017Uncategorizeddirty-secrets-of-small

In This Episode

If there’s one thing we’ve learned in all our decades running and advising business owners it’s that no one can have true success in their business without good people. Unfortunately many small business owners have never experienced what a good person can do in their business.

Too many business owners burden their company with family and friends. Not that there’s anything wrong with family and friends, it’s just hard to be objective when trying to determine if they’re good employees or not. With current laws in place, it’s no wonder so many small business owners don’t bother looking to hire non-family or friends. How do you interview someone you don’t know? How do you avoid asking the wrong questions?

One challenge is knowing where to go find good people. Do you go to Craigslist? How about indeed.com or ZipRecruiter.com? Should I go to a staffing company or use a recruiter? That seems expensive! There are lots of answers to this perplexing question of how to find and perhaps more importantly, retain those good people.

People, Companies and Resources We Mentioned in the Show

Cleveland Plain Dealer article from Associated Press on November 3, 2017 called “Job interviewers often cross a line, poll finds”
Craigslist
Indeed.com
Zip Recruiter
Amazon
Movie Office Space and “The Bobs”
Movie Tommy Boy and not strangling your employees

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How do I deal with bad employees and other how questions?

November 3, 2017Uncategorizeddirty-secrets-of-small

In This Episode

How does delaying on dealing with bad employees harm your business? There have been lots of stories in the news lately about some bad employees (Kevin Spacey or Harvey Weinstein anyone?). Chances are you have some too. Maybe they aren’t sexually assaulting people, but there are lots of things bad employees can do to harm your business and it’s up to you to do something about it. We spend a lot of time talking with our coaching clients about bad employees and why it’s best to cut ties sooner vs. later.

How do you figure out what to give your team in terms of bonuses for the year? We have a client who for the first time last year gave their entire team Christmas bonuses. Now it’s become expected. But it’s the owners’ fault since they didn’t tell the team why they were getting the bonuses. We are big fans of putting together a pool of money that shares the profits of the company in the form of discretionary bonuses given out by the owners and key managers.

How do you hire somebody one of your new employees referred when that employee is subject to a non-solicitation by a former employer? One of our clients recently had this situation and when attorneys get involved, it never ends in a win-win situation for anyone.

How do you run a business when you don’t know business? Especially the numbers? Most folks start or get into a business because they know and/or like the products or services. Then they learn the other “stuff” of business. At some point, usually after a couple of years, the owner realizes that there’s more to this stuff than most people (them included) realize.