23 Oct 2015
Having a well-planned strategy for business growth is just one piece of the puzzle. Making sure you have the financing to proceed to the next phase is another piece of the puzzle. The third piece of the puzzle is having employees who are fully engaged with and committed to the growth of your company and to its success. A meta-analysis, conducted by Gallup in 2012, showed the connection between employee engagement and a variety of performance outcomes.
Companies with engaged employees were more likely to rank high when it came to positive performance outcomes, such as a high level of customer satisfaction, profitability, and productivity. Businesses with engaged employees also had lower turnover rates, fewer instances of absenteeism, and less shrinkage than companies with unengaged employees. The Gallup analysis also showed companies with engaged employees tended to have higher earnings per share.
If you are concerned about a lack of employee engagement at your company, there are a few ways you can ameliorate the situation. Employee engagement starts at the top and trickles down, so making sure your management team is on point is the first step to building a more engaged workforce.
Be Good Role Models
How management treats employees has a direct effect on the engagement of those employees, a 2014 study from the Energy Project and the Harvard Business Review found. Employees who felt that their supervisors valued their work were more likely to stay with a company and more likely to be productive. If your team has completed a project before deadline or pushed through a new update that helped your company move to the next level, recognize their contributions and thank them for it.
One way to keep employees engaged and productive is for management to adopt an open door policy. Being available to staff helps increase trust and a sense of pride in the company. Employees are also more likely to be invested in a company if they know what is going on. Management should strive to be as honest and open with its teams members as possible.
Recognize Top Performers
One of the top ways to drive employee engagement, according to a survey conducted by the Harvard Business Review, is to recognize people when they do good work. How your company recognizes top employees depends on your preference. You can have an employee of the month program, for example, or offer quarterly or annual bonuses to people with the best performance record or sales.
Remember That Everyone is Human
Your employees aren’t robots, which means that sometimes mistakes will happen or issues will come up that need to be dealt with. For example, an employee might need to call out sick when he or she has the flu or leave the office in the middle of the day to pick up a sick child at school. It helps to remember that everyone’s human and that some flexibility in the workplace will make everyone happier. Giving your employees some degree of flexibility when it comes to scheduling signals to them that you trust them while allowing them to make room in their lives for non-work commitments. If your team feels that you understand them and are supportive of them, they are more likely to go the extra mile to help the company thrive and grow.
Focus on Togetherness
The staff that plays together stays together. Although the success and growth of your business might be front and center on your mind, it’s important to leave some room for team bonding. Programs such as a company picnic, holiday gift swap, or softball team can all foster a sense of community among your team members, allowing employees to feel more committed to the company overall.
Know What to Look for When Hiring
Just as there are some traits to look for when hiring managers, there are some traits you can look for when hiring for other positions that will signal to you whether the employee will be engaged or not. You want to hire someone whose skills are a good fit for the position, but you also want to hire someone with a positive attitude and whose personality meshes with that of your company.
To learn more about how engaged employees can help your company on its path to growth, and how to best utilize your employee mix, contact New Direction Capital today. We’ll act as strategic partners for your business to help you plan your next steps.
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14 Oct 2015
As your company grows, hiring people to oversee specific departments or to manage certain areas, particularly when you can’t be on-site or in the office, is essential. Deciding which positions will best benefit your company is just one piece of the hiring puzzle. You also want to make sure you find the best people to fill those positions. Whether you are looking to hire a general manager or to fill a higher, executive level position, there are a few things you can do to avoid making a hiring mistake and to make sure the person you hire is a great fit for your company.
Don’t Rush the Process
Running a company that has a gap where a manager should be can be a challenge. But, it’s even more challenging to run a company when the manager you’ve hired isn’t a good match or isn’t able to live up to the requirements of the job. For that reason, it’s best to take things slowly during hiring, in terms of how long you accept and review applications and the care you take in interviewing and investigating potential employees. When hiring, make sure you exhaust all of your options when it comes to spreading the word about the opening. Reach out to headhunters and recruiters and place an ad on a jobs listing site. You can also advertise on your company’s website and in journals that are specific to your industry.
Look at Potential
When hiring managers, there’s often a focus on a candidate’s competency. While being competent and able to perform the tasks of a position is important, executive search consultant Claudio Fernández-Aráoz argues in the Harvard Business Review that a candidate’s potential is often a better indicator of his or her potential for success than competency. Potential implies that a candidate has the ability to grow with the company and with the position. It usually suggests that a person will be able to thrive rather than give up when challenges arise. Fernández-Aráoz recommends looking for a few qualities when gauging a candidate’s potential. Find out how curious the person is, how insightful he or she is, how connected he or she is to others, and how determined he or she is.
Ask the Right Questions
You can get a fair sense of a person’s potential as a manager by asking the right questions. Behavioral questions, or questions that require a bit of reflection on the part of the candidate, instead of a basic “yes” or “no” answer, are often a good way to judge potential. A simple behavioral question might be “how do you respond to criticism?” or, “what did you do the last time someone criticized you?” As a follow-up, you can ask if the candidate would handle a similar situation in the same way or if he or she has learned from that experience and would handle it differently.
When you are hiring for top-level positions, it’s often a given that you will check references. You want to confirm that the candidate has the experience he or she claims to have and that there are no skeletons in the closet. Along with verifying your candidate’s abilities, you can also find out more about the candidate’s potential and magnetism when you check in with his or her references. You want to hire a leader or manager with whom people want to work. A good question to ask a reference is “would you work with him or her again?” Even if a reference otherwise speaks highly of a person, if that reference balks at the idea of working with or under the candidate again, you have a pretty good idea of how well the candidate works with or attracts others.
A virtual CFO can help you map out a strategic plan for your company, including creating a plan for hiring the best talent. Finding the right employees is a crucial step on the path to growth. If you need help determining what will best help your business, reach out to the team at New Direction Capital for customized guidance today.
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02 Oct 2015
Although your business might face different daily challenges than a business in a completely unrelated industry, your company shares more in common with other businesses than you might think. Even if two companies have considerably different organizational structures or management styles, they are likely to face similar challenges and concerns if they are at similar stages in their growth and development. For example, two companies are just starting up might encounter the same problems, even if one is a technology-based company and the other an entertainment business. The Harvard Business Review outlined five basic stages of business growth back in 1983 and there have been many articles highlighting the specific challenges of each stage ever since. Even though it’s been decades since the article was published and there have been considerable changes in the world since then, most small businesses today still move through the same stages.
A business in the existence phase, sometimes also called the inception or new start-up phase, is just getting going. At this stage, the focus is usually on making sure the business is able to find and keep customers and able to continue to provide its main product or service. Financial considerations at this point in time usually focus on making sure there is enough cash to keep the business going until it can reach the next stage. Some companies never leave the start-up or existence phase. An owner might quickly realize that being in business is more demanding than anticipated, or the company’s product or service might never catch on with customers.
If a business does end up having a product or service people want to buy, it eventually moves to the survival stage. Now that it exists, the company needs to begin to focus on maintaining its existence, or surviving. This second stage of business often involves a focus on maintaining and expanding cash flow. At this point, a company wants not only to break even or to have enough cash to cover costs, it also wants to start thinking of ways to use that cash to move to the next step. Although many companies do move on to the next stage, there are a considerable number who remain in the survival stage for years or decades, essentially treading water until the business is shut down or sold off.
By the time a business has reached the success stage, which can also be called the growth stage, it has started to be profitable. It’s possible for a company to remain in this third stage for the rest of its life, although many owners usually end up taking their businesses in a new direction at this point. Often, an owner might begin to disengage from the business during this stage, and new managers or executives might be brought in to head up the day to day operations of the company. Another option is for the owner to start planning for the company’s growth during this stage. This is usually the point at which a company starts working with a virtual CFO and planning out a roadmap for the continued success and growth of the business.
Take-Off or Expansion
During the take-off or expansion stage, a business begins to follow its plan for growth. Expansion is often a delicate stage for businesses, as the slightest upset can make or break a company at this stage. Financial concerns typically bubble up during this phase, as companies need to work to find new sources of income or financing to accommodate their growth. The question of whether it’s worthwhile to sell the company might also crop up during the take-off stage and an owner might wonder if selling for a profit is the best option for the business.
Once a business reaches the maturity stage, it has several things going for it, namely a strong management team, stable finances, and a developed strategic plan. Although it might seem like the ideal stage for sitting back, it’s important that managers and executives not get to complacent at this point. Mature companies should continue to look ahead to the future, to develop plans for continued growth and to aim to stay ahead of the curve.
What stage is your company in? No matter where you are in terms of your business growth, the team at New Direction Capital can help you plan for the next phase. Contact us today for more information.
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A business can’t be static. In order for it to continue to be successful, it needs to grow and evolve over time. But, a business can’t grow without some sense of direction or purpose. Taking your company to the next level involves careful planning and assessment. Whether you plan on introducing a new service or product or want to break into a new market, it can help to ask your company some questions first.
What is the Competition?
When assessing a new business opportunity, it helps to examine the current market and any current competitors. Are there companies out there who are doing the same thing you plan on doing or who are targeting the same customer base you plan on targeting? Take a close look at those potential competitors. Are they offering the same exact product or service you plan on introducing? Are their customers found locally, nationally, or globally? How loyal and committed are their customers? Do your competitors have any clear weaknesses or strengths? Are their companies performing well financially?
Has the Product/Service Been Tested?
The business world is full of products that seemed great on paper, but failed once introduced to the market. When assessing a potential growth opportunity, it’s important to see how the public and your customers react to the new product or service. You can test products in several ways. One option is to survey your current customer base. Ask them if they have interest in the new product, if they feel they have a need for it, and if they would buy or use it. Another option, which should come after you survey your customers, is to produce a test product or a trial run of the service. Called a minimum viable product, it’s the most bare-bones version of what you’re planning on offering. The goal of introducing a minimum viable product is to gauge the feedback from early adopters or early users. Are people willing to pay for the new product or service, even when it’s at the most basic level? When they use the service or product, does it meet their needs or perform as expected or is there considerable room for improvement? Would they purchase the product once all the intended bells and whistles are added?
Will it Make Money?
You also want to look at how profitable a new business direction, new product or new acquisition will be. How much do you expect to be able to sell the product for and how did you arrive at that figure? How much does producing the item or introducing a service cost your company and how much does it cost your business to promote, advertise for, and market the new product or service? How do you know that customers will be willing to pay $XX for the product?
Does Someone From Your Business Have Experience With the Product?
If you are branching out into a new area, it helps to have someone with some experience in that area on your team. Is anyone on your current team familiar with the product or service you plan on introducing? If you need to hire a new person who does have experience in that area, is he or she a good fit for your team? If you are expanding your company by acquiring a similar business or a competitor, will it be beneficial to keep the current management team at the company or bring in an entirely new team?
Asking the questions above is the just the first step to assessing an opportunity for growth or for new business. Working with New Direction Capital and a virtual chief financial officer can help you plan the next steps for your company. For strategic planning guidance and assistance taking your business to the next level, contact us today.
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17 Sep 2015
Why do people go into business? One of the answers is to make money. When you own a for-profit business, you are continually looking for ways to increase your profits. But, increasing the amount of money your company makes is just one part of the equation. If you are able to cut expenses and reduce the amount your business spends, you’ll also be able to make your company more profitable. There are several, out-of-the-box ways you can trim your business’ expenses.
One way to reduce your company’s advertising and marketing costs is to partner up with another business in your area. For example, if you run a real estate agency, you might reach out to a mortgage company and see if it would be interested in sharing mailing lists or running a joint promotion with you. If you own a store in a shopping plaza, see if the stores that neighbor yours would be interested in distributing flyers for your store to their customers. You can offer to distribute coupons or flyers for their stores to your own customers.
Make the Most of Mailings
If you send your customers or potential customers physical mail from time to time, such as catalogs and brochures, trim your costs by making sure your mailings are working for you. Have someone from your company review your mailing list, weeding out any customers who haven’t responded for a certain amount of time. The US Postal Service also has a number of tools that will help you maximize your mailing list and avoid sending mail to incorrect addresses or to addresses that people have left years ago. Look into bulk mail procedures to further reduce your postage costs.
Go Online When You Can
Web-based companies are often able to offer the same services for a much lower price than brick and mortar companies. For example, you can usually get business cards, brochures and other printed products for considerably less from an online company than you would from a print store. The basic rule to shop around before you commit to one vendor over another applies here. When you need supplies or a specific service, get a quote from a few online companies and compare it to a quote from a brick and mortar store, then choose the offer that will help you cut costs while meeting your needs.
Try to Go Green
Going green where and when you can doesn’t just help the planet. It also helps your bottom line. Remind employees to power down equipment before they leave the office for the evening, to cut your electrical costs. Switch to LED light bulbs, which cost more upfront, but last for much longer than other types of bulbs and use less energy. If you haven’t already, try to digitize as much as possible, from your files to your company’s communications. Ask employees to only print documents when absolutely necessary and to try to use two-sided printing whenever they can.
Outsource and Go Virtual
Your business might not need to fill certain positions on a full-time basis. Working with independent contractors reduces your company’s expenses as you aren’t responsible for paying FICA taxes or for providing benefits to contractors such as a retirement match or health insurance. Going the contract route can also mean that you are able to work with a more experienced professional for a lower rate.
For example, you might not be ready to hire a chief financial officer full time yet, but still need guidance when it comes to managing your company’s finances or putting together a strategic plan for growth. Hiring a virtual CFO allows you to work with a professional in the field, for much less than the cost of hiring someone with equivalent experience. Another option for cutting employee costs is to lease your staff from a staffing agency or hire temporary workers to boost your team during busy periods, without the expense of going through a lengthy hiring process.
Saving your business money doesn’t just mean looking for the lowest rates when it comes to financing and finding the banks that offer you the best deal. It also means finding ways to creative cut costs during the every day operations of your company.
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