The Case for Hiring an Outside Manager in Small Business

October 6, 2012


My previous post on the biggest mistake of hiring a manager from outside generated considerable interest and feedback. The feedback covered both pros and cons of hiring a manager from outside for small businesses. While many agreed with my assessment that hiring an outside manager is a big mistake, several others raised valid points on the flip side. Those points do have merit and worth mentioning here to be fair.
The drawbacks of hiring an internal candidate has mostly to do with the internal competition / conflict between the manager who gets promoted and others that are not, along with the fact that internal candidate is not likely to bring fresh perspective. In this post I will attempt to summarize the pitfalls that arise when your business does not bring an outsider for the manager job, but instead chooses to promote an internal candidate.
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The Biggest Hiring Mistake – Hiring a Manager from Outside

September 29, 2012


In earlier post on best practices when hiring a manager I mentioned that the small business owners should first try find an internal candidate and promote someone who is already working with you when you need to hire a manager. The feedback we received on the post as well as discussions with other small business owners has validated this practice. The reason is obvious. Any mistake made in hiring a manager will hurt your business for a long time. The best example of why this is the case can be seen in the difference in last 10 years in the performance of America’s two storied technology companies.
Look at the stock performance of IBM and HP. While IBM has experienced tremendous growth in those 10 years HP has gone in exactly the opposite direction. One of the factors that has contributed to this divergence is the way they have hired CEOs. IBM has had only 2 CEOs in the last 10 years. Not only that, they were both promoted from within and were groomed for several years prior to that. On the flip side, HP has gone through 5 CEOs since 1999 – all of who were hired from outside. I believe this is the primary reason why both companies are where they are. Let me explain the reasons why internal candidate is your best choice when hiring a manager.
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7 Qualities of a Good Small Business Manager

September 21, 2012


One of the most important decisions you will make as a small business owner is hiring a manager to take care of day-to-day operations of your business. This is the person who will be running the show for better or worse. Hiring a bad manager can hurt your business in a number of ways. The customers will walk away. The employees will complain and leave. The reputation of your business will decline beyond repair. In the end, the business will become a mess that can take long time to recover, if at all.
That is why it is imperative to pay careful attention and take time in hiring manager. I discussed best practices in hiring a manager in earlier post. I mentioned that you need to consider personal qualities of the potential hire – even more than the skills. So what are those qualities you need to look for when hiring a manager?
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7 Best Practices in Hiring a Small Business Manager

September 8, 2012


Manager is probably the most important person for small businesses, after you. He is the one who manages day-to-day operations when you are not around, ensures that employees perform their job and is responsible for customer satisfaction. Yet many small business owners rush to hire managers without doing sufficient due diligence and end up regretting their decision afterwards and paying price in terms of business decline.
It is true that not every business needs a full-time manager, however in many situations it is a necessity for various reasons. For example, if you are running an absentee business manager is the one who will run the show. In some cases, business operating hours are more than you can provide yourself. Or you may just want to focus on high-priority strategic items and let the manager take care of operations. No matter what your reason is for hiring a manager the best practices described here will help you hire a manager who will help you grow your business.
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A Great Employee is 10X as Valuable as Good – How to Find One

July 18, 2012


A great employee can contribute to your business that 10 good employees combined cannot do. Behind a successful business owner there is a strong lieutenant who stands by him every step of the way and is not afraid to give right advice even if it means disagreeing with the owner. If there is one thing you must do to succeed in your business it is to hire great employees, even if it means paying more, and give them freedom to do the best. The return you get from them makes it more than worth.
Of course, hiring great employees is easier said than done. But it is possible to do it and it starts with spotting the right person. You first need to understand what sets great employees apart from the mediocre ones. One hint – it all starts with attitude. I mentioned in earlier post that when hiring employees you should first look for attitude, not the skills. You can teach old dog new tricks, but you will not be able to straighten its tail, as the saying goes in India. So what skills do great employees have that are not easily found in others?
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HR Must-Haves for Growing Startups

June 3, 2012


What does it take to grow a company from startup to small business? Growing a business isn’t simple. Entrepreneur need to take care of many facets of the business to ensure it is ready for the next phase. One of the most critical aspects is to put together a team of people that can handle the pressure and is ready to make the transition. That is why HR plays a crucial role in this phase of the start-up. Whether the start-ups have a formal HR organization or is handled by the founder team itself here are five must-haves they identified to take your business to the next level.
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7 Reasons you are Losing your Best Employees

May 29, 2012

It is estimated that best employees contribute 30-50% more than average employees for a typical business. Their contribution is not only in the form of higher productivity, but it also comes from new ideas and better customer service. These are the employees who can take your business to new heights provided you are able to hold onto them.
Employee turnover in general is harmful for small business. When it comes to turnover of star employees it could damage your business beyond repair. That is why it is paramount to treat your star employees well and ensure they are happy to work with you.
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Your 90-day Action Plan after Buying a Business

May 12, 2012


The actions you take in the first 90 days after you have purchased a business are crucial for its long-term success. We showed what things you need to take care of in the first 30 days after you buy the business. I asked you not to take any major decision in that time, but to learn and document everything about the business by asking questions and observing. By the end of 30 days you should have a plan of action to improve the business in the coming days and months. The plan of action needs to fall in two categories – short-term tactical improvements and long-term strategic direction.
Your focus in the first 90 days should mostly focus on short-term improvements. The idea is to get quick benefits by taking advantage of “low hanging fruits”, while at the same time keeping long-term direction in mind. These steps you take in the first 90 days will position your business well for coming months and years.
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Filed Under: Buyers, Customers, Employees, Purchasing Tagged With: , ,

Creative Perks that Keep Employees Motivated

March 4, 2012


For many employees, the lines between work and their personal lives are blurring. They’re seeking balance between the two, and are finding value in the ability to choose the specific benefits that best meet their needs at this point in their lives. And employers are learning that, when chosen and implemented effectively, benefits can demonstrate leadership’s concern for the well-being of employees, reinforce cultural values, and foster deeper employee engagement.
According to James Berkeley, Director of Berkeley Burke International, however, there’s still a disconnect. “The decisions made regarding what benefits to offer are often based on subjective viewpoints, viewpoints that are far removed from the actual needs of employees.” Rather than assuming you know what your employees want, Berkeley suggests you ask them. Though answers will vary, many people are interested in more benefits in these areas:
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7 Common Mistakes that Impact Cash Flow and How to Avoid Them

January 3, 2012


Cash flow is a lifeblood for small business. Fail to plan properly for the month-end cash flow needs and you will start losing your sleep when the time arrives to write paychecks for employees or to pay vendor bills. That’s why it is very important to keep a keen eye on money coming in and going out, and plan for those times when you will need sizeable cash outflow. Not only that, but you have to take into account unexpected emergencies that will force you to spend money here and now. In earlier post, we showed how managing your inventory, account payables and receivables can help you better manage your cash flow.
In addition to those tips, you should also look at the obvious as well as not-so-easy-to-find ways in which small business owners squander cash and end up in dire situations. Here are examples of the mistakes many small business owners make and how you can avoid them.
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