Business Success Is About People, Not Money!
Have you considered where your business would be today without your clients and your hired team of employees?
Logical answer really, isn't it! Your business would be closed.
Now consider why you started your business in the first place.
Building businesses with a "lets make money, create jobs, get rich" philosophy is dangerous for a number of reasons.
- Was it to make money, get rich, retire early?
- Was it to buy that boat, take a world trip, have time with your family?
- Have you considered the value of your desires in business, and your thought process toward money?
- How is it all working out for you?
- Is your business growing successfully or is it struggling?
1. A strictly money driven business mindset overlooks the heart of business, which is excellent customer service.
2. Many companies as large and as long standing as Darrell Lea have faced difficult outcomes, such as when voluntary administrators were appointed to Darrell Lea amid fears of deep financial distress.
* source: www.news.com.au 18/07/12
3. The economy has no regard for people, while travelling in financial cycles based on external factors resulting in GFC.
4. Without valued clients and a happy productive team, all businesses, regardless of their size, will struggle and financial stress may occur.
5. When work is hard to find, discounts are given more freely and prices reduced in fear, clearing away any potential profit.
The greatest challenge modern businesses face today commences with their thinking toward success and how they will achieve it.
Most people think of businesses in terms of products, services, cashflow, marketing, expenses, vehicles, and making money at all costs.
Rarely do we stop to consider the life blood of any business, which is its valued clients and hired team. The people our business serves within the community, and the team that is hired to grow the business to better serve its valued clients - is the businesses greatest asset.
On the other hand, stress is the enemy of business. The reality of today's modern small businesses is the high stress levels of the owners, and their shortage of financial resources and clients.
This stress has repercussions. It effects the atmosphere by impacting on existing clients, and the working team while clouding the owners thinking. Stress holds a business back from productive growth.
The solution for management is to delegate and train your team to be excellent in customer service.
Delegating can be the most challenging task self employed business managers do in their day. Yet to delegate and to create a happy, productive team environment is to create the most valuable asset in any business.
Invest in self development training, and conduct weekly team meetings.
Create a team attitude of " working with you, not for you!"
Teach your team everything they need to be successful within their roles.
Encourage working productively and happily together towards team goals, by being respectful and positive, therefore leading by example.
Encourage feedback and improvement from your team regarding their roles, both collectively and individually at team meetings.
When your customers feel valued, and your team feels valued, your business will succeed. Referrals and testimonials will follow, creating opportunity.
By engaging your clients with a well trained, happy team - you have created a business that will grow and develop beyond the management which oversees it. This will provide you the time and profit to grow your business further.
Let us explore this concept shared with me by a business friend:
'The energy for today is all about the momentum of working in a team. Sometimes we believe we can do it best by ourselves and yet when we explore the avenue of a team it brings together different energies and ideas - opening up to greater opportunities in life and work.'
Consider a Team which unites to become: Together We Achieve More!
With this team philosophy at heart, your team will become your businesses most valued resource. By working together in a happy environment, everyone will succeed.
The backbone of any business remains its valued clients. Build your team, and train them to be a cooperative, collective group to serve and value your clients.
With this client / team mindset, your business will grow to be successful, as money is no longer the underlying factor in the equation.
Until next time.
Stacy Nichols is the managing director of Infinite Electrical in the Gold Coast. She has 20 years experience working in both private and public enterprises within Australia. She now owns and operates her own businesses. She is always looking for new business ventures and ways to create income.
The True Cost of Employment
Have you taken the time to look at what the true cost of employment is to your business?
Recently the financial officer of a large business figured out the cost of an employee by performing the following calculation:
Annual Salary ($80,000) divided by weeks of the year (52) divided by hours per week (38)
$80,000/52 = $1,538 per week
$1538/38 = $40.47 per hour
Is this really the true hourly cost of an employee? He was correct on the hourly rate at face value but when I asked if he knew the real hourly rate is he still tried to convince me it was $40.47 per hour, this is about the time an HR Consultant starts ripping her hair out.
What this financial officer failed to take into account was the real cost implications of hiring an employee; now let the education begin!
Obviously there is a base salary as outlined above, but he had not worked out the associated costs of that employee. Consider an employee on a base salary of $80,000 example, did you know that this employee will end up costing you up to 1.4 times more than $80,000?
How you ask;
1. Firstly there is superannuation, which is paid on top of the base salary for any employee earning over $450 in a calendar month, which is a minimum of 9%. So immediately you need to factor in another $7,200 that you need to pay out.
2. Next is annual leave. Although this is built into their wage, you are effectively paying $80,000 for 48 weeks of work in the year, which means the correct annualised wage for the employee is roughly another $6,667.
3. In addition you have sick leave, which is generally 10 sick days per annum, roughly another $3,333.
4. Next you have public holidays, again there are usually 13 public holidays in Australia each year, adding another $4,332.90.
5. Compulsory workers compensation varies depending on the industry you’re in, but can be in excess of 15% of the total annual wages. For our example, we will use 5%, another $4,000.
6. Payroll tax is payable in each state when you pay over a certain threshold in wages, the threshold and percentages vary from state to state, but QLD for example has a threshold of $1,100,000 and a rate of 4.75%. Even though you may not have passed the threshold yet, if you are planning on expanding your business, you may pass it in the future, and thus should account for it. This would mean another $3,800
7. Another cost you must consider is the cost of actually recruiting staff, on average this will cost around $5,000, which includes the recruitment costs, down time and training. If your staff member were to stay with you for 2 years, this would be an annualised cost of $2,500.
After taking these things into consideration, your staff member who you employed on $80,000 p/a, is actually costing you roughly $111,833, a new hourly rate of $56.60 a little bit more than the $40.49 my client first thought. Keeping in mind that these aren’t all the costs associated with employing someone, you would also need to consider ongoing training and professional development, office space, stationary, computers, office furniture, staff amenities etc. to get the full cost of employing someone.
Now that you have a better understanding as to what your employees are costing your business what measures will you put in place to reduce turnover and manage non-performing employees to get a better return on investment?
Sharon Collitt is known as the Employment Relations Specialist, and founder of Employment Toolkits. Sharon is a qualified Human Resources Professional who is passionate about empowering business owners to take control of their employment relationship management to ensure legal compliance and an efficient workforce. With the right people and processes Sharon has proven that their business will stand out from the crowd and make a difference. She achieves this by providing the most up to date information and toolkits that gives employers the leading edge in managing and developing their people.
Inspiring for Start Up Businesses
My business 'Fun Fondues' is a mobile fondue (tabletop style of cooking) catering service located in the ACT. I am inspired through my recently deceased mother - back in the 70s she would host the most amazing fondue parties, creating my most cherished, memorable memories growing up.
Recently I went to a used gold jeweler to sell some gold, diamond and sapphire wedding and engagement rings left to me to help with my start up business. They only offered me $125 for the lot!
I noticed that one ring had some words engraved on the inner ring. Not being able to read it clearly, I asked the jeweler to use his magnifying glass and read it for me.
It read..." the journey of one thousand miles begins with one step."
The hair stood up on the back of my neck, tears welled in my eyes - a message from beyond.
This has become my mantra. Every day now I take one step in the development of my business.
Recognizing our worth, NO I did not sell the jewelry.
02 6262 9845
The HRMWEB Recipe for Better Customer Service
...whipping your staff admin processes into shape!
Your workforce is your most important, and often your biggest, business asset, so better structure and processes around managing your staff offers many obvious benefits such as time savings, money savings, better staffing decisions, increased control and peace of mind. However, there are benefits that are not always so obvious... one of those is better customer service!
Essentially, your staff are your business. They are your representatives, your front line, the driver behind your day to day operations. Your product and service offerings, customer service and reputation all rest on your staff - so you need to ensure you manage them effectively.
It’s easy to understand that when your administrative processes and your workforce are well organised and working effectively it results in a professional looking business (which consumers do notice) and happier staff - and that means better customer service and a better overall customer experience!
See our three key ingredients to gearing your workforce towards better customer service...
1) The “right” number of staff
It’s the thing that keeps you up at night - figuring out how many staff you need working at any given time, who will work what shifts and what's it going to cost you. It's called rostering and if you don't have processes around how you do it, it will cost you time and your business money.
Not enough staff rostered on - customer’s won’t get the level of service they expect, you'll lose sales and the staff you do have on will be overworked and stressed. Too many staff rostered on - it’s a waste of resources and money... and your staff are bored and frustrated.
REAL LIFE EXAMPLE: You are at a bar... the line up is 5 people deep. It’s slow, it’s frustrating and all you want is a beer or a wine or maybe even just a soft drink. Is that too much to ask? It is a bar after all – isn’t serving drinks their staple?
Rather than wait you bail and go to the bar down the road (there is always a bar close by!). Not only did that bar lose your business, you’ll tell everyone about that bad experience you've had and you’ll think twice about going back there or maybe you’ll never go back there again!
All that bar needed to do was make sure it had more staff members on to serve... imagine the extra cash that business could make by putting just one extra person on. Now, what if they could use software to predict their “busy” periods and suggest appropriate numbers of staff. Or what if they could see it was getting busy and send a broadcast SMS to all the staff the system knows is free to work a shift at that time – a staff member could be there within 15mins! This is all very possible!
2) Organised and informed staff
If you want your staff to feel like a part of your business "team" then treat them in a way that shows you respect them. Keep them well informed and manage them in a way that is consistent.
Your staff want to be kept in the loop and want easy ways to communicate with each other and with you. Most importantly they want to know you have things under control. They want to be able to come into work and do their job. No one likes surprises!
When your staff feel secure in your ability to manage them and run your business that attitude of calmness and confidence is passed onto the customer.
REAL LIFE EXAMPLE: Joe comes to work and does his hours, he fills in his paper timesheet... it’s hard because he has to rely on his memory quite a bit but he uses some post it notes to jot down his times every day to make it easier.
Every time his pay is deposited into his account he goes through it with a fine tooth comb making sure to match it up with the post it notes he has been keeping. It’s such a hassle for Joe but he has to do it because his pay packet is sometimes wrong. Joe doesn’t want to be underpaid or overpaid because every time there is an error it is such a hassle to chase up and takes a lot of time for him to do so.
All he wants is for his work hours to be documented accurately and his pay to be correct every time. Is that too much to ask? He does his job properly why can’t he be paid properly? Eventually frustrated, Joe goes and finds a job with another business that has automated systems in place that make his life much easier! Joe was a great worker and the customers loved him... he was a great asset that is now lost.
If only Joe’s employer had an automated roster, timesheet, pay rate calculation system. That way Joe could fingerprint on and off his shifts, have his hours automatically recorded, have his pay rates calculated automatically and then that could all be sent through to payroll. With the reduced reliance on human intervention in that process, Joe could ditch his post-it notes and have the confidence in knowing his pay packet is correct!
3) Happy staff
It's simple. If your staff are happy it will influence how they behave with your customers. It's all about positive vibes - most customer experience goes beyond words - attitude and actions is where it really counts.
A major gripe of staff is how they are managed especially with regards to administration or as we like to call it "the paperwork". For instance, staff want to be allocated shifts based on their availability and they want to easily see what shifts they are working. They want to do as little admin paperwork as possible - they see it as a waste of time, and it usually is!
Having sound processes around how you manage your staff will make their lives, and yours, easier!
REAL LIFE EXAMPLE: Susan always makes sure her manager knows what times she is available to work. She studies and works part time at another job so she has to manage her time effectively and make sure she is super organised.
Even though she goes to the trouble of detailing her availability in emails and post it notes her manager is always losing them or not looking at them when he does up the roster. So many times she finds out about shifts less than a week in advance or she is rostered on to work at times she has already said she can't do. She has had to amend other parts of her life many times to accommodate shifts that she didn't know she was working.
Every time she is given an incorrect shift she gets frustrated and often the manager asks her to help out and find a replacement. Eventually Susan becomes so frustrated that her "needs" are not being taken into account that it starts to show when she is dealing with customers. She still does a competent job but she is less than happy and customers see that - they walk out of the store saying things like "gee, it would have been nice if I could have at least gotten a smile". They will get that smile somewhere else and then you lose their business.
Staff feel respected when their employer takes into account that fact they are human and have lives outside of work, that they like to know what they are doing in advance and that they can't just drop everything and work a shift. If only Susan's work had an automatic rostering process. She could enter her availability online and the rostering software would take it into account when building rosters. Then the system would sms her the shifts she is to work, well in advance! She could sms back to confirm she can work those shifts and if for some reason she couldn't work a shift wouldn't it be great if the system could find a replacement for her. How easy would that be for Susan! How easy would it be for her manager as well!
...and of course with any good recipe there needs to be a binding ingredient: Technology.
To enable the above three ingredients to be achievable you need to add a fourth “binding” ingredient that pulls everything together – and that of course is, technology.
The days of rostering via Excel spreadsheet, staff availability scribbled on bits of paper, phone calls to communicate shifts, written timesheets based on memory, calculators to add up hourly rates and fat fingering numbers into payroll, are over. Those frustrating, error prone tasks are now able to be completed quickly, easily and accurately by software solutions that are geared specifically to helping administer a business workforce.
Look for a cost effective, web-based, easy to use software product backed by a provider who will deliver you a fully supported solution. Web-based is the way technology is moving (you will hear “the cloud” mentioned a lot these days!) and it’s great because you can access your system from anywhere with an internet connection – so you can run your rostering, payroll, check what staff are on duty etc from home, work, Hawaii – wherever!
Look for guarantees as well - like metrics on exactly how much time and money the product is likely to save you. Also your provider should be able to do continual evaluations and analysis of your “savings & benefits” for a couple months after the software solution is implemented - just to check its working properly for your business.
Be careful of big up-front costs. Older desktop based solutions will cost a lot up front as you are paying for expensive and probably already out of date hardware. Look for solutions that have small set up costs, require minimal hardware and charge an ongoing monthly rate that is calculated on a “per person” basis – that way you will only pay for what you need.
...and most importantly look for a provider who will actually get to know your business processes before they even suggest a solution. The more they find out about how you currently manage your staff the more value they can offer in terms of streamlining your processes and matching software to your business needs.
Streamlining staff admin processes will result in better staffing choices and a smoother running and happier workplace for owners, managers, and employees. The flow on will be obvious as a better work environment will result in a better customer experience.
Streamlining may seem like it’s a difficult or costly thing to do, but it’s not. There are tools out there that can be tailored to your business to quickly and easily streamline your staff admin processes. Just be sure to look for a cost effective, web-based, simple to use product that does everything you need and is backed by a provider who will deliver you a fully supported solution.