Each time you are honest and conduct yourself with honesty, a success force will drive you toward greater success. Each time you lie, even with a little white lie, there are strong forces pushing you toward failure.
~Joseph Sugarman
In this very slow economy, employee and customer theft is a growing problem. The more your employees and customers are financially squeezed, the greater the probability of theft of funds or assets.
The U.S. Chamber of Commerce estimates that employee theft accounts for somewhere between 20 and 40 billion dollars in business losses. The Chamber also reports that an employee is 15 times more likely to steal than a customer or non-employee, and 75 percent of all employee crime goes unnoticed. In addition, less than 10 percent of the employee base is responsible for over 95 percent of theft. Bottom line, theft represents a significant cost to most firms, but it is one that can be reduced.
The best thing you can do to prevent theft is to make your business theft-resistant. In other words, do everything you can to deter theft rather than dealing with it once it has occurred. Like most things, making your business theft-resistant requires a plan and some research into where your vulnerable points are. However, there are many common areas that most businesses share to work on to make your business as theft-resistant as possible.
One of the best means of theft prevention is installing surveillance cameras anywhere financial transactions take place. Some entrepreneurs are hesitant to take these measures out of concern that employee morale will decline as they no longer feel trusted. While this does frequently happen, it can be easily avoided by telling staff ahead of time what you will be doing and why. Most people seem to understand the importance of a deterrent.
Good background checks and pre-employment screenings are critical when theft-proofing your business. Start with honest employees and combine that element with anti-theft measures. Together, these are the keys to reducing theft.
Frequently, businesses hire applicants that have a blemish on their record (e.g. felony conviction) to give them a second chance. This is a disaster waiting to happen considering that these past issues are just the ones for which the applicant got caught.
Another practice that is so important to preventing theft is ensuring that each employee takes some time off every year. Frequently, employees are able to cover up theft by routinely altering the books. Taking time off would mean getting caught if they tried to do this.
Materials and fuel are vital areas to watch when making your business theft-resistant. Controlling access to both your fuel and credit cards is so important, and staff should be made aware of the fact that you are monitoring these.
Taking inventory on a regular basis (more than once a year) is a great way to prevent theft. I have personally seen so many cases where theft of materials by staff members could have been easily avoided had a simple monitoring system been in place.
Finally, whenever cash is involved, it is always good to have a system of checks and balances. For example, at the end of the day, cash is counted and signed off on by two staff members.
Now go out and develop a plan to make your business as theft-resistant as possible and then implement this plan.
You can do this.
Monday, September 28, 2009
Monday, September 21, 2009
Focusing on Accounts Receivable
Managing your accounts receivable is so critical in today’s economic environment. So many entrepreneurs are having problems with cash flows, that paying late just seems to be becoming more and more pervasive. While you can be empathetic with your customers’ issues, you must insure financial viability of your company. Managing your accounts receivable and being proactive in their collection is the way to insure that you have enough cash to meet your obligations.
In order to measure collections of accounts receivable, there are two standard measures. The first is an “aging schedule” which just lists the amount that is owed within certain time periods. This might say that $100,000 of receivables are less than 30 days old and $200,000 are 30 to 60 days old and $100,000 is over 60 days. With this aging schedule you can see over time how effective your collection effort is.
Another benchmark for measuring collections of accounts receivable is the ratio called, average collection period. This ratio just specifies the number of days of credit sales tied up in accounts receivable. The formula is just accounts receivable divided by credit sales per day. If I have terms of net 30 days and my average collection period is at 45 days then it says that I am not doing an effective collection effort.
Some of the things that you can do to improve collections is to make sure that someone is in charge of this activity. Like most things, if no one is in charge, it tends to slip between the cracks. Additionally, you need to make this a top priority of yours and remind staff how important this is to the business.
Now making collections calls and asking for money is no fun and many folks do not like to do this. However, this must be done and you doing some of these calls sets the right tone for your business.Some firms have moved successfully to the policy that the bill is due upon receipt rather than having terms like net 30 days. This due on receipt really does speed the cash coming in.
Another thing that you need to consider is credit terms to encourage customers to pay early. For example you can offer terms of 1/10 net 30 which means if you pay with 10 days, you can take 1% off the bill but the full amount is due by day 30.
Charging a fee of 1.5% for late payment is another thing that you can do to speed up collections. However, if someone does not have the money to pay, this seems not to have a great impact.
Finally, you need to have a collections policy in place. It should specify what will happen as the lateness of the bill increases. For example a collection policy might state: a. if a bill is 15 days past due then a duplicate invoice with a nice note saying the invoice might have gotten lost. b. if a bill is 30 days past due, then a call is made checking on the status of payment and finally, c. a demand letter goes out and says if payment is not made, the bill will be turned over to a collection attorney and no further goods or services will be provided to the customer.
You can do this!
In order to measure collections of accounts receivable, there are two standard measures. The first is an “aging schedule” which just lists the amount that is owed within certain time periods. This might say that $100,000 of receivables are less than 30 days old and $200,000 are 30 to 60 days old and $100,000 is over 60 days. With this aging schedule you can see over time how effective your collection effort is.
Another benchmark for measuring collections of accounts receivable is the ratio called, average collection period. This ratio just specifies the number of days of credit sales tied up in accounts receivable. The formula is just accounts receivable divided by credit sales per day. If I have terms of net 30 days and my average collection period is at 45 days then it says that I am not doing an effective collection effort.
Some of the things that you can do to improve collections is to make sure that someone is in charge of this activity. Like most things, if no one is in charge, it tends to slip between the cracks. Additionally, you need to make this a top priority of yours and remind staff how important this is to the business.
Now making collections calls and asking for money is no fun and many folks do not like to do this. However, this must be done and you doing some of these calls sets the right tone for your business.Some firms have moved successfully to the policy that the bill is due upon receipt rather than having terms like net 30 days. This due on receipt really does speed the cash coming in.
Another thing that you need to consider is credit terms to encourage customers to pay early. For example you can offer terms of 1/10 net 30 which means if you pay with 10 days, you can take 1% off the bill but the full amount is due by day 30.
Charging a fee of 1.5% for late payment is another thing that you can do to speed up collections. However, if someone does not have the money to pay, this seems not to have a great impact.
Finally, you need to have a collections policy in place. It should specify what will happen as the lateness of the bill increases. For example a collection policy might state: a. if a bill is 15 days past due then a duplicate invoice with a nice note saying the invoice might have gotten lost. b. if a bill is 30 days past due, then a call is made checking on the status of payment and finally, c. a demand letter goes out and says if payment is not made, the bill will be turned over to a collection attorney and no further goods or services will be provided to the customer.
You can do this!
Tuesday, September 15, 2009
Can your leadership style be too aggressive?
The basic difference between being assertive and being aggressive is how our words and behavior affect the rights and well being of others.
~Sharon Anthony Bower
When running a company or managing people, you must be aggressive to achieve results, but is it possible to be too aggressive?
We are dealing with a very competent middle-level manager who is both very well-educated and a committed employee. He exceeds at everything his superiors ask of him, and he is 100 percent dedicated to the mission of the organization. He is well-liked but for one unfortunate attribute. Whenever he gets involved in anything, he just takes over, running rough shod over the others in the group and micromanaging it. Consequently, others do not show him any new ideas for fear that he will just take over.
The organization was considering a new training program for entry-level managers. While this manager had recommended a program like this many times before, no one seemed to pay attention. However, another manager had now made the recommendation, and it had reached the planning stages. A committee format was being used, and he was not involved. His presence was not requested, nor were his opinions solicited for fear that he would take over.
Obviously, his feelings were hurt as he felt he could contribute so much to this committee, and he certainly could. However, he just had never learned how to let go and be involved in something without being in charge.
Being a leader is not a 100 percent of the time job. Most leaders vacillate back and forth between being leaders and being followers depending on the conditions. For example, when attending meetings, a leader might simply be a participant rather than the leader; and when talking to staff, a leader might assume the role of a friend. The point is that leadership – and to some extent aggressiveness – is not a role that you want to spend 100 percent of your time in as it tends to alienate colleagues and staff.
Effective leaders are flexible in their style, molding it to fit the task that needs to be accomplished and the people who are involved. At times it is more effective to move people to a conclusion or a position using a persuasive style, as opposed to being directive.
This middle-level manager just never learned how to turn the switch off, and he defined himself with this type of role. While it served him for the majority of his work life, it was clearly not successful as he moved up through the organization. He had a very strong personality type, but if he was going to advance, he was going to have to learn how to turn that switch off and on as appropriate.
We worked with him, eventually getting him to see that it was okay to relinquish control and not be in charge all of the time. We were only able to really get this point across to him after having him do some role plays, recording them so that he could view the videos later. Upon reviewing them, he was quickly able to see how offensive his behaviors could become and how intimidating he could be. Watching himself through the camera lense allowed him to see a part of himself that he had not yet witnessed. It was enough to convince him to change his leadership style.
Now make sure that your aggressiveness is not overdone. One good way to monitor this is through a 360 degree evaluation, in which your superiors, your subordinates and colleagues at the same level evaluate your performance.
You can do this.
~Sharon Anthony Bower
When running a company or managing people, you must be aggressive to achieve results, but is it possible to be too aggressive?
We are dealing with a very competent middle-level manager who is both very well-educated and a committed employee. He exceeds at everything his superiors ask of him, and he is 100 percent dedicated to the mission of the organization. He is well-liked but for one unfortunate attribute. Whenever he gets involved in anything, he just takes over, running rough shod over the others in the group and micromanaging it. Consequently, others do not show him any new ideas for fear that he will just take over.
The organization was considering a new training program for entry-level managers. While this manager had recommended a program like this many times before, no one seemed to pay attention. However, another manager had now made the recommendation, and it had reached the planning stages. A committee format was being used, and he was not involved. His presence was not requested, nor were his opinions solicited for fear that he would take over.
Obviously, his feelings were hurt as he felt he could contribute so much to this committee, and he certainly could. However, he just had never learned how to let go and be involved in something without being in charge.
Being a leader is not a 100 percent of the time job. Most leaders vacillate back and forth between being leaders and being followers depending on the conditions. For example, when attending meetings, a leader might simply be a participant rather than the leader; and when talking to staff, a leader might assume the role of a friend. The point is that leadership – and to some extent aggressiveness – is not a role that you want to spend 100 percent of your time in as it tends to alienate colleagues and staff.
Effective leaders are flexible in their style, molding it to fit the task that needs to be accomplished and the people who are involved. At times it is more effective to move people to a conclusion or a position using a persuasive style, as opposed to being directive.
This middle-level manager just never learned how to turn the switch off, and he defined himself with this type of role. While it served him for the majority of his work life, it was clearly not successful as he moved up through the organization. He had a very strong personality type, but if he was going to advance, he was going to have to learn how to turn that switch off and on as appropriate.
We worked with him, eventually getting him to see that it was okay to relinquish control and not be in charge all of the time. We were only able to really get this point across to him after having him do some role plays, recording them so that he could view the videos later. Upon reviewing them, he was quickly able to see how offensive his behaviors could become and how intimidating he could be. Watching himself through the camera lense allowed him to see a part of himself that he had not yet witnessed. It was enough to convince him to change his leadership style.
Now make sure that your aggressiveness is not overdone. One good way to monitor this is through a 360 degree evaluation, in which your superiors, your subordinates and colleagues at the same level evaluate your performance.
You can do this.
Tuesday, September 8, 2009
Overselling
The reputation of a thousand years may be determined by the conduct of one hour.
~Japanese Proverb
Every business’ objective is to make money by offering a fair value to their customers thereby ensuring that they can continue to operate profitably. However, if a business takes advantage of its customers through overselling, its customers will rightly turn away from the business, which is exactly what should happen in the free market system.
I have three dogs: Sophie and Bella, both black labs, and Hoover, an elderly Shih Tzu appropriately named because he eats anything left on the floor. With all of these dogs, I spend substantial amounts of time in vet offices, and I have been going to one for about 18 months now.
It seems as though every time I go in there for services, their fees increase without explanation. On one visit for example, I went in to get them to sign a document that stated my animals were healthy, and it cost me $30. They have even started to request that each of my animals have semi-annual checkups – a practice even my own physician does not suggest. Even now when I think about this, my blood starts to boil.
In the exam room, the shelves are lined with a ton of products they are promoting. The last time I was in there, I sat down on a bench to wait for the veterinarian, and there on the seat was a flip book trying to sell me on dental cleanings for my dogs. Three months ago they told me that my Shih Tzu needed his teeth cleaned at a cost of $300, and he only has four teeth. Bottom line, I felt that they were grossly overselling their services.
Clearly each and every business needs to sell their products and services, but if you push too hard, you risk alienating your customers. Obviously, this vet practice figured this out as I recently received a form letter from them saying that they were reducing the prices of some types (unspecified) of preventative care.
The line between good selling and overselling is not always clear, but with this vet practice it was not just one thing that made me feel as if I was being taken advantage of. It was the unrelenting and continuous push to purchase some product or service.
I am not sure if the vets at this practice realize how this overselling is being perceived, but it would not be difficult to find out. One good way to do so is simply to ask your customers for their suggestions or improvements. Without customer input, the first time a business will notice that they are overselling is when they start to lose customers.Another way to see if you are overselling is just to put yourself in your customers’ shoes and see how your business looks and feels through their eyes. I really do think if these vets would come out and take a look at what I see, they would easily recognize the magnitude of their overselling.
Now go out and make sure that you are not overselling your customers.
You can do this.
~Japanese Proverb
Every business’ objective is to make money by offering a fair value to their customers thereby ensuring that they can continue to operate profitably. However, if a business takes advantage of its customers through overselling, its customers will rightly turn away from the business, which is exactly what should happen in the free market system.
I have three dogs: Sophie and Bella, both black labs, and Hoover, an elderly Shih Tzu appropriately named because he eats anything left on the floor. With all of these dogs, I spend substantial amounts of time in vet offices, and I have been going to one for about 18 months now.
It seems as though every time I go in there for services, their fees increase without explanation. On one visit for example, I went in to get them to sign a document that stated my animals were healthy, and it cost me $30. They have even started to request that each of my animals have semi-annual checkups – a practice even my own physician does not suggest. Even now when I think about this, my blood starts to boil.
In the exam room, the shelves are lined with a ton of products they are promoting. The last time I was in there, I sat down on a bench to wait for the veterinarian, and there on the seat was a flip book trying to sell me on dental cleanings for my dogs. Three months ago they told me that my Shih Tzu needed his teeth cleaned at a cost of $300, and he only has four teeth. Bottom line, I felt that they were grossly overselling their services.
Clearly each and every business needs to sell their products and services, but if you push too hard, you risk alienating your customers. Obviously, this vet practice figured this out as I recently received a form letter from them saying that they were reducing the prices of some types (unspecified) of preventative care.
The line between good selling and overselling is not always clear, but with this vet practice it was not just one thing that made me feel as if I was being taken advantage of. It was the unrelenting and continuous push to purchase some product or service.
I am not sure if the vets at this practice realize how this overselling is being perceived, but it would not be difficult to find out. One good way to do so is simply to ask your customers for their suggestions or improvements. Without customer input, the first time a business will notice that they are overselling is when they start to lose customers.Another way to see if you are overselling is just to put yourself in your customers’ shoes and see how your business looks and feels through their eyes. I really do think if these vets would come out and take a look at what I see, they would easily recognize the magnitude of their overselling.
Now go out and make sure that you are not overselling your customers.
You can do this.
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