The Perils and Perks of the Gig Economy: A Webinar

The Perils and Perks of the Gig Economy Presentation

We wanted to start posting the first of our Small Business Bootcamp webinars with you. Today, let’s share our second webinar, about how to navigate the gig economy. From archaic laws to strange situations to modern issues in the political sector, there is a lot to discuss. Feel free to watch our video now, it may save your business a lot of struggle down the line.

The Small Business Bootcamp is a LinkedIn group and weekly newsletter that provides information on how to provide for your small business. We discuss everything from marketing to employment to getting loans and more. Once a month we provide a webinar that outlines a content stream that we then talk about for the rest of the month.

Thinking about making changes to your business? ProStrategix knows how to help. Read some of our other articles below, or feel free to connect with us and get a complimentary thirty-minute consulting session.

In October, we made our second video about the gig economy and the pitfalls that occur in it. It is based in part on our article “We Use Gig Workers. Why You Should Too.” That post was far more about our experience. This video, however, gets into the history of the gig economy and why it is unsustainable in 2019. In other words, a lot has changed in the gig economy, and it is important to know more about it.

Here are some of the points of advice that we mention in the video:

      1. Know the history of the gig economy. It goes back so far and it still has problems. Our jobs system is still screwed up since the New Deal
      2. The current system is changing, as evidenced by the recent deal with Uber from earlier this year in California. That was a major change in policy, and it isn’t the end
      3. More than anything else, stay aware of what you’re asking of our employees. Know the difference between contract work and employee work.

All of these details and more are in the video. We also provide some examples that might be important for you to know about. If you want to know even more, feel free to contact us!

If you want to know more, join our LinkedIn group. It might help you learn more. This group includes small business owners across the New York area who are in similar positions. We want to help small business owners, and how better to do that than communicating. 

Join us, won’t you?

At ProStrategix, we know you have concerns.  We’re designed to help give you the business support you need so you can focus on doing what you love.  If you would like to learn about how we might be able to help you, please contact us.

How an Advisory Board Can Be Life Changing

small business advisory board

We aren’t exaggerating when we say that having a small business advisory board can work magic for you. Our client Jack is proof. His business was plateauing, and his advisory board helped him turn things around. It is a form odelegation at the highest level, but with completely different results.

Your business is doing well. But what’s next? ProStrategix knows how to help. Read some of our other articles below, or feel free to connect with us and get a complimentary thirty-minute consulting session.

No One Person Has All the Skills for Running a Business

Small business owners like Jack started their business to follow a dream. Jack’s dream was to be his own boss. Jack had been a successful attorney at a mid-sized law firm, but he was tired of the hours, rainmaking, and defending big businesses. He wanted something more meaningful out of life. So, he took the plunge and started out on his own. 

Look, there was no doubt that Jack is a great lawyer, but Jack had no real training in business operationBut that’s okay, because he had skills of his own. Many successful businesses were started by people whose experience as an owner was limited. It’s tough to run a small business when you’re suddenly expected to wear all these different hats. Lots of people may have advice for you, but yomight not necessarily know where to turn or who to trust. Jack was no different. 

When we first met with him, he was frustrated and overwhelmed. Our first question to him was whether he thought we could practice law. He looked at us quizzically and said, “no, you haven’t passed the bar.” We had to smile at that, because he was right. Just like how we weren’t trained or experienced to be lawyers, he wasn’t prepared to run a business. This was Jack’s “light bulb” moment, as it were. Jack wasn’t just a business owner, he was a CEO. And he had to learn how to act like one.

Why an Advisory Board Was Right for Jack

Running a law firm is quite different than running other small businesses. There are restrictions and requirements that must be metand that’s where specialists can be of use. The question is, hocan yomanage these experts cost-effectively? In this instance, we recommended an advisory board.

What is an advisory board?

An advisory board is a group of professionals with backgrounds in both necessary business disciplines and a specific industry. This group advises business owners on key strategic decisions regarding how to manage their business and help it grow. This differs from a board of directors because there is no obligatioon the owner to folloor to act on this advice. Advisory boards are a great way to learn without ceding control. A smart business owner won’t ignore the advice, but he or she still retains full controof the decisions being made. Unlike simple delegatioof tasks, this is delegatioof ideas.  

A woman trying to cope with her small business's struggles

Benefits of an advisory board

The most obvious are: 

      1. Perspective: challenges the owner to think differently or see the issue from various sides so he or she can make more informed decisions 
      2. Creativity: the more people involved, the less likely the group will suffer from tunnel vision 
      3. Connections: to be successful long-term, you need to have the right skills in place to get the job done. 
      4. Accountability: when running your own shop, there’s no one there to help keep you focused and on-track 
      5. Sounding Board: Having others around can help you find better solutions by sharing them with the group. 

The Dos and Do Nots of Advisory Boards

There are some clear dos and don’ts when it comes to setting up a board. Much like finding the right talent for your small business, it is important to find the right mentors and peers that can help you. So, here is our advice

Do...

      1. …focus on expertise in the field but also vision for the future 
      2. …seek diverse opinions – you don’t have to like everyone, but you do need to respect their knowledge 
      3. … prove your decisionmaking authority and ensure everyone agrees the process. 

Do not...

      1. …use family or friends. Unless you can have a frank and honest debate with the people in your lifeavoid them even if they have expertise in the areas needed. If they think the relationship is at risk, they will likely hold back. 
      2. pick myopic experts. You want people who know their field, but also those who can see a bigger picture.

What We Did with Jack

We knew enough about Jack’s business so we could identify the knowledge gaps. We had some of the experience required, but he needed some additional experts. To help, we sourced experts froour network. We provided the names to Jack and helped him interview potential board members. Each board member was compensated for their timon an hourly basis, just like any employee. We set up monthly advisory boards at the start, and switched to quarterly once the business was in a better position and once Jack didn’t need to turn to his board for every decision he didn’t want to make himself

The board consisted of 6 members, including a ProStrategix consultant and Jack himself. It is important to keep the board size to a manageable number. Enough to have the right expertise, but not too much to get bogged down in endless debate. Jack was struggling when we met him, and after 6 months, he was on a solid pathway to growth and expansion 

What if You Can’t Afford Jack’s Board

There are free ways to set up an advisory board. SCORE can help you. If you go this route, know that you are dependent on their volunteer base, which may not be exactly what you need. If you can’t afford the approach we took for Jack, it’s not a bad fall back option.

At ProStrategix, we know you have concerns.  We’re designed to help give you the business support you need so you can focus on doing what you love.  If you would like to learn about how we might be able to help you, please contact us.

Delegation: Letting Go is the Key to Grow

delegation

Delegation is key to the successful growth of any organization. However, delegating in the right way can be tough. Delegation is not abdication, and it requires clear metrics and the ability to hold people accountable – including yourself. While you may be an expert in your own field, it’s fine not be an expert on running the business end of the things. Too many small business owners spend time muddling through financial problems to get the necessary things done without mastering them. If it’s not strategic, it takes us away from growing our business. And this is where delegation becomes important, and where we introduce the story of our client, Adela. 

Your business is doing well. But what’s next? ProStrategix knows how to help. Read some of our other articles below, or feel free to connect with us and get a complimentary thirty-minute consulting session.

Adela's Story

Adela is an amazing veterinarian. She had worked as a junior member of a practice until she decided to start her own. The senior partners were getting older and thinking of selling and Adela had already established a base of pet owners who loved her. So together, they worked at setting up a practice for Adela to run. 

Adela got a lot of help and advice in setting up her clinic from her partners. She had the space, the systems, the equipment, and everything else that she needed. After she secured a loan from her former partners’ bank by leveraging their connections, she was all set. What Adela wasn’t ready for was the backend of the company. As a junior partner, Adela wasn’t involved in the day-to-day running of the practice, and she quickly realized it was more work that she had thought. As a result, Adela was limited in taking on new patients because she could barely serve those she already had.

Adela's Delegation Dilemma

We met Adela through her past partners. We had been working with them on how to sell the practice. They were concerned about her. They introduced us to her, and after our first call, it was clear as to what needed to be done. We started to talk about how Adela could begin thinking about delegation with our four painless steps: 

Delegation to employees means finding the right people to share tasks wtih
      1. Choose the right tasks.
      2. Choose the right employees.
      3. Make it automatic.
      4. Document company knowledge.

Chosing the right tasks

We started by making a list of all Adela’s daily activities and then sorting them as critical or not critical. Sometimes, small business owners are task hoarders. So, the analogy of ‘keep’ vs. ‘toss’ when cleaning out a full closet of clothes can help be a helpful visual. You’ll often find you have clothes that you haven’t worn in years stuffed in the back of your closet. The same is true for your daily tasks. 

On that same list, after we marked critical vs. not critical, we asked Adela to mark those, which she was good at doing vs. those she was not. The list of critical tasks that she was ‘not good at doing’ helped us with the next step in determining what to delegate and when. 

Other Things to Keep in Mind

What’s critical for an owner to keep, here are some thoughts from the Forbes Business Council: 

      •  Remember, only you have the vision for your company. While you can give people a glimpse of it, no one can see the company vision like you can, and no one has the drive to see it succeed as much as you do. This is one area of control that small business owners should never relinquish. 
      • Read, learn and grow. Every day, read and learn something new. This is so important to growing your business and yourself. Read about your trade and know how it’s changing. Read about people who have succeeded. They have much to teach us — not only about business, but about character strength. If you’re lucky, you will have a mentor. If not, these people can be that to you. 

Here’s some things to consider letting go: 

      • What you don’t know well: No man or woman is an island. We all need to accept that we need help. The exercise about will help sort this out. 
Finding the right talent means delegating to the proper employees
      • Work on your business, not in your business. In the beginning, you will need to wear a lot of hats to get your business off the ground. But remember, the objective is to have the time to work on your business—not in your business. To work on your business is to keep the vision front and center and direct the outcomes. To have that view and that perspective, you should build a team of competent, trustworthy people. This will take a little time but be sure it’s a priority. 

Choosing the right employees

We have a technique we like to use when it comes to finding new employees. Adela found that she did have some of the right talent currently, but she also had tasks where no one was the right person. That’s fine. It just meant we may need to look outside of our current set of employees and hire a few positions. There is an argument to be made to running lean when it comes to hiring, but there needs to be a balance between managing expenses and burnout. Both can keep your business from growing.  

Delegating means hiring and firing as is needed for new employees
Delegating means hiring and firing as is needed for new employees

If you do decide to hire, it important to consider that you are hiring someone for both their current role and their ability to learn and grow into greater roles. It benefits both the business owner and client to know that there can be a future for everyone. With Adela, we found that she needed help in booking, record keeping, bookkeeping, accounting, and – eventually – marketing. We built an interviewing process that Adela used, which helped evaluate their fit for the existing job and their potential for growing and learning new roles.

Making it automatic

In Pain-Free Delegation – How-To Guide, we offer a process to help do this. In addition, there are few good points from the Forbes Business Council on this area as well: 

      • Let go of responsibility without letting go of control. As trust built between us, I gave them the responsibility of overseeing others. I followed the model large companies use, which freed up my time because I had just a few direct reports. I trusted my key people, so I still felt in control when they gave me status updates. 
      • Use checks and balances. No matter the stage your business is in and no matter how much you trust your people, always have checks and balances in place. I do this for every area of my business. I trust my staff, but that trust is based on hard evidence that gives me details of exactly what’s transpiring each day. Remember, this is your business and your responsibility, so stay informed and on top of things.

For Adela, we built an internal organizational structure, which lessened her daily tasks and her number of direct reports. We also put into place a reporting structure, where weekly status reports were due from each employee. It was a simple, one-page template that was updated each week and uploaded to their shared system. This way, Adela could do a quick and weekly review to ensure everyone was staying on track.

Document company knowledge

How do you document company knowledge? Well, we already had. We had job descriptions, an organization structure, an interviewing process, and a reporting process. What seemed to Adela originally to be an overwhelming task, was found to be not that hard if she followed our process. We also created a worker’s manual and an onboarding process.

Business Issues 2019

Adela's Results

Within 3 months, Adela had all her job opening filled. Since we had the onboarding process in place before hiring, the new employees were successfully onboarded quickly. After about 4 months, Adela was able to start taking on new patients. She has continued to grow her business because she was more able to focus on right tasks, where she excelled.

At ProStrategix, we know you have concerns.  We’re designed to help give you the business support you need so you can focus on doing what you love.  If you would like to learn about how we might be able to help you, please contact us.

Eliminate Bias in Hiring to Combat Low Unemployment

US unemployment in the 2nd Quarter stood at 3.5%. This is the lowest rate since the 1960s. It caps the culmination of the trend starting in 2010. However, this rate isn’t equal. At nearly full employment for certain pockets of the population, we need to look at typically underserved workers as potential hires to fill the demand.

Thinking about making changes to your business? ProStrategix knows how to help. Read some of our other articles below, or feel free to connect with us and get a complimentary thirty-minute consulting session.

Young African American Unemployment Remains Stubbornly High

We’ve talked before about unretirement and job hunting amongst the elderly, but younger people are at just as much of a disadvantage. 

Across the age range of 25-34, Asian women fair the best with 2.1%. White men & women, Asian men, and Hispanic men have roughly equal unemployment rates (2.8-3.2%). Where things are a little different are with African American men and women and Hispanic women. Hispanic women are a full point higher than Hispanic men. African American men and women have similar rates (around 6.0%), but double that of all other ethnic groups. 

LGBTQ Inclusion

While there are no hard statistics on LGBTQ unemployment. Discrimination amongst transgender remains strong. As does, LGBTQ persons of color. It would stand to reason that their unemployment is likely higher than their non-LGBTQ counterparts

Eliminating Bias in the Hiring in Hard Work

Eliminating bias in hiring is extremely difficult. As humans, we all carry a perception of people different from us. It how we evolved, and it’s how we are socialized. Our tribe vs. theirs. This doesn’t let us off the hook, but rather, we all have to be honest with ourselves, however difficult it may be, to acknowledge where our biases lie. Only then can we deal with them.

Tips to Help with Eliminating Bias

According to the Harvard Business Review, here are some dos and don’ts to consider in your hiring process to eliminate unintentional bias in the process

Do's

      • Experiment with the wording of job listings by removing adjectives closely associated with a particular gender. 
      • Ask candidates to take sample work test, or provide a sample of how they solve a problem appropriate for the job. It’s useful in comparing applicants and it’s an effective predictor of future job performance. 
      • Control for your personal feelings about a particular candidate by giving likability a numerical score.

Do Not's

        • Engage in unstructured interviews. Instead, standardize the interviews process by asking candidates the same set of defined questions. 
        •  Allow surface demographic characteristics to play into your résumé review. Use a software program that blinds that information and ensures a level playing field. If you can’t afford software, blind the names

In Summary...

With the economy near full employment, bias can hurt our ability to compete and obtain the best candidates; so eliminate that mentality. Plus many States have tax incentives geared towards helping these disadvantaged groups. For example, New York State Youth Jobs Program provides up to $7,500 in tax credits for hiring disadvantaged youth. Even if you put half of that into job training, you will still come out ahead. 

At ProStrategix, we know you have concerns.  We’re designed to help give you the business support you need so you can focus on doing what you love.  If you would like to learn about how we might be able to help you, please contact us.

Unretirement: The Secret of a New Workforce

unretirement

I have a term for you that you will start hearing more and more over the next few years: unretirement. The title explains itself really, with the idea being that retirement is no longer a necessity. Now, you can keep your small business expanding beyond what you may have thought possible in the past, staying in charge past when people may see you as “expired.” Because why stop doing what you love because of something as arbitrary as age?

Your business is doing well. But what’s next? ProStrategix knows how to help. Read some of our other articles below, or feel free to connect with us and get a complimentary thirty-minute consulting session.

What Is “Unretirement?” Exactly?

As I’ve gotten older, that evil ‘R’ word kept creeping closer. I spent a lifetime of gaining knowledge. Am I to toss that away and sit in a home and wait to kick it? No, I don’t accept that. So, instead of thinking about retirement, I started to think about unretirement. My little 5-foot tall Italian grandmother worked with her sisters until she was 90. It gave her purpose. So, I used her as a model and started ProStrategix. 

The amazing thing was I’m not alone. Listening to an interview with Chris Farrell from NPR’s Marketplace was really eye-opening to me. 

It is time to shift the conversation about aging away from Social Security, retirement, physical decline, and an economic crisis, [and] focus on boosting the odds of healthy, active, and purposeful aging through working longer- including launching an entrepreneurial venture. Older minds who are involved in a community are happier.

Chris Farrell, interviewed on the Small Business Radio Show

So. What to do with this information?

Bam, Unretirement – A Whole New Workforce 

If a small business was willing to look past the stereotypes, this could be a real opportunity to access experienced workers. Age discrimination is a real issue, and people who want to work are often not hired at large companies. Think about it. Since when have you had someone with 20 or 30 years of experience in your market want to work at a small business, knowing it comes with a smaller salary? I bet the answer is never.  

It is a talent pool that is underutilized and underserved. So let’s think about ways to change that and to expand both your employee base and audience.

Unretirement – A Whole New Set of Entrepreneurs 

I was amazed by the statistic Mr. Farrell shared. 

For the first time, 25% of all business are started by people who are 55 to 64 years old. These older entrepreneurs are turning their passion into a business. What is different for these people is that many of these new entrepreneurs start to focus on a business with a purpose rather than just earning more money. 

Farrell, SBRS

Speaking as a Gen X’er, I know that I can be a little cynical when it comes to baby-boomers. However, it seems that they and I are sharing the same goal: work because you like it, not just because you need to. So let’s embrace these new employees for your market.

Working Longer May Keep Us Happier 

As we live longer, the traditional model for retirement really doesn’t make sense. We should embrace the idea of unretirement. Age has value if the aged are willing to learn and adapt. When I think back to my grandmother, who was born in 1914 and died in 2014, I am amazed at how much change she experienced. But in the end, she managed to evolve and adapt. If she could do it, why can’t we? 

At ProStrategix, we know you have concerns.  We’re designed to help give you the business support you need so you can focus on doing what you love.  If you would like to learn about how we might be able to help you, please contact us.

We Use Gig Workers. Why You Could Too

gig worker

As opposed to long-term and retained talent, gig workers provider short-term support when you need it. These workers are key to enabling us to effectively delegate. Consequently, we can focus most on building our business. If you are not tapping into the gig workforce, you should. Delegation is critical in any small business, no matter the size. Embracing a different kind of workforce could really help you in the long run.

Your business is doing well. But what’s next? ProStrategix knows how to help. Read some of our other articles below, or feel free to connect with us and get a complimentary thirty-minute consulting session.

Small Business Owners Tend to Take on Too Much

The payroll provider OnPay states small business owners spend almost 40 hours a month on HR and payroll. That’s a full workweek. And that’s just one (important) example. If you are spending so much time running the business, when is there time left for what you want to do? A gig worker could help. Referring again to our post on Pain-Free Delegation, we need to look at our list of what we can delegate and how. That way, you can see where you need the most help.

Gig Workers Can Do What You Hate

What you hate to do the most? Because let’s face it, there’s always a task that you put off until the last possible second. I have gig workers do my extra jobs; could a gig worker help you?

For many of our clients, it’s their books. They just hate it. Luckily, this is one area where the gig workers can help. There are plenty of reputable accountants and bookkeepers who can help. If you are in the New York City Metro Area, we can happily recommend some.

The key is to find what you consider a chore and see if there is a gig worker who can help. Often, they’re waiting in line happy to help.

Gig Workers Can Do What Don’t You Know

Here you need to be brutally honest with yourself. While we tend to think we can learn anything, there is a difference between the ability to learn something and whether you should learning it.

For us, it was social media. I know it. I’m functional in it. I know I could become an expert in it. However, I chose a gig worker for it because my time was better spent building the business. There were hundreds of great candidates that knew more than I did. Thus, frankly, it didn’t make sense for me to invest my time to become as good as they are.

For many small business owners, they are missing some of the key business skills. Maybe it is accounting, marketing, finance, etc.? It’s not worth your time in learning all these skills when there are a ton of gig workers who can help.

How do you access the quality of skill you don’t have? It’s tough, but most gig worker websites now have competency tests that can help. In our post, “How to Learn More About Business for Free”, we also provide a few resources you can tap into which can help.

Ok, You’re Not Picasso

Not everyone is a talented artist or a great writer. Here’s another area where gig workers can help. Professional headshot for LinkedIn. Videographers for short-branded videos. Web Design…the list goes on and on.

Finding gig workers for these tasks are relatively easy. Sites like Thumbtack, Fivver, etc. have plenty of willing workers. It may cost more than a DIY project, but do you want your Brand to look like a DIY project? For more creative types, DIY is more than sufficient. For others, it’s likely not. It’s about being honest with yourself.

In summary, the most important resource you have as a small business owner is time. Be wise how you use it.

At ProStrategix, we know you have concerns.  We’re designed to help give you the business support you need so you can focus on doing what you love.  If you would like to learn about how we might be able to help you, please contact us.

The Secret to Attract & Retain Small Business Talent is Revealed

Attract-Retail-Business-Talent

In our post, “3 Ways to Get the Best Talent More Often”, we cover how to recruit talent. In this post, we reveal the secret of how to attract and retain talent in your small business.

While small businesses can’t hold concerts, have a free cafeteria, or other major perks, we can be as creative and personalized as we want. And, that’s the secret to attract and retain talent. What keeps people motivated and dedicated is not their salary, but the intangibles. Luckily, as a small business, we can be flexible. Because we can be flexible, we provide our employees with benefits tailored specifically to their needs. This can be an asset in attracting and retaining talent. Let’s go through a few examples. 

Your business is doing well. But what’s next? ProStrategix knows how to help. Read some of our other articles below, or feel free to connect with us and get a FREE thirty-minute consulting session. 

First, Use Location Flexibility to Attract & Retain Talent as a Small Business

While some jobs require employees to physically be at one location, others don’t. Therefore, for those positions, offering location and time flexibility can be a great way to attract and retain talent. Why? It’s because people can choose when and where to work so that they fit their lives. Normally your work schedule dominates your life. But, in this case, your life guides your work. It’s an incredible perk. For instance, it’s very attractive to working families where childcare is an issue. Therefore, ask them when it is important to be in the office. If they can get their job done from home part of the time, let them. 

Second, Build a Team Where Everyone Feels Valued

Remember the team picnic or barbecue? Simple things with events and food can be powerful tools.  These can ensure that people feel bonded. Humans are social creatures. As a result, relationships are one of the most powerful tools to attract and retain talent, especially in small business. It doesn’t need to be a big event, just something your employees would enjoy. Ask for opinions and involve the team in planning it. It not only helps the inner workings of the business, but helps the company grow as well

Third, Attract & Retain Talent as a Small Business by Not Setting Hours

One of our key tools to attract and retain talent is providing work-time flexibility. For instance, we allow our team to set their own hours. It takes some time to adjust. You still need to set fixed times to review progress, like how we have weekly calls at a fixed time. During the call, each employee reviews their weekly status report with their manager. Businesses waste time, brainpower, and creativity by strapping people to a desk for 8 hours a day. 

Finally, Get Creative

Importantly, take the time to get to know your employees. Because by getting to know them, you can uncover what they value. And, what they value, likely others like them will value. Thus, it starts to build a self-sustaining culture. If you will want to delegate to your employees, it is helpful to make sure they like the environment they all work in. Importantly, it makes it someplace people want to work. In other words, that’s the true secret to attract and retain the talent you want. For even more information, Forbes has a number of great articles on attracting & retaining business talent, but for a more personal touch, come to us  

At ProStrategix, we know you have concerns.  We’re designed to help give you the business support you need so you can focus on doing what you love.  If you would like to learn about how we might be able to help you, please contact us. 

A Simple Way to Classify Workers in Small Business

classify workers

There’s a battle waging regarding how to classify workers in small business.  The Gig economy has significantly blurred the lines between the definitions of employees versus independent contractors.  This blurring has started a war between business owners and the States’ Department of Treasury or Taxation. It’s a very important job to set up correctly.

That question matters to your small business because there’s a war going on over the question of “employee status.”  Whether you’re a gig worker, service provider, consultant, or one of the hundreds of other kinds of self-employed entrepreneurs – or you hire those kinds of workers – you’re a soldier in this war.

USA Today

Your business is doing well. But what’s next? ProStrategix knows how to help. Read some of our other articles below, or feel free to connect with us and get a complimentary thirty-minute consulting session.

What’s the big deal?

How you classify your workers in your small business impacts the taxes you pay.  Employees and employers are subject to employment taxes and withholding.  Employees are also subject to a number of state regulations and laws, such as family leave, sick time, etc.  In contrast, employers of contractors are not.  Employers are required to file a form at the end of the year for each contractor.  After which, the employer’s tax obligations end.  So, it is easy to see the appeal to small business employers.

What’s the catch?

If this is such a great deal to employers, you might ask, why don’t we classify all small business workers as contractors?  Some companies, like Uber try, but here’s the catch.  The biggest losers in this war are the States, and they’re not happy about it. 

Contractors have to pay their own Federal and State Income taxes but are not subject to paying into workman’s compensation, unemployment, and other state employment taxes.  The Federal Government is getting its money, so the IRS isn’t the agency you need to worry about.  It’s the States. They are losing millions in lost revenue to their workman’s compensation and unemployment funds. So, they are furious. Therefore, they have been very aggressive in challenging how small business workers are classified.

Why should you care?

If a State deems that you are misclassifying your workers in your small business, they will bill you for the back taxes. Also, these taxes also come with some hefty fines.  The burden is on you to prove the state is wrong.  So, unless you have a staff of lawyers on hand like Uber, it’s a costly and time-consuming battle. Thus, you could stand to owe your back taxes, but also your lawyer’s fees, etc.

A simple hack to help with classifying your small business workers

While this is a very grey area in the law, as a fellow businessman, I tell my clients to follow this simple rule: If YOU direct the work, play it safe. Classify the worker as an employee (W2).  Conversely, if THEY tell you how they will do the work, they are more likely a true contractor. 

The easiest way to avoid misclassify workers in your small business is to clearly have a statement of work (SOW) from the contractor prior to the job.  The purpose of the SOW is to have the contractor specify his or her methods, timing, and check-in points. The important distinction is that the contractor through the SOW specifies how and when the work is done, not the contractee.  The contractee can agree or disagree on terms, but once signed, it’s set.  Contracts can be altered, but there is a clear paper trail when changes are made. 

This is not a foolproof method, but it does reduce your risk of getting tripped up in this grey area.  We have some tools that can help. Ultimately, if you have any specific concerns about your own business, you should probably seek the advice of your attorney.

At ProStrategix, we know you have concerns.  We’re designed to help give you the business support you need so you can focus on doing what you love.  If you would like to learn about how we might be able to help you, please contact us.

The Hidden Risk in Playing it too Safe with Hiring

too-safe-with-hiring

One of the most important ways to expand your business and take it that next step is to get the right talent to join your company. Are you playing it too safe with hiring?  How do you know?  After the last recession, small business owners have been reluctant to hire according to a U.S. Chamber of Commerce study. 

A U.S. Chamber of Commerce-MetLife survey released last week found that 28% of small businesses plan to increase their staffs in the next year, down slightly from 29% in the first quarter… A bleaker view of small business hiring came from payroll provider ADP, which earlier this month reported that companies reduced their staffs in May… Small business owners have been conservative about hiring since the recession.

Associated Press

Don’t let yourself fall behind by playing it too safe, and read on to know about how and when to add to your team.  

Unsure of how to take your business from good to great? ProStrategix knows how to help. Read some of our other articles below, or feel free to connect with us and get a FREE thirty-minute consulting session. 

You may be playing it too safe with hiring if:

First, you’re waiting for growth to hit until you hire

In our blog post “If You Don’t Plan for Growth Now, You’ll Hate Yourself Later”, we cover the reasons why waiting for growth creates more headaches than smartly managing and anticipating it.  It’s like tending a plant.  If you don’t add water until the leaves start to wilt, then it won’t grow as well as when you water it regularly.

Second, you or your employees are exhibiting burnout

According to a recent Gallup poll, 2 out of every 3 people feel burned out at their job.  1 in 4 is very often or always burned out.  Why?  Their companies are playing too safe with hiring.  They are understaffed and overworked.  In that environment, productivity falls, mistakes happen, and customer service plummets.

Lastly, customers are complaining or waiting too long

One outcome of our 24/7 always connected world, it’s no longer just New Yorkers who are impatient.  Customers have become more demanding.  They have become used to fast and easy service.  If you aren’t able to provide it, they will go elsewhere.  This is one of the key symptoms of waiting too long to hire.

How not to play it too safe with hiring:

First, know what drives your demand so you can plan on when to hire

It’s important to know what factors drive demand so you can predict it. This will help you ensure that you have the right team in place to handle it, and you are investing wisely in anticipating growth.

Second, know where the inefficiencies lie

It’s not just important to know how you drive sales, but also the cost it takes to service it.  If an increase in demand would cause you to have to pay overtime, then it might be time to bring another person onboard.

Lastly, not to play it too safe with hiring, you must invest

This last point is key, and it’s the scariest part.  If you don’t want to play it too safe with hiring, you often must spend the money before you see the reward.  Investing wisely in people, business processes, and business systems can ensure that you have the right people in the right roles at the right time.  It can also ensure that you are efficiently driving demand so that accelerating growth leads to accelerating profits. 

Hiring can be a cause of stress.  That’s why it’s often wise to get help, so you avoid playing it too safe with hiring.

At ProStrategix, we know you have concerns.  We’re designed to help give you the business support you need so you can focus on doing what you love.  If you would like to learn about how we might be able to help you, please contact us.

Pain-Free Delegation – How To Guide

pain-free delegation

In our post “How to Transition from an Owner to a CEO”, we shared how delegating is key in order to run a successful small business.  Having run several businesses, we know delegating can be scary.  But, you can have pain-free delegation if you follow a couple of simple steps. 

In Katie Lundin’s article “Delegation 101: What small business owners need to know”, she outlined four key steps that we thought were very smart.  So, we thought we would share them with you.  Her steps on how to take the pain out of delegating are: 

    1. Chose the right tasks 
    2. Chose the right employees
    3. Bake it in 
    4. Document Company Knowledge 

We would like to build on them. 

Your business is doing well. But what’s next? ProStrategix knows how to help. Read some of our other articles below, or feel free to connect with us and get a FREE thirty-minute consulting session. 

How can you choose the right tasks?

Ms. Lundin’s thoughts were: 

Delegate tasks that you don’t need to do.  There are crucial responsibilities that are best handled by you.  What are they?  Anything else should go to your support staff.  Be honest with yourself about your strengths and weaknesses.  Tasks that you’re just not good at… they should be handled by someone else. 

Business News

Pain-Free Delegation Starts with a List

Start by making a list of all your daily activities. Next, we sort them.  In one column, put all the critical tasks. In the other, put the non-critical. 

If You’re a Task Hoarder, Delegation won’t be Pain-Free

Sometimes, small business owners are task hoarders.  So, the analogy of ‘keep’ vs. ‘toss’ when cleaning out a full closet of clothes can help be a helpful visual.  For instance, you’ll often find you have clothes that you haven’t worn in years stuffed in the back of your closet.  The same is true for your daily tasks. Get rid of them. Make some room so you can painlessly delegate.

No one is good at everything.

Pain-free delegation requires that you delegate the tasks that others can do better. So, on that same list, after you’ve marked critical vs. not critical, next mark those you are good at doing vs. those you are not.  The list of critical tasks that you are ‘not good at doing’ will help with the next step, and will help you find the talents that can do what you don’t want to. 

How do you choose the right people to whom you delegate the tasks?

Matching the person with the right task makes delegation pain-free

First, we suggest that you take a piece of paper for each employee that you have.  On that piece of paper, write down what you think are that person’s skills, strengths, and weaknesses. 

Next, take your list of non-critical tasks and try to match them to each employee.  As you do so, make sure to ask yourself Ms. Lundin’s questions:

Does the employee have the time/capacity to take on more work?  Is the employee skilled enough to perform the task well?  Does the employee show the potential to learn to perform the task well?

Business Times

For instance, we’ve found that having a table, like the one below, to be very helpful in classifying workers

Employee Name Task Capacity? Skill? Ability to Learn?
Jane Doe Blog Writing Yes Partial Yes

How do you make it automatic, so delegation becomes pain-free?

Every extra decision you have to make is an extra drain on your resources.  Decision fatigue is a very real threat.  So, make it pain-free to delegate by creating your delegation plan ahead of time. 

Business Times

So, how do you do that? 

Now, this is where those sheets of paper come in handy again.  Because you took the time to assign tasks, examine strengths/weakness, you’ve actually created job descriptions and development plans. 

Wow, that sounds really corporate, and it is. However, corporations have these for a reason.  It makes delegation easier.  Now, you already know who is good at what, so when new tasks arise, you know where to put them.  Plus, you also know what skills a certain individual needs.  This makes it clear as to what training is necessary for that person to grow.

How do you document this company knowledge so delegation is always pain-free?

Well, frankly, you already have

Now, all you need to do is type up the pages we’ve been using into some formal document you can file.  Frankly, this might seem time-consuming. But, if you’ve been doing the steps all along, it shouldn’t be as bad as starting from scratch.

You can make delegating pain-free

Since you followed the steps above, you’re well on your way to pain-free delegation.  It can be challenging the first time you do it, but once you have, it becomes much easier and it sets you up for growing more in the future.  

Sometimes, this is hard to do by yourself.  As a fellow task hoarder, it was hard for me.  We’ve coached many people through this process, and we can help you too.

At ProStrategix, we know you have concerns.  We’re designed to help give you the business support you need so you can focus on doing what you love.  If you would like to learn about how we might be able to help you, please contact us.