How to Hire
One of the most important decisions you must make as a business owner
is whom to hire. The people you employ can make or break your business.
But you must recognize that you will never be able to hire the best people—only the best available people. You are always limited to the people who apply for the position you have open. Given that your choice will always be limited, how do you hire the best available person? Here are some helpful suggestions:
- Make your search for job candidates a continuous process. Start your search for employees as far in advance as you can. Don't wait until you're so desperate that you hire the first applicant who walks in the door. Be on the lookout for potential candidates constantly, even if you have no job openings at the moment. When somebody who's looking for a job walks in the door or sends you a letter, take the time to consider their application. If they look promising, go ahead with an interview. Sure, you'll be investing precious time in considering an application when you have no immediate plans to hire. But think of it this way—you are investing in the future.
- Obviously, you need to tell such job candidates what you are doing. Make it clear that you have no jobs open at the moment, but wanted to talk to them in case something became available in the future. Ask them if you can keep their names on file. This way, when you do have a job opening, you can contact these pre-screened applicants. True, many of them will have other jobs by then and may no longer be interested in making a change. Yet many will—particularly those who had a strong desire to work for your company in the first place. And after all, isn't that the kind of person you really want to hire—someone who really wants to work for you?
- Use part-time, temporary, and/or seasonal employment as a low-risk tryout.
Observing a person's performance on a limited trial basis, as a temporary, part-time, or seasonal employee, is a great way to find out what kind of full-time employee he or she might be. If it doesn't work out, you haven't lost anything. If such an employee does the job well, you have a proven candidate for the next full-time job available.
- Another good idea is to hire temporary workers to supplement the regular work force during peak periods or to fill in for regular employees who are on leave or on vacation. Obviously, some people are interested only in part-time, seasonal, or temporary work; they don't want to work full time. Many others, however, use part-time or temporary jobs to break into the work force for the first time, to move to a new line of work, or to support themselves while they look for full-time jobs in your company. The limited or trial work period gives them a chance to get to know you and gives you a chance to get to know them.
Use the "success indicators” to hire the best available person. Remember that any person's potential for success in a given job is a function of all the following success indicators:
- Their Job knowledge (the "how to" factor)
- Their motivation (the "want to" factor)
- Their ability (the "able to" factor)
Job knowledge is determined by a candidate's education, training and experience. Ideally, you are looking for people who already know how to do the job you'll be asking them to do and have done it successfully in the not-too-distant past. To evaluate job knowledge, check each candidate's work history, training, and education. Ask candidates what they have done, where they did it, and how well they did it. Ask about their successes and the problems they've faced. Ask about their training and education as it applies to the job you are trying to fill.
Ask for references, and call them to find out what kind of work the applicant did and how well he or she did it. Also, verify training and education. Did the person really obtain the degree, complete the course, and so on? Unfortunately, you can't depend entirely on what applicants tell you about their education, training, and experience, since many people will exaggerate and a few may even lie. At minimum, you should verify the dates of employment, training, and education with third-party sources.
Internal motivation is determined by what the candidate gets from performing the job. Think of work performance as an exchange—the candidate will perform the job well if he receives something he wants in return. Obviously, money is one thing the candidate wants. But money is rarely the only thing—and often not the most important thing—that people want from a job. There area lots of ways people can make money. Excellent job performance is usually motivated by something that goes beyond salary. For whatever reason, the best employees are those who enjoy what they do. Maybe they like the hours; maybe it's the location; maybe it's the people they work with; maybe it's the work itself. We all want and like different things. Your task is to make the best match—to find a person who wants to do and likes to do the job you're hiring them for.
How do you find out what job applicants want and like? Ask them. Knowing about their hobbies and interests can help you decide if they would be good at a particular job. For example, a person who likes to shop may enjoy retail sales. Someone who likes outdoor sports may also like working outdoors, selling sports equipment, or coaching. You should also find out what the candidate liked (and disliked) about jobs he or she held in the past. If a candidate hated working overtime on a previous job, you wouldn't want to hire him or her for a job that requires a lot of over time. If he or she hated commuting long distances to a previous job, you may be able to offer a place to work closer to home.
Try to find out why applicants want to work for you. Are they just looking for a job—any job—or are they attracted to your particular company for some reason? Get a sense of what the candidates think it would be like to do the job you will be asking them to do. Find out what their goals and ambitions are. Spend some time getting to know them. Then ask yourself if it's realistic to expect that they'll get what they want from the job you have to offer. If they will, great! You’ve got a prime candidate. If not, think twice. By offering the person a job, you may create a situation that will make both of you unhappy.
Finally, consider each applicant's natural ability. Excellent performers are often excellent because they were born with or developed unique traits that are ideally matched to their jobs. Consider the job you are attempting to fill. Does it require any particular personal characteristics—for instance, physical strength, hand/eye coordination, or verbal ability? What type of personality does best on that job—quiet and introspective, or boisterous and outgoing? How is the candidate similar to or different from people you know who currently perform that type of job well?
How do you evaluate a job candidate's mental and physical abilities? Testing is one option, but testing can be expensive, time consuming, and all too frequently unreliable. Your best bet maybe simply talking to the candidates and drawing your own conclusions. It's also a good idea to observe applicants performing some of the duties they would have on the job. For example, in hiring trainers for our own company, we have prospective candidates prepare and lead a short training session. Their performance is never perfect, but the session allows us to form some opinion of their training skills.
When you're through with interviews, reference checks, and testing, you should have a clear idea of the "success indicators” for each candidate. Then, and only then, are you prepared to make your selection. The ideal choice would be a person with all the requisite job knowledge, the necessary abilities, and a strong inner drive or motivation to do the work. However, the chances of finding such a perfect match are slim. Remember, you're selecting the best available, not necessarily the best. It’s unlikely that any candidate will rate a perfect "10" on all three success indicators, so you must choose the candidate with the best combination of traits across all three indicators. For example, the best person to hire might be a candidate who doesn't have the ideal mental or physical trails for the job, but has a strong drive to succeed and excellent job knowledge. Never discount a candidate for weaknesses in one of the three areas; strengths in the other areas can easily outweigh any weaknesses.
We have found that job knowledge, motivation, and ability are roughly equal predictors of job performance, with motivation having a slight edge. Your task in selecting a candidate is to evaluate what you have learned about their job knowledge, motivation, and abilities. How successful do you think they will be in the job? If you have any doubts, don't hire them, at least not until you resolve your doubts. A critical factor in the performance of any new employee is your belief that the person will succeed. To hire an employee for whom you have lesser expectations is to court disaster.
excerpt from The Competitive Edge
by Fran Tarkenton & Joseph Boyett
Your business plan confirms the feasibility, identifies the goals, and defines
the execution of your new business. Many individuals starting out in business
question the need for a written business plan. However, statistics show that the
majority of new businesses fail and one of the main reasons for these failures
is poor planning. Additionally, statistics confirm that businesses with proper
planning are much more likely to succeed and grow. A business plan is more than
a document to discuss financing with investors and lenders. It evaluates your
concept, outlines the plan to implement and develop the business and provides
an ongoing management tool. To appreciate the importance of a business plan, you
have to understand the components and how they impact your business. The style
and detail content of a business plan will vary based on company age, size, and
industry; however, the common core components are background information, marketing
plan, operating plan, and financial statements.
View the Full Article
Purchasing or Leasing a Printer
I see color printers advertised all over usually in the $200 0r so
range. Other than ink for jet printers and laser ones being offered on
a lease basis for .20/copy and .02 for b/w, what are considerations
that i should keep in mind?
As you have experienced, shopping for an office printer includes the
original cost plus the copy volume and type (black and white or color),
toner and ink cartridges, paper, and other operating costs. Several
questions you should ask yourself. Do I need a color printer or just
black/white? Do I need an All-in-One Printer (one that prints, faxes
and scans)? What is the volume I will be printing (speed is a
consideration)? Do I need a network printer (are more than one PC
needing to print to it)? Who can service it if needs repair? Should I
lease or should I buy?
There are several quality printers on the market to compare functionality and prices. Also, with low volume and primarily black and white printing needs, many small business owners consider more versatile multi-function laser printers that provide laser printing and copying with scanning and fax functions. The following are considerations and tools for comparing and buying office printers:
http://findarticles.com/p/ articles/mi_m0DTI/is_12_26/ai_53368737
http://www.pcworld.com/article/ id,125651-page,1/article.html
http://printscan.about.com/od/ buyingadvice/
In addition to comparing products at your local office supply and computer stores, one of the best ways to go about shopping for a printer is by making a list of your printing requirements and then researching the product reviews on the Internet. The following are examples:
http://sbinfocanada.about.com/od/ officemachines/
http://reviews-zdnet.com.com/4520-3155 _16-1012743.html?tag=txt
After reading the reviews, we suggest you visit a large office supply or computer supply store to see printers in action and gauge the quality for yourself. For reviews and comparisons of multi-function printers, visit:
http://www.bizrate.com/printers/ products_keyword--scanner%20printer%20fax.html
http://www.pricegrabber.com/ home_catpage.php/catzero=12
http://www.pcworld.com/ic/printers/
http://review.zdnet.com/4566-3181_16-0.html?tag=srch&qt=&orderby=prodName
http://www.pcmag.com/article2/0,1759,1814900,00.asp
http://review.zdnet.com/4520- 3156_16-6255033-1.html?tag=promo2
There are also numerous postings in groups that focus on comparing specific printers to one another. For example, the following focuses on comparisons of HP and Brother printers:
http://groups-beta.google.com/ groups?q=brother
%20compared%20to%20HP&hl=en&lr=&sa=N&tab=wg
Lease vs. buy. Though the financing costs are typically a little higher, many businesses lease copiers and other office equipment due to the cash flow, obsolescence, low residual value, and other considerations. When high volume is required, copiers and other office equipment is normally leased with service agreements that can be structured to include many of the operating and maintenance costs, but any costs under a lease and service agreement would need to be compared against what you are spending now to determine which option would be the most cost-effective. Also, lease can be structured with bargain ($1) residual value or installment purchase though the payments are higher. You can review lease vs. buy considerations at the following websites:
http://www.bankrate.com/brm/news/ biz/green/19990816a.asp
http://www.lease-vs-buy.com/
http://www.smartfast.com/enews/
ea_lease_vs_buy.html.
Creating a 1099 Form
Do I need to go through an accountant to do a 1099 form for a subcontractor?
If I can do it on my own, how do I do it?
While you can review the Forms 1099-MISC and W-9 filing requirements yourself at the below websites and you may file on your own, you may find a local accountant or CPA helpful in determining your specific filing requirements and preparing the necessary returns. If you do not have a CPA for your business, we have had good feedback on Padgett Business Services, which has franchisees around the country. For a referral to a local office, call (800)723-4388.
Businesses report payments for services rendered by non-corporate vendors, such as independent contractors, on Form 1099-MISC, which is filed annually and, in the case of services, only when payments total $600 or more during the calendar year. However, most payments made in the ordinary course of your trade or business will not be reported on Form 1099-MISC. Generally, a business is not required to report payments to corporations, or "payments for merchandise, telephones, telegrams, freight, storage and similar items" on Form 1099-MISC. Businesses are required to provide non-corporate vendors with copies of Form 1099-MISC for the preceding calendar year by January 31st. Copies of Forms 1099-MISC also must be submitted to the IRS and certain state taxing authorities for the preceding calendar year by February 28th; however, most states obtain their 1099 information through data sharing arrangements with the IRS. Forms 1099-MISC submitted to the IRS must be accompanied by Form 1096, Annual Summary and Transmittal of U.S. Information Returns. Forms 1099-MISC and 1096 must be submitted to the IRS electronically or using machine readable (optically scanned) forms that you can order directly from the IRS at 1-800-TAX-FORM (1-800-829-3676).
While you can download Forms 1099 and 1096 at the following IRS websites or through our website www.gosmallbiz.com in the Tax and Accounting section under On-line Tax Forms and can use these forms to generate copies for recipients, you cannot submit downloaded forms to the IRS. You can find and review Forms 1099-MISC, 1096 and the filing instructions at the following IRS websites:
http://www.irs.gov/pub/irs-pdf/f1099msc.pdf
http://www.irs.gov/pub/irs-pdf/i1099msc.pdf
http://www.irs.gov/pub/irs-pdf/f1096_06.pdf
Federal Form W-9, Request for Taxpayer Identification Number and Certification, is used by businesses to obtain a vendor's, including an independent contractor's, TIN or Taxpayer Identification Number (Social Security Numbers in the case of an individual or Federal Employer Identification Number (EIN) for a business) and to have the vendor certify that they are not subject to backup withholding. When a vendor fails to provide you with a TIN, you will be required to withhold tax from your payments to that vendor under the backup withholding rules. For 2007 the backup withholding rate is 28%. You can locate Form W-9 and instructions and review the backup withholding rules at the following IRS websites:
Form W-9:
http://www.irs.gov/pub/irs-pdf/fw9.pdf
http://www.irs.gov/pub/irs-pdf/iw9.pdf
Backup withholding:
http://www.irs.gov/efile/article/0,,id= 98151,00.html
http://www.irs.gov/efile/article/0,,id= 98145,00.html
Raises for full-time salaried employees
How often is a company required to give raises to full time salary
employees? What is a suitable increment?
As a general rule, companies have wide discretion in establishing
employee compensation. Typically, companies conduct performance reviews
on at least an annual basis and consider salary or wage increases at
that time, but unless the employee is affected by a minimum wage rate
increase or covered under a labor or employment agreement that requires
a salary or wage increase, there is no mandatory requirement to provide
an employee with a raise. However, for employees who perform
satisfactorily, annual raises that are at least equal to the increase
in the cost of living are common.
As indicated in the government information below, the core CPI or consumer price index for Canada as a whole rose 2.2% from November 2005 to November 2006. However, if you have quality employees that you want to retain, you should probably consider paying them something more than this relatively small increase. You can review information on the Ontario minimum wage and Canadian CPI information at the following websites:
http://www.labour.gov.on.ca/english/n ews/2003/03-65f.html
http://www.statcan.ca/english/Subje cts/Cpi/cpi-en.htm
Basically, employee compensation is based on a combination of factors, including what a business can afford, what the local job market pays, and the recruit's skill level and salary expectations. Also, minimum wage requirements can be a consideration. While some form of base pay plus commission or bonus may be options, the typical compensation in your industry, the mix of your jobs and fees, and the projected sales for your company will be factors in determining compensation for your workers. You can use salary survey information like the following to determine if your projected salary is within the range paid in your local market:
http://www.salaryexpert.com/
http://salary.monster.ca/
http://www.payscale.com/research/C A/State=Ontario/Salary
To help evaluate your employees' compensation and your company's hourly rates and fees, you can locate compensation and pricing information at websites like the following:
http://www.toolkit.cch.com/text/P05_4003.asp
http://www.toolkit.cch.com/text/P03_5200.asp
http://www.stc.org/49thConf/Session_Mate rials/file_2a.asp?ID=98
