Tag Archives | Entrepreneurs

Hiring 101, Evaluating the Candidate

Good employees can be the most important ingredients in a successful business.  But finding and hiring good employees can be among the most challenging aspects of running a small or growing company.

Numerous federal and state laws govern the various processes of soliciting employees, including advertising, interviewing and hiring.  If you don’t follow the rules, you may find yourself as the defendant in a lawsuit over your hiring (or non-hiring) practices.  Or, you may end up being stuck with a very costly and unproductive employee who you have trouble firing.

Employers are subject to many laws requiring equal employment opportunity and prohibiting discrimination in employment, which can include Title VII of the Civil Rights Act of 1964, the Equal Pay Act, the Age Discrimination in Employment Act, the Civil Rights Act of 1966, the Immigration Reform and Control Act, the American with Disabilities Act and numerous other federal and state laws.

You probably have many questions that you would like to ask a prospective employee.  But certain questions can only get you in trouble (yes, you can trip over many laws in an interview).  The following are examples of questions you should NOT ask:

How old are you?
Do you have any disabilities?
Are you pregnant?
Are you married with kids?
Have you ever been arrested?
What is your religious affiliation?
What is your sexual orientation?

Focus on questions relating to the skill and experience of the candidates and the qualifications needed to perform the job.

Once you find the “perfect” candidate for the job, you should perform a background and reference check before extending an offer.  Ideally the prospective employee will sign your “background check permission form” which allows you to get reference information from prior employers and even do a credit check.  Before formally requesting information in writing from a prior employer, make sure the prospective employee gives you permission to do so.  However, you may find that previous employers are relucant to give much information, often confirming only the employment, position and maybe salary.  (And yes, your company should have a similar policy with respect to your departing employees.)

From a fact checking perspective, think about checking out school experience (some people embellish their degrees or where they went to school); talk to the candidate’s former supervisor(s), if possible, who may provide more meaningful information than the company’s HR department; for sensitive jobs, check for felony convictions; and verify past employment (ensure the candidate actually worked at each of the companies listed, in the position listed, and check dates of employment).

Part 2 of this blog will offer helping hints for your hiring tool kit.

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What Happens to Your Business After You?

Many of you own your own business.  Have you thought about what comes next?  Both for you and the company?  With respect to your business there are only three options: You can die still owning it, you can pass it on, or you can sell it.  Many entrepreneurs fail to realize that without succession planning there is no value in the business.

There are four triggers that can create problems if not planned for in advance.  What happens if the owner dies?  What if the owner becomes permanently disabled?  What happens when the owner leaves?  And what if multiple owners cannot resolve their disagreements?

Succession planning calls for certain events to trigger a change, such as those in the preceding paragraph, and sets forth the method to determine the value of the company at the time of such triggering event.  Succession planning also encourages the owner to remember to dress up the business for sale at a later date.  The owner should start early in preparing both herself and the company for an eventual sale.

There are numerous steps in the selling process, from creating your team, finding a buyer, setting terms, determining the appropriate structure, financing, and so on.  The key is to plan, in advance, not to wait for a triggering event to set the wheels in motion.

In order to best realize the value of your business, run it with the objective of someday selling it.

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Five things to consider when hiring an eBusiness Managed Services firm

Challenges facing small and mid-market manufacturers:

Most small and mid-market manufacturers understand the value of an online presence, but they are facing other challenges in their respective industries just to stay competitive. Many are experiencing gross margins being driven down due to the lack of a skilled workforce and raw material pricing increases. Operating expenses are also rising as businesses spend time and resources in product development and innovation to stay cutting edge in their industry. This, combined with ever-increasing regulations and compliance issues, often pulls focus toward daily operations and does not allow forward planning.

Gaining a competitive advantage:

Selling “in-demand” products is no longer enough. Customers are demanding more and to meet those customer demands, it is vital to first anticipate their needs and second, to make doing business with you easier than doing business with anyone else. Finding creative ways to take work off of your customer and offering them something they can not get elsewhere is a good way to ensure they keep coming back.

Outsourcing your online strategy & customer engagement as an option

As a smaller or mid-size manufacturer facing these challenges, you may not have the infrastructure to optimize your online strategy around customer engagement. Turn that challenge into an advantage!

ERP Process ChartLarger enterprises are often slow to move and are tied up with enterprise IT systems which require much more planning to make changes. Robust, often turn-key technology solutions are now available to the SMB market at a 10th of the costs of enterprise systems. In addition, proven tactics and best practices in improving the customer experience and leveraging the internet to better engage your customers exist and can be easily implemented. All you may be missing is the know-how and diverse skill set to capitalize on these lower cost solutions and proven best practices.

At a much lower cost than hiring a full in-house team of diverse resources, hiring an eCommerce managed services firm gives you the best of both worlds. eCommerce platforms require constant updating and improving as your business grows and your needs change. Outsourcing your eCommerce efforts allows you to focus on your core business and on growing your revenue rather than investing your company’s time, money and resources into building and maintaining an ecommerce platform.

5 important considerations:

1. Executive level sponsorship: As a small or mid-sized manufacturer, you can not afford to delegate this to a staff member or manager to oversee. A successful engagement requires that your managed services firm understands the vision of your company. Knowing the strategic plan allows them to envision how to leverage the online channel to push your company’s vision and strategic initiatives forward.

The relationship with your managed service firm should not be viewed as a ‘staff augmentation,’ but rather as a partnership. Understanding online best practices often results in an out-of-the-box conversation to give your company a competitive advantage. A ‘just go do what I say’ approach is a waste of your investment and frankly a partnership any good managed service firm will not want.

2. Configurable options: Every company has different levels of technical or business expertise and a good managed services engagement will account for those skill sets already present within your company. From one end of the spectrum – a fractional eCommerce executive that participates in executive level, to the other end of the spectrum – more of an advisory role with someone more savvy with new technology.

Comparably, if your firm has design or development expertise, a managed services solution should account for leveraging your internal staff, as desired.

3. Integrated process: At a minimum, a managed services firm should meet with you quarterly to discuss business initiatives and online channel initiatives. These periodic strategy meetings should also involve brainstorming on how to capitalize on market opportunities and business initiatives.

In addition, it is imperative to meet with your managed services firm on a monthly basis to gauge their performance by reviewing agreed upon measurable metrics (increased revenue, cost savings, customer loyalty, brand exposure, etc.). A good managed services firm will have open lines of communication and have a process in place so that you may request, review the status of and update any current initiatives or discuss new initiatives.

4. Diverse skill set: A qualified managed services firm will have access to a diverse skill set to leverage for your online initiatives. This includes:

  • Digital marketing & usability experts
  • eCommerce Strategist
  • Technologists / platform experts
  • ERP/operations expertise
  • Systems integration expertise

5. Your Gut: Far more abstract, but perhaps the most important criteria is whether or not you are comfortable with the firm. Do you you think they have your best interests in mind? Do they act like an extension of your team? Do they treat you like a child or do they act more like a mentor or coach helping to develop your own expertise?

Are you comfortable with the on-boarding process or do you feel as though they are rushing the process? A good online managed services firm will take time and invest in learning your business, bringing ideas to the table, even start laying out a plan before you ‘sign on the dotted line.’

Conclusion

The two primary issues faced when investing in online customer experience and engagement solutions. – the cost of the platform/technology and the skilled expertise (strategic down to tactical) to capitalize on this – is now affordable and features robust solutions. Hiring the right eBusiness managed services firm gives you the ability to stay competitive with and even react quicker than your competitors, all at a reasonable investment.

Michael Moores

Written by Michael Moores

Michael is an entrepreneurial-minded and experienced eCommerce & commercial product executive with over 17 years’ experience working in technology-focused organizations of $5 million to $3 billion+ in gross revenues. He excels at business strategy, operational oversight and business development for e-business and commercial software solutions. Michael has been published in Chain Store Age, Business Wire, SmartBusiness and Mobile Marketer. He is the founder and CEO of Envalo.

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Successor Liability

Successor Liability: How It Impacts Your Business

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Gov. John Kasich signed House Bill 259 on Dec. 22, 2015, that included a provision helping to ensure entrepreneurs will not be penalized in the form of increased workers’ compensation rates, outstanding balances, or uncovered claims costs for assuming space that was previously inhabited by a completely separate business with negative claims experience. Our partners at The Greater Cleveland Partnership and COSE have been a long-time advocate for reforms on this issue in order to avoid unpleasant surprises related to workers’ compensation matters for business owners.

To date, business owners who started a business or who moved their business to a location that was previously occupied by a completely separate company may wind up inheriting certain workers’ compensation liabilities. A transfer of experience and/or debt—an Ohio Bureau of Workers’ Compensation (BWC) policy known as successor liability—had a negative and unanticipated impact on a business’ workers’ compensation costs.

With the approval of this legislation, the Ohio BWC will be required to reduce the transfer of negative experience to a successor employer under certain circumstances. And this legislation paves the way for relief for small business owners that are often unknowingly impacted until it is too late.

“Business owners have been blindsided when they inherited these liabilities after the move occurs and it jeopardized a small business owner’s ability to participate in certain workers’ compensation savings plans,” says COSE Executive Director Steve Millard.

Due to the passage of House Bill 259, Ohio law now instructs the BWC to establish conditions and criteria that might reduce or waive negative experience to be transferred to an employer who is a successor in interest.

“My company has opened four restaurants in Northeast Ohio the last few years,” says Operations Manager of Driftwood Restaurants Toby Heintzelman. “In three cases—and despite the fact that our company did not buy these businesses from the previous owners—we were surprised to learn that we were expected to pick up the previous companies’ workers’ compensation history. It made no sense. Moving forward, we’re encouraged that business owners will be responsible for the real risk they bring, not the history or disputes of former occupants.”

BWC also now provides a limited release of relevant workers’ compensation information before an acquisition or merger occurs. To help facilitate these requests, the Request for Business Transfer Information (AC-4) Form has been created. This form, which both parties must sign, allows the buyer to view any outstanding liabilities as well as the risk experience of the predecessor.

“The Governor, Ohio BWC, and legislative leaders like former State Representative Barbara Sears are to be commended for listening to the business community and acting on this issue,” says Millard. “The old approach served to prevent, or even worse, penalize new business creation in previously occupied or abandoned facilities. We’re confident these common sense changes will provide small business owners with greater clarity when they move to a new place or open up a new business which will help revitalize Ohio neighborhoods and lead to economic growth.”

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Secured Transaction, cont.

In addition to a sigsecured loanned security agreement, a security interest is not enforceable unless the secured party has given value, such as if the secured party provides the debtor with a loan, or sells or otherwise delivers goods to the debtor.

A security agreement may provide for past, current or future loans that a creditor may make to a debtor.  With the debtor’s consent, an existing creditor might obtain collateral for a past loan, and the earlier loan provides the necessary value. A security interest may also secure a loan made at the same time the security interest is taken. In addition, the security agreement may specify that the collateral will secure a loan that will be made in the future. If the creditor makes a binding commitment to make a future loan, that binding commitment provides the necessary value. However, if the creditor merely retains the option to make a future loan, value is not given and the security interest does not attach until the future loan is made.

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What is a Secured Transaction?

A secured transaction is a credit or loan transaction in which the borrower agrees to give the lender a security interest in the borrower’s property, known as the collateral.  If the borrower defaults, the lender (secured party) can take possession of the property and sell it to recover the value of the loan.  The security interest is a lien on the borrower’s property.  These transactions are governed by Ohio Revised Code Chapter 1309.

To protect its security interest, a secured party must “perfect” its lien, which is usually done by filing a financing statement with the secretary of state.  The secured party may sometimes perfect its lien by being in possession of the collateral, however in most situations this is impractical.  There are other complicated exceptions to the filing requirement set forth in the Ohio Revised Code.

Screen-Shot-2012-12-18-at-10.33.47-AM1By perfecting its lien, the secured party will be able to enforce the lien in the event the borrower seeks protection from its debts by filing for bankruptcy.  And even outside of a bankruptcy situation, the secured party will want to perfect its lien to protect the collateral from the claims of other creditors.

Chapter 1309 does not apply to mortgages or other interests in land.  Real estate mortgages are governed by Ohio Revised Code Chapter 5301.

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The Corporate Minute Book

corporate-minute-bookIt is important to keep your corporate minute book current.  It should include various important documents, such as the company’s articles of incorporation, bylaws, and minutes or written consents of all meetings and actions of the directors, committees and shareholders.

A current corporate minute book is a useful tool in helping you to comply with corporate formalities, which helps prevent shareholder liability.  In addition, in the event you want to raise money or sell your business, attorneys for the other side will likely want to see your minute book.

Problems to avoid include the following:

  • Minutes that the secretary has not signed
  • Written consents without all necessary signatures
  • No minutes for regularly scheduled shareholder or board meetings
  • Written consents authorizing execution of certain documents as attached, but failing to attach the documents
  • Failure to document calls or notices of meetings
  • Notices or calls of meetings that are legally inadequate
  • Shareholder minutes that do not reflect the number of shares present or how they voted
  • Resolutions showing board approval but not shareholder approval where both are necessary
  • Lack of authorization for issuing shares of stock

Keeping an up-to-date corporate minute book is not unduly burdensome, but well worth the time and effort.

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