Full Disclosure

In recent discussions with several people, I’ve noticed a trend in certain small businesses. Since there is significant amounts of paperwork and filings associated with hiring an employee, some companies choose to hire their workers as contractors, thereby reducing the obligations between the two parties. Additionally, it allows for more fluctuation in workload, while achieving consistent work by working with the same people all the time.

One of the side effects of this, however, is slightly problematic. Because the contractors are in the same business as their clients, providing a similar set of services, the contractors will want to pursue their own clients. Normally, this would not be an issue, since a standard non-compete clause would protect the employer from losing their own clients to their workers. Here, however, that may not suffice.

Any time the contractor brings on another client, a question must be answered as to whose client that person is. Does is belong to the contractor, since they operate independently of the employer, or does it belong to the company to which they are contracted to?

The advice below is a suggestion, and is not intended to be taken as legal advice. Please consult a lawyer before implementing any of the suggestions below.

One strategy I’ve seen implemented successfully is to create a limit on the size of a client the contractor can take on, and request full disclosure. For example, a company that builds large websites might allow its employees to take on projects under $2000 because they would not pursue such clients in any case. Larger than that and there may be a conflict of interest in addition to creating a distraction while the contractor is supposed to be working for the company.

The catch here is the disclosure – by having employees report all business they are doing on the side, it creates a legitmacy to their side business. At the same time, however, many employees may be reluctant to hand over their project list like that.

The second part, therefore, is in regard to when the employee does in fact bring in a client. Since there is a referral here, it should be treated as such. There should be a known rate for referring a client – either a percentage of the project, or a flat fee on a schedule based on project size.

Whatever the case may be, if you find your employees working on side projects behind your back, beware. Make sure you have a known policy in place that’s fair to both you and the employees, and that it is documented and enforced.

Negotiating a Raise

Many employees, having put in their time working at a perceived discount rate, begin to mull the possibility of getting a raise. The thought process involved often involves self-justification in terms of what they deserve or are entitled to. The walk to the decision-maker and subsequent bursting of the balloon leaves them upset, perhaps to the point where they leave the company and find another job, only to repeat the cycle a short while later.

In response to that, this article is intended to provide food for thought when thinking about negotiating for your next raise.

Timing

When asking for a raise, try to time it so that the request coincides with a recent success for the company that you were critical in pulling off. While those thoughts are fresh in people’s minds, it’s easier to convince others of your value to the company. The success should be in proportion to the nature of your position and the amount of a raise you are trying to get.

Additionally, some companies have policies they follow when giving raises – they may only be granted at certain times of the year (often coinciding with an annual performance review). Make sure you are familiar with the policy, and work within it. If they are tied to performance reviews, you may want to negotiate for an early performance review instead of negotiating directly for the raise.

Last, don’t forget the person you are actually negotiating with. Book a time with them when you will be able to present your case for a raise. Make sure that you won’t be interrupted during your meeting, and that as far as you know, the other person has not been having a bad day. If you feel they are not in the mood for such a discussion, ask to reschedule your meeting for another day.

Value

If you’re asking for more money, it’s only right that you prove that you’re worth the additional cost. Remember, the boss is not in the business of supporting other people, they’re in the business of making money. As such, if the increase in profits is marginal as a result of your work, don’t expect more than possibly a marginal increase in pay.

One thing that is often difficult for people to understand is the inherent value of the position they hold in the company. An employee doing a certain type of work has a value that is measurable. At the end of the day, the maximum value of a given employee is a function of the cost to replace that employee with one or more other people. A job well-done is not enough to merit a pay increase, but a job done in a fraction the time budgeted is. The reason for this is that employees are paid to do their jobs well, but if they can increase their productivity without sacrificing quality, then they’re worth as much as the increase in productivity.

Entitlement

The only thing an employee is entitled to is what’s stipulated in their contract. In regard to pay, that amount is fixed. Any negotiation that starts with the words “deserve” or “entitled” or “fair” are unlikely to succeed. Present your case why you’ve earned a raise, and then let the boss decide to give you what you deserve, or what’s fair. At the end of the day, if you truly believe that you are not being treated fairly, you can choose to go elsewhere to find employment, somewhere where your value will be appreciated and rewarded.

Don’t Ride Along the Fence

I’m surprised to learn on a regular basis about yet another company that was caught doing something shady (or, in many cases, flat-out illegal), and is then somewhat perplexed that they got caught. Dubbed cynical by many people, I still find it surprising that more people have not learned to adapt to the fact that the truth will come out.

As I have continually advised people, it is wise to run your life as if everything you do is known by everyone. That is, assume you are completely unable to keep a secret, nor is anyone around you able to contain a secret. With such an attitude, you will rapidly discover that your choices, when it comes to ethics, become a lot clearer. In this age of information freedom, there is a strong likelihood that the above attitude is correct in any case.

This applies to all aspects of life – spouses having affairs, students cheating on tests or assignments, employees thinking about placing their hands in the till.

I don’t claim to be perfect. This way of thinking, however, has motivated my methods of working – keep it honest, play it straight, and don’t even think about bending the rules. With that backing, it’s much more difficult to find yourself in a situation where you may be embarrassed by having taken certain actions.

Growth, Expansion, and the First Hire

Perhaps the hardest decision made by the owner of a growing business is regarding the first hire. It’s at this point that the stakes in the business change, from being responsible for yourself to being responsible for employees. Where before a lack of business meant that you personally didn’t get paid, now there are other people relying on you to pay them.

The first part, though, in deciding to make a hire, is to determine whether it’s financially worthwhile to hire someone. In general, an employee must bring in about 3 times their salary in increased revenues. Not from the first day, of course, but over a relatively short period of time. As such, the decision to hire is often preceded by an increase in the amount of work to be done, coupled with an increase in the base amount of work available.

The second part is the creation of a buffer. A business that has an operating line of credit can often handle the buffer through that – if not, a reserve of funds for a rainy day must be put away. This can be quite difficult, since it requires adjustments to be made that affect cash flow.

Third is the locating of the third employee. This is where your network can come into play. Pushing out a message to your network clearly indicating the nature of the work, the type of person you’re looking for, can help generate some leads, while there is always the option of using a paid service. This will rapidly be followed by the selection process for an interview, the interview itself, and making a choice. The task here may seem daunting, and the unwary business owner may choose to take some shortcuts and just hire someone quickly.

This has the potential to create problems later on, as the choice made is quickly realized to be faulty for some reason. Without careful preparation for the legalities of hiring someone, this can prove to be extremely costly. Additionally, there are decisions to be made – hire a contractor, or an employee? What are the legal and tax ramifications of each route? What will the costs be?

The only sure thing here is to first, make sure you can afford to hire someone, second, make sure you know what type of employee you need to hire, and third, make sure you speak to your lawyer and accountant to be sure you do it right.

Managing Multiple Projects

In recent weeks, the number of projects I’ve been involved with has rapidly grown, from the few constants and a couple small projects, to several large projects, a few smaller projects, and a constant turn-over of hourly projects. When I sat down one day to work, and realized that I had 8 active projects to work on personally that day, I spent a few minutes thinking about how to approach all those projects, and keep all my clients happy.

The problem is actually one that many small businesses that grow face at some point in their transitionary period – where the word becomes more than one person can handle, and yet there is not quite enough work, or enough regular work, to justify employing another person to help out. A typical work-work goes from 40 hours to 60 hours to 80 hours – and there is still a reluctance to hire someone, despite the fact that there’s enough work for two. I digress, though, as this is the topic of another article regarding growth, expansion, and the first hire.

The first thing I did when I realized that I had more demands on my time than I was able to track was that I wrote down a detailed list of all the projects I was working on. For each project, I wrote down what the next few tasks were, and if there was a real deadline involved.

Each morning, I would clear the list of all completed tasks, and add in the next set of tasks for each project. I would then figure out which tasks were most important, and therefore had to be done immediately, which projects I hadn’t worked on in the last few days, and therefore deserve attention, and which were waiting for some other input out of my control.

I found that merely creating and looking at this list increased my productivity, for a few reasons.

First, it gave me the ability to clearly see where I stood on each project.

Second, it reduced the likelihood of me forgetting a project, thereby impacting relationships with my clients.

Third, it helped me by providing satisfaction at marking another item as complete, limiting the number of items I would start one day and leave hanging, incomplete, until the next day.

A piece of advice given to me by Jeremy Lichtman of Lichtman Consulting was as follows. Make sure you work every day on every project, even for a few minutes. The reasoning is that by putting in some effort every day, even the low priority projects will get worked on, as well as the projects that have become irritants. Otherwise, you run the risk of having low priority projects never get completed until they become high priorities, which is usually at the expense of a client relationship.

Do you have any other suggestions to share? Please comment, I would love to hear from you.

The Ideal Management Team

Working with several businesses at various stages of development, as well as many projects that are to become the basis for future businesses, I’ve discovered something interesting about management teams. Every business or project has one, even if the entire company consists of a single individual. However, what I’ve discovered is that there is a consistent pattern in the management team that correlates to the success of the business as a whole.

The first thing I noticed was that businesses with only a single person involved in the decisions tended to limit their own potential. The reason for this seems to be a function of egocentricity, in that the manager of the business does not have someone to bounce ideas against, nor are they forced to recognize their own fallibility in their decision-making processes. With multiple people involved in making decisions, more thought is generally required of any decision made, thereby preventing certain errors from being made.

The second thing I noticed, which I found to be more interesting, had to do with the division of the management team. In a business with longevity in mind, a part of the management team must concern itself with the long-term plans for the business, while another part of the team must concern itself with the short term planning. The way I’ve come to look at it is the strategic and the tactical divisions of the management team.

In the tactical team, the key components of a perfect team include the ability to complete given tasks, to look for rapid feedback, and to execute plans of one to two years in length. The tactical team is not concerned with what happens to their work in the long-run, rather, that in the short-term, they prove to be as useful as possible. This may be in the form of becoming cash-flow positive as quickly as possible, the completion of short-term projects, or getting feedback as effectively as possible.

On the strategic team, the key component is vision. The management team here must look to the future of the company, five or ten years in the future, and where they would like to position the company in that time frame. They can then break that down to a sequence of short-term goals, which would be given to the tactical management team to execute. The strategic team would place controls over expenditures in the short-term, they would set goals and milestones for the company to ensure it will reach their vision.

On occasion, a company will have only two or three people managing the company. While this is perfectly normal, what they must be aware of is whether the members of the team have a tendency to focus on the short-term or the long-term. If the answer is the former, they should be made part of the tactical team, if the answer is the latter, they should be made part of the strategic team. Certainly, some people will cross both teams, which is important, but each person should have a primary area which they treat as their home-turf.

The Personal Brand

Sam ZipurskySam Zipursky is a Brand Consultant, Internet Marketer, and aspiring Digital Nomad. He spends most of his time focusing on the connection between internet, branding, design and marketing. He is one of the authors from the how to become a consultant blog Business Consulting Buzz. He is also a Co-Founder with Advicetap – The place where Canadian marketing and creative professionals find gigs and build connections with other professionals.

These days more than ever it’s really important to have a personal brand strategy in place. Whether you’re a freelancer, consultant, small business owner, or even someone working at a large corporation, it’s crucial to not only understand what it means but also be thinking about and applying what you know.

So what exactly is your personal brand?

Simply put, your personal brand is how the world around you sees and remembers you. For the point of this blog post I’m referring to what happens when someone types your name into Google? Do you get desirable and consistent results? Results that you control? This means thinking about all the information you have out there online – Twitter account, Facebook, Linkedin, Blogs, Websites, etc. The name of the game is here is consistency.

Grab all internet real estate with your full name

The first step is to take your full name and apply that to everything you do from your domain name, to your blog URL, to your twitter and LinkedIn accounts. For me I have uncommon last name so it was easy for me to register www.SamZipursky.com, www.Twitter.com/SamZipursky, etc, etc. If you do have an uncommon last name like me then you should make sure you register all your accounts like I have as it’s the best way to control the search engine results.

What if my name is already taken?

While it’s not ideal, don’t panic there is still lots that you can do. Think outside the box here. Can you use your initials to make it all work? Can you throw in what you do at the end of your personal brand? So for example if my name was already taken and registered maybe I’d go with www.szipurskydesign.com, www.Twitter.com/szipurskydesign, etc. I’m a designer so I would use my first name initial, last name, and then what I do. I think you get the point!

Things to remember

Once you choose the user name you want to go with and it’s available, stick to that with all your personal websites and online accounts. Of course when you’re designing your websites and filling in your profiles you should still fill in your full name and details (as this is how Google will know it’s you). The point here is that you have a consistent user name that is easy to associate with you and what you do across all your different online accounts.

Conclusion

I’m just skimming the surface here on how you can establish your personal brand online. If you remember one thing from this post please remember to be consistent in all your online profiles. Also if you want to learn more about this important subject there’s an amazing blog by personal branding expert Dan Schawbel www.PersonalBrandingBlog.com

Writing Proposals

I recently had reason to draft a proposal for something out of the norm for my line of work. I was asked by a family member to assist in writing a formal proposal for an after-school program, with the added twist that the program had already been approved in principal, pending the formal proposal. Not really familiar with how such documents are written and structured, I spent some time reading through templates and examples, and finally assisted her in writing her proposal.

What I discovered along the way is actually pretty simple. There are two parts to a proposal – content, and context.

The content of the proposal is intended to answer a few basic questions regarding what is being proposed. It usually starts with a general summary, followed with some details regarding the proposal itself, some discussion about the benefits to both sides. There will be a section with supporting documentation, and another about the merits of working with this particular provider, along with a summary of the qualifications of the provider.

The content alone is not sufficient to win a proposal, though. The context is also important.

The context is how you present the material. It doesn’t need to be fancy, or presented in a particular style. It does, however, have to impart additional qualifications about the author. A graphic artist would make sure it’s in a style that showcases their skills as an artist. A financial planner might include some portfolio summaries. In all cases, there will be a single page that can be used by all readers of the proposal to find the information they need to make a decision.

One of the suggestions I made regarding the writing of the proposal was to keep the sentences short and the paragraphs simple. There should be frequent headings, and the entire document, in this case, should not exceed 3 pages (not including the cover). The reason is basic – the document became easy to read, thereby increasing the chances that it would, in fact, be read in its entirety. The frequency of headings resulted in the document being easy to navigate – and negated the need for a table of contents.

Do you have any tips for writing good proposals that you want to share?