Author Archives: Ray Silverstein

About Ray Silverstein

RAY SILVERSTEIN is an entrepreneur, author and speaker revered for his high business intellect and ability to communicate meaningful and practical concepts to those wishing to achieve success in business. As the President of Peer Advisory Training and President’s Resource Organization (PRO), he is instrumental in creating breakthrough moments for executives wrestling with an assortment of personal and organizational issues. Ray describes himself in metaphorical terms as both a corporate chiropractor, one who helps straighten out businesses and a corporate farmer, one who provides the corporate fertilizer that helps business grow. He currently presides over seven peer advisory groups in Chicago and Phoenix.

The Smart, Easy Way to Recruit Top Talent

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Recruiting Top Talent

We discussed how the key to making successful hires is to target applicants who share your core values.

This time, we ask: why wait for those hires to come to you?

The smartest, easiest way to identify great potential employees is ‘24/7/365 recruiting.’ It’s simple: even when you’re not actively hiring, keep your eyes open for people who impress you, and get their contact information as you go.

It’s like you’re building your own major league baseball team. You’re always scouting at some level, and you keep a running roster of possibilities. So when it’s time to trade-up, you have a leg up.

24/7/365 recruiting comes down to being observant and building a few good habits, which include:

  • Always carry business cards. When you meet an exceptional worker, give him a card and request his. Tell him upfront that he impressed you, and while you don’t have openings now, you’d like to explore future possibilities. At the very least, you’ll make someone’s day.
  • Keep your eyes open at trade shows, chamber of commerce meetings, not-for-profit gatherings, etc. At these events, you have a golden opportunity to observe a potential candidate’s skills, work ethic, and communication style, without a formal interview or aptitude test.
  • When calling on customers, take a peek at the sign-in book. It’s a goldmine. You just may find an experienced sales pro or two who already know your client or target market.
  • Review your company website. Does it do a good job of reflecting your goals, culture, and core values? Make sure it does, because it will draw the kinds of candidates you seek to you.
  • Research your market. Visit the websites of competitors or firms that resemble yours in terms of distribution or skill sets. Some companies list key employees on their sites. Use the wonders of LinkedIn to learn more about them.
  • When you come across finished work that impresses you-say, a highly-effective website or print marketing piece-find out who did the work and take note. When you’re ready to start a project like that, you already have someone in mind for it.

I have a great example of the benefits of 24/7/365 recruiting. One of my peer group members, Joe, often grabs lunch at a sandwich shop near his company.

Over time, Joe became impressed by one of the shop clerks, Adam. Adam was very careful, and cordial, and took his job very seriously.

At the time, Joe was dissatisfied with the performance and attitude of one of his employees. He found himself wishing he could find more employees like Adam.

Then Joe realized that, instead of finding someone like Adam, he could hire the young man himself.

Out of courtesy, Joe asked the sandwich shop owner if he would mind if he approached Adam about a potential job. As it happened, the owner was all for it. The young man’s wife was pregnant and he knew Adam was ready and eager for a bigger job and paycheck.

So Joe was able to let his non-performer go and hire Adam without missing a beat. Thanks to his proactive recruiting, what could have been a setback turned into an opportunity.

And that’s how 24/7/365 recruiting puts you ahead of the curve.

Get the new Small Business Toolbook – 25+ years of Advisory Group Expertise

The Most Important, Most Overlooked Hiring Question

The Most Important, Most Overlooked Hiring Question
by Ray Silverstein

Good news: it seems like more small business owners are shifting into hiring mode. That’s a good thing for everyone.

Now, the bad news. Many small business owners don’t really know how to hire the best candidate. And making a bad hiring choice is one of the most costly mistakes an entrepreneur can make. Consider the recruitment costs, training costs, and lost opportunity costs incurred when an employee fails.

In my experience, most small business owners dread the hiring process. So they adopt a classic HR-type approach, focusing on background, skills, and experience. They come up with tricky questions to pose to applicants.

Background, skills, and experience are important, to be sure. But they are not the most important thing. So what’s the #1 factor that drives a new hire’s ultimate success or failure?

What are the applicant’s core values…and do they match our company’s?

Think about it. Skills can be sharpened. Knowledge can be acquired. Processes can be learned. But the kind of person you are in your heart isn’t likely to change. If you hire someone who’s competent but doesn’t share your values, you’re almost predestined to part ways down the line.

For example, if your company prides itself on its ethical dealing with customers, you can’t accept an employee who places profits or efficiency over quality service. An employee who takes shortcuts when he can get away with it isn’t the kind of employee you can build your business on.

Or, maybe it’s the other way around. It’s not about right or wrong here. It’s about ensuring a good match. It means recognizing your core values, and asking applicants to share theirs.

Say, you’re hiring an office manager, and work/life balance is one of your priorities. Or, conversely, maybe getting the job done is, at any cost. Either way, wouldn’t it be good to know what a candidate would do if forced to choose between staying to push a key project out the door or attending his/her child’s big recital?

When you’re making your list of interview questions, include some that start with:
What would you do if…
Did you ever have to choose between…
What matters more to you…

…and address the issues that matter most to you.

And consider this. When an employee gives notice, many small business owners view it as a blow, a setback. But it’s also an opportunity to raise the bar. Focusing on the core values that ground your business is one way to ensure that your human assets are in fact…assets.

Interested in raising your HR IQ? Request my Human Assets Worksheet at ray@propresidents.com.

Email me at ray@propresidents.com to find out more about working with PRO Peer Advisory groups to find out more about the numbers and what is behind them.

Get the new Small Business Toolbook – 25+ years of Advisory Group Expertise

A Business Perspective

A Business Perspective

We’re all committed to working smarter these days. We’re busy cutting expenses, trimming the fat and streamlining processes whenever possible. But there’s one wasteful habit we’re loathe to give up. Many of us still want to sell to “everyone.”

These days, most entrepreneurs are thrilled to sell their wares to anyone who wants to buy them, and that’s fine. However, when you try to include “everyone” in your marketing message, you may actually end up reaching no one.

When you broaden your message too much, you risk watering it down to the point where it no longer resonates with your best prospects. That’s symptomatic of a lack of focus—a dangerous flaw to have, especially now.

Furthermore, small businesses simply don’t have the time, resources or staff to chase every demographic. The reality is you can’t sell to everyone. Nor should you want to.

Yet many companies continue to take a scattershot approach to marketing and sales, thinking they’re more likely to score a hit. The truth is, if you want to hit the bull’s-eye, aim with a rifle, never a shotgun.

How do you do this? Start by determining who your best customer is by reviewing your current customer base. Identify your “A” list customers, along with what makes them valuable. Describe them in as much detail as possible. What common attributes do they share? Is it age, gender or annual income?

If you are a B-to-B operation, you can use the same kind of process. Do you value large firms or small ones? Or companies in certain industries or areas? Keep thinking until you arrive with a detailed description of your target B-to-B prospect.

Next question: What draws them to your products or services? What needs do you fill? How do you fill them better than your competition and how can you improve?

By the time you complete this exercise, you should not only know what your target market is, but what message you should be marketing to that market.

The same philosophy applies to customer service. Are you exhausting your staff in an effort to provide exceptional service to all customers? That may be admirable, but it’s not very wise. Resources are limited, especially these days, and frankly, not all customers deserve it.

So figure out who is worthy of your best service. Start by classifying your customers in groups from “A” to “F” based on criteria that matters most to you. Is it a customer’s sales potential, profitability or payment history? Is it the ease of doing business with them?

Once you’ve classified your customers, analyze what level of service you’re providing to each of them. Logically, you should be reserving your very best service to your “A” list customers, but don’t be surprised to find you’re providing best service to your worst customers. Often, the demanding, difficult accounts are the ones you spend the most energy trying to please.

There is both a direct and indirect cost to servicing a customer. Delinquent accounts, demanding accounts and unprofitable accounts all represent lost opportunity. And while no one wants to lose a customer right now, can you really afford to let an “F” list customer put a drain on your organization?

And if you recognize that you’ve been taking some quiet “A” list customers for granted, maybe it’s time to shower them with more attention.

Targeting customers is yet one more way you can cut, trim and streamline your business. It will save you money, time and aggravation, but best of all, it will also position you for future growth.

 

Get the new Small Business Toolbook – 25+ years of Advisory Group Expertise

Small Business Owners – It Ain’t Over Til It’s Over

As Yogi Berra said, “It ain’t over ‘til it’s over.” He was talking about baseball, but he might as well have been referring to the recession. But, we aren’t out of the woods yet.

For most small business owners, outwitting the recession has become an obsession, and in many cases a necessity. It’s certainly a subject we discuss often in our PRO peer advisory boards. Even after more than a year, I’m still learning new survival strategies, while finding value in revisiting the tried-and-true. You never know where or how the next good idea will surface. And when things are this dire, you can’t afford to leave any stones unturned.

Have you done everything possible to transform your company into a lean, mean fighting machine? One that can withstand the worse economic conditions since the Great Depression? Are you still searching for solutions? Do you need help taking action?

With this in mind, let’s consider some simple-but-powerful recession-proofing strategies:

Know Your Cash Flow – Right now, every small business owner should be projecting monthly cash flow (i.e., incoming vs. outgoing funds). Managing via your Profit & Loss statement is fine under normal economic conditions, but right now, P&Ls can lull you into a false sense of security. Do you know what’s coming in, versus what’s going out? If not, it’s time to learn.

Really, REALLY Reduce Expenses – Have you slashed your expenses as much as possible, in every conceivable area? I recently broke down typical small business expenses into 35 categories, some obvious, some easily overlooked. Do you still have cuts to make, but can’t seem to take action? What are you waiting for? What will it take to make you act?

Ramp-up Collections – If you’re having trouble collecting outstanding receivables, you’re not alone. But your old methods may no longer be sufficient. Consider new approaches, from getting personal (how about sending your accounts a “roses are red” delinquency love poem?) to getting tough (as in, yes, refusing to deliver more product until the account catches up).

Conduct SWOT Analysis – When was the last time you took complete, objective stock of your business? After all, you can’t make improvements until you know what you’re dealing with. Now’s the time to buckle down and analyze Strengths, Weaknesses, Opportunities and Threats.

Set SMART Goals – The Boy Scouts were right: if you fail to plan, you plan to fail. The key to achieving goals is to make sure they’re SMART: Specific, Measurable, Achievable, Realistic, and Timely. Write them down, break them down into steps…and yes, get them done.

I recently achieved one of my own key business goals. I finished writing my new ebook. “The Small Business Survival Guide: How to Survive (and Thrive) During Tough Times.” It’s filled with all the strategies I’ve learned over the years and especially this last one.

You can buy it now at http://www.thesmallbizsurvivalguide.com/Survival_Guide.html. For a special introductory price of $11.95 (the regular price is $19.95), you’ll get the collective wisdom of the best business minds I know. Buy it…I guarantee you’ll learn something you can apply to your business NOW.

Work Smarter, Not Harder with the 80/20 Rule

Are your days so busy that you rarely get to the most important items on your to-do list? According to small business peer board members, success came easier once they learned to concentrate on tasks that matter, instead of spending time on trivial activities. They learned to harness ‘the 80/20 rule’ and if you follow their tips, you can, too.

It’s tempting to spend time on small tasks at the expense of the big ones. They’re easier to finish, for one thing, and it feels good to cross things off your list. But “doing” isn’t the same as “accomplishing.” The key is to prioritize your activities, so you’re investing your time and energies where it matters most. That’s where the 80/20 rule comes in.

“I found that with the 80-20 rule we concentrated our sales efforts on current accounts and potential accounts that would generate the bulk of our revenues.” says Pat Conway, President of Mr. Dee’s, Inc. of Libertyville, IL, Creator and Producer of Frozen Classic Potato Favorites that have delighted families across the county for decades.

Understanding the 80/20 Rule

You’re undoubtedly familiar with the 80/20 principle in one context or another.

The concept was first proposed by Vilfredo Pareto, a 19th Century Italian economist, as far as I know. After studying Italy’s economy, Pareto concluded that 80 percent of Italy’s income was generated by 20 percent of its population.

‘Pareto’s Theory of Mal-distribution,’ as it was first known, suggests that 80 percent of output comes from 20 percent of input. Turn it around, and it means that a small percentage of our efforts generate a large percentage of our results—a fact just about every PRO member has found to be true.

Apply the 80/20 Rule to Your Workday

Now, apply the 80/20 concept to the way you manage your time. Of all the activities you engage in on a typical day, what tasks create revenue for you? What is essentially trivial? Identify which activities propel you forward and which ones hold you back.

That “busy work” is destructive. Once you’ve identified it, you’re job is to figure out how to get it off your desk. Can you delegate it? Automate it? Outsource it? Forget it?

However, some of my PRO members find that there’s some ‘small stuff’ you can’t delegate. They’ve found that setting aside a fixed block of time to attend it, say, one afternoon a week, is a good way to keep it in its place. The goal is to keep your main focus—and big blocks of prime work time—to doing things that count.

Sometimes, we busy ourselves with small activities because we’re not sure how to tackle the big ones. In that case, create an action plan. Break a massive project down into small, concrete steps that you can tackle one by one. If you like crossing things off you list, this will work well for you.

Review Other Aspects of Business through the 80/20 Lens

It’s helpful to review other aspects of business this way, too.

For example, look at your customer base. What ‘20 percent’ of customers generate ’80 percent’ of sales? The actual number may vary, but the principle won’t. According to PRO members, the key is to analyze the characteristics that your best customers have in common, so you can target more prospects like them.

Or, consider what additional products or services you could be offering to these key accounts. How can you maximize the sales relationships that matter?

Or, study your workforce through the 80/20 prism. Are some employees doing the lion’s share of the work while others coast? Use this knowledge to manage your employees more effectively and ramp up productivity.

Put It in Writing: PRO’s 80/20 Worksheet

Your time and energy is finite. Applying the 80/20 Rule to your workday can help you use both more effectively. Be principled about it—put it in writing.

Would you like to attend a free PRO peer board meeting?

 

Business Structures

2 Small Biz Guys engage a pretty dry subject with a little flair – business structures. Although the topic is about as interesting as watching paint dry, business owners have to face the fact that their business must have some legal structure. We are not attorneys and you are advised to consult both an attorney and CPA when determining how to structure your business.

The basic business structures include Sole Proprietorship, Partnership, C-Corporation, S-Corporation, Limited Liability Company, Trusts and Employee Stock Ownership Plan. The structures move from very simple with complete liability of the business owner to somewhat complex and less direct liability. Often businesses go through a progression or evolution from one to another over the course of the business’ growth. We discuss the various forms and the distinctions of each regarding personal, financial and tax liability.

Initially, determining a business name requires various legal forms, checking with the Secretary of State for the availability of the name, and filing appropriate paperwork with the State Corporation Commission. Every state is slightly different yet very similar in the process. For branding purposes, your business name should be descriptive and distinct regarding the business itself. It’s always best to describe what you do in your business name.

We close the show talking about the growth of holacratic businesses, like Zappos, and their challenges as Millennials take over the world.

You will find some useful information in our discussion and perhaps gain insight toward your own business path.

Winning Over “Impossible” Prospects – Entrepreneur Magazine 08-29-2007

It’s a familiar situation: You have a sweet target prospect you’d love to land, but you can’t seem to make any headway. You don’t know how to start a relationship. What can you do to create a beachhead or get your foot in the door?

Read more: http://www.entrepreneur.com/article/183462#ixzz2WVPWNhlM