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Everybody who has ever attempted anything has failed at least a couple of times before they actually succeeded. In the words of author, inventor, and consultant Dr. Edward de Bono, “It is better to have enough ideas for some of them to be wrong, than to be always right by having no ideas at all.” And sometimes your ideas will be wrong, and your plans not work out as you anticipated. However, the sum of our failures is equivalent to the mass of our opportunities to learn. The real trick is dealing appropriately with failure so that it becomes a strategy to eventual success rather than an unassailable impediment to it.

The first thing you need to consider in light of a failed business venture is to address secondary causes of stress. Keep in mind that you may need to make some adjustments to your life now. This may require moving, re-budgeting, examining your savings, changing your kids’ school, or any number of other alterations to your life that when viewed in context of “this is because I failed” add up to a lot of guilt and depression. Take each of these tasks one at a time and do them as separate from your business. Dealing with these smaller things will not only make the larger issue seem less important, it builds a momentum of successes with things that you can accomplish, helping to reshape your confidence.

The next thing to keep in mind is that while your business may have failed, that does not make you a failure. A huge part of business is confidence, recognizing your own worth and the value of your product. You’re undermining your future by seeing yourself in terms of failure by preventing yourself from projecting the confidence that is necessary to succeed. This will hinder your ability to find a new job, to start a new company, and reduce your social interactions. Actively work on divorcing yourself from the concept of failing will help keep you positive and ready to take on new challenges.

Finally, don’t become desensitized to the idea of failure. Yes, it hurts a lot when we don’t accomplish our goals. It’s supposed to hurt. That pain is the catalyst we need to pick ourselves up and try harder so as to avoid it in the future. Once we accept that failure isn’t so bad, that there’s no difference between it and success, then we lose one of our major motivational tools. More to the point, you have no impetus to learn from your mistake, to examine it for ways to avoid doing the same thing over again, and you no longer have as great a stake in your endeavor.

To try is to risk failure, and nobody wins all the time no matter how hard they try. It’s as true in real life as it is in great literature. It’s what we do with those failures that shape us and determine if we will succeed in the future.

Everybody has had that moment of pause when contacted by a potential new client. There’s something about this person that doesn’t seem quite right, something just a little off, and you can’t help but feel that they might not be best for your company. However, times are tough, new clients are scarce, and it’s usually a bad idea to turn down a potential source of income based on nothing more than a gut feeling.

When you get a client that you are unsure of, try asking them some fairly simple questions which will help you better understand who they are and what they’re looking for.

1. How did you find me? This first question is by far the most important. If they’ve been recommended by somebody else in the field, then you have somebody else you can ask about this person. If they’re responding to your advertising, at least you know they are consumers of the kind of media that you advertise in. Knowing how they came across you goes a long way in establishing their bone fides that they are legitimate clients.
2. Have you ever worked with somebody in this industry before? Again, this is a good way to find a potential reference for this client. If they haven’t worked with anybody in the field before, find out why they’re suddenly coming to you. If they have, find out why they’ve decided to seek you out instead of continuing with their current professional.
3. Was your previous experience helpful? If it wasn’t, this should be a major red flag. Why would your services be any better than the person before you? If they were good and helpful, why find a new person? Knowing if they were actually able to take advantage of the skills of somebody in your field will go a long way toward actually helping them and give you an idea if the reason they’re changing professionals is because of them.
4. What did and didn’t work about your last experience? This last is important, since it’s not just about what happened that caused the breakdown of the previous working relationship. It’s about how you can, if this person turns out to be a legitimate client, improve on their previous experience.

And that seems to be part of the purpose of these questions. Not only will they give you a basic idea of who you’re working with and a lot of information that can help you make a decision if this is the kind of client you’re looking to work with, they can also give you an idea of how to succeed where others have failed.

You should always trust yourself when it comes to screening new clients. It won’t always be easy to do, but it’s better than taking a risk that may have an adverse affect on your business. Asking a few simple questions could go a long way toward putting your mind at ease or confirming your suspicions. Either way, it’ll be better for your company to take the time to be careful.

Part four in my multi-part series on employee relations.

When it comes to running a company or even managing one, it’s easy to see yourself as the head of a complicated body of workers, all of whom look to you for guidance because clearly you’re the only one who has the vision for how to make the company work. However, this is really little more than an ego problem, and one that continues to bring down otherwise good corporations.

Companies that empower their employees to make decisions, take a stake in the company, and be a part of the events going on around them find that costs are lower, efficiency is up, turnover is down, and they can do a lot more with a lot less. The reason is that employees feel that their work actually matters and they aren’t little more than a face to some otherwise mechanical entity. Here are a few methods for empowering your employees that other large businesses have used successfully.

1. Teach even entry-level employees the basics of management practices and give them the authority to do things often reserved for management, like closing a location or implementing ideas that might increase efficiency. Maybe even let them have a say in hiring, or design a role for some of your employees in the hiring process. Most importantly, pay them more when you give them more responsibilities. Let them associate increased work with increased wages.
2. Have an open-book policy regarding your financial records, especially expense accounts. Let your employees see where money was coming in and going out, who it was being spent on, what sorts of discounts people were getting, etc. Dorian Drake International implemented this plan in 2002 and some of the immediate benefits were that employees noticed that some departments were getting vendor discounts others weren’t and pressured the company to negotiate for everybody. Also, travel expenses were severely cut, at least partially because everybody in the company would see how much you spent on business trips.
3. Give your employees the authority to spend money. If there’s a customer problem, let them solve it up to a certain amount without having to go through management for authorization or, worse, higher levels of bureaucracy. It doesn’t have to be a large amount, but the ability to give away something free or correct an issue caused by your company without adding a wait for approval on top of it ensures better customer satisfaction and will help retain clients, if not also garner referrals.
4. While this isn’t a solution for all businesses, some places might benefit from de-structuring the workday. Allowing employees to work hours that they are comfortable with and setting concrete goals with deadlines that they have to meet is a good way to relaxing the pressure on them and allowing them to produce most efficiently. If it isn’t necessary that they work along a set schedule, focus on a more results-oriented approach to scheduling and let them work out how to get it all done.
5. Skyline Construction has an innovative idea: let their employees choose their salary. They could pick a salary from within a specific range. The advantage to taking a lower one was that it gave them the opportunity to earn a higher year-end bonus if the company met certain goals. Many employees took lower salaries throughout the year, but worked harder to meet and exceed those company goals, many earning more as a result of their bonuses than they would have if they had taken the maximum allowed wage.

These are only some ideas of what you can do to make your employees feel as if they are a real part of your company. You can’t do everything yourself, nor should you try to. Give your employees a little extra responsibility and they might just surprise you with how they run with it.

Another part in my multi-part series on employee relations.

One of the toughest things that a manager has to do is motivate his or her employees. It’s difficult, especially in lean economic times, to encourage employees to work their hardest when there is very little that you have to inspire them with. The traditional concept of “the carrot and the stick” no longer applies, as carrots are in remarkably short supply and the stick of having to potentially find work in such a dismal job market is so constant as to have either desensitized workers to the possibility or, more likely, simply allowed them to be beaten down, losing the will to strive. Instead of trying to work with the outdated concept of offering reward while threatening punishment, try finding new ways to motivate your people.

The first thing you can do is give your employees a sense of autonomy. Everybody wants to feel as if they have control over their own lives, their own futures. Part of the problem with lackluster performance is a sense of no longer having any choice in their future. Again, the constant threat of being out of a job leaves employees with a sense of being at the whims of outside forces, and giving your employees a measure of control back will create a haven from that feeling at work. Let them have control over their hours, give them some control over what projects they can undertake, give clear instructions then let them deal with the work on their own, and don’t micromanage.

Next, give them specific goals to achieve. A worker who can accomplish a task, reach a goal, gains a sense of mastery over their own work. My giving them the opportunity to learn new skills and get better at them, they’ll continue to pursue learning and get better at things that they feel matter. Training programs, department exchanges, and inter-team competition are all things that can be used to foster a sense of mastery, to make employees find new, better ways to achieve the goals the company wants to meet.

Finally, give them a sense of purpose. It’s easy to get into a rut at a job where you feel that your actions show no tangible results. Why should a call center employee work harder to deal with more calls when their contribution is largely meaningless when considered with the hundreds of other people doing the exact same thing? It’s easy for employees to feel as if they have no impact on the company and therefore have no incentive to excel. Try opening the financial records of the company to employees so they can see what they contribute to. Offer bonuses throughout the company based on merit (this includes at the upper levels) rather than by contract or standard throughout the company. Make sure your employees know how well the company is doing, how they contributed to that, and how they can meet the new goals you set.

Motivation seems like it’s a tricky thing to deal with, but really it’s a matter of empowering your employees and bringing them into the company. Make them a part of what you’re doing, show them that you value and trust them, and that they are important parts of your business, not simply a means to an end. Treat your employees like intelligent human beings and they’ll work hard to meet your expectations.

And now for part two in our ongoing series on employment and employee relations:

Running a company in the United States means that there are a lot of bureaucratic hoops to jump through. Most of them involve filing paperwork, sending information into the government, and allowing people to keep track of your records so that everybody pays their fair share. Some of the requirements you have to meet are educational, however, and it’s important that you take the time to properly train your employees so they’re aware of the potential risks they might face on the job.

The first thing you have to ask yourself is, “Who sets the standards for training?” Obviously somebody has to decide what qualifies as federally acceptable training, both in terms of quality and content. The answer is that this is determined by the US Department of Labor’s Office of Occupational Safety and Health Administration (OSHA). They are the ones who decide exactly what is important for every US worker to know in every conceivable type of corporation. Regardless of what you do, there are certain types of training you will be required to have, and in specific industries there is additional knowledge you will need to know. More importantly, as a company owner, you’ll have to make sure your employees know it.

Before you even consider hiring employees, start at OSHA’s website and take a look at the materials you’ll need in order to properly train your employees. The OSHA Compliance Assistance Quick Start is a wonderful guide that will be able to help you pick the industry that you’re in and the types of training that might be required for it. Construction and Health Care are vastly different from other industries and have a different set of regulations that you’ll have to follow in order to be considered in line with federal requirements.

The next question you should ask is, “How am I supposed to actually train my employees?” If everyone trains new hires the way they want, there is no guarantee that the same information is being passed along or that it’s being done in an efficient and effective manner. It would be far too easy for a business owner to give a five minute rundown to an employee still on the job that can be misinterpreted or simply missed. Either way, there is a solution to that as well.

To quote their website, “The OSHA Directorate of Training and Education (DTE) develops, directs, oversees, manages and ensures implementation of OSHA’s national training and education policies and procedures.” What this means is that they’re provided the training and reference materials you need in order to make sure that your employees are up to date on federal safety requirements and the processes involved in maintaining them.

This is by no means comprehensive. Federally mandated training is not difficult to do once you understand what does and does not apply to your company, but it is vitally important to stay in compliance with the procedures. It’s also important to ask questions. Spend time browsing through the OSHA resources and getting an idea of what is required for you, and if you have questions, contact them and ask. You have nothing to lose and everything to gain by spending a few minutes familiarizing yourself with these regulations.

I’m beginning a multi-part series on employees and how to handle them today. Hopefully my readers will find these articles interesting and helpful in dealing with your own employees.

When you’re working for somebody else, the hiring process seems very simple. Turn in an application, go for an interview, fill out some tax forms, and you’re now part of whatever company you applied for. It’s easy for most employees to go through. However, as an employer, there are many more steps to be taken in order to bring that one person into your company.

The first thing you need is an EIN (Employer Identification Number). This is a way for the IRS to track who you are and how many employees you actually have. It also is necessary for reporting to state agencies. The IRS provides a wonderfully helpful guide on how to go about applying for one on their website, so take a few moments and find out exactly what you need to qualify.

Next you need to set up records for tax withholding. Now that you have employees, it’s your job to keep records of employment taxes for four years on all of your employees. You’re also required to have them fill out form W-4 in order to determine how much tax is being withheld from each check. Once a year, employers must also report to the federal government how much tax has been withheld from each employee in form W-2. Copy A should be sent to the Social Security Administration no later than the last day of February (last day of March if you’re doing so electronically), and a copy should be sent to employees no later than January 31st of the year following the one being reported. State taxes should be looked up by contacting your state tax agency.

The next important step is to make sure your employee fills out an I-9 form. This is a form designed to check for an employee’s eligibility to work in the United States. By federal law, it is the employer’s responsibility to verify this information, and they can do so by entering the data from the form into the government’s E-Verify system.

According to the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, employers must register new hires and new re-hires with their state’s reporting agency within 20 days. This is a relatively simple process, and instructions for it can be found here.

You are also required to get various types of insurance, including Worker’s Compensation coverage either through a commercial carrier on a self-insured basis or through your state Worker’s Compensation Insurance program, and Unemployment Insurance taxes, which can be determined by contacting your state’s tax agency. Also, if you have employees in California, Hawaii, New Jersey, New York, Rhode Island, or Puerto Rico, you’ll need to obtain Disability Insurance.

Once you have employees, you are now required by law to post certain notices in your workplace that inform your workers of their rights and your responsibilities to them. The posters are available for free from both federal and state labor agencies, and you can find the ones you’ll need by following this link.

As an employer, you now have many more tax forms to fill out, including but not limited to quarterly filings that must be made to indicate how much income tax, Medicare, and social security withholding you did for every employee. This requires you to file IRS Form 941 or 944 depending on how much you paid, an Employer’s Quarterly Tax Return, and several more besides. The federal government provides a good guide for what sort of forms you need to fill out on their website.

Of course, the mechanics of employment are not the be-all, end-all of being a good employer. It’s important to maintain a positive workplace, provide benefits, encourage workplace safety, and learn how to best manage your people. A lot is involved in having employees, but they’re also necessary if you want your business to grow.

Far too often, I’ve been seeing a disturbing trend of the idea of greed being confused with success. Business owners should be allowed to make money and when they work hard, they should be rewarded for that hard work. It’s a basic imperative to want to do better for oneself, and the accepted method for accomplishing this has always been to contribute to society in some meaningful way. However, more often than not, I see too many people upset that they won’t be able to pursue greed as an objective.

Let me be clear on this point: providing a quality product or service for a reasonable price and gaining the trust of the market is success. Finding ways to strangle competition so that you can provide a poor product or service once you’ve cornered the market and then raising prices or creating pools with other companies in your industry to prevent prices from dropping too low is greed. Rationalizations may seem to alter these definitions, but there’s no substitute for actual business ethics that seem to be sliding in our society.

If bonuses and contracts are sacrosanct, then we must also consider the work itself to be just as much so. If we are to reward success, we should punish greed in equal measure. Slippery slope arguments are all well and good, but instead of worrying about the potential for future abuses, it’s time to address the abuses we see currently. If we’ve come to the point where it’s no longer clear which is which, then we’ve already slipped far past the line of acceptable behavior on the other side.

I wish all people in business success. I hope that your companies grow, that you become well known and even beloved by your customers. I honestly wish success on every business owner. However, the moment that you forget that your job is not to make money, but rather to provide for your customers, you’ve lost sight of what’s actually important. Ethics are not an inconvenience, but an obligation. Don’t confuse success with greed.

So, you’ve worked hard for several years now. You’ve built up your business from nothing, creating a company that rests firmly on the standards of low cost, quality…whatever. You saw an opportunity and you took advantage of it, and now you’ve got a great business at your command that’s…starting to lose revenue. What happened?

So often in business we see success as a goal, something to focus on and achieve. The question becomes, once we achieve it, now what? So you’re a big success, your company is well known and doing great, does that mean you keep doing what you’re doing? Absolutely not.

In business, it’s not a matter of not fixing what’s not broken, it’s a matter of continuing to move forward before something breaks. It’s easy for us to believe that once we’ve accomplished our goals it’s smooth sailing from here on out, but if your company doesn’t continue to innovate or moves away from the standards that made it a success in the first place, it can and will still fail.

Look at Microsoft for a moment. While I never liked IE, they found a way to make it the premiere browser worldwide, primarily by integrating it into their OS. Good move on their part, and they drove Netscape into obscurity. Then they got lazy, assuming that nobody could possibly intrude on their browser supremacy. Which is when Mozilla arrived on the scene with a quicker, more user-friendly, more adaptable browser and suddenly Microsoft had to scramble to catch up to features like tabbed browsing. Now Mozilla commands a quarter of the browsing market.

Worse than not innovating is allowing your quality to slip. This is a trend I see a lot in companies who feel that they’ve done so well and become such a widely recognized commodity that they feel they can start cutting corners and lose track of what made them a success in the first place. How many of my readers remember A&Ps? How about Woolworth’s? Anyone ever fly TWA or drive a Studebaker? For my younger readers, ever shopped at a Circuit City location? No matter how big and well known your company is, it can still go under.

On a recent trip to Savannah I passed by The Lady and Sons (celebrity chef Paula Dean’s first restaurant) and noticed the misters installed to keep lines of customers cool while waiting to be seated. I asked about it and was informed by my resident friend that while this famous place that was built from a bagged lunch business used to be excellent, since Deen abandoned watching the day-to-day operations, the food and service quality have gone way down hill, and they basically survive on the publicity garnered by their famous owner. So much so that employees have to learn more about the face of the restaurant than the food served there.

There’s nothing saying that if you build an enterprise from scratch or even build it up from where you got it that you don’t deserve to enjoy your success, but if you feel that success means no longer running your business or trying to improve it (without over-extending yourself, but that’s another article), then it’s time to sell the business or pass it along to somebody who will continue to grow it while you happily relax and enjoy the fruits of your labor.

I often focus my blog entries on American business topics. This is easy to do for several reasons, the first being that I am American and live in America where the majority of information I get deals directly with United States companies. My experience has also been primarily in dealing with American companies. However, it’s also important to note that the American economy has a major impact on economies the world over, many of whom are invested in us or rely on our product ion in some fashion. The crash precipitated by people on Wall Street had just as much impact on traders in the City or on the Nikkei.

What I found fascinating to read, however, was this article over at bizcovering.com about how UK entrepreneurship is in trouble because of this. Now, American entrepreneurship is also on the rocks, but consider for a second that before the crisis it was already more difficult to get money in the UK. I don’t mean to say this in an offensive manner, but UK lenders tend to be more conservative than American ones to begin with, not the least reason because of a culture that has promoted thrift as a major social virtue from time immemorial. Finding startup capital was already a struggle, let alone the capital to actually maintain a business through the first couple of years.

And it’s that first few years that seems to be the clincher. Several small businesses have been able to get startup capital, many before last October, but are now finding that they have their lines of credit cut short, have their debts called in early, or simply won’t be extended new loans to continue their business despite an initial plan to do exactly that when the first loans were approved. The liquidity exists to support these business, but the will to spend it has been cut abruptly short, exacerbating a pre-established tendency to not loan money.

I hope that with the bouncing of the US economy that UK bankers will start to lend again. In a world economy it’s important that new ideas come from everywhere. Part of that means that within nations everybody encourages smart investments and don’t get gun shy when it comes to lending money. The only way out is through.

I recently read a blog post written by Chris MacDonald at The Business Ethics Blog. I don’t always agree with everything Mr. MacDonald says, and this is no exception, but I feel that his arguments are based on a primarily false assumption in his post Exploitation at the Top that the executives that are being socially pressured to accept less compensation are somehow “owed” what they are getting in the first place.

Let’s examine for a second in what way these people are “owed” anything.  Not all executives were directly responsible for the actions that lead to the financial crash we’ve experienced, but still, we’re talking about “bonuses,” which are a reward for good work. Contractually obligated bonuses are no more than salary, so I don’t see why people should either receive extra money or have their salary raised for failing to succeed in their jobs. As a side note, I find it ironic and amusing that the same people who argued for the sanctity of contracts when it comes to executive bonuses also argued that union auto workers should have their salaries and benefits cut despite their contracts, but I digress.

Compensation divorced from achievement is pure insanity, and I fail to see how the legitimate anger of people who have been dealing with rising prices and falling service for years now qualifies as “exploiting the weakened position of executives.”

Honestly, it is not exploitation to demand that CEOs and upper level executives take less money for themselves that could be used by the company to lower prices, increase quality, or hire more people when the unemployment rate is so high. How many people’s yearly salaries can be paid if a CEO takes a $4 million bonus instead of $12 million? How many more people could be employed if John Thain didn’t spend $1.22 million redecorating his office while reducing his workforce.

The very idea of attributing any sort of social pressure to exploitation of upper level CEOs and execs is almost comical. I appreciate Mr. MacDonald’s originality and the implied idea that exploiting people who have made their substantial livings on exploiting others is still wrong, but the consumer wields precious little power over companies of a certain size, especially when there is no competition due to the tacit agreements of corporations to not lower prices, and expressing their anger publically is some of it. While I don’t condone more extreme actions like the death threats some corporate CEOs have received, I see no problem with public threats of boycotts or demonstrations.

The executives of corporations have been exploiting consumers for years now in a carnival-like atmosphere, consequence and regulation free, and it sank our country into economic disaster. Now that people are demanding that they do their job before getting paid for it, they feel that are being treated unfairly. Unfortunately, you can’t go on preying on those with less power than you forever. I suggest taking bonuses only when you actually achieve something, so you don’t have only downsizing and higher prices to point to when people want to know what you did to earn those multi-million dollar checks.