Hiring and Retaining Staff
Many small businesses operate with the sole proprietor’s efforts alone. But what if you need more people to make your business successful? How do you find qualified candidates, hire them, and keep them for the long run? Monterey County Workforce Development Board can assist you in recruiting and training the people you need. For more information, visit our Business Services page.
The Hiring Process for Your Business
Understand your employment needs. Consider these areas:
- Where could you use the most help? With sales or marketing, customer service, manufacturing your product, keeping the books, or other tasks? With something you do not perform well, so that you can focus your energies on your strengths?
- How can employee’s best free you up to concentrate on running your business?
- Do you need one person or ten? Full time or part time?
- How much can you afford to spend on employees?
- Is there a more effective way of getting help without hiring employees, such as by using independent contractors or working with a temporary staffing agency? If you choose to consider independent contractors, what do you need to keep in mind?
Retaining Staff for Your Business
Once you have employees, it makes good business sense to keep them as long as possible. Help maintain a stable group of employees by taking these steps:
- Provide adequate training. Be sure your employees know what they are supposed to do and provide close guidance as they begin their time at your business. Give employees opportunity to increase or improve skills through additional training, if needed. Develop an employee handbook that explains the key steps about how you run the business and their role in your business.
- Give regular feedback. Make sure your employees know how they are doing on the job. Feedback can be informal, such as work-related comments as you are passing through the area: “I see you’ve organized the space to make it easier to find the forms you need” or “You might be able to make the sale if you tried…”.
- Facilitate reviews. In addition to informal, frequent feedback, schedule periodic reviews based on the job descriptions you have developed. Be sure you or your employees’ supervisor is easily accessible to answer questions or handle problems as they arise. Foster a sense of “we’re in this together” rather than “do it… or else.”
- Compensate employees fairly. Starting a business is expensive, and you may be tempted to cut corners on employees’ salaries. However, dedicated employees are what will help ensure the success of your venture. Employees are more likely to stay with you if they feel they are being treated—and compensated—fairly. Compensation can take forms beyond a paycheck, such as providing a flexible schedule, creating a pleasant work environment, offering incentives for increased sales or greater production, providing benefits, and more.
Technology, including computers, phones, and other gadgets, can truly be a tool that enhances your business. Technology can help in these ways:
- Improve efficiency
- Communicate effectively with customers, vendors, investors, and employees
- Track information
- Increase your marketing and sales potential
- Enable effective, ongoing research
However, technology can have a downside as well. Consider these potential technological pitfalls:
- Exorbitant expense of hardware and software
- Crashing systems
- Out-of-date software
- Software that doesn’t do what was promised
- Endless voicemail routing
- Spam email, corrupting viruses, and damage to your system from hackers
- Distraction of employees from productive tasks
- Need for specialized IT staff
How can you use technology appropriately to further your business interests? Review some of these suggestions.
Use the Internet to Extend Your Business
Computers connecting to each other from all around the world — what a few years ago sounded like sci-fi improbability is now an everyday occurrence we participate in without even thinking about it. This interconnectedness — the Internet — can have positive advantages for your business. You can use the Internet to:
- Establish your business “presence” for anyone who wishes to find goods and services similar to what you provide
- Communicate and interface with employees, customers, vendors, and suppliers
- Provide basic information and problem-solving strategies to customers, saving customer service representatives for more difficult issues to resolve
- Allow customers to order your products and services directly
- Work from several locations
- Serve as another medium for advertising or promoting your products or services
- Access search engines (such as Google or TECH-net) to perform research, identify existing products and services, explore competitors, access funding sources, seek grants, and more
Take Advantage of Hardware and Software for Business Functions
A range of electronic devices can help make your business grow. Many of these devices interact with each other. Here are some areas to consider:
- Personal computers are now powerful enough to perform most any administrative, research, or graphics function needed by your business. PCs can also be linked together — or tied into large centralized hard drives that store sensitive and critical information.
- Internal centralized storage devices can hold business data, including sales, accounting, accounts payable, word processing, balance sheets, marketing data, sales materials, training and product guides, and other information that needs to be accessed by people from various departments. These systems provide for efficient backup in case of a power outage or unexpected hardware failure and allow for information to be easily shared or updated from multiple locations.
- Phone system – including cell phones – can provide customers, employees, vendors, and others with more flexibility in communicating with each other.
- Other external or peripheral devices can enhance your business, including ink-jet and laser printers, photo printers, drawing tablets for illustration and graphic design, label makers, optical readers, fax machines, scanners, production equipment, robotics, cameras, and more.
- Business management software can make almost any aspect of running a business proceed smoothly. Typical software includes word processing, spreadsheet, graphics production, data management, project management, accounting, customer management, product design, and more. A growing trend is for the software company to host the software on their own servers. You access the software via the Internet for a pre-determined fee. The advantage is that you are not responsible for maintaining or troubleshooting the software as it is upgraded.
Which Technology Solutions Are Right for You?
As great as it all seems, technology can be expensive and frustrating. Many new business owners end up purchasing complex systems and software that are inappropriate for them. Avoid the pitfalls of technology by following these steps:
- Get a “second opinion” before making a large technology purchase. Talk to more than one person before making your investment.
- Plan on how you intend secure your technology and data — that is, keep your system safe from outside hackers and spammers as well as from inside theft or sabotage.
- Set up business-wide guidelines on what is acceptable use of the business’s technology. For example, is it okay to send and receive email at the business for personal use? What about Internet “surfing” during work hours?
- Assess how much technology you really do need. Prioritize your “wish list” so that you know where to start. Perhaps it’s with a basic word processing system. Or maybe you could benefit greatly from a laptop loaded with presentations for customers.
- Check out your free resources. The Internet abounds with technology resources for small businesses. Learn how to do a Google or other search to identify sites that may be most helpful to you. Sign up for a few e-newsletters to stay informed about the role of technology in your business.
Marketing and Advertising
Perhaps you were fortunate that your initial business idea met a need and your business flourished. Over time, however, growth may begin to slow — or even decline. Having a fully thought out plan for marketing and advertising your products or services can help ensure steady growth of your business.
Marketing Defined — “Marketing” simply means making your products and services available to the customers who need them, resulting in a profit to the company. A successful marketing plan includes these four parts:
- Conception: Identifying what the product or service is and why customers would want it
- Pricing: Establishing an appropriate cost for the product or service
- Promotion: Strategies for letting potential customers know about the product or service
- Distribution: Methods of getting the product or service to the customer
When you think of marketing strategies, you might first think of “selling” strategies. It’s true that selling the product or services is a critical part of marketing. However, marketing includes many other activities. The marketing activities you choose depend on the type of product or service that you offer. Following is a brief list of common marketing strategies. Many of these strategies overlap — and marketing strategies involve everyone within the business. These descriptions are listed alphabetically.
- Advertising: Paid notices or mailings to let potential customers know about your products or services; may include newspaper, radio, TV, or Internet ads
- Competitive analysis: Identifying others providing the same products or services, determining their strengths and weaknesses, and comparing them to your business’s strengths and weaknesses
- Customer service: Working with customers who have questions or problems with the product or service
- Pricing: Finding the price based on many variables such as the cost of materials and labor, advertising, and what the customer is willing to pay
- Product or service design: Determining through research and development the characteristics of a particular product or service
- Production: Creating of the product
- Promotion: Ways of letting customers know about your products and services, including advertising, phone book listings, public relations, direct mail, coupons, displays, and more
- Public relations: Getting the news out about your business, products, or services through news releases, emails, web site announcements, or other “free” sources of information
- Research: Determining the needs of customers and learning if a given product or service will fill those needs
- Selling: The actual transfer of the products or services from the business to the customer
- Tracking sales: Identifying number and amount of sales and related trends; can be used to plan continued production, new products and services, company income, and more
- Transportation: Taking the product from your business to the customer
When selecting marketing strategies and activities, start by reviewing your overall objective as stated in your business plan. Make sure that you have activities identified for each of the four areas of marketing (conception, pricing, promotion, and distribution). It often helps to have the advice of a marketing professional — either an employee or a consultant.
- Advertising. Although advertising is only one part of your marketing plan and strategies, it can play a critical role in the success of your business. Here are a few suggestions to get you started:
- Know your customers. This includes who your current customers are, any other target customers, and how best to reach them. Where do they go for information about your type of products or services? What appeals to them? What irritates them?
- Know what you are selling. Yes, you are selling a particular product or service. Beyond that, you are selling something that fills a customer’s need. Which features or benefits of the product or service best fulfill those needs? That’s what you want to advertise.
- Know your objectives. What are the objectives of an advertising campaign? To reach a certain level of sales? To acquire new customers or richer customers? To have current customers purchase more?
- Know your budget. What do you have to spend and how can you maximize your budget for the greatest outcome? Many experts recommend that you devote 3-5% of your annual revenues to advertising. How much is that? Do you need to spend more to penetrate a new market?
- Be true to yourself. Not only should advertising be truthful, but also it should portray the “real” you, the “real” business you have built.
- Work with a professional. Whether you have employees in house with advertising expertise, you hire an agency, or you work with the advertising specialists at the magazine or radio station, you can create more effective ads for less overall cost than when you go it alone.
- Know the structure of ads. Most include the following parts: a strong headline, some support copy, a “call to action,” company name, and a visual. Make sure all the pieces support each other and add to your overall goal: to make that sale.
- Keep track of your results. Set up a system for identifying which advertisements produced which sales. For example, salespeople can ask, “Where did you hear about us?” Use the information you gain to determine the best ways to spend future advertising dollars.
Ongoing Business Planning
Remember the business plan that you formulated at start up? Now is a great time to pull it out, dust it off, and re-read it. Your original business plan can help you…
- Communicate your priorities and goals to employees, customers, venders, and investors.
- Manage your business, both day-to-day and over the long term
- Plan for the future needs of the business
Of course, if you haven’t yet created a business plan at all, it’s never too late to do so. To get started, visit Creating a Business Plan.
But if you do have an existing business plan, take the time now to review and modify your plan to ensure that your plan meets your current goals for growth.
Review Your Formal Business Plan
Review the essential aspects of a business plan and be sure you have each area detailed.
Executive summary. These pages should still catch your reader’s attention and briefly explain the mission, goals, facts, growth, and future plans for the business. How has your business changed since it launched? Update the summary to reflect this.
Market analysis. When you started the business, you noted a particular need for a product or service. How well have you met the need? How has the industry changed since you first analyzed the market? Has your target market changed? What about your competitors? Are the barriers the same — or have you overcome them, or encountered unexpected barriers? Update your market analysis based on your new understanding and experience.
Company description. Is your business structured as you initially envisioned it would be? Have you made changes? Have the factors for success changed? What about your employee base and the market needs? Revise your company description to reflect any changes that have occurred.
Organization and management. If your company has grown, the organization has probably grown as well. Is that reflected in your business plan? Do you have the same key people? Have you acquired new owners or major investors? The updated business plan should reflect the current state of your organization and how the business is managed from day to day and over the long run.
Sales and marketing. Now that you have experience in marketing your products or services, reflect back on your original goals and plans. How have you penetrated the market? Which strategies for growth have worked? Have you reached your customers at levels that allow your business to succeed? What do you need to do to penetrate the market even more? How does your sales effort support your marketing goals?
Services or products. Do you offer the same services or products as when you first started the business? Why or why not? What has changed? What do you anticipate will happen in the next several months and years? Have the features or benefits of your services or products changed? Are you devoting enough effort to research and development to understand future trends?
Funding request. Have your funding needs changed? Did your best- and worst-case scenarios come to pass? Have they changed, as well? What would you need new funds for? How would you prefer to receive them? Are you considering changes in strategy, such as changing your business structure or going public, which might affect funding? Update your plan with this new information.
Financial information. Now that the business has functioned for a time, you probably have accurate historical data about the business’s performance. Add this to your business plan, along with any new projects for future expenditures and growth. Revise your projected income, balance sheet, cash flow statements, and planned capital expenditures. Update your ratio and trend analysis.
Appendices. Update the supporting documents for the claims you make in previous sections of this revised business plan. Include credit histories, resumes, product photos, legal documents, contracts, and any other documentation a reader might ask for.
Just as your business plan changed as your venture launched, so will the plan continue to change as the variables within your business change. Continue to use this plan as the driving force behind your business decisions. Change it as needed to reflect new conditions, new experience, additional research, and more. Make sure everyone in the enterprise understands the basics of the plan — and their “piece” in making the plan successful.
Strategies for Enacting Your Business Plan
You can help ensure the continued success and growth of your business plan — and, hence, your business — by incorporating the following strategies:
Find a mentor. Someone else has probably “been there, done that” — running a business like yours. Use that person as an experienced advisor to bounce off new ideas, solve problems, and anticipate new issues likely to arise within your business.
Network for maximum results. Networking means more than chatting with colleagues at happy hour, though that certainly can be helpful. When you consistently establish connections with the people around you, unanticipated benefits may result. Network with employees, managers, colleagues, mentors, other business professionals, neighbors, suppliers, customers, and more. You’ll glean advice, ideas, free marketing and an early “heads up” on potential problems. You have probably heard the saying that it takes a community to raise a child. It also takes your interaction with the community around you to make your business continue to grow.
Improve decision-making skills. As a business owner, you constantly make decisions. Some are quick, others require thought. Define what decision needs to be made — and whether you really need to make it or should it be delegated to someone else. Brainstorm alternatives, gather information, and think through the potential outcomes. Choose the option that makes the most sense — both for its potential outcome as well as for your own style of leadership.
Pull in resources. Don’t be timid about getting help when you need it. Whether it’s from employees, mentors, colleagues, or even consultants, use the resources available to you so that you can maximize your business’s chance for growth and continued success.
Local Technical Assistance Resources