Every business needs to train employees. Whether it’s teaching them something basic like learning the cash register or helping them develop more complex, niche skills. Unfortunately, most businesses handle training poorly, expensively and in a way that fosters worse outcomes.
Why is this the case and how can you avoid these pitfalls
The focus problem
First, we have the focus problem. Most business owners understand that training and development are important. What they don’t understand is which areas of training and development are most important. Having employees with more skills and greater familiarity is good. But, if your employees are learning the wrong things, their knowledge may not end up having any practical use.
How can you be sure that you’re training employees on the right things, and that you’re not wasting time?
Understand the most important skills to develop for your team: What’s stopping you from being successful? What could lead to a meaningful increase in productivity, efficiency or capability? For example, if you’re running a restaurant, it’s advisable to have all your team members be familiar with CPR and other life-saving techniques.
Make objective economic decisions: Try to reduce everything down to numbers and economics. Can you quantify the benefits your company will receive by training employees in this specific way? Does it make fiscal sense for your company to do it?
Remain adaptable: The best skills and knowledge to learn are always changing, as is your business landscape. If you want to become successful and remain successful in executing your training programs, it’s important to remain adaptable. Don’t keep the same systems in place for decades without at least tweaking them.
The employee engagement problem
We also have an employee engagement problem. It’s tough to keep employees engaged throughout the training and education process. But it’s vital if you want employees to retain what they’re learning and if you want to maintain or build employee morale.
So what steps can you take to improve employee engagement while training?
Incentivize participation: Make it compelling to participate in employee training. You can do this in several ways, such as by offering raises or bonuses to employees who undergo training.
Teach in many ways: There are many different learning styles. People learn better and are more interested in learning if they can learn in a way that aligns with their personal style and needs. That’s why it’s important for you to teach your students in many different ways, employing visual learning, active learning and more.
Get feedback and improve: Don’t just assume that your employees are okay with your training program. Ask them what they think. Collecting feedback and using that feedback to improve is indispensable in making your training program more engaging.
Are you sure your employees are remembering everything they’re learning? Training doesn’t do you much good if your employees forget everything they’ve learned after a few weeks.
Here are a few ways you can boost employee memory retention:
Test and reexamine: Consider testing your employees at the end of each skill development session. You can even test them in the future to see how much they retain.
Improve applications: People are much more likely to learn a skill if they’re using it actively. Make sure your employees are able to apply what they learn on a regular basis.
Get feedback and improve: Again, employee feedback is helpful here. Ask employees if there’s anything you can do differently to help them remember and practically utilize their new knowledge.
The spending problem
There’s one more way most organizations handle training poorly: they simply spend too much money. Training, education and development are all expensive, and there’s no real way around that. But if you consistently spend more than you need to, you could end up losing money in this area.
Here’s what you can do to fix it:
Narrow your focus: There is such a thing as training too much. Try to narrow your focus. Spend your time and money only on the training systems that seem to be most valuable for your organization.
Look for inexpensive alternatives: It’s possible to hire an outside consultant or use expensive training services. Chances are that you can find some inexpensive alternatives. Shop around to look for the best rate.
Train from within: Consider training from within. Employees may be more engaged if they’re working with teammates. Also, you’ll improve morale and save money in the process.
It’s true that most businesses don’t approach training in a productive or profitable way. But you don’t have to suffer the same fate. With just a bit of extra proactive planning, and a commitment to efficiency, you can reshape your business training programs. And start seeing better results.
Contrary to popular belief, growing a small business can be done without costing a fortune. It comes down to the investments an entrepreneur makes in the business, being careful to ensure that each new effort is about building and maintaining relationships and providing value.
As business experts, the members of Forbes Business Council are familiar with the actions it takes to affordably grow a small business. Read their recommendations below to determine what low-cost methods may work best for your business.
Forbes Business Council members share low-cost methods for growing a small business. PHOTOS COURTESY OF THE INDIVIDUAL MEMBERS.
1. Carry Out A Marketing Strategy
Grow a small business by implementing an intentional marketing strategy that includes three daily activities. First, a marketing activity whereby if you do it today, you get paid today. Second, an activity where if you do it today, you can get paid today or next week. Finally, an activity where if you do it today, you’ll get paid at some point in the future. These activities allow for immediate revenue and scalability. – Carson Porter, REV Agency Syndicate
2. Talk About Your Business
I believe that it is important that you actually talk about your business. You may be very good at what you do, and your product or service may be top tier, but if no one knows, you and your product or service don’t exist. Speak up. – Michael J. Polk, Polk Properties / Matrix Properties
Join a bunch of local community groups on Facebook and recommend your company. Invite your past customers there as well, letting them become brand ambassadors for your company. If you have a referral program in place, this will increase the likelihood that past customers will go out of their way to promote you! – Michael Stearns, Ascend Digital Agency
4. Nurture Your Current Client Base
Retention, referrals and reviews are keys to sustaining the growth of small businesses. Acquiring new clients is more expensive than retaining existing ones. Nurturing the existing clientele during all touchpoints is key to growing a small business in a low-cost way. – Marilisa Barbieri
5. Use Social Media
One low-cost way to grow a small business is to use social media to reach a wider audience. With social media, businesses can connect with potential customers for free and build relationships that can lead to sales. Additionally, businesses can use social media to create content that can help them rank higher in search engines, which can also lead to more website visitors and sales. – Matthew Ramirez, Rephrasely
6. Share Useful Content
Publish useful and interesting content on social media. You’ll build your brand while simultaneously establishing yourself as an expert on a subject. – Jo Stephens, Law Firm Sites, Inc
7. Leverage Customer Referrals
Look to leverage network effects. How can you create excitement among your early customers or adopters whereby they are telling friends and family? Hyper focus on these customers and ensure that they are 100% satisfied. They will go the distance for you in referrals and positive word-of-mouth. – Ed Beltran, Fierce Conversations
8. Automate Repetitive Tasks And Processes
Use technology to automate business systems and processes. Too many business owners are trying to do all the work themselves. Repetitive tasks in marketing, operations and sales processes can oftentimes be automated so that the business owner has more time to focus on prospecting, selling, relationship building and growing the customer base personally. – Amiee Ball, JAB Consulting Group
9. Amplify Your Brand Through Merch
Creating brand awareness is key to small business growth. One cost-effective way to get noticed and stay top of mind with prospective customers is to incorporate branded merchandise into marketing programs. Build merchandise into almost every campaign, from grand opening celebrations and outreach marketing programs to client referrals and even employee recruitment events to increase visibility and maximize ROI. – Valerie Hayman Sklar, Corporate Specialties LLC
10. Partner With Influencers
Collaborate with micro-influencers. Depending on your industry, you can barter with micro-influencers for a low-cost promotion in exchange for awareness and growth of your brand’s products or services. More often than not, word-of-mouth is one of the most effective ways of marketing and growing your small business. – Aidan Healy, Healy Consultants Group PLC
11. Leverage Public Speaking Opportunities
When someone invites you to speak at events or podcasts, say yes! Then, build relationships from there. People will be aware of what your expertise is and how valuable it is. At the same time, you can offer help if needed, like a fast consultation if they need one. It’s a great way to start building referrals as well. – Lane Kawaoka, SimplePassiveCashflow.com
12. Reach Out To Your Network
Look within your network for others who have successfully started and grown a small business. Reach out to them for advice and mentorship. It’s amazing what can come out of a focused conversation with someone who has done similar work, even if it’s only twenty minutes on the phone. – Andy Zhao, Ark7
13. Diversify Your Customer Base
Look for opportunities to diversify your customer or client base. Customers are not a homogenous group, and small businesses need to think of them as “market segments.” Is what you’re selling appealing to women and men? Is how you sell equally enticing for people of color and white people? How do you connect with an LGBTQ2+ audience? Not everyone has the same needs. – Michael Bach, CCDI Consulting
It all starts by serving one customer. If you focus on providing value to the humans that trust your product or service and do it consistently, your business will grow. Be customer-obsessed because if your customers get a “wow” factor and more value for their dollars, they will be your walking billboard. – Brandon Pena, 787 Coffee
15. Focus On The Customer Experience
Focus on delighting your customers. Referrals are the single best way to attract other talented employees and to find those who can benefit from using your product or service. – Aaron Painter, Nametag
16. Conduct Thorough Research Before Making Decisions
Low cost means using time well. Talk to people who’ve gone before you and use books, podcasts and articles about leadership, strategy, culture, alignment, operational excellence and customer care. Learn how to avoid costly blind spots and capitalize on opportunities by connecting with strategic allies to make the right decisions. The biggest cost is having to clean up unnecessary errors. – Jerry Cahn, Age Brilliantly
Meeting new people can be nerve-wracking, especially ones who’ve been working for you for months. Here’s how to make those first meeting jitters disappear for both you and your employees.
In the midst of the health crisis, it’s very likely you had to hire (and fire) people remotely. More and more employees want to work remotely now, and many companies are happy to oblige.
According to a just-released survey of more than 800 knowledge workers by freelance marketplace Braintrust, nearly two-thirds of workers said “freedom of location” is what they now want the most out of their jobs. Eighty-five percent said they would even seriously consider becoming a freelancer to have the freedom to work remotely.
The changing world of hybrid work offices
Now, with vaccinations increasing and life slowly transitioning back to normal, many companies are returning to the office. Some are creating hybrid work environments where people spend only a few days per week in the office.
Whatever you choose for your company, it’s very likely you’ll be having face-to-face interactions with employees soon if you’re not doing so already. If you haven’t met your remote hires at all yet, and you have the opportunity to do so, you should probably make it happen as soon as possible. Assuming people are comfortable being indoors with others, it is important to establish in-person rapport.
Knowing you in a context other than just another Zoom call will improve loyalty. It can even help employees want to do better work for you. When you do finally meet your remote hires, here’s how to capitalize on that time for the best possible professional outcome.
1. Acknowledge the awkwardness
Let’s face it — being part of a team of people you’ve never met, especially when they already know each other, can be pretty awkward. No matter how hard you may have worked to establish company culture remotely, it’s simply not the same as being in person. Remote hires might have been part of your team for months or even a year without ever meeting you or any of their coworkers. They might know everyone on a surface level, but they don’t know how tall their team members are, how they carry themselves, or what they eat for lunch every day.
There’s no way around the fact that it’s intimidating to meet your boss for the first time after an extended period of time working together remotely. By talking about it and clearing the air, your employees will feel more comfortable opening up about how they’re feeling in the midst of the transition.
It’s best to get this out of the way quickly so nobody gets caught up in the discomfort. Then you can move straight into getting to know each other and integrating your remote team members into the office community.
2. Have activities in place to break the ice
We all know that ice breakers can be great for team building and bonding, especially when some employees don’t know anyone. Having some structured activities and topics to go through will ensure that you’re not in charge of running the entire conversation. It will also make sure that gregarious and shy folks alike will all be answering the same question and no one employee will end up dominating the conversation.
The best thing about ice breakers is that they eliminate that pesky, aforementioned awkwardness by making sure everybody gets a turn to speak. This is especially important if you’re getting together with a team. However, it can be helpful in one-on-one and two-on-one settings as well.
Working from home has been hard, especially for people with other obligations like children or elderly live-in parents. No matter how many times you may have thanked your employees on Slack or Zoom, when you meet them in person make sure to look them in the eyes and voice your appreciation for all their hard work.
This may seem small, especially if you have made it a point to thank them remotely, but it will go a long way. Expressing your appreciation in person will create a sense of connection and camaraderie that will incentivize continued hard work. Employees want to know the sacrifices they have made to produce quality work for you during such a difficult time are worthwhile.
It’s important to remember that you are most likely the more experienced one — both with your particular office environment and office environments in general when it comes to young, new hires. They are probably much more nervous than you are about making a good impression.
Make sure to let all of your employees know you’re there to guide and support them in the transition back to in-person work. If they know you as a friendly face around the office moving forward, you’ll establish trust and comfort. This will go a long way toward creating a positive work environment.
5. Be yourself
When meeting new people for the first time, many feel the need to act impressive or go into people-pleasing mode. This is especially true as we re-integrate into social settings. After a full year with very few in-person interactions, many people feel they lack confidence in their social skills.
While the instinct to act in a certain way to make people like you is understandable in everyday social life, it can do more harm than good in the office. Remember, you’ll be spending a lot more time with these people moving forward. There’s no need to be anyone other than you, and people will appreciate you for it.
Many business owners get by with a little help from their friends. Bank of America explored how they feel about it.
Small business owners rely on friends and family for social, financial and sometimes even operational support.
A 2016 survey found that more than half of respondents relied on family in important business roles, both formal and informal.
That reliance is not one way – communities rely on small businesses to fulfill unique local needs, and small businesses rely on their communities to thrive.
Small business owners need a lot of support to succeed, whether it’s financial, operational or emotional. One of the most important sources of that support for many entrepreneurs is their network of friends and family members. People are social creatures, and many entrepreneurs face the rigors of the business world either alone or with a small staff of dedicated employees. Friends and family provide that support system that can help entrepreneurs face stress, balance work and play, and generally keep a sense of perspective even amid the stress and responsibility of starting and maintaining a successful business in an often unfeeling marketplace.
Bank of America’s Small Business Owner Report, based on a semiannual survey of 1,000 small business owners across the country, found that more than half (53%) of the respondents rely on family to serve important business roles, like advisors, employees, investors and partners. Additionally, 38% of the entrepreneurs surveyed have received a financial gift or loan from family and/or friends at some point to fund their business, and 35% said that friends and family help them the most with running their business.
“We know small business owners are inherent self-starters making significant personal sacrifices on behalf of their businesses, but what’s fascinating is this dimension of family, friends and community that they see as core to their success,” Sharon Miller, head of small business at Bank of America, said in a statement.
According to the report, here’s how small business owners viewed the support they received from their personal connections. For business entrepreneurs, family and friends are a lifeline when times get tough and a resource pool for skilled jobs when times are good. Gratitude, emotional connection and financial support from the community weave a web of connection that help small businesses, families and community members find stability and connection. The 2016 survey found:
1. Most small business owners who borrow from family or friends feel grateful. Sixty-six percent of entrepreneurs who used funding from family and/or friends to help with their business said that they feel grateful for that support or appreciate it. Respondents reported other emotions related to borrowing from friends and family, including anxiety or pressure to pay it back (30%), happy or optimistic (27%), and awkward or embarrassed (23%).
“We didn’t see signs of reluctance or payback guilt among the 38% of small business owners who said they’ve received financial support from family or friends for their business. In fact, very few actually said they felt awkward or embarrassed about it,” Miller said. Of those surveyed, a vast majority had no regret about asking their loved ones to invest in their business. Miller added, “Perhaps that’s because nearly three-quarters intend to pay it back.”
Owners of newer small businesses –businesses less than five years old at the time of the survey – were not only more optimistic than their more established peers, but they were also more likely to receive financial support from family and friends (34%, compared to only 18% of both growing and well-established businesses).
2. Small business owners rely on family for support beyond financing. Emotional support can be just as important to a small business owner as financial support. The stresses that come along with building and growing a business can’t always be solved with money. Fifty-seven percent of respondents said that they rely on family and friends for emotional support. Volunteering and providing business referrals are other nonfinancial ways that friends and family can support a small business owner.
“Beyond investments in the business, 13% of small business owners say their family or spouse financially supports them with personal expenses such as buying groceries or clothing,” Miller said.
3. Small business owners and local communities rely on each other. According to the survey, nearly two-thirds of small business owners report that residents in their community actively support small business, with nearly 50% saying their local community plays an important role in the success of their individual enterprise. To show their appreciation, 67% of small business owners surveyed reported that they support charitable or nonprofit organizations in their community.
Be the support a small business needs
“A strong tie to the community and the support of local business is important to many small business owners,” Miller said. A survey by Guidant Financial of small business entrepreneurs in 2020 found that around 10% were still using funding from family and friends as a source of capital.
The ties that bind us as family, friends and communities enrich our lives and strengthen our social bonds. They also throw a lifeline to small businesses working in the era of big box stores and online marketing. Community ties and support between local businesses can help entrepreneurship thrive as we enter a new decade in the 21st century.
Small businesses need the input and support of their communities to thrive. To be that community for the small businesses you use, do what you can to make a difference for them. Consider skipping the big Black Friday rushes during the holiday season, and, instead, support your local businesses on Small Business Saturday. More importantly, remember them for everyday shopping in your community. Like small businesses on your social media feeds, follow their work, share their posts and comment back when you see something you like. Be a good community steward of local businesses, and you’ll continue to have access to the diversity of products and service offerings they provide.
Extrinsic rewards (benefits, bonuses, etc) are not the only way to motivate employees, and at times, can demotivate your workers. LuciditySBM
If you’re a manager, it’s likely keeping your employees motivated is among your top concerns. This is especially true in competitive industries, like sales and technology, and those where people have to do a lot of routine tasks, like manufacturing or office administration. Understanding intrinsic rewards is tantamount to driving results. In this article, we define intrinsic rewards and explain their role in creating an effective workplace to learn and grow by offering intrinsic rewards examples.
What are intrinsic rewards?
There are two broad categories of rewards that managers might keep in their toolkit to increase motivation among team members; these are extrinsic and intrinsic rewards.
Extrinsic rewards are ones that you’re more likely to notice in the workplace because they include tangible rewards, like a monetary bonus or an extra day off of work. Intrinsic rewards are harder to identify because they vary from person to person, and they aren’t tangible. Intrinsic rewards include things like a sense of pride, personal fulfillment from completion of an activity, gaining a new skill and feeling like an important part of a team.
Why are intrinsic rewards important?
Intrinsic rewards are intangible, psychological rewards that you get from a job well done. These vary from person to person and include things like a sense of pride, personal fulfillment from completing an activity, gaining a new skill and feeling like an important part of a team.
Intrinsic rewards examples in the workplace
Below are some intrinsic rewards that may impact your workforce. Fostering these activities and feelings in the work environment could help your team grow and thrive:
Completing meaningful tasks
Letting employees be selective
Gaining a sense of competence
Making noticeable progress
Feeling inspired to be more responsible
Being an important part of an organization or team
Feeling accomplished
Mastery of knowledge or a skill
Feeling pride
Completing tasks that are meaningful
When employees complete meaningful tasks, that could provide an intrinsic reward. Managers can take advantage of this reward by talking to employees to determine what they think are the most important parts of their job and helping them structure their day around tasks that give them a feeling of purpose.
Example:“Shelly works as a shift manager in retail, and feels like the most meaningful part of her job is training employees. Shelly’s manager decides to include Shelly in training planning sessions going forward. As a result, Shelly is motivated to be the best retail manager because she is doing something she finds personally rewarding.”
Letting employees be selective
Some employees feel rewarded when they get to make choices throughout the day and structure their own workday. Giving employees some freedom to prioritize their own tasks and complete them as they see fit could be an intrinsic motivator for your team.
Example:“As a media producer, Carson knows that every day he is responsible for certain tasks that go into creating the daily news. Carson feels rewarded when his employer lets him choose how to structure his day, as long as all his tasks are completed successfully. Carson’s employer recognizes this trait in Carson and embraces it by making sure Carson has the freedom to schedule his day, provided the news is produced efficiently.”
Gaining a sense of competence
When employees feel like they are doing a good job, that can be a reward in itself. If your employees are tasked with completing complex tasks, simply doing those tasks over and over again until they feel comfortable and confident in their abilities offers intrinsic reward opportunities.
Example:“Minerva is a chemical engineer who studies metal alloys. She started using a new piece of equipment that posed a new challenge, but as she became more comfortable with the equipment and her competence grew, she felt rewarded. Minerva’s employer could keep Minerva motivated by letting her be the person who learns new equipment and processes, then teaches them to the team.”
Making noticeable progress
When people can see their progress, they are more likely to receive intrinsic rewards from it. As a manager, you can create an environment where people can see progress and learn from mistakes to reap the benefit of motivation.
Example:“Henry is a personal trainer. He asks his clients to take before and after photos. Henry has worked with dozens of clients at the gym that employs him. When he’s feeling like he needs some motivation, he looks at the wall that shows all of the before and after photos and feels motivated to continue doing his good work. His motivation comes from the sense of accomplishment he feels when he sees the good work he has done.”
Feeling inspired to be more responsible
Earning increased responsibility is a way some employers show a job well done. When people feel inspired to take on more responsibility, they may get a greater sense of accomplishment even though their role hasn’t changed too much.
Example:“Martha is a cashier at the grocery store. She feels rewarded when she gets there early and her supervisor lets her clock in to help with daily sandwich prep at the deli counter. Martha’s intrinsic motivation is that she’s learning a new skill and developing at work. Martha’s employers could take that as a sign that Martha is ready to develop, and they could give her more responsibilities.”
Being an important part of an organization or team
Feeling like your role is an important part of the team or organization you work within offers intrinsic rewards that could motivate employees to do more and stay focused. That’s because being recognized by your team members as playing a vital role feels good.
Example:“Hadley is a project manager in a DevOps workforce. Today, Hadley is starting his first sprint. As scrum master, he will play an important role in keeping the team on track to meet goals. This makes Hadley feel important, accomplished and recognized for his good work.”
Feeling accomplished
There are several ways that employees might gain a sense of accomplishment at work. This could be learning a new skill, completing an objective, working on a project or being recognized as an important contributor, to name a few.
Example:“Melanie is a writer. She recently increased her writing speed to 500 words in 30 minutes and feels a sense of accomplishment that motivates her to do more. Her motivator is that she sees measurable improvement. Melanie could bolster her writing business by tracking her progress and relishing in small milestones.”
Mastery of knowledge or a skill
Gaining knowledge of a new skill provides intrinsic benefits that could result in greater motivation. This one is relatively simple for employers to set up to reap the benefit of motivated employees by offering training and opportunities for employees to gain new skills. This could be in the form of online courses, on-the-job cross-training between roles or group retreats geared at education.
Example:“Percy is an accounting specialist. He has the opportunity to train with the company’s controller to learn new skills. This makes Percy feel motivated to continue to do great work in accounting, because he wants to build a career in the field and getting special attention from the controller feels like a step in the right direction.”
Taking pride in your work can offer intrinsic rewards. Achieving a sense of pride from having others admire your work can have the same effect. When people feel like they’ve accomplished something substantial, they are likely to feel proud. Managers can use extrinsic motivators like words of affirmation to inspire this intrinsic motivator in their employees.
Example:“Velma is a house painter. She completed the trim of a house in bright white. Her supervisor said, “You did a really great job, Velma. Keep it up,” and she felt a strong sense of pride in her paint job. That feeling of pride motivates Velma to keep doing good work. She especially appreciates words of affirmation because they make her feel accomplished.”
Levels of intrinsic rewards
Studies suggest people experience intrinsic rewards in different levels that correspond with things like mood and how people feel about work:
High engagement
Some people will experience high engagement with intrinsic rewards. These people are highly motivated to succeed by internal factors. They feel energized and positive when intrinsic rewards manifest in the workplace.
Mid-range engagement
Many people find themselves engaging with intrinsic rewards at a moderate level. For example, you might feel like you’ve made progress at your job, but not developed your skills enough to get a promotion. The skill development you did do may feel satisfying and meaningful, though you know you aren’t where you need to be yet.
Low engagement
People who experience low engagement with intrinsic rewards at work are less likely to be satisfied with their job and may struggle to find meaning in their tasks and duties.
How to create high engagement at work
To create a work culture of high engagement, you should:
1. Create engagement purposefully
Intrinsic rewards are abstract, and that can pose challenges when communicating them to the people who are supposed to develop programs that appeal to intrinsic motivations. For example, simply talking with a company’s HR department and asking them to develop an intrinsic rewards program may not be the right solution because of the complex nature of intrinsic rewards.
A better solution is to ensure that intrinsic motivators are a part of the company’s culture and values. That may take new training initiatives, manager or corporate retreats, motivational speeches, deploying new management styles and more. Consider what motivators are important to your employees and how to purposefully make them an engaging part of the corporate culture.
2. Focus on your mid-range engagers
Once you’ve established a company culture where intrinsic rewards are prioritized, HR can develop a measurable program that employees are likely to understand. A good group to focus on is the mid-range engagers. For one, there tends to be more of them than outlying categories, so you have the opportunity to move a larger group toward intrinsic rewards. Second, they represent a group that’s already somewhat engaged, so they may be more receptive to intrinsic rewards than lower engagement groups.
3. Think about change management
Make an entire culture shift and implementing new intrinsic reward programs at the same time is a lot of change for any organization. Look to large organizations that have made similar cultural shifts to understand the best change management practices for your company.
Sure, theoretical advice is nice, but when you’re struggling to keep your business going, you want real help from people who’ve lived through the same situations. I’ve collected 27 money-saving tips from real small businesses that are succeeding in a tough economy. Real people, real businesses and real ideas to help you cut costs, lower your overhead, and still reach your target market and build your business.
1. Cut traditional advertising in favor of low-cost alternatives.
This is a popular move for small businesses and thanks to the many options in internet marketing and advertising, it’s possible to cut traditional advertising costs and still reach customers. Marissa K. Haynes of Wealth Management Group of NA, LLC recommends public relations as a much cheaper and more effective form of advertising. Haynes and her colleagues have used their expertise to be featured as credible sources in publications and media outlets.
John Boyd, CEO of cloud-based Meeting Wave, chose to stop paying for advertising and focus on inbound marketing. Shai Atanelov, CEO of BigTimeWireless, cut down even on paid internet advertising (such as Google Adwords) and focused on getting results by using SEO techniques within the company website and creating YouTube videos, a move which garnered over 700,000 views and a boost in traffic to the website.
2. Get sponsors for events.
Events can be huge draws for both old and new customers, and many businesses rely on regular events, from galas to seminars, to expand their customer base. Haynes recommends getting sponsors who will help carry the expense of events in exchange for some form of advertising within the event. It’s usually a good trade for both the small business hosting the event and the sponsor paying for expenses, if the two are in related areas.
3. Outsource, outsource, outsource.
Employees are essential to getting work done, but employee costs—from salaries to office space to insurance—can be the biggest chunk of a small business’s budget. Georgette Pascale, owner of PR Firm Pascale Communications, chooses to keep her full-time staff to a minimum and outsources work to independent contractors for the work that her staff cannot cover as needed.
Deborah Sweeney, CEO of My Corporation Business Services, Inc., uses the same method by hiring consultants as needed; Sweeney maintains that she can not only negotiate a lower rate with consultants, but that her business benefits from their more varied experience in their fields of expertise.
4. Negotiate with vendors.
What you’ve been paying your vendors does not have to be the final word on what you continue paying. Ultimately, vendors want to stay in business too, and they’re dealing with a tough economy just as you are. Many are often willing to negotiate lower prices rather than lose a regular customer. Ian Aronovich, of GovernmentAuctions.org, shares that his firm was able to negotiate better prices on everything from office supplies to the phone bill. You certainly won’t lose anything by trying, and you may find yourself able to shave several hundred dollars off your monthly operating costs.
5. Think beyond the cash box.
When that cash supply gets low, as it tends to do in small businesses, don’t close the door on getting what you need. Pascale recommends the age-old practice of bartering. She used bartering successfully by offering her own PR services in exchange for work by an interior design firm when she needed an office redesign. As with the vendor negotiation, the worst answer you can get is a simple no, and you might be surprised by how quickly you’ll hear a yes.
6. Live in the cloud.
Frugal marketing advice gurus will give you a cloud-based solution before you even finish asking your question, but real small-business owners recommend the same strategy. Boyd, of Meeting Wave, avoids the cost of expensive hardware and uses cloud-based services to host data. Bibby Gignilliat, founder of San Francisco-based Parties That Cook opts for cloud-based software, “such as Salesforce, PayCycle and Staffmate where we pay per annual user, rather than needing to purchase and maintain expensive software in-house.”
7. Cut extraneous employee expenses, not employees.
Aronovich says that his business used to provide free lunches to in-house staff, until 2009, that is, when the economy forced them to rethink their expenditures. Though neither the company nor the employees wanted to give up the perk, it was a better choice financially for them to offer a simple bagel breakfast on Fridays, save the money spent on the free lunches, and thus be able to keep their employees working rather than laying them off.
8. Embrace telecommuting.
Telecommuting isn’t possible for all businesses, or for all employees within a business, but when it is, it can be a huge money-saver. Pascale’s business was founded as an all-virtual agency. Keeping things virtual allows small businesses such as Pascale’s to avoid the expense of office space and the ongoing operating costs that come with it, and focus on producing work at minimum overhead. If you’re not able to convert your entire staff to a telecommuting situation, find a way to convert at least some of them.
9. Go green to save green.
Going green is not only a great PR move, it’s also a smart financial move, according to Shel Horowitz, author of Guerilla Marketing Goes Green: Winning Strategies to Improve Your Profits and Your Planet. Horowitz recommends simple moves such as keeping equipment on a power strip and turning it off when not in use, or replacing your existing printer with one that prints on both sides of the paper, thus reducing paper waste and cost. Since the object of many environmentally friendly changes is to save energy, and you have to pay for the energy your business uses, if you can reduce energy use you will also be reducing your costs.
10. Hire smart, inexperienced people.
Experience isn’t everything, and it costs more. Next time you put up a job ad, eliminate the line that says, “Must have X years of experience,” and replace it with “Recent graduates welcome to apply.” Sweeney used this approach and hired developers who were fresh out of graduate school, gaining a monetary advantage by providing an entry-level salary and, she says, benefiting by having employees who are “up-to-date on the latest technology…often more nimble and eager to learn.”
11. Clarify your policy on giving.
Rather than cutting out all charitable contributions, spend 20 minutes putting together a policy that will clarify your procedures and limits. This is especially helpful if you’re in a food-based business, which can be overwhelmed by requests for “food donations” for fund-raising events, or if your business deals in other goods which charitable organizations need. Tracy Kellner of Provenance Food, a Chicago-based business, found this approach the best way to deal with the frequent requests she had to spend time answering. Instead of using her own time to respond, Kellner created a very specific policy, made it available via e-mail or as a physical document, and instructed her employees to hand it out to anyone seeking donations.
12. Negotiate with your landlord.
Joellen Sommer, a financial expert, suggests renegotiating a lease to save on costs. Gignilliat of Parties That Cook did just that and was able to save on one of the biggest expenses small businesses face. If prime retail space is important for your business, start asking about a better deal and cut down on that budget-buster.
13. Cut down on employee time.
Sommer also finds that her clients can cut many employees down to a four-day work week, which often works better for employees as well as business owners. A four-day work week means increased savings in utility and operating costs, as well as a lower salary cost for the business as a whole.
14. Practice guerilla marketing.
Guerilla marketing can not only get your business noticed, it can also save your business money. Nina Cunningham of Liberty Tax Service points to their practice of using “Lady Liberty costume wavers” and on-the-street entertainment. They’ve been using these techniques since 1997, says Cunningham, and find that “for every two hours we have a waver, we get a customer.”
15. Keep your meetings lean.
On-site meetings can be expensive in terms of travel and hosting costs, and even virtual meetings cost you in terms of billable hours or salary costs. If employees are sitting in a meeting, rather than producing work or getting new clients, you’re losing money. You can’t eliminate meetings altogether, but you can learn from David Lanagan, founder of SMB Communications. Lanagan recommends, first, that you limit the people who are required to participate in meetings. “By keeping client meetings to the lowest head-count possible,” Lanagan says, “[I] ensure that my employees’ time is well spent and that the associated costs are low.”
16. Save on shipping.
Jessie Connors, CEO of luxury e-tailer Peppermint Park, notes that her shipping manager constantly checks and compares prices on shipping, negotiates better terms and makes sure that they save every penny they can. As Connor states, “If we save a few pennies in shipping on each product the savings falls to the bottom line and can add up to become big money.”
17. Cut down on maintenance.
Do you really need a daily cleaning service at the office? Sommer recommends reviewing ongoing maintenance costs such as these, and cutting back wherever possible. Employees can empty their own trash. A cleaning service can come in weekly instead of daily. Reduce the frequency of maintenance costs, and you can save money without reducing the maintenance or necessary service items completely.
18. Get interns.
Gignilliat found marketing interns from local schools for help with building the business’s social media program. “They blogged, tweeted and posted to Facebook regularly,” says Gignilliat, “which helped us improve our search engine optimization and get more business.” And using interns rather than full-time employees cuts way back on expenses, from salaries to benefits to office space. Combine this strategy with telecommuting and you’ll be able to get a lot of work done for a fraction of the cost.
19. Review all expenses, even the little ones.
It’s just smart business practice, but it’s often overlooked until tough economic times force you into it. Aronovich remembers that, in 2009, they analyzed all company expenses to cut anything unnecessary. Small cuts in ongoing expenses can add up to large savings over the long term. Review everything that isn’t providing a ROI, cut back to the bare minimum and completely eliminate anything extraneous.
You can often find a cheaper way to provide the same employee perks, as in the case of Gignilliat, who cut out the $900-per-year water cooler expense and replaced it with a filtered water pitcher. From $900 to $30 is a significant savings, and if you can accomplish that sort of financial savvy in more than one area, you can turn your business into a lean, profit-generating machine.
21. Buy in bulk.
Gignilliat’s company switched to shopping the cheapest deals on office supplies such as inkjet cartridges, and purchasing from bulk warehouses or online suppliers to save money on both the product cost and the shipping cost. Analyze your ongoing expenses and pinpoint the ones that are purchased randomly or at middle-man suppliers. Check into bulk buying and see if you can’t save a significant amount on those frequent-use items.
22. Use open-source software.
Software, from the basic to the complex, is essential on some level in every business. Before you spend hundreds on software purchases or updates, check into the free open-source alternatives. Boyd’s company used open-source software to build their online product, and you can find open-source software for everything from photo editing to invoicing to accounting, project management, and document creation.
23. Do some old-school marketing.
Rhondalynn Korolak, managing director of Imagineering Unlimited, finds that the simple, old-fashioned practice of sending a handwritten thank you note to customers can have a huge return. Korolak has found that this practice alone “can lift sales by 10-20 percent,” making it a definite worthwhile investment of five minutes of time and the cost of a stamp.
24. Create partnerships for marketing.
Boyd advocates creating partnerships with other startups to cut costs and increase reach on promotional efforts. Alicia Vargo, CEO of luxury lingerie store Pampered Passions, concurs: “We have given up the print and radio advertising and focused on related alliances, for example bridal shops, post mastectomy businesses, photographers, hospitals and plastic surgeons. These are related areas for us. The organic partnerships far outweigh an ad or a radio promotion.”
25. Simplify your distribution process.
Atanelov allowed a financial crunch to lead to a complete overhaul of the business’ distribution system, eliminating the practice of warehousing and shipping their own inventory and turning to suppliers instead to “create a drop shipping partnership with them.” Says Atanelov, “Our supplier would ship directly to our customers for us… [they] agreed to do this on the condition that we bring in enough orders.”
Look at the distribution process in your own business and find ways to simplify or eliminate the processes involved. Focus your business and your employees on their strengths, and negotiate smart agreements to keep your business moving forward.
26. Know your customer.
This simple advice from Allen Ash of Almar Sales Co, a family business founded in 1965, is perhaps the most applicable. Think of it in terms of your particular business. If you know your customers well enough to know where they actually go online, then you can focus your online marketing efforts there instead of spreading your resources out over a whole arena of internet options.
If you know what your customers like, how they respond, what they want and what they’ll spend, you eliminate all the other options from your budget. Eliminating useless options means the money you do spend is more focused and will garner a better response, so you’re not only saving money initially, but you’ll be producing more profit from what you do put forth.
27. Reward your profit-makers.
It may seem a little backwards, but spending to save does make sense in some cases. Korolak recommends taking the proactive approach of rewarding profitable behavior from both your employees and your customers. What does that look like? For Conners, it means making little gestures, like an occasional free lunch or treat, to boost employee morale and keep the work environment positive.
It could also mean offering bonuses to employees who meet certain requirements for sales or productions, and offering deeper discounts or value-added packages to your most loyal customers. If you’re spending a little money on the people who do the best work for you, or purchase the most product from you, you’re simply investing in a relationship that will ultimately bring more profit to your business.
Inflation is on the rise. According to a recent Economic News Release from the U.S. Bureau of Labor Statistics (BLS), the Producer Price Index for final demand grew by 1 percent in March. February saw “final demand prices” grow by 0.5 percent; and January’s final demand prices increased by 1.3.
According to BLS, the Producer Price Index (PPI) consists of many indicators and evaluates the mean difference over a period of time for the “selling prices received by domestic producers of goods and services.” In other words, PPI is a way to gauge how much manufacturers and similar businesses face in increased costs due to inflation.
This inflation gauge takes a broad survey of approximately 10,000 unique manufactured items and the amount of inflation businesses face. The BLS’ PPI measure looks at items produced by fisheries, food growers, miners, manufacturers, etc. It also includes 72 percent of production of the service sector, as the 2007 Economic Census found.
Hedging with Futures
One way to reduce risk is by hedging. A popular example is with futures contracts. Much like buying an insurance policy, futures contracts can reduce the impact of a negative event, such as a spike in commodity prices.
If a company is worried about the price of oil for their planes or coffee for their cafes, they can enter into a futures contract to buy a designated quantity of that particular commodity at an agreed-upon price, with the ability to exercise it on or before the expiration date.
With a futures contract, a company can better plan its budget based on the contract’s parameters and the cost of the contract. If the price of the commodity rises in the future due to increased demand or limited supplies, the business can save money by taking delivery of the particular commodity at the originally agreed upon price through the futures contract.
Since the goal of hedging is to protect against losses, it’s important to weigh the cost of the futures contract. If the price of the commodity falls for the above-mentioned futures contract example, the company would still be forced to buy the commodity at the contract’s price, which would be a poor investment. If, however, it sells the futures contract before its expiration to avoid receiving the physical commodity at a poor price, that would lead to a loss. Having a contingency plan to reduce losses in futures contracts is always a good part of a hedging strategy.
Negotiate with Suppliers
Much like businesses enter into specified timeframes with suppliers, companies can do the same with their purchased supplies to provide more predictable prices. When the PPI measurement is used, the purchasing company can contract with its supplier to settle on the initial product’s price, and how price fluctuations will be determined going forward. Since the PPI is released monthly, the price can adjust accordingly (decrease or increase, depending on the PPI) for the supplier and purchasing company. It can be re-evaluated every three, six or 12 months, for example.
While there’s no predicting the future and if and how much commodity prices may rise and impact businesses, the more tools that businesses have to mitigate increased costs, the more likely they are to survive rising inflation.
Hedging, securing future contracts with suppliers now, is a great way for small businesses to protect themselves against the rising cost of inflation. Not only do they guarantee a future lower price if prices continue to rise, but they can take much of the guess work out of forecasting and thus, increase budgeting accuracy. LuciditySBM
When greenbacks are no longer welcomed, bartering may be a viable alternative to digital currency – SH
By: Eric J. Nisall
WHAT IS BARTER?
Barter is simply the trading with no cash involvement.
It can be goods, services, or any combination of the two.
Have a look at the exact definition:
There is no set pattern or rule as to what can be traded for what, aside from those goods and services which are deemed illegal.
To promote it, and make it easier for people to interact, barter networks were established.
These systems enable trading to be taken to a new level by offering “barter credits” which are used like cash within that specific network.
We’ll look at how all of that works next.
BARTER NETWORKS
Barter networks make it easy to find people with whom to trade your services, and it’s even easier when they come to you!
As mentioned earlier, there are barter networks that use their own “currency” to facilitate commerce.
For each transaction you make within the barter network, you would get “credits” which you can then bank and use at a later time on any other products or services.
These barter networks make trading more accessible as you wouldn’t have to find a partner directly, which will help expand your business.
You just need to get used to not using traditional financial institutions in these types of transactions.
For example:
You join a barter network to provide and purchase goods or services.
If you are a web designer, for example, you can design a site for an architect and get paid in barter credit.
You may not have any use for an architect’s services, but rather have a need for business cards.
You can then take your credits and hire a printer within the barter network to make your cards and pay them with the credits you earned from doing work for the architect.
Or, you can just keep those credits in your account until the time comes when you need something from anyone else within the barter network.
In the traditional barter system, you would be forced to search for a trade partner who has what you need and needs what you provide.
This method is easier than direct trade since you can acquire new customers who might not have anything you need in return.
These networks generally charge a monthly fee, plus commissions per transaction to support the network.
Companies like Itex, a publicly traded barter network, use those fees to support their communities by hosting websites that provide classified ads, member directories and profiles, account information, and other benefits that vary based on the different networks.
Plus with barter networks, worrying about collecting receivables is greatly reduced as many of the networks give you online transaction-processing built-in.
As far as bookkeeping goes, you record your transactions the same way you would cash transactions, except with a different account for your credits as opposed to a regular cash account.
There really should be no learning curve–or just a small one–and you can essentially hit the ground running.
HOW YOU CAN BENEFIT FROM BARTERING
There are a number of reasons you may want to consider getting into bartering:
Due to the fact that there is no cash involvement, practically any business can participate in a trade. This is especially helpful to a small and/or new small business where cash-flow tends to be a big concern.
Any combination of things can be traded: accounting services for web design; printing services for cleaning services or repairs; advertising for legal services. There is no limit to what you can trade for.
The accounting and tax treatments are exactly the same as if you were using cash: all sales are taxable income and the same rules apply for deducting expenses (although the valuation is different which we’ll address a bit later).
Without the need for access to large amounts of capital or credit, your business may be able to develop and grow more quickly.
There are people in all sorts of businesses looking to trade a variety of goods and services, so your options are not limited.
A way to reach a potentially untapped source of customers and generate word of mouth publicity that can spread to cash customers in the future.
Trades may lead to future cash transactions or may be used to entice customers into cash transactions.
You would conserve your cash for use on expansion such as hiring employees or use on expenses that cannot be traded for such as utility bills, business licenses, and self-employment taxes.
It provides a way to sell off excess or slow-moving inventory when traditional marketing/sales methods have failed
Some companies even use barter systems & credits to run payroll (don’t ask how employees want it, but I’ve seen it before!)
Unfortunately, barter is like dating as you won’t always find someone to partner with and it can feel disappointing.
Just like with anything in life, it’s not all positive with the barter system.
Unfortunately, there are drawbacks as well.
One of the biggest issues I ran into was the fact that I had little need for other people’s services or goods.
My business is pretty streamlined since I work out of my home and I’m 99.9% paperless.
That means I don’t need to trade for rent or office supplies or any other general office-related stuff.
I also have people that I use and trust for the services I actually do need so I already outsource business tasks like website maintenance or graphic design that are above my pay grade which eliminated those things.
So what happens when you have a bunch of “money” in your trade account and you can’t find someone to use it on?
I can tell you firsthand what happens:
YOU LOSE IT!
And it sucks, but I got lucky that I only dabbled so it wasn’t a huge loss.
Obviously, if you’re doing straight trades and not going through a network, then you aren’t going to “lose” anything, you’ll simply have a hard time finding trading partners.
If you are on a network, you have to pay a cash monthly fee as well as a percentage of your transactions.
Income taxes are always a confusing issue, just don’t forget that barter transactions are taxable transactions, too!
As always, when the topic turns to your taxes please, please, please check with a qualified tax accountant!
Bartering is no different than any other manner of accepting revenue.
You still are required to include any “income” you make via bartering with your reportable income.
When using a network, that’s really easy because each “trade dollar” is the equivalent of a US dollar which makes tracking easy.
You even get the benefit of deducting the costs of doing business such as the network dues and fees they take out as well as the cost you incur in the normal operation of your business.
When you trade outside of a network, one-for-one (or group trades), it becomes a little more difficult–but not impossible.
But for straight barter trades it’s…well… backward.
You see, you have to report the value of the services you receive as your income:
Bartering is an exchange of property or services. You must include in your income, at the time received, the FMV of property or services you receive in bartering.
The reason why you report the value of the other good/service is because your income is based on what you receive in exchange for it.
Generally, that comes in the form of money–so when bartering, you replace the dollars with the value of the good or service received.
Now, let’s assume the client is an attorney, and instead of money, they represent you in a case about a breach of contract. The total value of the representation ends up being $5,000 worth of time. In this case, you would recognize $5,000 as income since that is what you received in exchange for your services.
Let’s say you are a photographer. You receive $1,000 to shoot a wedding. Because you received $1,000 in return for your service you report $1,000 as income.
You simply replace the cash consideration with the value of the good or service you receive to determine the amount of income you must recognize from bartering.
This is something that a lot of people who write on the topic DO NOT KNOW OR FAIL TO EXPLAIN.
WRAPPING UP
Now you know a bit more about the world of barter –and probably a lot more than most of what can be found online will tell you!
What you do with that info is totally up to you.
If you think you use it to add yet another way to sell your goods/services, great!
If you think it’s a good way for you to get goods/services while you use your cash to reinvest in your business, awesome!
Even if you decide not to get involved, at least you can now make that decision based on complete information!
I Have been working with female entrepreneurs for a long time now, helping them to clear their path to success and build a sustainable business. In every single case, there has been one constant hurdle they have had to overcome, and even more so if they are a spiritual entrepreneur.
The Witch Wound.
This is not something you will find in any conventional business course. If I knew about this at the start of my journey, I could have saved myself a lot of time and money.
This wound is held in the collective consciousness from the times of the witch trials. Wise women, healers, shamans, midwives and intuitives were persecuted and even killed for their gifts and beliefs. Women were becoming way too powerful, and the patriarchy needed to remain in control, and so the witch trials were born. The time of the witch trials spanned from the 14th to 18th centuries and it is estimated between 40,000 and 100,000 people were killed worldwide!
Imagine being put to death, shamed, tortured all for being a strong and intuitive woman and being seen by society as:
Too weird
Too outspoken
Too different
Let’s think about the consequences of this. FEAR. Fear would have been rife at this time in history.
This fear is stored in our DNA and handed down from our ancestors who lived through these times. This fear plays out through the ancestral line, and has been doing so for a long time.
Fast forward to modern day entrepreneurship and this collective wounding shows up as:
Fear of being seen. How many times have you held your finger over the go-live button and broken out in a cold sweat? I see so many females holding themselves back in business because of this fear. This is actually a fear that will keep you invisible and stop you from getting your gifts out into the world.
Comparing yourself to others. You end up looking at everyone else and thinking they are better than you. Stalking other coaches and then feeling like an imposter or a fraud. This comes from those memories of lifetimes where others feared you for your witchcraft, and friends and family would turn you in to save themselves from persecution. This fear of being a fraud will lead to you undervaluing your services.
People pleasing. Not wanting to draw attention to yourself because, on a deeper level, you remember making a scene led to your downfall. This will stop you from making that post just in case you rock the boat. Better to stay in the shadows.
Not expressing yourself fully. Problems with your throat area and speaking your truth. You just won’t write the post that will move your business forward. You won’t talk about what you do confidently.
Fear of authority and getting into trouble. Of course, this comes from the witch trials as well, but this will stop you from putting contracts in place, keeping on top of your finances. All these will keep your business small and end up costing you because you don’t have the legal contracts in place to deal with any potential client problems.
It is my firm belief that past life and ancestral healing have a part to play in driving your business forward.
I remember working with a client who was not earning the money she wanted, clients were treating her with disrespect, cancelling at short notice, and she was constantly chasing her tail. We went back under hypnosis to a past life and discovered she was a witch. She had been murdered but the villagers. She saw the villagers back then, who were her clients in this life. We did some healing work around this and she was then able to put some boundaries in place in this life.
The result was clients paying on time, more new clients and money flowing with ease, plus a healed relationship with a parent as an added bonus. She was also able to stick to her boundaries without caving in, as she had done previously.
This may not be for everyone, but for myself and my clients, clearing this wound has been an absolute game-changer.
As I look back at my corporate career, I can see how it was playing out there too. That fear of speaking out in meetings, outshining my colleagues and watching people get trodden on as someone else was striving for that next promotion.
Even though I left that toxic environment for the bright lights of entrepreneurship, little did I know the “witch wound” was something I needed to clear for me.
Now I share who I am and what I do with a sense of pride and I am thankful I do not need to hide anymore.
Lucidity SBM 