Entrepreneurial News®

Should You Impose A Mask Mandate?

We blogged about this on our Twitter account, some time ago, before we had Entrepreneur News back up and running, and the circumstances have changed a bit, so we’ll have another go at the topic.

  1. You as the owner should probably keep your feelings about masks and the vaccines out of the equation. I have owner clients who are unalterably opposed to the vaccines and I’d be willing to bet that their employees have a lower than average vaccination rate.
  2. There remains some question about the effectiveness of the vaccines, but the media is fond of pointing out the failures, without pointing out what percent of the population is affected. We don’t think anyone in the media ever had to take a college statistics course.
  3. There’s a guy named Joe Rogan, who’s opposed to vaccines, got COVID, and took a cocktail of drugs centered around Ivermectin, and recovered in two days. He’s getting pilliored in the media, as one might expect.
  4. There is also some question about the effectiveness of masks. Opinions are all over the lot. Surgeons and other medical personnel still wear the heavy duty N-95 masks, which are effective, but aren’t exactly a fashion statement.
  5. There is also the question of what your state policy is, and whether it’s law, or rather a guideline on the wearing of masks. Here in Arizona, we have no mask mandate, as of a couple of weeks ago, and we’re not likely to get one. I was just in a veterenarian’s office dropping off my dog, and they have a mask mandate, but I walked in without on and no one said anything. But, I’m large person, and get the benefit of the doubt.
  6. Mask mandates seem to be the province of large liberal states, such as New York, California and Illinois; the rest of the country seems to have moved beyond them.
  7.  In our humble non-binding legal  opinion, we don’t think mask mandates are constitutional, but they haven’t come up for discussion in the courts yet, which is a little surprising, given the widespread use of masks and some opposition to them.

So, what are we to conclude on mask mandates? We wouldn’t impose one on our employees, but would point out the plusses and minuses of wearing one Probably worth a Friday town hall among your people.

How to Hand Off Your Business

This is actually a topic that I’m doing in a podcast for my good friend Shauna Weckerlein, The Tax Goddess, so I’m throwing it out there to see if we get some comments.

  1. Do you have any idea what you’re going to do after you hand off the business? IMHO, playing golf travelling and eating get old after a while.
  2. What or who are you going to hand off to? Do you have kids who are interested? Are they in the business? Do you have another person who’s interested? Don’t expect to make the decision on a Sunday, do the handoff on Monday and be done with it. (Entrepreneurs usually don’t think that way, anyway)
  3. If the kids are interested, what have you discussed with them? If you have more than one child interested, could they both, or do they, run the business in tandem? Is the business big enough to support all those who want to run it, or could it grow to support everyone? Is it clear who the lead dog is?
  4. What have you done to validate your children or this person’s interest in running your business? Have you done an in depth interview with them, probably offsite?
  5. Assuming after the answers to one and two above are positive, what are his/her plans for the business? Do they plan to run it ‘as you would have’ or do they have larger plans? For example, when I and my business partner bought my family company, I knew what the weaknesses were, and I thought we could fix them, and we was successful, but there wasn’t an organized, written down plan. And, after he bought my controlling stake, he stayed on essentially the same plan for another 15 years, so it was enduring.
  6. What financial arrangements are in place, or could be in place for the new manager to acquire a financial stake in the business? (In our experience, managers should have a financial stake in the company, so they have an incentive to make the business grow and prosper)
  7. Do you have in place a non-disclosure agreement with the prospective handoffee?
  8. If you have performance goals that have to be met, by the handoffee,  are they spelled out?
  9. Is there a buy/sell arrangement that is in place, should the handoffee want to purchase the business?
  10. Do you need the money that you might get from a sale? When and how do you need it? Monthly payments ease the tax and cash flow burden, if not the overall tax of buying the business. BTW, whatever you hammer out with the handoffee, run it buy a tax advisor.
  11. What are the financial metrics that you’d like the handoffee to meet? E.g., profits, return on equity.

Whew.

Do I Need to Worry About Cybersecurity ?

The news is full of stories about the Chinese and the Russians hacking businesses, but the question is whether you, as a small business owner, need to be concerned.

We’re going to outline some thinking points, and you can think about them.

We are going to try to write this from the standpoint of our average client of 50 employees and $5 million in annual revenues.

  1. Do you have any enemies that would want to harm your company, such as disgruntled former employees? An example would be a former employee that took you to court for back wages, or reinstatement during the COVID crisis.
  2. Do you have any corporate secrets that someone in some foreign country or even this country would want enough to hack your computers or cell phones? For example, do you do any classified work for the Defense Department or other agencies?
  3. What kind of protection do you have on your computer network in your office or any remote locations that you have? What carrier to you use for communications? Do they have any security? Note that T Mobile just had it’s entire 52 million person customer list hacked. They clearly have problems. Wireless networks might be more vulnerable.
  4. Can you think of any other vulnerabilities that your business might have?

That’s all for the moment.

Avoid These Hiring Mistakes during COVID Era

  1. Don’t move too slowly, because the available labor pool is smaller than the number of jobs available. We’ve in the past counselled deliberation because the cost of a bad hire is high, but it might be time to temper that deliberation.
  2. Don’t rely on ‘post and pray’, e.g posting your job on a hiring board, even an online one, and pray that the right person shows up. Use multiple job boards, and talk to your employees about who to hire. Many employees come from within your company’s circle..
  3. If you interview on Monday, and the candidate seems good, make an offer; don’t wait all week to think about it.
  4. Don’t insist on office interviews, since not all the people who need to interview a candidate might be in the office. Use virtual interviews over Zoom or some other video platform.
  5. Don’t assume the hiring process over when the offer is accepted. There is less ethical behavior among employees, because they know that they’re in demand.
  6. Start your onboarding process as soon as the offer is accepted; corral the people that the newbie will be working for/with and have them start making the newbie comfortable.
  7. Don’t nickel and dime the offer; guess at what the competition is offering and raise it 10% if you really want the newbie.
  8. Don’t make a big deal of a new hire’s vaccination status: there’s some question legally about how much you can ask. You can get them vaxed later if they’re proving out well.

Investor Tax Credit To Be Extended

The following article appeared in the Phoenix Business Journal on July 21:

AZ Gov. Doug Ducey recently signed a bill that will extend the Small Business Capital Investment Incentive, a program commonly called the angel tax credit that’s designed to encourage investment into startups by giving a tax break to the people writing checks to fund them.

The program, which is run by the Arizona Commerce Authority (ACA) is now reauthorized for $25 million in investor tax credits until June, 2031. The bill says that the ACA can authorize no more than $2.5 million in tax credits each fiscal year. Under the law the ACA must certify both the investors seeking the credits and the small businesses receiving angel funding.

The program was started in 2006, and has had 455 applications since its inception, 140 since being reauthorized in 2017. (JH Note: There was no note of how many were approved during any time period, but it seems rather low)

The program is risky, with a fairly high failure rate, although the tax credits do encourage encourage investors because of the Federal tax laws. There is no indication whether the ACA uses a ‘murder board’ such as Solutions Forum, to review candidates, which was done some years ago.

The bill states that investors get a 10% tax break for three years for their investment,totalling 30%, and is open to non-Arizona investors. The credit is slightly higher for bioscience investments, or investments in rural AZ companies.

The ‘qualified investor’ may be an individual, an LLC investment company, partnership or a corporation, and investments must be at least $25,ooo.

For more details, contact Andy Blye of the Business Journal, [email protected]., or the ACA.

How to Beat the Competition

This is one of my favorite topics, and I’m pleased to present ideas mostly borrowed from INC that I never used (but might have), even while tripling sales in my family company (my first entrepreneurial venture):

  1. Buy a competitors former phone number: in this day of acquisition by out of state businesses, one of your competitor’s old phone numbers might be for sale as a ‘market expansion number’.
  2. Have a phone number that’s easy to remember, preferably one that relates to your business. Numbers with two or three zeros, or alliterative properties are good. For example, when I started my consulting practice, my phone number was 602-995-4000. Made me look like a big time player. Even now, our main number, 480-200-5678 is easy to remember.
  3. Talk to shelf stockers. Find out where the best location for your brand is. It might be better by the door. Talk to your customers, too. Buy as much shelf space with retailers as you can afford, because it makes you seem larger.
  4. Talk to users of your product. My wife and I have a thing for packaging, which might be child proof (assuming kids bought the product) but breaks fingernails in getting it open. The idea is to make using your product as easy as possible.
  5. Snoop through public records. Public companies will often disclose strategy through public filings and you can counter them. My partner in one of my companies found a trade loophole in a patent filing, which we charged through.

No More Mister Nice Guy

There are a number of different leadership styles, all of which I outline in my monograph ‘How to Run Your Business’.

With apologies to INC Magazine, for borrowing their title, it seems to me that the current state of COVID policy in most businesses is a good time for Presidents and CEOs to test their leadership styles.

I’ve been accused of using whatever leadership style will work in a given situation, which is true, and in  Solutions Forum we coach our clients to do the same.

But, in the present COVID problem (it’s not really a crisis to me), it seems to me that people in a position of responsibility have to get the vaccine, and their employees, to keep their jobs, should do the same.

My GP shocked me the other day when she said that she didn’t plan to get vaccinated, but didn’t have a rational reason for not taking the jab. That’s irresponsible, IMHO. But she does COVID tests regularly.

Which means that you, as the leader, can’t play the Nice Guy. You’ve got to be vaccinated, and you owe it to all of your employees that they get vaccinated too. In fact, they owe it to their coworkers. Why run a risk that you don’t have to?

What is means is that unless an employee has had COVID, or has a doctor’s note about having natural immunity, make sure they get vaxed.

How hard is that?

 

Do You Have A Toxic Work Culture?

This topic has been much in the news, but surprisingly, there isn’t a definition of what it is, so we’ll try to define it by asking questions that you should know:

  1. Does your company have a clear mission statement that most of your employees understand and agree with?
  2. Does there seem to be a lot of arguing about things that aren’t related to the business, e.g., politics?
  3. Are the arguments started by one person, or a small group of people?
  4. What have you done to resolve conflicts?
  5. Have you taken a survey in the last six months or less about how your employees feel (yes, it’s an emotional issue) about your culture?
  6. Do you think you could be the reason for the toxic work culture?
  7. If you find you have a toxic work culture, what do you plan on dong about it?

Are You Really Customer Centric?

The economy is perking along, despite what the Washington Wizards tell us—the small businesses I talk to are generally too busy to come have a free lunch with us in Solutions Forum!

Since you’re all busy, we’ve found that your staff might be relenting a bit on it’s customer focus.

In fact, in our new book on Starting, Running and Selling Your Business, we’ve come up with a new term: Customer Centric, which means what you do revolves around your customers.

Some things to look for in determining whether you’re customer centric enough:

  1. What’s your customer loss rate (should be less than 10%) in the last year?
  2. What’s your customer complaint ratio through all of your activities….production, sales, marketing, post-sale service. Just figuring out how many customer transactions you had is an interesting task.
  3. Have you done any recent customer surveys to measure customer satisfaction?
  4. Do you have a customer advisory panel?

There are probably more questions you could ask, but these will start you in the right direction

How to Spy on Your Rivals

I know, you might think this practice is a little out there, but there are actually companies out there who will help you do it, as mentioned in INC Magazine’s Insider.

First is Task Rabbit, who does things you might not want to do, such as providing intel on a competitor. No idea what the fees are, but the example in INC cost $150, which isn’t much if the intel is good.

Second is Clubhouse, which will keep ongoing track of your rivals for you. Fees weren’t mentioned, but they’re probably proportionate to how much intel you want and how often you want it.

Third is Glassdoor, who does reviews on the competition, such as looking at their Yelp ratings, or Trustpilot. You could do this, but you run the risk of the target finding out who’s making inquiries about them. I’ve used both to research potential clients, and recommend them.

Fourth, you could go full monty and hire a private investigator if you really want a lengthly workup on a competitor. I would imagine you’d Google them.