Mike Michalowicz's Blog, page 77

Is Money Always the best Way to Reward Employees?

Employees love to be rewarded. Heck, we all do! It makes us feel good and appreciated for the things we do. But, believe it or not, money may not be the best way to reward employees. That’s because there is too much “routine” involved in giving money as a reward.

You know the routine – like it being time to give out the Christmas bonus again. What was it last year, an extra two weeks of pay? This year, you better match it, even if you can’t afford to, because, well, you have set the precedent. From the employees’ standpoint, money is nice, but when it comes to routine, it isn’t so much ‘nice’ as it is ‘expected.’ And when you don’t deliver on that expectation, well, people get upset and disappointed.

Change It Up

So here is the first lesson: Whatever you do, don’t reward employees the same way every time. Don’t always give them the same $100 or the same pat on the back. You need to be careful about setting an expectation where the reward is perceived as simply being part of their “normal compensation.”

But here is the biggest thing that employers miss – money is a very short high. When you get money, it is exciting for maybe 10 minutes. Then it dies off. The reason is because money isn’t tangible. I mean, really. You get it on a small piece of paper (like a check) or a few bills, and then it disappears.

Lasting Options

There is a better way to reward employees on many occasions, and that is with a thoughtful gift. Why? Because a gift is tangible and has lasting power. That gift will come up in their thoughts again and again. The employees will get to use the gift again and again – providing that you gave them something they will actually use and that is an appropriate recognition for their efforts.

Here is what you can do to make sure you give them a gift they will truly appreciate:

– As you work with your employees, and personal conversations happen, make a note of the things they like or want.

– Write those things down because, when it comes time to get a gift, you will not be able to remember, as hard as you try.

– Build a list of these things to reward the employee with, when the time is right. You will also need to make sure that the gifts are appropriate.

Here is an example of how I did this with an intern who worked in my office last summer. He was working for free, to build his resume and gain some experience in the field. One day, he mentioned how he loved the Xbox and wanted one. It caught my attention, and I asked him what kinds of games he liked, and how many people he likes to play the game with. After the conversation ended, I quickly jotted down the details.

With that accomplished, I bought the Xbox, games and controllers. One vital tip you need to understand is that, if you give a gift, give the full function of the gift. An Xbox is useless without games and controllers. So giving just the Xbox would have been a burden on him, not a gift.

Making It Special

What an amazing day it was, when I gave him the gift! The total gift cost around $650, but the experience was priceless. On the last day of his internship, I walked him into the conference room, where I had the gift wrapped up in 7 different boxes. It was like Christmas morning for him! I told him how much we valued his help, and our hope for his future success, and then I told him to tear into the gifts.

I can’t tell you how thrilled he was! He jumped up and down, shouted, even hugged me. He called all his friends to share the news and announce a game night, that night at his house. He was absolutely thrilled! And, as a little extra surprise, I told him he had the rest of the day off so that he could set up for his game night.

The Payback

What we got back in return from that gesture was huge! He sent a nice thank you card and a voice mail, saying he couldn’t believe the generosity of the company, and that all his friends wanted to work there. Over a year later, I interviewed an exceptional guy who seemed eager to do anything, just to work for us. After we hired him, I asked why he wanted to work with us so badly. He explained, “Everyone does. Everyone knows you guys care about your people like family.” As it turned out, he had heard about us from the intern, when he stopped by his house and asked, “Where did you get the Xbox?”

So giving thoughtful gifts works! But one note – don’t think that giving money to an employee so they can get the gift is the same. They will have the momentary excitement over the money, but it will be quickly forgotten. And when they buy the gift themselves, it won’t make them think of you, it will only make them remember what they picked out for themselves.

How To Figure Out Your Competitors Revenue

Analyzing your competitor’s revenue is a helpful tool in measuring your own progress and potential.  Duh.  It’s not rocket science.  You won’t beat ‘em if you can’t find the finish line.  So how much are your competitors taking – or raking – in, and how the hell do you find out?

If your competitors are public companies, than you get to read all about their top line and bottom line in the annual audit report available to investors.  Of course they’re not always truthful (surprise!)  Sure, the government cracked down on the Enrons of the world, trying to avoid another disaster for investors, but people always find a way to lie.

For small and private companies, lying about top line revenue may have more to do with hiding the trouble so as not to worry staff or negatively affect the brand.  Or it is just chest pounding ego. Either way the lies are rampant.

Sometimes it’s a little white lie, like rounding up on the number.  Sometimes it’s a huge lie, like making up numbers.  (Pay no attention to the man behind the curtain!)  And sometimes it’s a lot of money and they don’t want you to know how much they’re hiding under the mattress.

But some companies are honest about it – they’re not going to tell you how much they make and that’s that.  It was nice of you to ask, but it’s none of your business.  Okay.  Fine.  Time for Plan B.

To get to the truth, you’re going to have to do a little spying, but not as much as you think.  And no gadgets required.  Sorry.

Read quickly.  This blog post will destroy itself in sixty seconds!

1. Find out how many full-time employees your competitor has.  Most people will not dodge this question or fudge the number.  If you have trouble getting the information, just call and ask the receptionist if she’ll participate in a three-question survey.  Come up with two other benign questions she wouldn’t be afraid to answer, like “Where do you buy your office supplies?” or “Which crappy chain restaurant do you use for holiday parties?” Then ask the big one, “Approximately how many full time employees do you currently employ?”

2. Multiply the total number of employees by $125,000 and then again by $200,000.  The company revenue is likely between these two numbers.

3. If your competitors are in trouble their top line revenue is on the low end, and if they are doing well, it will be on the high end.  If they are kicking ass and taking names their revenue will be above $250,000 per employee.  I know one small private company that is bringing in $1,000,000 plus for each full-time employee – that is AWESOME!

4. How can you tell if a competing company is in trouble?  That, my friend, is a spy lesson for another day.

Why does this calculation work?  Because generally, when revenue increases so does the workload.  And for many business models, revenue is dependent on employees, such as agents for real estate firms or other sales staff.

Get your top secret on and figure it out.  Soon you’ll be calculating top line revenue in seconds flat.  You’ll even be doing it at parties.  (Hint: Don’t do it at parties.  You’ll never get a date.)

You Are Your Name

This article exemplifies the power of the words we use…

There are more “Clays” in the pottery business compared to other namesakes.

There are more “Melodies” and people with the last name “Singer” in choirs than other vocalists.

There’s more “Johns” that are #1 in the #2 industry.

It’s all related to the power of suggestion; We repeatedly hear our own names over and over again, therefore we become what is subconsciously suggested to us. So what name will you give yourself? “Loser” or “Winner”?

Episode 59: Concrete Profitability with Nick Dancer

Also Available On

 

Show Summary

Nick Dancer joins Mike Michalowicz, Chris Curran and Kristina Bolduc for Episode 59 of the Profit First Podcast! Nick talk about his experience with implementing the Profit First system in his business.

 

Our Guest 

Nick Dancer began his work with concrete right out of high school working a summer job pouring concrete basements. In 2007 he started what is now known as Dancer Concrete Design. Initially creating custom architectural elements out of concrete such as countertops and furniture he found his true passion in changing the design of a space through concrete flooring. Nick has a vast portfolio including works installed on projects ranging from small residential to large commercial projects. His passion and love for concrete and his developing awareness of design encourages Nick to always find solution to various problems. Dancer Concrete Design works with clients who value open communication, quality workmanship, and good design and they hold themselves to a high level of accountability and look to serve. Nick and his team only complete projects that they can be proud of. Nick is also very involved in the decorative concrete industry by speaking at conferences and writing for various trade publications. Dancer Concrete + Design serves residential, commercial and industrial clients and has no limit on project size or concrete condition and welcomes the challenges that other contractors may turn away.

 

Show Quotes 

Prior to Profit First, Nick tried to grow his business by forcing growth. He thought if he hired enough people growth would just come… but that didn’t work so well and they ran out of funds. They were a 10 person company and brought in a little less than $1 Million dollars in revenue; November and December were their weakest months. Nick sold his personal car to make payroll which was a wake-up call. They needed a systematized way to handle their bills and incoming receipts. That’s when Nick was introduced to Profit First… now they are a 14 person company and will do over $1 Million dollars in sales, and November and December have been their best months.

What we don’t like we push off until later; whatever get’s pushed off until later never gets done.

Start a tax account to prepare for taxes. Also consider setting up an extra account for “charitable giving” – if you’re involved in your community and someone asks for donations or sponsorship, you already have money budgeted for it. “When in doubt, set up another account.”

Staying disciplined with your accounts is crucial!

 

Show Links

http://nickdancerconcrete.com/

http://nickdancerconcrete.com/core-values-promise/

http://nickdancerconcrete.com/life-of-purpose/

http://nickdancerconcrete.com/photo-galleries/

 

Corporate Partners

Nextiva – VOIP phone providers for small businesses.

Fundera – Single source online funding for entrepreneurs. Also offers an adviser program for CPAs, bookkeepers and business coaches.

TSheets – The #1 customer rated time tracking solution!

Fundbox –  the simplest and fastest way to fix your cash flow by advancing payments for your outstanding invoices.

Hire People Who Care

I don’t care what your skills are. If you don’t give a shit, it will be reflected in what you do. And I, your employer, will lose.

I could give a shit about your skills, if you care tremendously about your work. It will be reflected in what you do. And I, your employer, will win.

Episode 58: Women Empowerment and Profitability with Michelle Patterson

Also Available On










Show Summary

Author and Entrepreneur Michelle Patterson joins Mike Michalowicz, Chris Curran and Kristina Bolduc for Episode 58 of the Profit First Podcast!  Michelle gives female entrepreneurs fantastic tips on how to become as successful as possible.

 

Our Guest 

Michelle Patterson is the CEO of Women Network LLC, a media and production company giving women a voice to share their message.  Women Network’ s  “umbrella platform” shines a light on organizations and corporations who empower women and bring them together as a community to experience “We are Better Together.”  Women Network is creating the largest community of women globally.  They are the exclusive event producer of the California Women’s Conference.  This fortunate relationship allows Women Network to provide additional promotional benefits to the California Women’s Conference through its array of web media functions.

Michelle Patterson’s name conjures up many credits – visionary, author, acceleration executive, founder, passionate, talk show host and dynamic speaker.  She is a woman of many talents and dimensions.  She is also the founder of Global Women Foundation, a 501 (c)(3) non-profit public charity created to bring women together to create global change by empowering them to transform their communities. Its mission supports women to effectuate this change through serving as a world-wide conduit for connecting community, mentoring, education, and financial support.

 

Show Quotes 

Have that passion project and continue to work for it, but don’t undermine your value! Get paid for the work and services that you’re doing.

It often boils down to confidence and over-criticism. If a man goes into an interview and has 3 out of the 10 requirements for the position, he may still have the attitude of “I’ve got this!” If a woman goes into the same interview with 7 out of the 10 requirements, she will still be uncertain about her qualification of the position because she doesn’t have all 10 requirements.

Having women engaged in senior level positions will help your company be more successful because of the diversity.

Step into you’re greatness and make the decision to take advantage of opportunities that come your way.

You need to be your biggest advocate – not to brag but to show the world what you do!

Ask for help! You don’t have to manage it all on your own – recognize your weaknesses and ask for help when you need it.

Reach outside your comfort zone! Growth happens when you’re uncomfortable.

There are 5 elements that tie into true happiness (only 7% of people in the world have all 5):

1. Career – how you’re spending your day

2. Physical – having the energy to do what you want to do

3. Financial – having the means to do the things you want to do

4. Relationships – having a support system

5. Community – how are you engaged with your community? Are you giving back?

 

Show Links

Website: http://womennetwork.com/

 

Corporate Partners

Nextiva – VOIP phone providers for small businesses.

Fundera – Single source online funding for entrepreneurs. Also offers an adviser program for CPAs, bookkeepers and business coaches.

TSheets – The #1 customer rated time tracking solution!

Fundbox –  the simplest and fastest way to fix your cash flow by advancing payments for your outstanding invoices.

Ask for Money. Ask for Advice

Ask for money and you get advice.

Ask for advice and you get money.

Be Unique. Be Interesting.

Not a single unique person has a universal appeal.

Not a single interesting person is universally liked.

Yet the people with the courage to be truly unique are the most interesting and most liked by some.

How To Be Positive About Something Negative

I am not sure if this applies to entrepreneurship as much as life itself, but here it goes.  I was at the gym yesterday, and the woman on the treadmill next to me was clearly cranking some Phillip Phillips in her headset.

Her squeaky, ear warping, horrible voice was singing “cause I am going to make this place your home.”  Her singing was miserable. Her voice was ugly.  She was distracting.  And my inner voice started to hate her and her crow voice.

As a mini-rage started to consume me I noticed that I started to lose my running gate.  I stumbled.  Isn’t it funny, when we put our focus on what we don’t like that the wheels start coming off the cart on everything else?

The good news is that for some reason, I caught myself in my mini-rage negativity. I did an attitude of gratitude flip, using a process that you too can use the next time negative energy starts to consume you:

1. Acknowledge What You Don’t Like – For me this was super obvious, it was that woman’s nasty voice.

2. What Is The Exact Opposite Of What You Don’t Like – This was an easy one for me too: Silence.

3. Look For Instances Of The Opposite –  I looked around to see if there was silence. Sure enough about twenty people, who were also running, weren’t making a peep (expect for the usual grunts and gasps).

4. Consider Too Much Of A Good Thing –  I asked myself if life only had the one thing I wanted (silence) and never anything else, how would it feel?  I thought that would kinda suck.  Silence forever sounds good for a moment, but about 3 days into it I suspect it becomes a major drag.

5. What Brings Balance? I asked myself what would bring balance to too much silence. A squeaky, ear warping voice may suit that situation.  And with that, all of a sudden, that signing wasn’t so bad after all.

The Bigger The Fix, The Bigger The Pay

The bigger problem you solve, the more you will get paid to solve it.

Fix big problems.