Should You Be a Business Owner?
Retirement for Small Businesses
Tip-Toeing Through The HR Minefield
Corrections or additions?
This article by Kathleen McGinn Spring was prepared for the May 8,
2002 edition of U.S. 1 Newspaper. All rights reserved.
Difficult Employee? Or Just in the Wrong Job?
There was a secretary who was discontent. A smart woman
and a hard worker, she was frequently late for work and demonstrated
other signs of passive rebellion. After trying any number of methods
to get the secretary in line, her boss tried one more. "She
promoted
her," recounts
based in New York City. In her new, more responsible position, the
former secretary’s foot dragging behaviors vanished.
"Most people are in the wrong job," says DiResta. "It’s
not skills," she adds. "It’s a disconnect between their values
and those of the jobs. Sometimes people are over their heads, but
not usually." The case of the secretary was a matter of a capable
person who did not see herself as a secretary. A change of situation
turned her into a model employee, and, says DiResta, the same type
of tactic can turn many — if not most — difficult employees
into adequate performers — if not stars.
DiResta speaks on "Dealing with Difficult People" on Thursday,
May 9, at 5 p.m. at a meeting of the Society for Human Resources
Management
at the Holiday Inn in Somerset. Cost: $35. Call 732-356-8905.
DiResta studied speech at Brooklyn College and earned a master’s
degree
in speech pathology from Columbia. She worked for the New York City
Board of Education for 10 years, then moved into the private sector,
where she worked for several Wall Street firms.
"I have experience working with difficult people," she quips.
"They don’t get any more difficult than the people on the trading
floor." In her last position as an employee, her title was
assistant
vice president of sales and trading training for Drexel Burnham.
"I
like the fast pace, the money, the recruiting, and the training,"
she says of her life on Wall Street. What she did not like was the
culture — "the back biting."
Seeking a breather, she left Drexel Burnham and began to freelance,
thinking it would be an interim move. Finding, however, that she
thoroughly
enjoyed working on her own, she formed Diane DiResta Communications
(www.diresta.com) in 1989 and has run the business ever since.
She gives a number of speeches and has written a book dealing with,
among other things, how to cope with difficult audiences. It is called
Knock-Out Presentations: How to Deliver Your Message with Power,
Punch,
and Pizzazz.
Here is her advice for turning a difficult employee — or boss,
or audience — into putty in your hands:
raging boss, or a heckler in an audience, chances are that the unhappy
individual is not unhappy with you. "He may be having a bad day.
He may have gotten bad news. He may have poor self-esteem," says
DiResta, ticking off just some of the reasons that this person is
inclined to give you grief.
really win — a battle with a sour subordinate, cranky boss, or
quarrelsome member of your audience. "Don’t engage," advises
DiResta. "It’s a lose/lose situation. If you engage, you’re the
enemy." Even if you win the skirmish, there is an excellent chance
that your adversary will rally support, and will strike again.
"It’s not `you’ and `I,’ it’s `it.’" Listen. Find out what
the problem is, and work on the problem itself. If the other person
is not ready to talk about the problem rationally, walk away,
promising
to talk things out at a calmer moment.
presentation,
look for signs of resistance, a sure signal that trouble is brewing
below the surface. Examples of resistance, says DiResta, include
silence
or one-word replies, closed off body language, and side talk. Be open
about this behavior. "Start a dialogue," says DiResta.
"Say
`I’m sensing a little resistance.’" Get to the root of the
problem.
Perhaps an employee doesn’t understand how to do a project. A failure
to be clear about expectations and deadlines is a frequent cause of
balkiness.
Perhaps an employee needs more independence. The latter is a common
problem, DiResta says: "if you’re a hands on boss, you may have
to back off."
DiResta has seen that careful listening, clear guidelines, and a
respect
for an employees’ egos and work styles will bring most difficult
workers
around. Bringing a difficult boss to heel is a much thornier problem.
One suggestion she offers is to be sure to communicate in the way
the boss prefers. If he is an E-mail sort of guy, grabbing him in
the hall for an impromptu conference may be off-putting. If, on the
other hand, he values face-to-face interaction, E-mail updates,
comments,
and complaints sent to him may get little attention.
Another tactic for dealing with the difficult boss is to present
solutions
along with problems. Let him know what you have already tried to do
to resolve the issue, and what else you would like to try. This works
better than throwing up your hands and putting the whole mess in his
lap.
With a difficult boss — someone who is perhaps disorganized,
arbitrary,
and mercurial — DiResta says many employees are left with no
option.
A request for a transfer or a new job may be the only answer. "You
have to cut your losses," she says.
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Should You Be a Business Owner?
Do you have the stuff it takes to succeed as an
entrepreneur?
If you can feed on joy and angst in almost equal degrees the answer
may be yes. Both emotions routinely greeted
she awakened in the morning, and when she was jolted awake in the
middle of the night too. For 15 years, Eagle ran Gail Eagle Associates
Custom Publishing, an East Brunswick-based business she sold just
about one year ago.
Eagle, whose company had as many as 10 employees, has moved from
running
a business to advising others on whether the life of a small business
person is for them. She is now assistant regional director of the
Mercer/Middlesex Small Business Development Center. She moderates
a panel on "Thinking About Being Your Own Boss?" at the New
Jersey Chamber of Commerce 2002 Small Business Conference, which runs
from 8 a.m. through 3 p.m. on Friday, May 10. Other panels include
"Traditional Marketing, Advertising and PR," "Marketing
Using Technology," "How to Get Financing for Your
Business,"
and "The ABCs of Buying a Business." Cost: $69. Call
609-989-7888.
Eagle sold her business because "plain and simple an offer was
made." Also, she says, it was time for the company, which
published
a number of specialty publications and did marketing and public
relations,
to move to the next level. Does she miss the life of an entrepreneur?
"Not as much as I thought I would," she says. While the
never-boring
lifestyle of an entrepreneur brings with it tremendous excitement,
it also carries heavy responsibility. Shedding some of that
responsibility
was a relief.
"Owning a business," Eagle says, "becomes an obsession.
It overtakes your life in some ways." That can be good. "It’s
so exciting," she says. "It requires you to accomplish things
you never thought you could do." But it can be wearing. Anyone
thinking of taking the plunge would do well to do so with eyes wide
open. Here are some key considerations:
it could not be more important. "Would you drive from New Jersey
to Wyoming without a map?" asks Eagle. Creating a business plan
is even more important. It provides key information on demographics,
demand, finances, personnel and so much more. But even more than that,
it is a test. If a person is unwilling to go through the work of
creating
a business plan, says Eagle, that is a pretty good indication that
he is not cut out to be an entrepreneur.
the CEO, CIO, COO, CFO, facilities manager, marketing director, and
then, at the end of the day take the garbage out?" asks Eagle.
If the answer is no, think twice about the entrepreneurial life.
someone
who is prepared to assume three or four or five of the above job
titles,
but knows he would be no good as a CFO? Or who thinks he can do it
all — except the marketing? No problem, says Eagle. Self-knowledge
is critical. If a would-be entrepreneur knows he has no talent or
maybe no patience for one or more essential tasks, he needs to set
aside funds to outsource that task or to hire someone to perform it.
says Eagle, tend to be resourceful, organized, good negotiators, and
risk takers. Add a sense of humor and family support to the list,
and all the personal ingredients are in place.
who might not make it as a business owner is the non-flexible,
super-organized
type. An entrepreneur has to be ready for anything, must realize that
change is the only constant, and must take it all in stride.
but, says Eagle, it doesn’t. The SBDC can put entrepreneurs in touch
with lenders, but the lenders expect to be repaid. What they look
at, she says, is an entrepreneur’s credit history, his collateral,
and the amount of his own funds he is going to commit to the venture.
more — fail for lack of cash flow than for any other reason. So,
is bigger cushion going in the answer? No, says Eagle. The key is
planning, scrupulous planning for every facet of the business.
to help all entrepreneurs, those for whom a business is still just
an idea, and those who have been working a business for many years.
Help includes one-on-one counseling to determine feasibility, sessions
with lawyers, accountants, marketers, and other professionals, and
workshops. Counseling sessions are free, and workshops carry, at most,
a small charge.
are showing interest in a number of opportunities, including
consulting,
retail, and technology. A former SBDC client herself, Eagle says she
is enjoying shepherding others through the process. Succeed or fail,
she says, owning a business teaches so much that "you can apply
to every part of your life."
The lessons even spill over to the next generation. Both of Eagle’s
children have benefited from growing up in an entrepreneurial family,
she says. Her son, Scott, is a national sales manager for Disney-owned
radio stations, who brings an entrepreneurial spirit to his job. Her
daughter, Dana, is a comedian and actress, who recently moved from
New York City to Los Angeles. Dana, she says, understands the business
side of entertainment.
For Eagle herself, a decade and a half as a business owner continues
to pay dividends. "It gives you such a sense of confidence,"
she says, "a feeling that you can do anything."
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Retirement for Small Businesses
Small business owners deserve to retire too. Heaven
knows, they work hard enough. But, focused on their companies and
often working 24/7 to make them profitable, some neglect retirement
planning. Take some money out of the business, and put it to work
in investments ear-marked for retirement, advises
a financial advisor with Merrill Lynch.
Seamon speaks on "Retirement Planning for Small Business"
at the Middlesex County Regional Chamber of Commerce’s 48th Annual
Business Resource Day on Tuesday, May 14, at 11 a.m. at the New Jersey
Convention and Expo Center in Edison. Other speakers at this free
event address issues of interest to small business, including human
resources, accounting, insurance, and credit card processing. Call
732-821-1700.
Seamon, who studied accounting at Rider University (Class of 1991),
has worked for Merrill Lynch ever since, first at the company’s home
office, and then as a financial advisor at its East Brunswick office.
Saving for retirement is an issue for everyone, but it can be
particularly
tough for business owners, who sometimes put all of their resources
into their businesses. "Diversify," says Seamon. He hesitates
to pull out the old saw, but "don’t put all your eggs in one
basket,"
fits the situation perfectly. "Separate out some of your
wealth,"
he advises. "Take some money from the business to fund
retirement."
Make a plan, he says, offering this advice on doing so.
a business owner and for his employees — starts with an analysis
of a business’ current situation. Tote up assets, look at cash flow,
and make sure insurance is in place.
of all. Decide when you want to retire, and how you want to live.
A business owner with 20 working years left, no children to educate,
a wife with a trust fund, and a desire to spend his golden years
tending
the garden in front of his humble Cape Cod will want a different
strategy
than a business owner who wants out in five years, has a daughter
headed to medical school, and dreams of traveling the globe —
maybe in his own sailboat.
analyzing expenses, and clarifying goals, designate money to go toward
retirement savings.
choose
among a number of retirement plans that carry tax advantages. Among
them are SEP accounts, 401 (k) plans, and profit sharing. Often
employees
need to be covered, too, and allowed to contribute — or have
contributions
made for them — in the same percentage as their boss’s
contribution.
Maximum contributions to some of these plans have been raised this
year, and will continue to go up for the next several years. "You
can put up to $40,000 in a SEP this year," says Seamon. All of
these plans are relatively easy to set up, and carry low
administration
fees.
up a companywide, tax-advantaged plan, say a 401 (k), can still put
money into a Roth IRA. This retirement account does not confer an
immediate tax advantage, as a standard IRA does, but withdrawals are
tax free.
plans, a small business owner should consider other investments. Real
estate, a portfolio of stocks and bonds, and CDs all help cushion
the transition to a life after work. A recent Wall Street Journal
poll finds that those who invested in a number of these vehicles enjoy
a substantially more satisfying retirement than those who did not.
"Brainwashed"
by his Merrill Lynch training, he started his own retirement accounts
nearly a decade before his 30th birthday, but he says that even
50-something
business owners still have time to save themselves into a comfortable
retirement, "as long as they’re realistic." At that point,
he figures, a million dollar house by the sea might not be in the
cards. But a comfortable retirement is still within reach.
Top Of Page
Tip-Toeing Through The HR Minefield
The biggest HR mistake employers make, says attorney
to new hires." New Jersey is an employment at will state, which
means that any worker can be hired or fired for any reason, as long
as retaliation or discrimination is not involved. Employers, however,
may give away their right to fire at will by a simple hearty greeting.
Something like "Looking forward to having you become a part of
our family here at XYZ Corp." can be enough to create an implied
contract of employment, especially when combined with a couple of
other equally innocuous-sounding statements or policies.
A good attorney, says Harris, keeps employers from drafting documents
that can help sink them, while at the same time encouraging the
creation
of documents that provide protection — not only in wrongful
discharge
suits, but also in such matters as the protection of trade secrets
and intellectual property. Harris speaks on "Top 50 HR Do’s and
Don’t’s" on Tuesday, May 14, at the 48th Annual Middlesex County
Regional Chamber of Commerce Business Resource Day, a free event that
runs from 11 a.m. to 7 p.m. at the New Jersey Convention and Expo
Center in Edison. Call 732-821-1700.
Harris, a partner in Wilentz, Goldman & Spitzer, graduated from
Washington
and Jefferson College in 1988 with a degree in psychology and English
and earned her J.D. from New York University. She spends her days
counseling corporate clients. A vivacious woman with a good sense
of humor, she takes a down-to-earth view of the limits of putting
a moat of legal protections in place.
"Employers ask," she says, "what can I do to avoid being
sued?" Look, she tells them, "the court house is open to
everyone."
Anyone who wants to file suit will get a hearing. Avoiding casual
statements — written and oral — and having good policies and
procedures in place, however, greatly improve the chances that any
such suits will be settled quickly and with a minimum of pain. The
same strategy can protect a business from loss of customers,
reputation,
a steep drop in value, and even a roadblock when it comes time to
sell the company. Harris’s advice:
handbook
is no big deal. In New York, for example, courts give it little weight
as a promise of continued employment. In this state, however, the
books, passed out so casually by employers, and quickly thrown away
by legions of employees, can be ticking bombs. "In New
Jersey,"
says Harris, "courts will go along with an implied right of
employment."
A lot of her clients come from New York, bring along the handbook
they used at their former company, change the name on the front and
pass it out. If the book speaks of the long, happy days each employee
will spend with the company, the employee could infer that he was
being offered lifetime employment. If the book mentions a probationary
period, the employee might think that after he got through that two
or three months, he would be home free, unable to be dislodged from
his job. "What it might mean is that insurance would not start
for two or three months," says Harris.
Not all employees who sue citing such language are out to get their
employers, she says. There can be genuine differences in
interpretation.
This is among the reasons that she says a handbook is not a great
idea for a small company. Better to do without than to risk sending
out a message that could be interpreted as a promise of lifelong
employment.
Companies that do opt for an employee handbook would do well to seek
expert legal advice in drafting the document.
than it is worth, but, says Harris, individual policies and procedures
can save the day. Should an employer, for example, be sued because
of alleged sexual harassment, it is very helpful if he can point to
workshops, training sessions, written guidelines, and posted policies
indicating that his company will not tolerate such behavior.
years,
attracting high-quality employees has been a struggle. The situation
has eased a bit, says Harris, but is still an issue. In this climate,
employers have been using every weapon in their arsenal to pull in
the best employees. Offers of stock have become very popular, but
can be dangerous.
"A client of mine owned 85 percent of his company, but gave away
15 percent to three employees, five percent to each," Harris
recounts.
In New Jersey, even minority stockholders have rights, and when the
business owner recently wanted to sell, the stock he had given away
came back to haunt him. The buyer insisted on including the three
minority stockholders in the negotiations. Two, it turns out, were
on good terms with the, and did not cause a problem. The third,
however,
had become a competitor and was not on good terms with the owner.
The stock he owned gave him leverage, says Harris, and greatly
complicated
the sale.
actual stock, says Harris, is presenting some or all employees with
"phantom" stock. This is basically a contract that promises
to pay employees a percentage of certain stock events, such as an
IPO or a distribution. This way, she points out, employees share in
the success of the company, but do not have the leverage they would
have as actual stockholders.
confidentiality
clauses in employment contracts and restrictive covenant agreements,
employees agree to keep their employers’ secrets, and, by extension,
the secrets of their employers’ customers. They may also agree not
to go to work for a direct competitor should they quit and not to
raid their employer’s personnel roster should they start a competing
business.
Harris says employers need to take care in drafting these documents.
"You can’t shut an employee down," she says. He must still
be able to make a living after he leaves your employ, but if documents
are carefully drawn, and do not appear to single out an individual
employee without a good business reason, courts will be inclined to
uphold the agreements. And the agreements could save a business.
Without
them, a former employee, say an individual with knowledge of all vital
source code and relationships with all important customers, could
set up shop across the street, hire his former co-workers, and cripple
his former employer.
few employers relish, yet it is often necessary, and the smart
employer
will be prepared. Among the issues, says Harris, is asking terminated
employees just what company property they have — and asking to
have it back. Along with the laptop and cell phone, be sure to ask
if the employee has downloaded any files from the computer. If the
answer is yes, get the disks back.
Many employers have discharged employees sign a release agreeing not
to sue. To be valid these releases must be accompanied by what the
courts call "consideration." Consideration in this context
often is a severance package. Sometimes an employer fears that a
certain
discharged employee may bring a claim — perhaps for age or gender
discrimination — and he has that employee, but not other
discharged
employees, sign a release. If that employee is given just the standard
severance package, the release will not mean much.
Craft the release carefully, says Harris, particularly if the employee
being discharged is part of a protected class. The release is not
a guarantee that the employee won’t bring a lawsuit — and won’t
prevail if he does — but it’s a help. Or, as Harris says,
"It’s
not 100 percent bullet proof, but at least it’s a bullet proof
vest."
showing them the door. Missteps can drain time and money from a
business,
and can even bring it down. Being careful about what papers to prepare
and what policies to put in place will minimize the danger. Says
Harris:
"you never know what’s going to blow up."
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