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Monthly Archives: March 2015

Hammernik’s 3 Big Tips For Entrepreneurs

There’s a scathing new film out that seeks to tear down St. Jobs from his Apple Empire pedestal (http://bit.ly/1G944Dy). And that’s fine. He was certainly a flawed man.

But here’s what I know: Steve Jobs made the business of being in business “cool” again. Those old enough to remember can hearken back to the early 80’s, when Lee Iacocca was the leading biz figure. And his contribution? An effectively-managed government bailout of Chrysler. (editor–sounds familiar.)

Then Jobs burst onto the scene with the Apple Macintosh, and Silicon Valley millionaires jumped to the forefront. Guys in their 20’s, with style, making great products which the masses loved. Suddenly, business was no longer the realm of backroom cigar-smoked pinstripes. Oh, and those products sure are great.

And it wouldn’t have happened without a Wall Street IPO in 1980 when Apple raised $101 million.

So, in actual honor to Steve Jobs (and to not get caught up in the modern urge to tear down our public figures), I thought I’d put together my thoughts on real-world entrepreneurship … and how to manage it now.

Again, this is just for the purposes of being a helpful voice to you … I don’t presume to have all of the answers, but I *have* seen a few businesses work pretty darn well in my day.

Hammernik’s 3 Big Tips For Entrepreneurs
“Most of the successful people I’ve known are the ones who do more listening than talking.” – Bernard Baruch

In years past, being an “entrepreneur” could carry a negative connotation. The general public (or “civilians”, as one of my business owner friends refers to them) associated business owners with insanity. After all, who would invest everything they had into running a business that may or may not succeed?

Well, as I mentioned above, Steve Jobs did a great deal to change all of that.

Business ownership is now a badge of courage–something to be admired. In this economy especially, “business opportunity” companies are thriving. But here’s something you may be surprised to hear me say about these folks: Too many of the “new” generation of entrepreneurs want to play it safe.

They start a part-time company while still holding a regular day job. Or, they invest a little bit of money into a company, and back out when things become too difficult.

If this describes you, I have a little bit of news. You are a risk taker. Whether you would consider yourself one or not, you’re an entrepreneur…and therefore a risk taker. You took a risk in starting your company.

But are you holding back to the point where you’re stunting your growth?

Well, I can relate–I’ve never been known as a “free-wheeler”, but I’ve learned a few things over the years about risk–and reward.

So here are a few “big picture” tips for entrepreneurs, which you can use to guide your risk-taking decisions and still see large returns:

1. Invest in your education. The wisest entrepreneurs read about the success/failures of others, and plan accordingly.

2. Invest in a system. If you do not understand the importance of having a system in your company, read Michael Gerber’s books (The E-Myth series). But, I think you probably inherently understand how critical it is to make your business “scalable”.

3. Invest in sales and marketing automation. Marketing is the key to growing your business. And, automation is a way to run your company while you work on growing your company. Rather than investing in expensive sales people, figure out a way to make sales online, or through other advertising media … in a systematic, “hands free” sort of way.

If you’re not taking risks, you will certainly not see the rewards of your efforts. Take the time to analyze the level of the risks you might be taking. But realize that without being willing to go out on a limb once in a while, you will never see the rewards you dream of.

Feel very free to share this article with a Waukesha County business associate or client you know who could benefit from our assistance — or simply send them our way? While these particular articles usually relate to business strategy, as you know, we specialize in tax preparation and planning for Waukesha County families and business owners. And we always make room for referrals from trusted sources like you.

Warmly (and until next week),

Dale Hammernik
(414) 545-1890

Hammernik & Associates

Dale Hammernik’s 10 Ways to Prevent Employee Fraud

I find myself playing a sort of funny role when I sit down to write these weekly posts.

On one hand, I’ve discovered that one of my most critical roles to play with my referral partners and contacts is to encourage them in the face of all of the doom and gloom running rampant in our media today. This requires me to write like a cheerleader sometimes!

And, with the other hand, I’m an accountant! I’m the uptight one in the room, and the one who is punching the brakes just when the visionaries are kicking their spurs and cracking the whip. (I also seem to specialize in mixed metaphors, apparently.)

Well, this week, you get Uptight Dale. But drink up — it’s good for you.

Dale Hammernik’s 10 Ways to Prevent Employee Fraud
“You can’t leave a footprint that lasts if you’re always walking on tiptoe.” – Marion Blakely

You don’t have to be a huge business for there to be major holes in your profit bucket!

I’ve seen enough business owner friends get burned because they did NOT have the following procedures in place, that I wanted to share these policies with my entire list.It is a very good idea to take every reasonable precaution to preventemployee fraud or theft in your company, and further — in the event it does occur — to be sure you are adequately protected with the right insurance.

So, I developed this fraud checklist which is a must for every business. Some of them might seem obvious, and yes they are, but do document (and enforce) this.

Don’t feel as though you’ll seem like a “big corporation” by implementing these — you’ll just be a smart business.

Oh, and I’ll even give you permission to put it in your employee manual.

Hammernik’s Fraud Checklist
1. Develop a code of conduct which explicitly prohibits employees from committing fraud, having conflicts of interest or engaging in any other form of illegal or unethical behavior. Ensure that all your employees, vendors and customers get copies of it. Have key employees provide annual confirmation of their compliance.
2. Have a clear company policy on time and expense reporting.
3. Verify the credentials of all new vendors before they are authorized to supply the company.
4. Make sure all disbursements are properly approved.
5. Use direct deposit for payroll.
6. Require two signatures on checks over a certain amount.
7. Review the bank statements before anyone else does. Consider having them sent to your home address. Review cancelled checks (or copies) and match payee names with endorsements. Review invoices for any payees you don’t recognize.
8. Make sure bank statements are reconciled each month and that your accountant reviews the bookkeeper’s work periodically.
9. Make sure everyone takes their full allotted vacation time and be suspicious about anyone who appears to live beyond their means.
10. If something seems odd, whether it is a disbursement to an unfamiliar vendor or an unexpected expense, check it out and don’t accept a casual explanation.

You can catch or prevent employee fraud 99% of the time just by following these simple steps.

I’m personally dedicated to the success of your business–and your staff. Can other tax accountants say that?

Feel very free to share this article with a Waukesha County business associate or client you know who could benefit from our assistance — or simply send them our way? While these particular articles usually relate to business strategy, as you know, we specialize in tax preparation and planning for Waukesha County families and business owners. And we always make room for referrals from trusted sources like you.

Warmly (and until next week),

Dale Hammernik
(414) 545-1890

Hammernik & Associates

Dale Hammernik On A Smarter Way To Screen New Staff

Last week I encouraged you to take a hard look at the staff you’re “running with”, and whether they’re helping you or not.

And I mentioned that I’d be back with some counter-intuitive thinking about screening and interviewing potential employees who will actually help you.

Here’s what’s great about the approach I’m about to share: It doesn’t have to be used solely with prospective employees. Use this question-asking approach with your *current* staff, and watch your unity and effectiveness soar.

Dale Hammernik On A Smarter Way To Screen New Staff
“When placed in command – take charge.” – Norman Schwarzkopf

Frankly, there is just so much pabulum out there about how to conduct an interview… “What’s your greatest achievement?”; “How do you respond to adversity?”; “What’s your favorite color and why?” … and so on. Yikes.

Many interviewers (and managers) resort to this approach simply because it seems what everyone else does. Unfortunately, it’s not only lazy, it’s terribly ineffective. No, high-quality interview questions should have four characteristics:

1) They should be easy to answer. They need to be direct, and focused into specifics as much as possible.

2) They should have just one answer. Instead of asking a general question like, “How do you deal with deadlines?”, ask,”What was the biggest deadline you had in writing your last book? Step me through how you dealt with that deadline.” The second question gives you specific information you can use to evaluate the candidate.

3) They should have a clear, specific purpose. The purpose of every interview question is the same: to gather a piece of data–but it doesn’t ALWAYS have to be a direct attack. For instance, if you want to know if someone stays current on the latest technologies, a good question would be, “What technical journals do you read?” as opposed to, “What’s the last book you read?”

4) They should be task-related. Sure, we all like to delve into personal issues, but you’re always better off if you stay with topics that are very specific to the job.

I’ve put together a good list of sample questions that you can use as a guide for putting together interviews and performance reviews…these are samples of course, and can be a jumping-off point for you.

*Factual questions
-How many people report to you?
-By what percentage did you increase sales last year?

*Action questions
-How did you handle the last customer problem elevated to your level?
-Step me through how you debugged that particular program.
-How did you build your business plan for the roll-out of that division?

*Candidate-specific questions
-What was the last deal you closed?
-What was the biggest objection you got in that sales cycle? Step me through how you overcame that objection.

To recap, these specific interview questions are good because they require specific examples of behaviors, not just theories that sound good. If your candidate can provide specific examples of past behaviors, chances are she’ll exhibit those same behaviors in the position you have available.

*Probing questions (these are follow-up, clarification and detail questions):
-Tell me more about that.
-Could you please be specific?
-What do you mean by that?

Remember, past behavior is the best predictor of future performance.

I’m personally dedicated to the success of your business–and your staff. Can other tax accountants say that?

Feel very free forward this article to a Waukesha County business associate or client you know who could benefit from our assistance — or simply send them our way? While these particular articles usually relate to business strategy, as you know, we specialize in tax preparation and planning for Waukesha County families and business owners. And we always make room for referrals from trusted sources like you.

Warmly (and until next week),

Dale Hammernik
(414) 545-1890

Hammernik & Associates

Dale Hammernik Discusses A Company Culture Problem and a 3-Step Plan to Employ a Great Team

Have you ever read Michael Lewis’ book The Big Short? It can be scary reading, even now, after the market has “recovered”. Though the reality behind that recovery may not be very firm, as I suppose we are still discovering, even now, years later.

But the book is a fascinating look at the systemic issues behind the subprime mortgage bond crisis which wreaked so much havoc in our economy a few years ago — as it continues to do.

But one thing is clear: human behavior is driven by incentives.

Speaking of incentives, there’s a deadline looming for our clients with a corporation structure: March 16th is the day we need to have your business tax return filed. This is NOT for those who use a “pass through” entity like an LLC, but rather for those who operate as an S-Corporation or a C-Corporation (though it should be noted that some LLC’s can “act” as an S-corp, but still maintain the LLC filing structure).

If you have questions on this, here’s the number to call: (414) 545-1890
Or visit http://WaukeshaAccounting.com/contact

Now, back to the other stuff: Lewis makes the compelling argument that the actual incentive structure within Wall Street firms created a rich environment for self-delusion and greed, on a massive scale.

Not nearly as perverse of course, but your employees are also driven by a series of incentives (just like you, and me too!), and it’s critically important to think through these incentives for how you manage (and whether you keep) your employees.

Here’s what I mean…

Dale Hammernik Discusses A Company Culture Problem and a 3-Step Plan to Employ a Great Team
“When planning for a year, plant corn. When planning for a decade, plant trees. When planning for life, train and educate people.” – Chinese Proverb

The success of your business depends largely on who you hire. You can spend all of your time developing marketing materials, and sales strategies, setting goals, investing in the latest technology and creating infrastructure–but if you hire the wrong people, you are simply not going to grow your business as you would hope. It’s not just “the economy”.

The wrong people damage your productivity, customer service, teamwork and sales. Ultimately, they will prevent your company from reaching its profit potential.

Look at your current staff. Odds are it is comprised of these two types of people:

1. People Who are Keeping Your Business Where it is Now
2. People Who Can Take Your Business Where YOU Want to Go

The ugly truth is: Your people usually can’t be both. And the right people today may not be the right people tomorrow.

I’d like to suggest a 3-step plan for changing this paradigm in your business that will help you employ a great team…

1) Acknowledge the problem.
Until you realize your people are holding you back, you’ll struggle to grow. No matter how much money you spend on advertising, inventory, technology, consultants (or yes–accountants!). Systems don’t work when you have the wrong people running them.

That’s why you need to take a hard look in the mirror, and implement a standards-based review of what’s actually occurring among your people.

2) Bring in new blood.
Make it your objective to only hire the right people for your open positions from now on. Many hiring experts might tell you that employee referrals are the best employees–but that’s only true if the employee doing the referring is a winner! The “right” people are those who fit your culture, their team and the job you are hiring them to do.

In fact, sometimes bringing in new staff sends a signal to current staff that their job isn’t guaranteed.

3) Create renewal.
You don’t always need to fire people for renewal to take place. Usually they will end up quitting on their own; especially once you start surrounding them with motivated, productive, team-players.

When your “mis-hires” and “workplace survivors” eventually quit, you can replace them with more of the right people. Though the earlier you do this, the sooner your business will start accomplishing the goals you’ve set for it.

Next week, I’m going to blow up some of the standard thinking in regards to interviewing and hiring your “new blood”. Be on the lookout.

Feel very free to share this article with a Waukesha County business associate or client you know who could benefit from our assistance — or simply send them our way? While these particular articles usually relate to business strategy, as you know, we specialize in tax preparation and planning for Waukesha County families and business owners. And we always make room for referrals from trusted sources like you.

Warmly (and until next week),

Dale Hammernik
(414) 545-1890

Hammernik & Associates

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Dale Hammernik Discusses A Company Culture Problem and a 3-Step Plan to Employ a Great Team
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The success of your business depends largely on who you hire. I’d like to suggest a 3-step plan that will help your business employ a great team.