Since I make it my practice to put together this missive on Monday mornings, I don’t yet have any commentary about this week’s midterm elections. Once everything settles out, I’m sure I’ll have something to say.

Because there are so many “hidden costs” with all of our everyday decisions (in business AND life) … and I simply can’t turn that part of myself “off” when I look at the decisions made by politicians (nationally AND here locally), and by other businesses.

And of course, there are the very real, not-so-hidden costs which we started talking about last week.

So I’ve put this together, to help you as you consider these decisions — but also as a friendly reminder that I’d love to figure out a way that my firm could come alongside you and your business, and help you eliminate the “hidden costs” of poor planning.

Randall Hancock’s Last 2 Keys to Chopping Costs Correctly
“If you want to achieve excellence, you can get there today. As of this second, quit doing less-than-excellent work.” – Thomas J. Watson

Last week, you and I discussed how to reduce overhead expenses, as another way to help your business thrive in this economy.

We talked about how one of the most expensive overhead items for almost any business is payroll. So, in this week’s post, I’ll share with you two more ways to reduce the cost of payroll. Here they are:

3) Hire slow, fire fast.
This is a somewhat “tried and true” adage…and it’s that way for the simple reason of its eternal truth.

Please…don’t hold on to people that aren’t contributing to the success of your organization. Firing someone is tough work for any small business owner, but if it’s got to be done, you’ve just got to do it. And do it NOW!

A quick tip: identify some clear benchmarks for a struggling employee to meet. If they continue to NOT meet these guidelines, you’ve got a safe standard to point to, if the firing ever gets dicey.

Now you can avoid poor hiring decisions by simply spending more time in the hiring process. This can be difficult, if you’re feeling the need for more help — but it really does pay off.

Develop an interviewing and screening “system” (i.e.–don’t go with your “gut”) to use when searching for new candidates, and have a few people in your company interview the candidate. Avoid “open-ended” questions, and ask your candidate to specifically identify successes and failures from their past.

4) Start by establishing clear deliverables and deadlines with every employee.
Then, set aside time on your calendar to “inspect what you expect”. As I’ve mentioned before, don’t just “assume” that because you assigned a project to an employee, it will get done satisfactorily! (You know what happens when you “assume”.)

Take time to inspect the results and to give constructive feedback to your employee. It’ll be a great way for both of you to make sure that your business is running on all cylinders.

Feel very free forward this article to a Birmingham 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 Birmingham families and business owners. And we always make room for referrals from trusted sources like you.

Warmly (and until next week),

Randall Hancock
(205) 715-4488
Randall M. Hancock CPA, PC