Business Banking E-Newsletter - July 2013
The Power of Giving Back: How Community Involvement Can Boost Your Bottom Line
Companies that encourage community involvement distinguish themselves from their competitors, and see many benefits, including loyal customers and happier employees. According to a May 2013 study by Cone Communications and Echo Research, 82 percent of U.S. consumers consider corporate social responsibility (CSR) when deciding which products or services to buy and where to shop.
"I've found that customers really want to know how you're making the world a better place," says Erin Giles, an Aiken, S.C.-based business philanthropy consultant who helps entrepreneurs find causes they're passionate about and incorporate their message into their business. Moms and Millennials are particularly interested in a business' corporate social responsibility platform, Giles says.
Here are four things to consider when incorporating community service into your business plan.
1. Build relationships within your community.
Look at your community to see what's important. Are the schools struggling? Does the animal shelter need donations? For example, Cody Pierce, vice president of marketing for Orange City, Iowa-based Pizza Ranch franchises, says the restaurants host "community impact" nights, where friends and family members bus tables to support a local cause, such as raising money for a class trip. Pizza Ranch donates the night's tips and 5 to 20 percent of the profits to the cause, while community members often provide additional donations.
The business benefits because it fills the restaurant on a typically slow night. He says building relationships starts by making genuine connections with your customers, then finding ways you can contribute.
2. Get your employees on board.
Giving employees an avenue to give back is important to morale and builds a collaborative and inspired team, Giles says. "When your employees love what they're doing, they do a better job," she says. Giles suggests that businesses offer employees an opportunity to volunteer during work hours or participate in get-togethers after work, which is more fulfilling than just meeting for drinks.
Volunteering also provides leadership opportunities for employees, which leads to increased staff performance and fulfillment and, ultimately, increased productivity and sales, Giles notes.
3. Create a custom volunteer plan.
Giles recommends that business owners evaluate their business and employee strengths and select volunteer activities that draw upon those strengths. For example, if you own an accounting firm, you could volunteer to help a nonprofit set up their accounting practices or do their taxes.
Likewise, if you own a restaurant, consider catering a school staff meeting to show your appreciation for your local teachers. Pierce says this may open the door to future catering opportunities, an incremental way to increase revenue. Decide how much time your employees can volunteer through the business on an annual basis, taking into account your operation demands.
4. Let customers know how you're giving back.
Once you've implemented your volunteer strategy, let current and prospective customers know what you're doing by including this information on your website. Giles suggests putting a dollar amount of how much your donated time or services would normally cost next to the number of hours your employees have spent giving back so it's easy for customers to understand how much your company gives to the community.
Business Growing Pains, How to Meet the Challenge
Although there are many types of businesses, the challenges that growth can bring to each of them is surprisingly consistent. Knowing what these risks are, and facing them head on, can help to ensure ongoing success. Here are the core areas that should be addressed and monitored in order to ensure the health and productivity of your growing business:
Whether your business is a startup, a relatively new enterprise, or a veteran company, it is important that you clear your daily calendar of clutter that can be easily outsourced or digitized. You will also gain quality time to brainstorm creative, new ideas that can ignite even greater business expansion in the future.
Review your business' processes
The processes your business uses to facilitate mandatory functions—payroll, tax administration, employee benefits—and to manage growth—inventory, fulfillment, customer relationship management—obviously become more important as your business moves into expansion mode.
Give up control
As business starts to expand, the entrepreneur must evolve from a multitasking, jack-of-all-trades mindset into a big-picture leader who inspires his or her team to meet and exceed the organization's mission. Let your team do what they were hired to do and inspire them to ascend to even greater heights.
Hire smart talent
Hiring the best talent requires a trained professional who will identify skills your ideal candidate must have. Unless such a professional is a part of your team, it is often a good idea to outsource the process to a firm that can fulfill your recruitment requirements.
Keep an eye on cash flow
A few tips that can improve your cash flow include:
- Projecting your monthly sales and expenses
- Collecting client payments as soon as possible
- Paying invoices on the last day they are due
- Setting up a cash reserve account
- Learning how to decipher financial statements
- Reconciling your monthly bank statements
Meet the demands of change successfully
As your business develops, there is one constant challenge that you will need to confront: the element of change itself. The best way to ensure the continued growth of your business is to approach the demands that change brings from a strategic perspective. Addressing these challenges head on will ensure the health and productivity of your growing business for years to come.
How to Make Huge Decisions
Opinions. Feedback. Advice. Guidance. Counsel. Consensus! Yuck.
Granted, it's natural to look for input when we need to make decisions. And if asking for advice doesn't come naturally, the business world trains us to actively solicit opinions, bounce ideas off other people, and run our ideas up proverbial flagpoles in order to harness the amazing brain power of the many to make awesomely incredible decisions.
Sometimes that approach works... but sometimes it's the worst approach to take when you need to make a huge decision.
The main power wielded by group thinking is the power of the middle ground. Groups grind away the edges and the sharp corners. After all that input and feedback and devil's advocacy what remains is safe, secure... and similar.
If you want to be different--if you want to achieve "different"--the only opinion that truly matters is yours. Group decisions give you an out. Other people can be at least partly responsible. Other people can be wrong.
When you make the decision, everything rests on you: Your vision, your passion, your motivation, and your sense of responsibility.
So you'll try harder if only to prove others wrong. You'll fight through every obstacle and roadblock, if only to prove yourself right.
You will do everything possible to make it happen.
So when you need to make a huge decision, this is how to get input and opinions--while still making sure you, and only you, make the final decision:
1. Take a "crazy" idea.
Choose something you believe in late at night but in the cold light of day hesitate to try.
Or choose an idea you've been told will never work.
2. Then seek data, not opinions.
Input from other people is useful, but only if you see that input as data points and not opinions.
Opinions carry extra weight, like the weight of credibility (he's really smart, so I'm sure he's right), the weight of guilt (if it turns out he's right, I'll never hear the end of it), or the weight of safety (yeah, there probably is a reason no one has tried this before).
"I think you're crazy to try to open a store in that market," is an opinion. It may be accurate, may not be accurate; it's still just an opinion.
If you value the person's opinion, ask them how he or she arrived at that opinion. Always look for the data behind the conclusion.
Otherwise ignore everything that isn't data--warnings, cautionary tales, and well-intentioned but poorly founded advice--since you already know all those things anyway.
3. Evaluate the data.
Data analysis is easy when opinions and "weight" are stripped away.
Make a pros and cons list. Apply sensitivities. Be objective. Be smart. You know how.
4. Decide how strongly you believe...
Analysis will only take you so far, since critical thinking tends to steer decisions towards conventional wisdom.
An innovative product only looks like a sure thing in hindsight. The emergence of a new industry only seems inevitable after it has emerged.
At some point, someone believed when others didn't.
5. ...then decide if that someone is you.
If you believe when others don't--and a major portion of that belief is based on analysis, not gut feel--then go for it. Start a business. Sell a business. Enter a new market. Take a chance on a new product.
Go for it, knowing you'll go harder and faster and longer because the only person that really matters made the decision. You.
4 Steps for Handling a Key Employee’s Departure
Having a trusted team member leave your company is never easy, but it doesn't have to be business crippling.
With Yahoo's recent acquisition of Tumblr, the micro-blogging site lost a key employee -- its fifth hire and creative director Jacob Bijan. The many employees who have left gaming company Zynga has been well documented in the media. And with engineers in short supply and high demand, poaching at major tech companies occurs on a regular basis.
So if -- or better yet when -- it happens to you, don't be surprised. Just remember to keep your cool and follow these steps to ensure a positive parting:
1. Understand their perspective.
Even if your startup is trucking along, seeing traction and has big plans to raise a round of funding, a larger company can swoop in and nab one of your employees for a much larger paycheck. Consider the example of Facebook. At the tech behemoth, if a coder gets an offer he almost has no choice but to accept it (if it makes you feel better it has been reported Google has offered its employees millions to not leave for the social network).
While being priced out by a larger company is a potential scenario, there are numerous other reasons for someone wanting to jump ship. Understanding their reasons could be a turning point for you or your company. If you feel comfortable, ask them to give it to you straight. If not, ask them to write out their reasons for leaving. If they deserve a recommendation, give it to them.
2. Sever gracefully.
If you're parting on good terms, make their last day a reason to celebrate their time with your startup, such as serving an ice cream cake during lunch or a trip to the local watering hole. If the employee is leaving on not-so-great terms, provide a note expressing your regret that it didn't work out and thank them for their contribution.
After they've given you their two-weeks' notice, it is not your job to announce their decision to all of your team (not including HR and other hiring managers). Give your employee space and let them look back on their time with your company fondly.
Don't put off the hiring process. Get it done and get your replacement trained as soon as possible. You should first figure out if anyone on your team can step into the former employee's shoes. If not, ask your peers and employees for recommendations, while also posting the position opening on job sites.
Once you narrow down potential candidates, make sure they'd fit in with your startup culture. Ask yourself if they are someone you'd be able to spend countless hours with during a crunch-time weekend.
4. Keep in touch.
Once the employee has left, don't be a stranger. Forgetting that someone exists is generally not the best course of action. Even if you aren't happy with the departure, rage cools, feelings mend and you may come to realize it was for the best. Keep their email in your contacts and wait awhile before asking for an update on their life. By being nice, people are more willing to throw business, partnerships and other networking opportunities your way.