Employees love perks. They are like birthday presents all year long. They can also be non-taxable to employees and a tax deduction for small businesses. The best perks promote team building and provide daily reminders about how great it is to work for the company. For example, allow employees to work from home, bring in fitness trainers for free lunch-hour workshop, or offer free seminars by professional speakers on topics such as “The Dynamic Management Team”.
In this economy, cancel the holiday party and give employees practical perks; a BART card, movie and theatre tickets, or dinner reservations at a local, sustainable restaurant. Promote giving by exchanging the gift cards with a warm coat to give to the One Warm Coat project. Or, cancel the holiday party entirely and do something socially responsible. Each year, Nvidia funds a community project and their employees participate in the project. Last year they built a multimedia studio and a volleyball court at an elementary school in California working directly with the students.
For managers, give them something they cannot get on their own. I once had a boss pay for a reserved parking spot for me. I was a working mother with four sons. He knew that I would value a reserved parking spot much more than cash because I was not eligible to get one of the coveted parking spots on my own. He was right, and every day I parked in the spot, I thought of my great boss — the perk worked.
Here is the sure-fire way to set up your Chart of Accounts in Quickbooks: follow the categories on the federal tax form (Form 1040 Schedule C, Profit & Loss From Business). This will save time and headaches at year-end as your P&L totals can be quickly entered on Schedule C.
For instance, code auto expenses to “Car Expenses”, cost of business cards goes under “Advertising”, and put telephone costs (and anything else that has a large balance) under “Other Expenses” which are itemized in Part V, so the Quickbooks account is “Other Expenses: Telephone” (a subcategory)
Do you need help with your accounting? Contact us for a free consultation or call at 800-921-9007 (9 to 6pm PST).
Ideally, small businesses should have a Line of Credit (LOC) established with a bank to draw on when expenses and income do not match. Employers are required by law to meet payroll (that is, you have to pay employees on payday). Meeting payroll is a key reason to use the LOC. Managing expenses against income is very important and of course you do not want to spend more than you make, but spending more at startup is all right if your projections for income in the future (usually the next two to three years) will cover the startup costs. A budget, business plan, or even sketch made on a napkin in a restaurant is required before you start.
Probationary periods do work. Be serious about using the probationary period to let employees know how they are doing. If you have taken the time to hire well, most employees will pass the probationary period with flying colors.
If deficiencies show up, by half way through the probationary period, sit down and tell the employee what they have to do to successfully complete the probationary period. Keep it simple and don’t list more then six things (more than six things means the employee is not the right match).
Tell the employee that it is up to her whether she can keep the job — at the end of the probationary period she needs to have adequately performed the items on the list. This is the best part for a manager — taking an employee who is weak and coaching them to succeed. Unfortunately, from my experience, if an employee is having problems, less than half will still be working for you after the probationary period. But for those who are, it is the greatest reward for a manager to watch an employee benefit and grow from mentoring.
Fire employees for serious misconduct — dishonesty, unethical behavior, gross insubordination or inebriation on the job — or where it is clear that the employee cannot meet the level of performance of the job. Employees who lie can’t be trusted; it is impossible to ‘train’ an employee not to lie.
For example, when an employee changes the time on an email to cover up, fire him because you will not be able to trust him in other situations. Fire employees if they steal objects or cheat about their time (stealing from your payroll). Fire employees who consume an inordinate amount of administrative time (someone who needs constant remediation to get along with co-workers). Fire those who cannot adhere to a work schedule or are always late when arriving at work is important to your business. Fire employees whose productivity is low. Fire employees with bad attitudes. Fire employees where their continued employment will decrease your income.
There are four major parts to running a successful business. Funding, and a great product (or service). You will also need drive, passion, enthusiasm, and determination. You want to run a business so badly that you think about it 24/7, and you love thinking about it. It is not a burden, it’s a dream. So now you have the funding (bank loans, your own capital, loan from your mother), the great product or service, and you have the drive. What is the fourth part? Talent.
Some people just have a talent, a natural ability to run a business, some do not. That does not mean you cannot succeed. If you don’t have innate talent, you can learn it, through training or mentoring with other business people to get a good handle on the backend.
The product or service is 50% (will people buy it, will people want the service), and the quality of the management of the business is 50% (you can sustain audits, you firgured out a marketing plan that works, you follow the employment laws, etc.)
Businesses should have a signed contract for all independent contractors. We recommend that you have an attorney draw one up for you. The chances of a boilerplate contract that you found online holding up in court are slim.
If you are offering a service over $1,000 per service, you need a contract and a deposit. Depending on the industry, you should ask for 25-50% upfront.
