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Performance Improvement Job Descriptions - Jul 31, 2009

Posted by: Keith A. Simmons in Articles

Performance Improvement - Job Descriptions

A well-considered job description is an area that, too often, is not given the attention it deserves. Since a company’s performance is the sum of each employee’s performance it would make sense to hire individuals who hold the skills to succeed at their job, and therefore the success of the company as a whole. Needs of a company change over time and it is wise to consider hiring those with the ability to learn new skills, or those who have learned other skills in prior jobs. Yet many companies shy away from job descriptions without understanding the impact this has on morale, customer satisfaction and profitability.

The effort placed in defining a particular job description can be the difference between a company that excels and one that trails the competition. Hiring the right person requires an owner or manager to identify the specific skills and knowledge needed for each job. It also helps them determine the right interview questions to ask, identify the best résumés and better evaluate the candidates. Here are several guidelines to assist you in this process.

For improved performance

 

Every company should have clear goals and an understanding of how each job supports the needs of the company. Corporate goals should be divided into functional goals, functional goals divided into individuals goals. With this structure an employee’s goals will support the higher corporate objectives. Growth oriented organizations also should consider their future needs.

The employee you are looking to hire should have the necessary skills and the ability to grow with the company. This requires that you understand current requirements and hold a vision of what skills are needed to support future plans. If you don’t know what skills they need, how will they know?

You have the choice of hiring to meet future needs or hiring to meet current needs. If you hire to meet current needs there should be a plan to train the employee for future responsibilities. Hire for current ability while considering their potential.

Look to improve the level of skills in your business with each hire. This goes back to the idea of having a keen understanding of company needs and a plan for fulfilling that future vision.

Don’t hire cheap. You will pay the price many times over.

If a new employee is unsure of what you expect of them, what can you expect of them? Provide clear goals and periodic reviews. They want to know how they are doing. They don’t like surprises any more than you do. They especially don’t appreciate a 12 month review where they learn they’ve been underperforming. Keep communicating and advise them frequently.

If you hear “who’s responsibility is this?” too frequently it is probably time to take another look at those descriptions.

Perhaps you are forced to hire a temp because the staff isn't able to get the job done. You may be able to avoid these excess costs. First look at the performance standards for the staff. Are you about to hire a temp because of poor prior hires? Would you be able to avoid hiring a temp if the staff was better trained (in Excel, Word, business software, company policies. Does the staff have a clear understanding of their individual goals and have the tools to perform their job?

Underutilized and poorly implemented software....

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Testimonial - Occunomix - Jul 7, 2009

Posted by: Keith A. Simmons in Testimonials

Keith's insightful and in depth analysis identified strengths and flaws in our organization helping us work towards building a better business. He is open minded and decisive. Keith is a joy to work with and brings a fresh point of view to the business.

Nicole Novick

Product Manager and HR Manager

www.occunomix.com

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A CFOs Advice To Entrepreneurs - Oct 19, 2008

Posted by: Keith A. Simmons in Articles

 

A CFO's Advice to Entrepreneurs

Posted by Mitchell York under Interviews | Tags: B2B, B2BCFO.com, CFO, small business

I was introduced to Keith Simmons from B2Bcfo.com by my CPA. I don't often get together for a cup of coffee with a stranger, but because my accountant is someone I really trust, I decided to do it. We had no particular agenda except to see if there might be some common interests, and indeed there were. Keith is a partner in a fascinating business that helps small firms have access to expert chief financial officers on a temporary basis. His focus is Long Island and the New York metro area, but his company has partners nationwide. He answers some of my entrepreneur-focused questions here.

What are the biggest mistakes new business owners make when it comes to managing the financial side of their business?

I find fewer than 10% of all businesses-new and established-take the time to create a plan. Lack of planning is the most common error of new business owners. Planning encompasses a lot of territory, including the financial responsibility of supporting your business until the business is able to support you. Eighty percent of new businesses fail in the first year. The primary reason is lack of cash, another is holding a vision that did not meet the reality of the business. As a new business owner your first task is to translate your vision into a business plan and have it critiqued by qualified persons. Include financial and cash flow forecasts. Then on to Plan B showing sales at 50% of the original forecast. Assuming your venture will be self-funded, does the reduced sales forecast still show cash flow in your favor? If not, do you have the financial resources and confidence to contribute additional cash to your business. Companies most often fail because they have no plan, are unable to measure progress against a plan, and don't see the end coming.

A lot of experts talk about having lines of credit available at all times. What if a bank won't extend credit to your small business? Are credit cards a good option? What about shifting balances between credit cards?

Credit can be hard to come by for start-ups. Establish a relationship with your banker, even if they cannot loan. Contact your local Small Business Development Center (SBDC), Community Development Center of Long Island (CDCLI), Long Island Development Center (LIDC) and others to determine if funding is available and the steps necessary to obtain funding. I'd consider credit cards as a good option only when an owner faces a brief shortfall of cash and is confident that the business is able pay off all balances in the short term. Move credit balances to the card with the lowest interest rate and pay on time. Late payments can result in highly unfavorable interest rates.

Do small businesses need to subscribe to Dun & Bradstreet or similar services to know their business credit score?

This is always a good idea. You should review your credit rating quarterly and correct any errors. If you have good credit that is not shown on the report, speak with a credit representative and provide additional credit sources to be added to your report. Go to annualcreditreport.com for a free report of your personal credit rating. The rating agencies are Equifax, TransUnion and Experian. Each allows one free report per year.

I have many small business clients who have problems with collections. Not that their customers aren't going to pay-they just take 60 or 90 days. How can a small business with little leverage over clients speed the cycle?

Being successful as a small business owner requires a high level of confidence. This inner confidence is critical when discussing price and payment terms. Those that lack confidence will sell below market price and fail to discuss terms. Price and terms are both components of the sales discussion. It may be to your advantage to run a D&B report on the client's payment history and be able to discuss any concerns. When you receive an order obtain the name, phone number and em....

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Labor Costing Part I - Sep 13, 2008

Posted by: Keith A. Simmons in Articles

 

 Billable Labor Hours

Is it possible that 90% of small and mid-size businesses are subject to incorrect costing? Surprising and disturbing, but that's been my experience. Cost estimating is often a poorly understood science.  And if our cost estimates are incorrect how do we accurately price products and services, or determine profit margins?  Or prepare a realistic budget? And if price is market driven, how do we determine if we are operating at sufficient profit?

When pricing is based on erroneous estimates a company will lose orders due to overpricing or capture unprofitable sales due to underpricing. In either scenario it is the competition who benefits and it is you who will eventually close your business. Since we are not in the business of aiding the competition, we need to take a good look at our costing model.

Cost estimating needs to be a clearly defined process, and by following the proper steps we will achieve accurate estimates. So how do we identify the necessary steps?

Today we document a procedure that allows us to identify the number of labor hours available for sale. But first, can you guess how many billable hours are available from the average employee in one year?

Your estimate here: ­­­_________

Now put that costing hat on, open up your cost estimator notebook and we'll fine tune that estimate!

 

Billable Labor Hours Worksheet

In our example we have an employee who is paid 40 hours a week, receives 3 weeks vacation, 10 paid holidays, 8 paid sick, and as we are one of the more benevolent employers they also receive bereavement pay and a few days off for good behavior (no overtime in this example). We find that a sizeable portion of payroll and benefits are paid for hours not worked.

Total Hours Paid                     52 weeks x 40 hours =                2080 hours         100%

To calculate the Non-Worked hours:

            Vacation                      15 days x 8 hours =  120 hours

            Holiday                       10 days x 8 hours =    80

            Sick                            8 days x  8 hours =    80

            Bereavement                3 days  x 8 hours =    24

            Other time off               2 days  x 8 hours =    16

   Total Non-Worked Hours                                                        - 320                   -15%

Leaving us with Total Available Hours of                                      1760 hours          85%

So, we pay our employee 100% of the time while they are available only 85% of the time. 

But wait, there is one final step in our labor hours costing process. At best we are in the position to bill 1760 hours to our clients (assuming we bring in enough business to keep the employee productive at all times), but this is rarely achievable. What other factors come into play? These will vary depending on the type of business and would include non-billable hours committed to administrative tasks, clean up, tardiness, etc. Manufacturers face machine inefficiencies and machine downtime that are non-billable.  If we estimate these items require only 3 hours per week, we calculat....

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