How To Optimize Your Business Expenses

Seeing your company growing beyond its initial small size can be quite the rewarding and exciting experience, especially considering the huge range of opportunities that the modern IT sector gives you.

However, one of the most annoying problems that most tech companies have to deal with sooner or later is the rapid explosion of their costs in certain critical areas.

Knowing what those areas are, and how to prevent potential issues in them, is a great skill that you should strive to build up over time.

Outsourcing Can Sometimes Have Hidden Costs.

As the industry collectively moves towards embracing the idea of outsourcing work more and more, some of the hidden issues beneath the seemingly shiny surface have started to crop up. Communication is a big one, especially when it involves people in a completely different time zone. You also have to account for difficulties around intellectual property transfers and other similar deals, as it’s not rare to hear horror stories of companies that get put in a really compromising position by an overseas “partner”.

Power Is a Big Drain.

As your offices expand and you keep buying more and more computers to serve the increasing needs of your business, you might notice your power bill getting heavier every month. Don’t panic – this is normal for companies in this sector, although it does require fast action if you want to minimize the potential harm. Look into signing a contract with a company like Conservergy if you’re planning to expand even further, as having your energy optimization done by someone with actual experience in the field can make a world of a difference. This is definitely not something you’ll want to use a DIY approach with, especially if your business has grown more valuable recently.

Careful with Overtime.

There’s a lot to be said about the crunch culture permeating the tech industry, and most companies have started to realize the negative impact on their operations recently. This is certainly a good thing for both sides – it gets tiring to hear about yet another company that puts its coders through several months of 80-hour work weeks just to push the project through the deadline successfully. And when you draw your own bottom line, it won’t look pretty either – all that overtime can make things complicated in your accounting. The point is, if you plan ahead properly and know your workers on a deeper level, you won’t have to run into this issue in the first place, so make it a point to build strong connections within your team.

In the end, patience makes a lot of difference in this field, and you’ll want to take a careful, calculated approach to everything you’re doing to avoid getting into a messy situation that you won’t be able to get out of. Just explore your options and remember that there’s usually always a way to cut some of your costs down without compromising the quality of your operations in any significant way. A smart leader has to learn to recognize those opportunities.

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Source: http://www.youngupstarts.com/2018/07/22/how-to-optimize-your-business-expenses/

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How To Conduct 90-Day Performance Reviews Without Biases

The performance review which follows the 90-day probationary period is a stressful time for the employee. Not only are they adjusting to the new role, it’s also a period for the employer to gauge their work ethics and skills. Writing an informed and accurate review can be difficult for during this period.

Luckily, there are tools available which can be helpful when going through this process.

Why Do 90-Day Performance Reviews Matter?

The 90-day probationary period is not only a long-established rite-of-passage in the professional realm, it also serves a clear purpose and offers numerous benefits for everyone involved. Here are some benefits.

1. Feedback: These conversations serve as a “checkpoint” for new employees on the progress that they’re made. It reinforces positive performance, while addressing areas for improvements. This way, any issues would be addressed early rather than later. The goal of these reviews is to place the employee in a position for success.

2. Discussion: These reviews also create an open environment where the employee can ask questions. They can discuss their expectations or even where their interests lie within the company. This latter can also be said for the manager who wants to clarify the employee’s goal with the company.

3. Future Expectations: The main purpose of these reviews is to gauge performance and potential of the new employee within the company. Reviewing their work and the growth they’ve made early on is a great way to ascertain what can be expected from them in the future. If they demonstrate lots of potential, it’s a good idea to continue to challenge them.

4. Assists Hiring Practices: Speaking with new employees can create insight when it comes to the hiring process. Having been recently hired, these employees will be able to offer insight of the potential shortcomings of the onboarding and hiring process.

5. Improved Performance: Feedback often results in improved performance thanks to positive feedback and the clarification of expectations and tasks.

6. Relationship Building: These contexts are great for strengthening manager-employee communication. It creates an open environment and conversation to address issues and acknowledge successes. This establishes trust and understanding between the two parties, while also creating a constructive conversation.

90-Day Review.

It’s important to remember that these reviews are formal practices. This involves:

1. Setting a Date: Don’t delay setting a date for this review. And once you do, don’t delay it. These reviews are important to new employees; postponing it may result in negative feelings on the part of the employee. Postponing the review too often will also skew the results.

2. Having an Agenda: Go into the review prepared with notes to focus on specific examples of work that they have done. This will ensure you are informed and do not end up with incorrect information.

3. Reviewing Company Practices: Reviewing company practices will paint a picture of expectations and better outline objectives. Talking about the company, or organization, will show new employees how they are a part of a community.

Foregoing Biases.

The issue with the 90-day probationary period is that management is still getting to know new employees and their working style but have an established first impression. This means biases may occur during the review period. From the leniency bias to the Halo Effect, these can negatively impact the review as well as the growth of the company if it becomes too prevalent.

This is where review programs can be used to create objective and unbiased 90-day reviews for new employees. The 360 degree evaluation looks at all factors necessary to create a fully-realized review. There are templates available to use, but unique criteria can also be created to better suit the needs of each company or organization.

Conclusion.

90-day performance reviews are stressful for new employee for many reasons, which can negatively impact their performance. Fortunately, using an unbiased as thorough system like 360 degree system can alleviate some of the stresses that comes with starting a new job.

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Source: http://www.youngupstarts.com/2018/07/22/how-to-conduct-90-day-performance-reviews-without-biases/

[ADV] How Businesses Are Improving Customer Service With Lyft

Exceptional customer service is what sets businesses apart from the competition. After all, happy customers are more likely to become repeat customers and share their good experiences with friends.

One unique way businesses are improving their customer service is through Lyft’s ridesharing services.

Here’s how:

1. Arranging Drop-Offs and Pick-Ups.

Automotive repair shops and dealerships are leveraging Lyft Concierge to arrange rides for customers. The platform allows small businesses to arrange pick-ups and drop-offs with a few clicks of a button. Lyft Concierge minimizes wait times and ensures that customers can get where they need to go.

New riders can get a discount on rides, which can help some businesses save money.

2. Helping Diners and Employees Get to Their Destination.

Many restaurants are now offering a free ride home – through Lyft – if dining groups spends a specified dollar amount. Some high-end establishments will arrange rides to and from nearby hotels.

Restaurants and bars also use Lyft Concierge to ensure that employees who work late – after public transportation has stopped running for the day – get home safely.

3. Transporting Guests.

Hotels use Lyft to ensure that guests get to and from the airport or another specified destination quickly and seamlessly. Hotels can use Lyft Concierge to request and schedule rides hours or days in advance.

The system will even send text messages to guests with all of the details about their ride and a notification when the driver arrives. Securing reliable transportation to and from airports can be a challenge for hotel guests. Offering this service makes everyone’s lives easier.

4. Getting Patients to Appointments.

Healthcare facilities are facing a major challenge: ensuring that patients arrive to the appointments on time. The most common reason patients miss appointments is lack of transportation.

Lyft Concierge can be used to arrange pick-ups and drop-offs for patients at healthcare facilities.

5. Transporting Event Attendees.

Businesses hosting events can leverage Lyft’s services to arrange for attendees to get to and from the event. Lyft’s services can even be used to replace the conventional shuttle arrangement.

The on-demand nature of the Lyft platform gives attendees peace of mind that they’ll get where they need to go without having to deal with long wait times or jumping through hoops.

6. Ensuring Residents Get to Their Destinations.

Lyft recently struck a deal with Brookdale Senior Living that makes it easy for residents to book rides. Residents can book rides – either pre-scheduled or on-demand – through a concierge in the community. No apps or smartphones are required for residents to use the service.

The rides will be billed directly to the senior’s rooms, so there’s no need to give out credit card information.

The simple, convenient service ensures that residents get where they need to go without having to rely on busy friends and family.

Similar services will undoubtedly be launched in other communities.

Exceptional customer service should be a top priority for all businesses – big and small. Lyft’s Concierge platform gives businesses a new way to improve their service and offer memorable perks to customers and clients.

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Source: http://www.youngupstarts.com/2018/07/22/adv-how-businesses-are-improving-customer-service-with-lyft/

With Eyes Wide Open: 8 Risks Of Starting A Business

There are many benefits and opportunities for starting a business. It can be an exciting move when the economy is booming, and you have the motivation sparked by a great idea.

You’re certainly not unaware of the risks and sacrifice that accompany every startup, but neither are you unwilling to tackle that journey. You don’t want to walk into a major business opportunity without recognizing all the risks associated with it, however.

Here are some key perils to anticipate.

1. Financial Uncertainty.

Your business has the potential to bring solid financial returns, but it can also lead to financial hardships. Most business owners don’t see wealth immediately. It’s a long process with losses and low points you’ll have to handle.

First, you’ll give up the steady paycheck. No more will you know exactly how much you’ll bring home every two weeks.

In many cases, you may not show any positive revenue for months, possibly even years. Many entrepreneurs go many months without depositing a paycheck, but they assume it will be worth it for the future payoff.

A significant amount of personal capital will also be required to launch a business. Not only does it involve personal investment, but you may also have to support yourself on your savings. Many entrepreneurs struggle to take off if they don’t have significant personal savings at the outset.

Finally, there’s the matter of cash flow. Cash flow problems are a leading reason startups fail. They’re unable to maintain positive revenue, and without money, there’s no growth.

These financial risks make opening a practice challenging, certainly in the beginning.

2. Legal Risks.

At any point, someone could slip and fall on your property and you would face a serious personal injury claim. There are also the risks of worker injury, committing a business error, performing unintentional fraud on your tax returns, and so much more.

You’ll need insurance and attorneys to meet these legal risks, and this is an expense that many startups may be tempted to forgo in the interest of putting their capital to other uses. For the sake of your firm’s ultimate success, however, don’t take risks with these business legalities.

3. Unreliable Team Members.

Whether your business partner isn’t pulling his weight, or your workers aren’t showing up, there’s a good chance you’ll experience the woes of unreliable team members. Other people aren’t necessarily going to be as invested in the success of your business as you are, and it can be a battle to find and keep good help.

4. Working Overtime.

Never underestimate the massive time commitment required for getting a business underway. You might be excited to leave the steady 9:00 a.m. to 5:00 p.m. grind, but that doesn’t mean you’ll get to work fewer hours.

Entrepreneurs often spend extra hours fostering a successful company, and many hours will have to be donated because the outfit is not yet sufficiently profitable to produce a paycheck. You’ll likely lose sleep, damage relationships, and suffer high levels of stress.

Given such stressful conditions, it’s all but impossible to maintain a healthy emotional life. You may discover the toll of working long hours is more costly than you could have imagined.

5. Health Risks.

Because of the time commitment and personal sacrifices, busy entrepreneurs often face higher health risks than they did when they worked for someone else. Along with mental costs like anxiety and depression, they can develop physical illnesses like diabetes, high blood pressure, and cardiovascular disease, thanks to the longs hours of sitting and high-stress conditions.

6. Unstable Market.

You might have a great idea and a strong business plan, but if the market isn’t ready to receive them, there’s little you can manage to achieve success. Most businesses fail because there’s not a current market need for the product, and the concept doesn’t survive.

The market might also be unstable, so the need for your product could be good, but the economy doesn’t allow people the wherewithal to purchase it. In such cases, you can do little wait for the market to improve before you can build a successful business.

7. Poor Business Plan.

Very few companies survive for long without a clearly defined business plan. It should be well thought out, and take every possibility into account, as well as employ realistic predictions for success.

Pay special attention to market factors and financial planning. These two pieces often hold the most weight in the overall success of your practice.

8. High Expectations.

Business owners often expect more from their firm than the market can sustain. As a result, they’re disappointed that plans fail, and they lose their motivation.

Every business will take on a life of its own, and you may not see the results you predicted. Always be willing to adjust your business plan and consider every avenue so you don’t expect more than your business can realistically deliver.

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Source: http://www.youngupstarts.com/2018/07/22/with-eyes-wide-open-8-risks-of-starting-a-business/

5 Ways To Get Extra Money To Start A Business

It’s not enough to have a good business idea. If you really want to launch a business, you need the money to get off the ground and running. And if the burden of debt is too intimidating, you’ll need to self-fund.

5 Ways to Get Cash Without Going Into Debt.

Contrary to what most people believe, there are ways to get cash for your business without going into significant amounts of debt. While it may be easy to fill out an application at your local bank or credit union and get a loan, it’s not always the wisest option. When lean growth is the objective, you may have to get creative.

Here are a variety of options to contemplate:

1. Sell Possessions. 

If you’re personally strapped for cash to fund your business with, one of the first things to do is take inventory of your possessions and see if there’s anything you can sell. Some ideas include:

  • Sell old electronics you have lying around – such as smartphones, tablets, computers, and TVs. You can sell through a site like eBay, Craigslist, or Facebook Marketplace with very little effort.
  • Do you have an old vehicle sitting around that doesn’t work? Rather than let it continue to take up space – or go through the expense of fixing it up – sell it to a junkyard and make money off the scrap metal. Thanks to some changes in the industry, the process is simple.
  • Look around your home for items that have value. Do you feel an emotional connection to these items? Do you use them? If you have items that don’t hold any value to you, it may be worth selling them off for quick cash.

Considering that the average household has more than 300,000 items inside, there are most certainly a few things you can do without. Don’t sell things you need, but do get rid of the items that are taking up space. 

2. Pick Up an Extra Job. 

Can you pick up an extra job on the nights or weekends? You probably don’t want to work more hours, but it may be necessary. Thanks to the gig economy, it’s possible to do things like drive for Uber, rent a room in your home through Airbnb, deliver food, or do some side jobs online. Adding just a couple of hundred dollars per week to your budget may make a big difference.

3. Get a Small Business Grant.

If you’re looking for free money, a small business grant is the closest thing you’ll find. While the loan application process can be rather time-consuming and strenuous in certain situations, it’s hard to beat getting cash with no strings attached (at least in terms of interest rate or equity).

4. Launch a Crowdfunding Campaign. 

Are you familiar with crowdfunding? More and more startups and small businesses are using this method to generate cash for their new products and ideas. It involves setting up a campaign on a platform like Kickstarter or Indiegogo and pitching an idea to the website’s users. In return for money, the campaign typically provides its supporters with different perks and products.

5. Pre-Sell Products. 

Do you have a prototype or concrete idea for a product you want to launch, but don’t have the funds you need to manufacture it? One clever option is to pre-sell products and use the funds to take care of production. It’s not ideal for every situation, but does make sense when the right circumstances are present. 

Get the Cash You Need. 

When it comes to launching and growing a business, cash is king. While there are always ample opportunities for small business loans and other financing, there’s something to be said for not giving up equity or saddling yourself with a bunch of debt. Try a few of the methods highlighted in this article and see if you can improve your financial standing and grow your business in a sustainable and cost-effective manner.

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Source: http://www.youngupstarts.com/2018/07/22/5-ways-to-get-extra-money-to-start-a-business/

The Pros And Cons Of Forming An LLC

When you launch a business, you’ll probably consider the option of forming an LLC. This stands for limited liability corporation, and it can be a great approach. But it might not be for you.

A limited liability corporation (LLC) is one of the simplest business structures, designed for startups that have few employees. It’s easy to form and inexpensive. It offers certain tax advantages, limits the liability you’re apt to face, and offers certain legal protections.

If you’re considering forming an LLC for your startup, you’ll want to know the best and worst aspects of taking that course.

Pro: Limited Liability.

One of the most obvious benefits is the limited liability on your personal name and assets. Whenever you start a business, you run the risk of your personal life being affected, especially if the operation goes under.

In the case of unpaid business debts, vendor disputes, damages, and other challenges that can take your company down, your personal name and credit will be protected. You can walk away from a failing company without a scratch.

That being said, it’s called “limited” liability for a reason: There are a few exceptions to the rule. In the case of fraud, failure to meet LLC requirements, mixing of business and personal funds, insufficient capitalization, and a few other situations, your personal name won’t be safe.

Con: Fees.

Though an LLC is one of the most affordable ways to incorporate a business, it’s not free. Licensing and filing fees generally cost between $50 and $1,500.

In the grand scheme of things, that’s not a lot. But when you’re starting out, it can feel overwhelming to put that much money toward a business you’re not 100 percent sure will succeed. You have to think about the long-term peace of mind offered by liability protection.

Pro: Easy to Create and Facilitate.

In most states, forming an LLC is as simple as filling out an online form and paying with your credit card. You’ll need your personal information ready to hand, and you’ll have to be ready to furnish the basic details of your business.

Many companies will form your LLC on your behalf for a small fee. You simply send an email will all the information attached, and you won’t have to think about it again until your LLC is issued. It’s as simple as that.

Once the LLC is in place, you’ll only have to hold a formal annual meeting, file an annual report, and complete any applicable tax forms. The company that filed your LLC can even do that for you.

Con: More Tax Forms to Fill Out.

You will have more paperwork to fill out during tax time. Even if you don’t have money coming in and going out, you must prepare K-1 forms for every member of your LLC. Each member also shows taxable profits that must be processed.

But this is only a drawback if you do your own taxes. If you hire a firm to do them, which is wise unless you’re a tax wiz, it will handle the extra paperwork for a nominal fee.

Pro: Tax Benefits.

And if you have someone else do your taxes, that means you may enjoy all the tax benefits associated with an LLC. When you’ve formed an LLC, you experience the greatest tax flexibility. Most small businesses, no matter how unorthodox, fall under the LLC tax umbrella.

If you’re a single business owner, your tax burden will be significantly lower. You’ll still be charged employment tax, but it’s more affordable than fronting the cost without being an LLC.

Also, an LLC is a pass-through entity, which means the profits from the business can go directly to members without being taxed first. You’ll process the taxes on your federal income taxes, which means a lower individual tax burden.

Con: No Wages for LLC Members.

As a member of the LLC, you are not allowed to draw a wage. Wages are one way that many new business owners pay their living expenses, even when they’re not profitable.

However, with an LLC, you’re not allowed to take any money until your business makes money. This isn’t unusual among various business structures, but it’s something you should be aware of.

When your business becomes profitable, those profits will be far more valuable than your wage, so most entrepreneurs find it’s better to wait it out.

Pro: No Numeric Member Restrictions.

LLCs don’t restrict the number of members or partners, which can be advantageous if you’re an entrepreneur who likes to dabble. Many business people in real estate, pharmaceuticals, branded retail products, and segregated product lines and services turn to the LLC because it distributes the responsibility and limits the tax burden.

The more partners you have, the more difficult the administrative aspect can be, but it can be comforting to know you possess the flexibility to make your business anything you want it to be.

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Source: http://www.youngupstarts.com/2018/07/22/the-pros-and-cons-of-forming-an-llc/

[INTERVIEW] Glen McKay, Newfoundland Business Leader, Co-Founder of Newfoundland Hard-Rok, Inc.

Starting as a deckhand delivering cod and turbot from fishermen in Newfoundland and Labrador, over the past forty years, Glen McKay has molded his career into one that focuses on entrepreneurship and leading the growth of companies operating in a range of industries.

Having founded or co-founded several private companies and a public company, Glen currently serves as chair of the Board of Directors of Newfoundland Hard-Rok Inc., a business that he founded in 1985, which operates in the explosives industry.

A look at how Glen founded Newfoundland Hard-Rok illustrates how important timing and taking advantage of opportunity when it presents itself is.  In 1985, he was appointed as the distributor for DuPont Explosives in Newfoundland, which was one of the businesses operating under the Hard-Rok umbrella of MRO Supplies Ltd.  Two years later, in 1987, Newfoundland Hard-Rok Inc. became its own entity after Glen sold part of it to Carl Foss and Keith Phelan who worked for MRO Supplies’ explosives division. With Foss and Phelan taking care of Newfoundland Hard-Rok’s operations and Glen looking after the daily finance and administration of the company, over the past roughly thirty years, Newfoundland Hard-Rok has become a leading explosives manufacturer and drilling blasting provider in the Newfoundland and Labrador area and on Baffin Island.

Glen explains it more simply: “Newfoundland Hard-Rok’s operating premise is that if you really value your people, they in turn will increase the value of your business. Simple but very effective.”

But, leading Newfoundland Hard-Rok Inc. is not the only business leadership experience Glen has gained over the years; nor is the explosives industry the only industry he has worked in.

In 1987, Glen provided the capital for Apex Construction Specialties Inc. He stayed on as a shareholder and board member until the company was sold in 2017.  The experience is something Glen calls “A classic example of investing in great people with great ideas who have the motivation to succeed.”

In 1997, Glen co-founded Cornerstone Capital Resources Inc., a mineral exploration company that became recognized internationally for its technical and business acumen during McKay’s tenure as President, CEO and Vice Chair. Cornerstone continues to explore its Cascabel copper-gold discovery in Ecuador as well as other properties in Ecuador and Chile.

Recently, Glen McKay spoke to Young Upstarts about how challenging the entrepreneur journey can be and offers some advice to those just getting started.

From your experience, what advice would you give to young entrepreneurs just starting their first company?

Glen McKay: Many people underestimate the complexities of establishing and operating a successful company. The entrepreneur may have a skill set or experience in a certain area of business. Many fail though by not recognizing that the financial, accounting and legal aspects of a business must be run effectively or else it is doomed to failure from the start. It’s easy to hire these services and these must be incorporated into the business plan from the start. I still use the same accounting firm that I engaged in 1985 and It’s made my life so much easier. Plus, its kept the business in conformity with changing regulatory and taxation requirements.

With over 40 years business experience what are some lessons you feel have been vital to your success?

Glen McKay: Motivation and determination are essential attributes of any successful entrepreneur. These are attributes that can be unlocked only from inside a person, not by external influences.

A desire to learn and cultivating the ability to be insightful are necessary in assessing business opportunities.

Most important are the people that you choose to be on your team. Hire people who have strengths to offset your weaknesses and empower them. Foster a team spirit working atmosphere and remunerate key staff above market.

Going back to the very start of your working career, what skills did you learn as a deckhand in Newfoundland that helped you build up those companies you founded?  Any qualities or lessons that you learned during that time?

Glen McKay: Hard work and team spirit! Someone is quoted as saying “The hardier I work, the luckier I get”. Without hard work the best of opportunities can evaporate like a morning mist.

My employer at that time and those up to the time I took my first business leap valued me in large part because of my work ethic and my ability to work as part of a team.

In my own businesses I looked for self motivated, bright hard-working people who had the ability to be a part of a team.

Having experience in a variety of industries, do you believe there is a formula for success regardless of what market company you lead deals in?

Glen McKay: Absolutely!!

It’s not the commodity you sell, the buildings you work from or the equipment you own. These are all part of business, but the MOST IMPORTANT asset is your people. Empower them and show that you value them, and they will increase the value of your business.

What advice do you have for young entrepreneurs trying to pave their way through industries that are resistant to change? 

Lead by example! Many people and therefore many businesses are resistant to change. However, change is the only constant in a successful business. Never get comfortable with the status quo. Be alert to new technology and developing trends in your industry or in areas that could affect your business. Be proactive and be ready to change with them, if not before. Such leadership in my business must come from the chair that I sit in.

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Source: http://www.youngupstarts.com/2018/07/22/interview-glen-mckay-newfoundland-business-leader-co-founder-of-newfoundland-hard-rok-inc/