Friday, January 31, 2014

Being a Leader

 

Over the past several years, one of the most important contributions psychology has made to the field of business has been in determining the key traits of acknowledged leaders. Psychological tests have been used to determine what characteristics are most commonly noted among successful leaders. This list of characteristics can be used for developmental purposes to help managers gain insight and develop their leadership skills.
The increasing rate of change in the business environment is a major factor in this new emphasis on leadership; whereas in the past, managers were expected to maintain the status quo in order to move ahead, new forces in the marketplace have made it necessary to expand this narrow focus. The new leaders of tomorrow are visionary. They are both learners and teachers. Not only do they foresee paradigm changes in society, but they also have a strong sense of ethics and work to build integrity in their organizations.
Raymond Cattell, a pioneer in the field of personality assessment, developed the Leadership Potential equation in 1954. This equation, which was based on a study of military leaders, is used today to determine the traits which characterize an effective leader. The traits of an effective leader include the following:
  • Emotional stability: Good leaders must be able to tolerate frustration and stress. Overall, they must be well-adjusted and have the psychological maturity to deal with anything they are required to face.
  • Dominance: Leaders are often competitive, decisive and usually enjoy overcoming obstacles. Overall, they are assertive in their thinking style as well as their attitude in dealing with others.
  • Enthusiasm: Leaders are usually seen as active, expressive and energetic. They are often very optimistic and open to change. Overall, they are generally quick and alert and tend to be uninhibited.
  • Conscientiousness: Leaders are often dominated by a sense of duty and tend to be very exacting in character. They usually have a very high standard of excellence and an inward desire to do their best. They also have a need for order and tend to be very self-disciplined.
  • Social boldness: Leaders tend to be spontaneous risk-takers. They are usually socially aggressive and generally thick-skinned. Overall, they are responsive to others and tend to be high in emotional stamina.
  • Self-assurance: Self-confidence and resiliency are common traits among leaders. They tend to be free of guilt and have little or no need for approval. They are generally unaffected by prior mistakes or failures.
  • Compulsiveness: Leaders are controlled and very precise in their social interactions. Overall, they are very protective of their integrity and reputation and consequently tended to be socially aware and careful, abundant in foresight, and very careful when making decisions or determining specific actions.
  • Intuitiveness: Rapid changes in the world today, combined with information overload result in an inability to know everything. In other words, reasoning and logic will not get you through all situations. In fact, more and more leaders are learning the value of using their intuition and trusting their gut when making decisions.
  • Empathy: Being able to put yourself in the other person's shoes is a key trait of leaders today. Without empathy, you can't build trust; without trust, you will never be able to get the best effort from your employees.
  • Charisma: People usually perceive leaders as larger than life. Charisma plays a large part in this perception. Leaders who have charisma are able to arouse strong emotions in their employees by defining a vision which unites and captivates them. Using this vision, leaders motivate employees to reach toward a future goal by tying the goal to substantial personal rewards and values.
Leaders are rarely (if ever) born. Circumstances and persistence are major components in the developmental process of any leader, so if your goal is to become a leader, work on developing those areas of your personality that you feel are not up to par. For instance, if you have all of the basic traits but do not consider yourself very much of a people person, try taking classes or reading books on empathy. On the other end, if relating to others has always come naturally to you, but you have trouble making logical decisions, try learning about tough-mindedness and how to develop more psychological resistance. Just remember, anyone can do anything they set their mind to.

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Thursday, January 30, 2014

Hiring Your First Employee

Hire Your First Employee


If your business is booming, but you are struggling to keep up, perhaps it's time to hire some help.
The eight steps below can help you start the hiring process and ensure you are compliant with key federal and state regulations.

Step 1. Obtain an Employer Identification Number (EIN)
Before hiring your first employee, you need to get an employment identification number (EIN) from the U.S. Internal Revenue Service. The EIN is often referred to as an Employer Tax ID or as Form SS-4. The EIN is necessary for reporting taxes and other documents to the IRS. In addition, the EIN is necessary when reporting information about your employees to state agencies. Apply for EIN online or contact the IRS at 1-800-829-4933.

Step 2. Set up Records for Withholding Taxes
According to the IRS, you must keep records of employment taxes for at least four years. Keeping good records can also help you monitor the progress of your business, prepare financial statements, identify sources of receipts, keep track of deductible expenses, prepare your tax returns, and support items reported on tax returns.

Below are three types of withholding taxes you need for your business:
  • Federal Wage and Tax Statement
    Every year, employers must report to the federal government wages paid and taxes withheld for each employee. This report is filed using Form W-2, wage and tax statement. Employers must complete a W-2 form for each employee who they pay a salary, wage or other compensation.
Employers must send Copy A of W-2 forms to the Social Security Administration by the last day of February to report wages and taxes of your employees for the previous calendar year. In addition, employers should send copies of W-2 forms to their employees by Jan. 31 of the year following the reporting period. Visit SSA.gov/employer for more information.
  • State Taxes
    Depending on the state where your employees are located, you may be required to withhold state income taxes. Visit the state and local tax page for more information.
Step 3. Employee Eligibility Verification
Federal law requires employers to verify an employee's eligibility to work in the United States. Within three days of hire, employers must complete Form I-9, employment eligibility verification, which requires employers to examine documents to confirm the employee's citizenship or eligibility to work in the U.S. Employers can only request documentation specified on the I-9 form.
Employers do not need to submit the I-9 form with the federal government but are required to keep them on file for three years after the date of hire or one year after the date of the employee's termination, whichever is later.

Employers can use information taken from the Form I-9 to electronically verify the employment eligibility of newly hired employees by registering with E-Verify.
Visit the U.S. Immigration and Customs Enforcement agency’s I-9 website to download the form and find more information.

Step 4. Register with Your State's New Hire Reporting Program
All employers are required to report newly hired and re-hired employees to a state directory within 20 days of their hire or rehire date. Visit the New Hires Reporting Requirements page to learn more and find links to your state's New Hire Reporting System.

Step 5. Obtain Workers' Compensation Insurance
All businesses with employees are required to carry workers' compensation insurance coverage through a commercial carrier, on a self-insured basis or through their state’s Workers' Compensation Insurance program.

Step 6. Post Required Notices
Employers are required to display certain posters in the workplace that inform employees of their rights and employer responsibilities under labor laws. Visit the Workplace Posters page for specific federal and state posters you'll need for your business.

Step 7. File Your Taxes
Generally, employers who pay wages subject to income tax withholding, Social Security and Medicare taxes must file IRS Form 941, Employer's Quarterly Federal Tax Return. For more information, visit IRS.gov.

New and existing employers should consult the IRS Employer's Tax Guide to understand all their federal tax filing requirements.
Visit the state and local tax page for specific tax filing requirements for employers. Download Adobe Reader to read this link content

Step 8. Get Organized and Keep Yourself Informed
Being a good employer doesn't stop with fulfilling your various tax and reporting obligations. Maintaining a healthy and fair workplace, providing benefits and keeping employees informed about your company's policies are key to your business' success. Here are some additional steps you should take after you've hired your first employee:

Set up Recordkeeping
In addition to requirements for keeping payroll records of your employees for tax purposes, certain federal employment laws also require you to keep records about your employees. The following sites provide more information about federal reporting requirements:
Complying with standards for employee rights in regards to equal opportunity and fair labor standards is a requirement. Following statutes and regulations for minimum wage, overtime, and child labor will help you avoid error and a lawsuit. See the Department of Labor’s Employment Law Guide for up-to-date information on these statutes and regulations.
 
Also, visit the Equal Employment Opportunity Commission and Fair Labor Standards Act.

The Executive Suite

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Wednesday, January 29, 2014

Writing A Market Analysis For Your Business Plan

Market Analysis


The market analysis section of your business plan should illustrate your industry and market knowledge as well as any of your research findings and conclusions. This section is usually presented after the company description.

What to Include in Your Market Analysis

Industry Description and Outlook – Describe your industry, including its current size and historic growth rate as well as other trends and characteristics (e.g., life cycle stage, projected growth rate). Next, list the major customer groups within your industry.

Information About Your Target Market – Narrow your target market to a manageable size. Many businesses make the mistake of trying to appeal to too many target markets. Research and include the following information about your market:

Distinguishing characteristics – What are the critical needs of your potential customers? Are those needs being met? What are the demographics of the group and where are they located? Are there any seasonal or cyclical purchasing trends that may impact your business?

Size of the primary target market – In addition to the size of your market, what data can you include about the annual purchases your market makes in your industry? What is the forecasted market growth for this group?

How much market share can you gain? – What is the market share percentage and number of customers you expect to obtain in a defined geographic area? Explain the logic behind your calculation.

Pricing and gross margin targets – Define your pricing structure, gross margin levels, and any discount that you plan to use.

When you include information about any of the market tests or research studies you have completed, be sure to focus only on the results of these tests. Any other details should be included in the appendix.

Competitive Analysis – Your competitive analysis should identify your competition by product line or service and market segment. Assess the following characteristics of the competitive landscape:
  • Market share
  • Strengths and weaknesses
  • How important is your target market to your competitors?
  • Are there any barriers that may hinder you as you enter the market?
  • What is your window of opportunity to enter the market?
  • Are there any indirect or secondary competitors who may impact your success?
  • What barriers to market are there (e.g., changing technology, high investment cost, lack of quality personnel)?
Regulatory Restrictions – Include any customer or governmental regulatory requirements affecting your business, and how you’ll comply. Also, cite any operational or cost impact the compliance process will have on your business.


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Tuesday, January 28, 2014

Conducting Market Research? Here are 5 Official Sources of Free Data That Can Help

Are you writing a business plan? Planning to expand into new markets?

Then it’s worth knowing that Uncle Sam offers access to free data that can help you understand your market and analyze consumer trends and demographics. In fact, the federal government is the largest producer of data in the U.S. with numerous offices dedicated to collecting, analyzing and providing free access to their findings – good news for budget-conscious small business owners.

Here are five government sources of market data and statistics that may boost your market research efforts:

1. Business Data and Statistics from SBA.gov

A good place to start is SBA.gov’s Business Data and Statistics page, where you’ll find a collection of resources providing free access to information about business and economic conditions and indicators collected by the U.S. government. Whether you sell to businesses or consumers, these sites include data and statistics on income, employment, trade, and manufacturing, and plenty more.

2. The U.S. Census Bureau

The U.S. Census Bureau (www.census.gov) maintains a vast repository of information that is quick and easy to navigate, thanks to a variety of Data Access Tools. For example, with The American FactFinder, just enter a city and state and the tool will generate multiple options for viewing social, economic, household and demographic data for your town or future location.

The main site has also been newly re-launched to make it very simple to find the data you need, including a neat interactive map that shows a mash-up of economic and demographic statistics for any town, city, or state in America.

If you like what you see but are not sure how to use and interpret the data, the Census Bureau hosts seminars across the country to help business owners learn more about business and industry data on the site. Learn more.

3. FedStats.gov

If you want data but don’t know which agency maintains or produces it, head on over to FedStats.gov. This no-frills data-driven site provides access to a full range of official statistical information produced by the federal government without having to know in advance which federal agency produces which particular statistic. Data is available on wide-ranging topics, including economic and population trends, crime, education, health care, aviation safety, energy use, and farm production.

4. Small Business Statistics

Interested in statistics about how small business is doing? The SBA Office of Advocacy conducts and publishes its own research on topics such as the small business economy.

5. EconomicIndicators.gov

For briefings on retail sales, durable goods, manufacturing, construction, new home sales, and more, Economicindicators.gov provides access to daily releases of key economic indicators from the Bureau of Economic Analysis and the Census Bureau. This is probably your best bet if you're looking for one site that says it all.

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Monday, January 27, 2014

5 Ways to Find the Right Niche and Target Market for Your Small Business

One of the first steps in the business planning process is determining who your target market is and why they would want to buy from you.

It sounds simple, but do you really know what you are selling and to whom? Is the market you serve the best one for your product or service? Are the benefits of dealing with your business clear and are they aligned with those or your target customers?

If you aren’t sure about the answers to any of these questions then you need to step back and revisit the foundation of your business plan.

The following tips can help you be clear about what your business has to offer, identify the right target market for it and build a niche for yourself there.

Be Clear about What you Have to Offer

Sounds obvious, but more than just a product or service, what are you really selling? Think about it. Your town probably has several restaurants all selling one fundamental product—food. But I’ll bet one sells drive-thru fast food, perhaps another sells pizza in a rustic Italian kitchen, and maybe there’s also a fine dining seafood restaurant that specializes in wood-grilled fare. All these restaurants sell meals, but they sell them to targeted clientele that is looking for the unique benefits each has to offer. What they are really selling is a combination of product, value, ambience (or not), and brand experience.

So, if you are starting a business, be sure you understand why anyone would buy from you. What needs does it fulfill? What benefits and differentiators will you bring to the table that will help you stand out from the crowd?

Don’t Become a Jack of All Trades, use Strategy to Focus

One of the pitfalls of not defining what you have to offer is that you can quickly become a jack of all trades and master of none and this can have a negative impact on business growth.

Think about it from the perspective of a consumer. How often do you see marketing flyers promoting the service of a local handy man who claims to be an expert in everything from drywall installation to plumbing repairs, and so on? Now, this handyman may get some business out of his efforts, but he’d win a lot more if he specialized in doing one or two things well, building a reputation for himself, and fine tuning his marketing message. This is why you need a strategy: it will focus you.

Identify Your Niche

The flip side of being a jack of all trades is finding your niche and playing to your strengths within that niche. Creating a niche for your business is essential to success. For example, say you want to quit your day job and become a freelance writer. You know there’s a need in the market for a trustworthy, reliable, and consistently good technical writer – and clients are willing to pay a certain price point for that quality and value.

Now you could simply advertise your services on an online freelance marketplace, as many do, and hope to pick up any business from any customer anywhere on the map. But by identifying your niche and choosing to attract customers who will value your services, you will quickly build on that niche and be on the path towards business success.

Finding Your Target Customer

Identifying and finding your ideal target customer is a process few businesses can afford to get wrong.

Tailor your Business Message to Your Market

Now that you’ve identified your target market you’ll need to craft a message that reaches and speaks to that market while reinforcing your brand identity. It should explain what you have to offer, why you’re different, and why anyone should buy from you.  The following blogs can also help you nurture and build your small business brand identity:


Useful Resources