On a recommendation from a dear friend I recently began reading The Harvard Business review. That’s right, a guy with an aircraft cleaning business and an economics degree from Radford University is reading the HBR. I can tell you, there are some amazing articles in this publication and this one struck me at the core.
Here is part of the story, this link will give you the entire article.
Harvard Business School’s graduating class asked HBS professor Clayton Christensen to address them—but not on how to apply his principles and thinking to their post-Harvard Business School careers. The students wanted to know how to apply them to their personal lives.
This is an excerpt from Clayton:
On the last day of class, I ask my students to answer three questions:
1. How can I be sure that I’ll be happy in my career?
2. How can I be sure that my relationships with my spouse and my family become an enduring source of happiness?
3. How can I be sure I’ll stay out of jail?
(I would make number 3, How can I be sure that I have enduring health)
In my opinion, for most of us the last would not apply, but as Clayton explained, two of the students from his Rhodes scholar class had done jail time, one was Jeffrey skilling from Enron.
The point is this. We make life entirely too difficult on ourselves. If we just focused on these three core areas, life would be pretty good.
1. Happy Spouse and Family
2. Happy Fulfilling Career
3. Good Health
Enjoy the rest of the week and share this with anyone who might enjoy the insight.
The high protein breakfast is a great way to start the day, it gets your metabolism activated and gives you the energy you need after fasting all night. Here is my personal favorite.
Costa Rican Breakfast Stack
- 1 corn tortilla
- 3 egg whites fried hard
- generous portion of black beans
- light sprinkle of cheddar cheese
This is great after a workout or surf session and will keep you feeling great all day. Enjoy!
Goal setting, like anything else requires practice and patience. We often over estimate what can be done in a year but under estimate what can be done in five years. When setting new goals remember this rule of thumb.
Goals must be S.M.A.R.T.
- Specific – Answer the, who, what, when, where, why, and how of your goals.
- Measurable – Establish concrete criteria for measuring how you are doing. Set time frames on certain levels of achievement.
- Attainable – You want to think big, but be realistic. You have to think you can do it.
- Relevant – The goal must create an emotion in you and be something you are passionate about. What impact will it have on your life and the lives of others?
- Timely – You need to establish a time frame for the achievement of your goals.
“Give me a stock clerk with a goal and I will give you a man who will make history. Give me a man without goals and I will give you a stock clerk.”
– James Cash Penny (1875-1971)
Founder – JC Penny Company
1. Great leaders empower others
- Provide your employees with the vision, tools, systems and knowledge to succeed. Praise their success and help them through their challenges.
2. Great leaders follow The Golden Rule
- Treat others as you wish to be treated, no questions, no excuses, no exceptions.
3. Great leaders lead by example
- Always conduct yourself in a way that you would want your team to emulate.
4. Great leaders listen
- Try to spend more of your time listening to your team, your employees, your customers, your spouse and your kids. They are a wealth of knowledge.
5. Great leaders trust but verify
- It is extremely important to trust the team you have in place but it is equally important to verify the results and feedback you receive.
In his best selling book “Good to Great” Jim Collins wrote the following about great leaders.
The great leader looks in the mirror and takes personal responsibility when things are not going well, but has the ability to look out the window and give praise and credit to others when things are going great.
The great leader always gives credit to others for his or her success.
Workers at Jim Garland’s aviation-services firm need FBI background checks, uniforms, health and unemployment insurance and other hidden costs that push the price tag of a $14/hour worker much higher.
NEW YORK (CNNMoney.com) — You probably cost your boss a lot more than you think you do.
For Jim Garland, who owns a corporate aircraft cleaning and support services company, a $14 per hour worker has a true cost of $19.63 per hour, or about 40% more than base pay. This so-called “loaded rate” includes fixed expenses — federal and state taxes, health insurance, workman’s compensation, uniforms, and paid time off — along with soft costs like the time spent training a new hire.
Washington’s lawmakers are throwing a lot of ammo at reducing the jobless rate, including a new tax break for hiring the unemployed. But no matter what incentives the government offers, it’s hard to convince business owners to hire until they’re absolutely certain they need to. Employees are often the most expensive investment a business makes.
“Our entire existence revolves around two numbers: revenue and payroll,” Garland said of Sharp Details, in Dulles, Va., which he launched out of his car trunk in 1991. Payroll for 60 workers accounts for around 70% of his firm’s operating costs.
Garland outsources his entire human resource department. Joe Sherrier, director of human resources for Employment Enterprises — the company that manages Garland’s HR — said that as a general rule, business owners should to expect an employee to cost an additional 25% to 30% on top of base salary each year.
Breaking down the numbers: Hilda Kernc has been running a Lebanese food production company out of her home kitchen near Chicago for a bit more than a year. Her vegetarian cooking is so popular that she works as many as 20 hours a day keeping up with demand for her hummus and other Middle Eastern fare.
Kernc is applying for a Illinois state business license and is about to start renting out a commercial kitchen part-time. Previously distributed under the name Hilda’s Homemade Appetizers, Kernc’s snacks will now be branded “Deleez Appetizers,” a combination of the word “delicious” and the Arabic word that means the same.
Kernc thinks it might be time to bring on her first employee. “My husband is helping me, and we were thinking we need to hire somebody,” she said. “It will kill me if I am going to work like this.”
To prepare, Kernc began researching the costs.
State income taxes vary significantly, but federal taxes are standard: Social Security tax is 12.4% on the first $106,800 of earnings, and Medicare taxes run another 2.9% of all wages. The employer and employee each pay half. (The self-employed pay the full cost of both taxes themselves.)
Employers also have to pay a federal unemployment insurance tax of 6.2% on the first $7,000 of each employee’s wages. Illinois adds on a state unemployment tax that’s currently 3.9% for new companies on the first $12,520 of wages. (Existing companies have their rates adjusted up or down depending on how many former workers file unemployment claims.) Part of the state unemployment tax is deductible from the federal, but that still leaves employers on the hook for a tax bite.
“I can’t afford it,” Kernc concluded. “When I saw the price to hire somebody, at this point I can’t do it.”
But Kernc she also knows she can’t put it off indefinitely if demand stays high. “I can’t work 24 hours per day,” she said.
Hidden costs: The little perks that employees come to expect, from free coffee to daycare services to group life insurance, factor into the price tag of a new worker.
“All of a sudden, by hiring a new employee, adding up all the fringe benefits, it can be costly,” said Tom Ochsenschlager, a senior manager at the American Institute of Certified Public Accountants.
Sam Meisler owns two animal hospitals and a vaccination clinic in Knoxville and Alcoa, Tenn. He’d like to hire another one or two full-time assistants to work in his clinics. His company’s business is growing, but still, timing the staff expansion is tricky: “What we have to try to do is anticipate the recovery,” he said. “It is difficult to know when to hire.”
A new hire can actually decrease sales in the short term as they learn the job. As new assistants train on their computer system, Meisler expects occasional missed charges.
“You may even lose a client or two just from miscommunication, because of the veterinarian assistant not knowing how to talk to them on the phone,” he said. But on the flip side, extra administrative help gives the veterinarian more time to talk to each client and potentially sell additional services, such as grooming and dental cleaning.
A bad hiring decision can be a big hit to a company’s bottom line.
“The cost of hiring the wrong person becomes incrementally more expensive the shorter period of time they have been with you. The first 90 days are typically the most expensive to have them on board,” said Sherrier of Employment Enterprises. “If they stay, that is cost you can recover.”
The cost of losing an employee and hiring a replacement throws complicates the “loaded rate” calculation of what a worker costs each specific business.
Garland’s employees work on high-profile corporate jets, and each of his new hires has to go through a full FBI background check and drug screening. Swapping an experienced worker for a brand-new replacement that needs training sets back the team’s productivity.
Washington’s policy plans: Job creation “must be our No. 1 focus in 2010,” President Obama said in January in his State of the Union speech.
Since then, he’s let loose with a fusillade of proposals, including a $5,000 tax credit for business owners for each new hire. That didn’t fly on Capitol Hill: Congress pushed back hard against so much spending in the face of a record deficit and growing national debt.
The $17.6 billion jobs bill Obama signed into law last week included a one-year Social Security payroll tax holiday on new hires that were previously unemployed — but it’s a shadow of the more aggressive hiring initiatives Obama had pushed for.
Meisler can hire an entry-level assistant for $8 to $10 an hour. At an annual base salary of around $20,000 — plus $2,018 for Social Security, Medicare and Tennessee’s typical state and federal unemployment taxes — every extra dollar of government hiring incentive puts a new worker closer to the tipping point of paying off financially.
The $5,000 tax credit Obama talked about would have prompted him to add staff. “I am not sure whether payroll tax credit alone would do it,” Meisler said. “I will probably just act like I usually do — when we need someone, we will hire them — but there is no real incentive at this point.
Source: CNN Money
By Jim Garland, CEO, Sharp Details – 03/15/10 05:17 PM ET
It’s a great day to be a small-business owner or entrepreneur. Even when the odds are against us and some on Capitol Hill feel capitalism and profit are somehow wrong, we charge ahead.
Small-business owners and entrepreneurs possess the best weapon against fear mongering, a growing government and uncertain economic times: Positive thinking and focused action. As an entrepreneur in business aviation since 1994, I have experienced Republicans and Democrats in office, economic ups and downs, frivolous lawsuits and the catastrophic aftermath of 9/11. Often, there is not time to ponder the possible negative forces because the small-business owner knows he must provide sufficient paychecks to loyal employees who provide excellent services to vital customers. The small-business owner stands on her own two feet, always takes responsibility for herself, and cannot afford the excuse of being a victim.
As entrepreneurs it is our thoughts and subsequent actions, and not the outside elements, that control our results. As healthcare reform looms and legislation is crafted, we understand that some policies may be favorable to our industries but most will not. As the backbone of America, employing over half of all working U.S. citizens, the small-business owner must adapt to these changes that impact our business plans and not lay blame on others. Prior to 1929 it seemed that if a man failed he blamed himself — my, how things have changed.
We should all take a lesson from one of America’s greatest entrepreneurs of all time, Henry Ford, who said, “If you think you can or you think you can’t, you are probably right.” How you think about your business, the economy and your customers will have a far greater impact on your venture than anything.
We have control over only one thing in our lives, and that one thing is our thoughts. When we exercise that control and keep our thoughts focused and positive, we can control our actions and in turn, in the spirit of Henry Ford, produce extraordinary results.
Published by THE WALL STREET JOURNAL – Emily Maltby on Monday, March 29, 2010
At Amazon Reptile Center Inc., owner Scott Solar is paying for the pink slips he issued.
After several years of growth, the company, which has two reptile pet stores in Montclair and Covina, Calif., ran headfirst into the recession. As employees left, they weren’t replaced, but recently the company decided to let go of three workers. In three years, the staff shrunk to five from 12. Now, like many owners, Mr. Solar will be paying a higher state unemployment insurance tax as a direct result of those layoffs.
State unemployment insurance taxes are paid throughout the year, as owners pay their other payroll taxes. States typically have a base unemployment tax, which owners will pay according to the size of their payroll. But as a company lays off employees, it develops a negative history or so-called “experience rating” that can boost that tax.
“We didn’t know there were repercussions, but we had to do it,” says Mr. Solar of his thin staff. “But now we’re going to be punished for keeping the business alive.”
Adding to the burden, a number of states are running out of funds to pay for their out-of-work populations. With jobless claims swelling and coffers depleting, at least 35 states are hiking unemployment tax rates this year, according to a survey by the National Association of State Workforce Agencies conducted late last year.
“This has been a gradual problem, and like a cancer, it’s been spreading as more and more states hop on the bandwagon,” says Henry Atkinson, a financial consultant for staffing solutions provider Ajilon, part of Adecco Group North America in New York.
The tax increases will impact thriving businesses as they expand their payroll, as they will have to pay based on their growing wages. But the hikes are more detrimental to firms that have laid off employees recently.
“The business that has laid off folks gets hit proportionately higher because while they pay less in total wages, and therefore less in employment taxes, their experience rating will go up and it takes numerous quarters of no layoffs to get that experience rating back down,” says Henry Paula, a tax principal at Reznick Group PC, in Bethesda, Md. “Things are tough already for them, so this is a big deal.”
Jim Garland, owner of Sharp Details Inc., pays state unemployment taxes in the six states where his airplane-cleaning and custom-detailing business operates. Four of those states have increased tax rates recently.
Taking into account the vacillating base tax rates in all six states, Mr. Garland says he’s paying about 7% more than three years ago. “From 2007 to 2008, there was no increase. From 2008 to 2009 there was some. But between 2009 and 2010 there was a big jump, which I see as a direct correlation to the unemployment levels,” he says.
Some employers are bracing for higher increases, particularly if they have had multiple rounds of layoffs or are located in hard-hit states. According to the NASWA survey, the unemployment insurance tax increases vary widely from state to state, with a median of 27%.
Mr. Garland’s 55-employee company has been growing and adding staff, so his state tax rates have remained at the base levels, but because some of those base levels have been rising, he’s been burdened by the cost. “When the economy was rolling, we could… explain we need to pass costs along,” he says. “But now the customer is facing the same squeeze and wants lower prices.”
Meanwhile, payroll tax breaks have become a priority on the federal level. In January, President Barack Obama proposed giving firms a $5,000 tax credit for every new job added and, for those firms expanding payroll, a payroll tax holiday on the 6.2% Social Security tax. A watered-down version of the proposal passed in a $17.5 billion jobs bill earlier this month, relieving employers from Social Security payroll taxes on new hires and giving them a $1,000 tax credit if the workers stayed on for a year.
It’s difficult to evaluate whether the good news from the federal level outweighs the bad news from the state level, financial experts say. Johanna Sweaney Salt, a CPA at Kaufman, Schmid, Gray and Salt LLP, says growing firms may find the federal tax breaks lucrative in states where unemployment taxes are only marginally increasing.
But others, such as Mr. Atkinson, say there’s no clear-cut answer. “For most businesses, the [state] payroll tax hike starts to bite pretty hard,” he says.
Mr. Solar, the pet store owner, doesn’t see federal tax breaks helping him, as he is in no position to hire. “To take advantage of a tax credit, I need to make a profit and I’m not,” he says.
Mr. Garland thinks the federal tax breaks are too restrictive. For example, the provisions outlined in the recently-passed jobs legislation will only apply to new employees who have been out of work for two months.
“When the government helps you out, it’s extremely complicated,” he says. “You have to set aside a weekend to find out if it’ll help you and, at the end of the day, it might not. But when there are new taxes…it’s just across the board.”