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February 2023
We see a strong similarity in baseball and your small business; they both create winners!
In the game of baseball, one of the statistics that is closely monitored for each player is that of "RBI". RBI stands for "runs batted in". A player can score a RBI by themself by way of a home run. However, most home runs involve multiple players with one player being on base and another batter getting a walk, hit, or home run. The player who is doing the batting is the one who is credited with the RBI. In small business we want to suggest using RBI as an acronym for rewards, bonuses, and incentives. We have often suggested using these in business and are not surprised by the seminar participant who says they would never give any type of incentive, reward or bonus to an employee for doing the job they are already being paid to do.
Our answer is that we agree with their concept. And with a bit of humor we say, "and when you get it to work for you please give a call so that we can come and see how you do it". Usually there is a giggle from the audience and no further discussion.
Let's explain what each of these items are as they are frequently mistaken for all three being the same.
A reward is a one time something for an employee having done something exceptional. Our example is that of an employee who discovers a way for the business to save a sizable amount of money by controlling an expense. The saving can go on indefinitely, but you want to reward the employee for their thinking. What if your business had a sizable electric bill and the employee found a way that would save $200 a month. That would produce a savings of $2,400 a year; every year. What if you gave that employee a reward of $1,000? Your business would earn back that $1,000 in five months and yet the savings would continue each month.
A bonus is a way of saying "thank you" to your employees. An example comes from our business where we gave each employee a watch. There were no strings attached and there was no specific reason for the watches. We had seen them at a trade show and decided to spend the money to show our appreciation to everyone. While that happened in 1993, we recently participated in an online exchange and found that the three people in the conversation all still had the watch!
The "I" stands for incentive. Incentives are designed to increase revenue, decrease expenses, or change the way something is done within the business. Some incentives are individualized and some are teamwork incentives. An incentive can be a singular short term situation and it can be something that is ongoing. You tailor the incentive to what you want and need in your business.
The bottom line is that we have seen the RBI concept work. And we have seen where these concepts are not applied correctly. Ever see the movie, "Christmas Vacation"? The underlying story is that of Clark Griswold is expecting a big Christmas bonus from work. There has been a bonus every year so there is an expectation of one for this year. He does not know how big the bonus will be; he does not know what he can do to make the bonus larger; nor does he know what would cause the bonus to become less. It is just an expected event.
That is from a movie and is meant to be funny. Unfortunately there are businesses we know that use the same concept. Don't be one of those businesses. Instead, use the RBI concept to engage your employees to take your business to the profitability you want to achieve.
Article of the Month - Beating the summer doldrums What? It is snowing and cold in many places and here is an article mentioning summer. The focus of the article is not summer but instead refers to the time of year for each business when your revenue is at a low point.
Just because you are in an industry that has a "slow time of year", it does not mean that it has to also refer to your business. In any industry there are businesses that are the exception to experiencing the doldrums; why not your business becoming the exception?
Who is visiting Small Business Converations this month? - Ken Banks We are planning to have Ken Banks visit us for the February Small Business Conversations. Ken has spent his entire career in advertising. He is in the retail advertising hall of fame. We have asked him to share his expertise with each of us so that we can get a better response to the dollars we spend in our efforts to attract customers; whether the dollars are spent in the traditional media, social media, or directly to your customer database.
Watch your email to see which Thursday evening the program will be held. As always, it will be 8pm Eastern on a Thursday.
Book of the Month - Thou shalt prosper by Rabbi Daniel Lappin This book has a subtitle; "The ten commandments for making money".
This book is an appropriate read for this month because I continue to meet what I would think is too many owners who focus on what they sell or do in their business instead of focusing on how their business should be making money.
Invest a bit in yourself; and listen to what the Rabbi has to say.
Internet Tool for Your Business - Keeping in line with the book suggestion for this month, the Internet tool of the month is the Small Business Knowledge Test. It is a 20 question multiple choice exam to help you find what you know about business. While we frequently make decisions according to our gut instinct, we should all have a core knowledge about business that we use to guide us.
Please note that several of the questions are not service business oriented but instead apply to our readers who are retailers.
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MAY 2024
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With over 25 years of frontline experience Tom Shay is America's leading Small Business Management Expert. He's a "Must Have" for your next event.
Small Business
The May Small Business Advisory is titled "Planning for a successful accountant" and is appropriate for many with the April 15 tax deadline having passed.
Did you work with your accountant? Or, did you just give them a bunch of papers and wait to receive a completed tax return?
Successfully working with an accountant requires a partnership. This month's Small Business Advisory gives suggestions of how to make this happen in 2024.
Small Business
We see that many small business owners have too much of a focus on the "top line" of their income statement.
Increasing revenue is great, but it is not a cure all for any challenges your business is facing. And sometimes, incresing revenue can create a challenge.
Who is your customer? Some small businesses have no focus. Their customer is whoever calls or walks in the door.
And some small businesses have determined which customers, in sufficient numbers, they should spend their efforts to attract.
The article of the month shares an old Southern rhyming couplet about business; "The bertter you niche, the more you get rich."
Lean Startup by Eric Reis is our suggested book for May.
As the title suggests, the reader of the book would be someone that is starting their business. However, we see more value than just that.
Perhaps you have been in business for many years. We think this book could give insight to items, and methods, that a small business owner should think about with their business today.
