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02

Feb'17

Cutthroat Management Style

Many business owners think that a cutthroat pressure-cooker management style works.  Turn up the heat and things will cook.  Be ruthless with people and only the best will survive. It’s almost a cliche — put on the pressure and you’ll get results.  Does it really work? High pressure organizations may think their approach works, but it has consequences.  The stress results in higher healthcare costs, more workplace accidents, and a revolving door with employees. Who can be loyal to a company that treats its employees like automatons, throws out the “bottom” 10 % each year, and creates internal conflict and strife as a management approach? Studies have shown that cutthroat organizations are actually less productive.  They have less employee loyalty and higher turnover. It negatively affects workforce health, sucking the life out of people. What exactly is a cutthroat organization?  What things characterize that management style?  As in most things, there’s a spectrum, from mild to extreme.  Most  cutthroat environments have these ten characteristics: 1. They overwork people. Bring on those 50 hour workweeks! Create artificial deadlines and pile on the tasks.  Be sure to put high priority on  all tasks, and as a kicker, when one project is only half done, …

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02

Feb'17

How To Deal with Bullying At Work

Question:  I work for a small business and the manager is a total jerk, a bully in full form.  His management approach is pressure cooker.  It’s not uncommon to see him blow up at an employee, berating them for a minor problem.  He relishes firing people in front of other workers.  He assigns impossible tasks with unreachable deadlines and explodes when things aren’t up to his expectations. What do I do?   Response:  My sense of it is that the culture of an organization is established by one or two key opinion leaders. It may be a small group, where the leadership dynamics have descended into a desperate competition of egos and will to succeed.   The first step is to understand the dynamics of what is really happening. To do this, a person has to be able to step back and evaluate what’s going on and why. This is often much harder than it seems. Next, you are going to have to identify who are the opinion leaders. Where is the power, and who is pushing the “mean” button. Where is the pressure coming from, and why?   Then, you’ve got to have a turtle shell. The flow of …

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02

Feb'17

How to Deal with the Bitch at Work

It’s a problem.  We’ve all run across that woman in a leadership role who ends up being called a “bitch” behind her back.  She manages to create the perfect storm of resentment and fear  among her co-workers.   But is she really a “bitch?”   Is she acting in any way that different from what her male counterparts would do in a similar situation? Often, my sense of it is that women in the workplace fail in “tough management” jobs due to (1) a disconnect between the way they look and the way they act, (2) the particular way in which they address confrontation, which often is much different from men, and (3) and this will sound weird, but I think it’s true the different intonation in a female voice versus a male voice. Before everyone jumps on me for sexism, let’s be clear: there are distinct difference between men and women, in case you haven’t noticed. Un-PC thing #2, we all live our lives to varying degree by stereotypes. Sorry folks, it’s biologically built in. So, when we get a disconnect between what we subliminally expect and what would be normal male leadership behavior, our minds go tilt. Cognitive …

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27

Jan'17

Will a LLC Protect Me From Liability?

Here’s the long and the short of it: a LLC will protect you from some liabilities, but not all liabilities. Here is a non-lawyer’s  business person’s response ( always consult a lawyer for specifics.) If you are doing business as a LLC, you are still participating in the LLC and you are personally liable for any tort liability that you cause or are responsible for allowing to be caused. If I am to simplify this further, let’s just say that there is an “illusion” of protection, which may help you in limited circumstances. If you get into a battle, the attorney on the other side will sue your company, you, and your dog. Will they be able to pierce the LLC protection? It all depends, and it could be a function of how good your attorney is, the attitude of the judge on that particular day, and what the phase of the moon is. Do not, repeat, do not ever assume that an LLC will completely shield you from responsibility. We live in a litigious society. You have to protect yourself, and here are the best ways: Vet your customers. Don’t do business with jerks. Know your customers. Never, ever …

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26

Jan'17

What are the Psychological Implications of Starting a Business?

Question: I am working on a startup. I want to know how to be psychologically ready for the challenge. Response:  There are a variety of things that hit you: There’s a rush, excitement when you start out. Watch out, the bubble will burst, and you can’t predict when. Then there’s the overwhelming impact of the zillion things that have to be accomplished simultaneously now. Getting used to it is difficult for those who have been linear thinkers in a corporate environment. There’s the anxiety associated with every decision, the wait time, the gestation period from inception to survival, and finally, what comes next. There’s a strong chance that you may experience bipolar like euphoria and depression, sometimes almost simultaneously There’s the constant worry about cash flow, metrics, sales, cash flow, personnel, production, cash flow, marketing, cash flow There’s an exhaustion that sets in somewhere between 6 months and a year when you realize that you really are on a treadmill, and that you better run faster and better than all the other fools out there who are competing with you. Then there is the family. The spouse has been reading Inc Magazine and /or Entrepreneur, or has a friend who …

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26

Jan'17

What Company Should I Use to Form a LLC?

Question:  I see lots of companies offering to form a LLC or corporation on line. Which is best? Answer: So, we’ve decided we need a LLC, and we want to know who to have it done. My suggestion is that you stop and consider that you could do it all yourself, painlessly on the  Secretary of State website. That would be easy. Would it be best? Maybe not. There’s a lot more to a LLC than just getting a charter from the state. Most of the services you will see on line do little more than what you could do at the Sec of State website. Before you set up a legal entity, doesn’t it make sense to get some legal advice? Of course it does! LLC’s can be formed for many different purposes, and it if you don’t have the right legal paperwork such as an operating agreement, you could be wasting your time. Getting a charter from the state is the last step, not the first step in forming a LLC.  Even though you want to do it yourself, it makes a lot of sense to consult with a lawyer, and at least have them help you with …

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26

Jan'17

Employee or Independent Contractor

Question:  A gig I had last year was assumed to be under the table. The company now (Jan.) requested my tax info. What percent will I owe and is this legal? “Assumed to be under the table?” Under the table is illegal, and if you know it. What you have proved is that there is no honor amongst thieves. The company had a “come to reality” session with its accountant, and now they are trying to make it all pretty. So, what can you do? Precious little, other than provide the information to them. However, instead of sending them a W-9 form, which they probably requested, I would send them a W-4 form, all nicely filled in. Why? Well, if we are going to make pretty, let’s do it the right way. The chances are you technically should have been engaged as an employee, not an independent contractor. W-4’s are for employees. Be sure you keep a copy of the form. Now, they will probably send you a 1099 anyway. So what you do is file a form SS-8, and ask the IRS, was I an employee or an independent contractor? Chances are pretty good IRS will say “Employee!” This …

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02

Jan'17

Should I pursue a business idea that already exists?

“That which has been is that which will be, And that which has been done is that which will be done. So there is nothing new under the sun”  Ecclesiastes 1:9 So, your comment is stating what has been observed by mankind for centuries. Yet there are so many new things! Indeed, and they are all built upon small changes to things that already existed. A mighty oak tree is but a collection of small, un-noteworthy cells that combine in such a fashion as to create a beautiful monument to nature. So how about that idea of yours? How can it be different, better, What is your USP ( unique selling proposition)? It’s a good thing that there are already some competitors. That shows you that a market exists, that there is a demand out there for your idea. Now, how will you address that market that will bring customers to you? What will you do that will incrementally make your product/service better than what exists? Don’t be discouraged by competition. Be energized by it. Seek to be the better alternative for your target market. Figure out a way to communicate your USP and provide a better experience for your clients/customers. …

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02

Jan'17

Is a Delaware C-corp right for our start up? How many shares of stock should we issue and at what value? How many for co-founders?

So I am going to throw cold water on this whole idea. Why would you want to have a C-Corp for a start up? ( I know the answer you are all thinking: to get funding, the VC’s want a C Corp so they can take it public). STOP. So you are going to run your life by the Inc. Magazine playbook? Let’s reiterate what that “playbook” looks like: young energetic entrepreneurs start a company, they incorporate in Delaware, get VC funding, then take their company public and everybody rides into the sunset in their Teslas with megabucks. That is a stylized cartoon view of reality. It is promoted by the media and Inc Magazine in particular. It’s not what really happens in real life to most entrepreneurs. The narrative is a fairy tale. Consultants, lawyers and the like buy into this stylized narrative because it means they can fleece their clients for big bucks now and keep them dazzled by the golden rainbow ahead of them. STOP. First off, you need to think about taxes. A C-Corp is the worst structure for that. It locks up all the early losses in the Corp, with no flow through to the …

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25

Dec'16

How do I find a Good Sales Person?

Whoa! What all of us business / marketing types crave: a craftsman who loves to make things. OK. but you all be careful, y’all hear me? There are a lot of great builders who get burned big time. Ask anyone who was on the Windows development team, or the original Mac development team. If you are the engineer / builder, you must protect your skills and contributions. So, if you like building, and you are the one who is the driving force, then you are the owner. Now, you want to get some marketing talent. The problem is that marketing folks love to sell, and the first person they sell is you. For 50% of the firm, they will sell the hell out of it. STOP. First off, let me say I’ve started over a dozen businesses, taken two companies public, worked for many years as a CPA and adviser to many businesses, start up to middle market, to large public ( Aetna, Union Oil, etc type companies) My approach to management may be a bit German, but that’s my heritage, so it’s in the genes. There has to be a boss, and there have to be troops. Who is …

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