Employee Archives - GUJRAT INDIA

More Than an Oracle – The Employee Engagement Practices of Warren Buffett

Warren Buffett is in the news these days after publicly expressing his confidence in the future of American corporations and recently investing $8 Billion Dollars to purchase interests in GE and Goldman Sachs. With the recent stock market turmoil, many look to the world’s wealthiest man for guidance, and rightly so. Buffett is widely recognized as an exceptional judge of corporate value. “The Oracle of Omaha,” as he is known, is arguably the most successful investor in history. Corporate leaders regularly make the trek to Omaha, Nebraska, seeking his wisdom. With so much attention on Buffett’s investment acumen, it’s easy to overlook another talent: motivating people. It’s one of a host of reasons his investments tend to outperform the market.

The talented managers who run Buffett’s companies remain with him because he keeps them engaged in their jobs. In Buffett’s own words, “Charlie [Charlie Munger, Buffett’s longtime business partner] and I mainly attend to capital allocation and the care and feeding of our key managers . . . Most of our managers are independently wealthy and it’s up to us to create a climate that encourages them to choose working with Berkshire over golfing or fishing.”

A closer look at Buffett shows, at least in part, how he does it.

He imparts an inspiring identity to members of the Berkshire Hathaway family. The vision he constantly communicates is that Berkshire companies are well managed and have great people. It’s not unusual to hear him tell employees to “just keep on doing what you’re doing . . . we’re never going to tell a .400 hitter to change his batting stance.” Who wouldn’t be flattered to be praised by Buffett?

Buffett shows that he values people in several ways. He is trusting and forgiving. By investing for long periods in the companies he owns, Buffett indicates that he trusts his managers. He delegates decision-making authority, in his own words, “to the point of abdication.” And when a manager makes an honest mistake, he keeps it in perspective. One manager who informed Buffett that his business had to write off $350 million was stunned when Buffett told him, “We all make mistakes . . . if you didn’t make mistakes, you can’t make decisions …You can’t dwell on them.”

Buffett models civility and respect for others. His secretary has said she hasn’t seen him mad once in the nine years she has worked for him. The one time I met Buffett at a meeting in New York City, he patiently waited around to speak with everyone who wanted to meet him. He was attentive and focused on them, never projecting the slightest hint of self-importance.

He is confident, yet humble. Buffett knows he’s very good at what he does, and he projects an easy confidence rather than superiority or arrogance. He credits his managers for his success, remains plain spoken, works in a modest office, lives in a modest house, and proclaims thrift as a virtue (the vanity plate on his former car read “Thrifty”).

Compare Warren Buffett to Donald Trump, for example. It’s hard to imagine Buffett prominently displaying his name all over everything he owns or relishing in telling someone “you’re fired.” Instead of everything being all about him, Buffett insists it’s all about others. He appears to be guided by the Golden Rule rather than Machiavelli’s The Prince.

Given the way Buffett treats people, it should come as no surprise that some private company owners report turning down more lucrative offers to join the Berkshire family. It is telling that no manager who sold a company to Buffett has ever left for a competitor, and several continue to work well into their eighties. Put simply, “people want to work for him,” proclaimed another satisfied manager, Rich Santulli, head of NetJets.

Buffett promotes communication by being approachable and candid. At the annual meeting he hosts in Omaha for Berkshire shareholders, Buffett and Charlie Munger sit on a platform, listening to shareholder opinions and answering questions for hours on end. In dealing with his managers he follows the data they provide him in periodic reports and makes himself available if they want to talk. Buffett writes and speaks with candor, even pointing out mistakes he made and what he learned from them.

Warren Buffett’s ways make the managers of Berkshire Hathaway feel proud to be affiliated with the company, feel valued as human beings and feel they can communicate openly and honestly with Buffett. These feelings (or emotions) make people want to give their best effort in their work and make them more energetic, optimistic, trusting and cooperative. Warren Buffett’s behavior reflects common sense and yet studies have shown that such behaviors are uncommon in practice among those with power in organizations. It is yet another reason why Buffett deserves to be called the Oracle of Omaha.

How to Improve Employee Morale in a Bad Economy

According to a recent Time magazine study, approximately 80% of people feel disrespected at work. In today’s economy, it’s increasingly difficult to find jobs – but it’s also very important to maintain employee happiness in order to maximize the efficiency of the company in preparation for long-term success. A few years ago, I attended a private leadership training seminar in Louisville, Kentucky, held by Adrian Gostick, author of “A Carrot a Day”. Gostick, who teaches the importance of maintaining employee morale through rewards and recognition, is one of the best public speakers I’ve ever seen. He runs the websites Carrots.com and OCTanner.com along with his business partner Chester Elton. The two travel the world speaking publicly and offering advice for implementing greater standards of employee recognition in the business world. During the session, he shared some of his tips for maintaining employee happiness in almost any size organization. Smart Money magazine recently reported that “optimistic diehards” are more successful in the business world – but anyone who has worked in that world knows just how difficult it can be to maintain a positive attitude sometimes.

Negativity is contagious and once it sinks into the corporate environment, it can spread like wildfire. So how do we combat it? With recognition, he says. An animated, witty presenter with a contagious sense of optimism, Gostick recommended praising efforts of employees who are attempting to improve their own performance, and actually rewarding them when those efforts bring measured results. Recognition is a huge factor in boosting employee morale. If you feel that your employees could use a fresh breath of positivity, try personal or symbolic recognition, or positive re-enforcement of good behaviors. PERSONAL RECOGNITION Personal recognition is exactly what it sounds like: recognition for a job well done. It can be in the form of a “great job” or a pat on the back. Sometimes, it could go a step further and emerge as a thank you card passed from a grateful boss to an employee who just went above and beyond. These types of recognition are almost always welcome – and can put a smile on someone’s face for the rest of the day. SYMBOLIC RECOGNITION Of course, in order to be effective, you want to avoid overkill. Too much of a good thing can become redundant or seem insincere. If you are constantly praising your employees, your words may lose their meaning. Employees may come to expect praise, and view it as less of a “reward” – or, even worse, feel hurt when you forget to praise them for doing what they consider to be a good job. Make sure you praise frequently, but not TOO much.

Praise when needed, and when recognition is deserved, when building rapport or when a particular employee needs a morale boost. And try different types of praise. Personal recognition is highly effective, but symbolic recognition can also be very helpful. Symbolic recognition involves going a step further and rewarding an employee with something other than just words, a smile, a handshake, or a friendly pat on the back. Symbolic recognition is often tangible, and involves gifts or prizes. I’ve seen companies provide everything from plaques to an employee’s favorite food, or even something as simple as a stress ball or bracelets. If you really want to make the employee feel special (and if it’s within your company’s budget to do so) a personalized trophy could be awarded to a top performer to proudly display on his or her desk. Now that we’ve discussed a few ways to recognize top performers, let’s examine how to be effective in our recognition. In order for recognition to be successful, Adrian Gostick says it must follow the following three rules: – frequent – specific – timely In his book “A Carrot a Day” (which I highly recommend to anyone in a leadership or management role) Gostick recommends doing something to boost morale once a day. The theory here is, if you continuously work to improve employee morale and keep your top performers satisfied, they will continue to work hard and keep your business running smoothly. However, if top performers are neglected, they may lose interest in working for your company.

This should not be underestimated, as top performers generally realize their own worth and know that, even in a tough economy, they stand a better-than-average chance of finding another job. Another reason recognition is important, Gostick says, is because “customers base their opinions of a company on its frontline employees.” Think about it. Front line employees are usually the first to see the customers, often dealing with them face-to-face in person. Unfortunately, they are also usually the lowest-paid. Because studies have shown that people associate more money with happiness, this also means front-line employees often run the risk of becoming unhappy with their jobs and even quitting to pursue other options. If your front line employees are unhappy, are they going to provide top-quality customer service? Probably not. “Customers will drive further and pay more for better services or cheaper pricing,” Gostick says. The key to employee retention is making your employees happy. Certainly, some idealism comes into play, but the theory itself is a good one and boosting employee morale can never be bad for business. In fact, Gostick states in his book that employees who are praised and/or rewarded regularly “focus better on company goals. They spot new opportunities faster. They have longer employment life spans.” The book even offers ideas for managers who are looking for new ways to praise, recognize and reward employees. No wonder, then, that it quickly became a bestseller on both the Wall Street Journal and Business Week lists. Some of the most notable tips:

Remember to thank people who’ve influenced you. This too often gets overlooked. Don’t just promote front line employee morale; promote it on all levels of your company.
Bring out the star inside your fellow employees. Publicly reward when appropriate – and observe the change it brings in attitudes and performance.
Make a formal event out of recognition. Have a ceremony at least once a year to publicly praise top performers and make them stars. This also gives employees something to work towards throughout the year.
Keep track of what your employees like – or dislike. This doesn’t just mean their feelings about the work environment. It can also help you think of creative ways to reward them. Get on a more personal level with your reward ideas by asking them what motivates them. You could even do an anonymous (or not) written survey of all employees for prize ideas. If possible, tailor your rewards to each specific person you’re honoring. They’ll appreciate the personal touch, while knowing you were listening to their needs and wants. This is a great way to build rapport by letting them know you care!

Rewards don’t just have to come from upper management – so don’t exhaust yourself trying to think of new ideas! Create a formal employee rewards & recognition program that allows employees to nominate and possibly even reward each other when they appreciate something a coworker has done or notice a job well done. This boosts morale, team rapport, and takes some of the weight off your shoulders so you can focus on other important management duties. Just make sure you aren’t relying on your employees to provide 100% of the recognition. Most of it should still start with you! Don’t underestimate the power of recognition. It is extremely important in the business world. Without it, you could actually lose employees. Top performers are the most capable of leaving because they have the very skills that other employers are searching for – and they KNOW it! Fail to show your top performers how valued they are and they may leave you for another opportunity, should one arise. However, if an employee is truly happy with his or her surroundings, or feels respected and appreciated in the workplace, he or she might settle for less pay or a longer commute just for those feelings of value. To further illustrate this point, Gostick shared a story about his recent experience traveling in China. During his trip, he met a young Chinese girl who spoke a little bit of English.

Deciding to strike up a conversation with her, he asked: “Have you ever been to America?” The girl replied that not only had she never visited the United States, but she had never even left her hometown. Understandably amazed, Gostick decided to probe further by asking: “Why have you never left this city? Don’t you want to see the rest of the world?” “If I’m happy here,” the girl answered without hesitation, “why would I ever want to leave?” It sounds like businesses could learn a lot from this story.

Consequences of Poor Employee Scheduling

The base line of any business is to achieve profitability. Employee scheduling has a major impact on company’s profitability. Scheduling staff to meet business requirements is a complex task. In previous times there were traditional office hours and shift work. Now It has become complicated especially because of extended or 24/7 working hours on one hand and on the other employees working shifts, flexible working hours, split-working, job share or part-time hours etc. Business managers who undertake this task of employee scheduling manually spend considerable time to deliver good schedules and in case the manager fails to deliver an optimal schedule the consequences of poor scheduling will be apparent in company’s operations, revenue generation, employee satisfaction, retention etc. Most important, it will also have impact on the brand image of the company.

Poor employee scheduling can lead to chaos in the company’s operations. This will be perceived as being arbitrary and will invite ad-hoc changes for reasons not connected with the business. This will lead to repeated corrections and amendments and appear as a rough guide of the work schedule. This leads to loss of credibility of the schedule in the opinion of employees and desire to get changes as per the employee’s preferences and it is difficult to encourage an ordered and responsible approach to staff deployment. In case of poor leave scheduling overall head count may be met but there may be poor skill mix leading to loss of proper work-flow and productivity. Furthermore in the absence of a definable work-flow, managers find it difficult to timely deliver consistent staff schedules associated with company goals saved supervision time

Consequences of poor employee scheduling is generally seen in the form of workplace stress, staff conflicts, poor productivity, increased absenteeism, and ultimately poor retention of trained workforce. Staff finds it difficult to manage when they are confronted with unplanned schedule changes at short notice, especially those with responsibilities.

The costs associated with poor employee scheduling are difficult to define. Misunderstood schedules can be very costly to any company. Controlling overtime costs is a benefit most companies understand, but much higher costs are involved in less obvious areas of activity as payments for work not performed, reduction or a temporary halt in production, possible reduction in the quality of work, vacation scheduling, negative effect on the morale of the employees, training expenses of replaced employee and administrative costs. Effective scheduling, which includes matching specific skills with specific needs in the most cost effective manner, is vital to achieving goal of the company as well as providing the best possible financial results.

Poor resource management leading to poor retention of employees influences employee relationship in a negative way and can also result in poor public relation. Reduction in the quality of products leaves a negative impact on the brand name. The Electronic Employee Record maintained in the soft wares available for these purposes provide a crucial link between the financial and productive side of the business.

6 Business Benefits of Employee Automated Time and Attendance Systems

Your employees could be stealing $800 or more each year with your blessing. Employee time theft is a rising concern across the small business community as workers come in late, take long lunches, clock out early and waste time on Facebook. If just a single employee making $10 an hour is late 15 minutes each workday, you are handing over $800 annually and getting nothing in return. One of the simplest solutions to get that money back is to implement an automated time and attendance system. Most costs are recouped within the first year, and the accumulated benefits far outweigh the initial investment.

Here are just a few advantages of electronic time and attendance systems:

1. Control employee time theft: Don’t let an employee say he was present on a particular day when he wasn’t. An automated system tracks all hours at a particular worksite and gives managers instant access to attendance reports.

2. Automate reporting: Learn what your employees are doing even if you are out of the office. Many automated time and attendance systems send you notifications about late sign-ins, absences or potential errors in time tracking.

3. Maximize efficiency: Most paper attendance systems require the employee to fill out a timesheet, then the supervisor signs it, a senior manager audits in and a payroll agent enters the data into a payment system. You can eliminate duplicate work by letting employees swipe in and out and sending the data directly to payroll. You also eliminate costly human errors.

4. Integrate time and attendance details with payroll: By getting rid of wasteful data entry steps, your company can process more payroll transactions in less time with fewer employees. You don’t have to collect time cards, track down late submissions, calculate hours or contact employees about inaccurate or illegible details. You also avoid the hassle of missing timesheets and paper record-keeping.

5. Gain more flexibility: Archaic paper systems are typically built on time-consuming processes with little documentation. If the payroll technician takes time off during a pay period or, even worse, leaves the company, the business comes to a standstill. With automated systems, payroll personnel can take vacations and the staff still gets paid on time. Most modern systems are so simple that new employees and temporary replacements can be up to speed within a few hours, even if the official payroll representative is not there to conduct the training.

6. Gain business insights: Most paper attendance systems are so complicated that business owners have little time to look for trends. Automated attendance software lets you review a variety of metrics, including the number of employees off on any particular day, high-volume vacation periods, popular lunch times and even projected absences over holiday weekends. You can use staffing reports to coordinate times for training and other events.

5 Steps to Move From Employee to Entrepreneur

Have you been considering quitting your day job in favor of starting a business? Have you just lost your job and are currently exploring alternative ways of earning a living? Have you always dreamt of owning your own business some day?

Before you take the leap of faith into self-employment, consider these 5 steps:

Get clear on your goals/passions – It’s not enough to decide to become a business owner. There are several questions and things to consider before you move forward in becoming a business owner. You will need to think about what kind of business you wish to run. You`ll need to determine if you wish to grow it from scratch, buy an existing business or purchase an available franchise. But even before you decide that- you should think about how the business will fit in with the rest of your life. Running a business can be a huge commitment of time and money. So ask yourself what do you enjoy doing or what will bring you joy? You will spend much of your day on your business so it’s a good idea for the business to provide work you actually enjoy doing. Ask yourself what you are most passionate about? What would you love to do? What is your dream job/business?
Do your research/homework – Don’t make any rash or impulsive decisions and don’t leave your day job until you are absolutely sure of what you want to do and have a plan for doing it. Take the time to do good research by researching the industry, the marketplace, your potential target clients, your competitors. Do proper business research including a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis. Get a good handle on projected revenues and realistic operating costs as well as an understanding on how long it will take to breakeven and generate more revenues than expenses. Identify your personal strengths and skills and determine if there are any skills gaps. Determine how you will close any skill gaps or lack of expertise. Which gaps can be closed through skills training? Which gaps can be closed through recruiting the right people? Which gaps can be closed through coaching or mentoring? Determine what options and opportunities are available to you right now?
Learn from others’ mistakes – There is no shortage of people who have started or run a business. Speak to as many people as you can who have gone before you. Learn what you can about what works, what doesn’t, and what mistakes others have made. Don’t waste valuable time and money. Be open to hearing others` perspectives on what they would have done differently. Hindsight is always 20/20.
Business Plan ahead – Do the work and develop a business plan. While it may be a lot of work, it will be time well spent and most financial institutions will require one if you are searching for financing. The process of business planning is not only to prove to the bank that your business will be a success, it’s also a roadmap for you to follow to ensure success. Running your business finances can be like running your weekly, monthly or yearly personal budget – so if you haven’t developed good budgeting and financial management skills, it might be particularly challenging and doubly important to have a solid business plan.
Hire a mentor – Starting and running a business can be challenging or even lonely at times. In addition to the day to day operations of the business, you may be mentally or emotionally overwhelmed by being a business owner. Having a safe place to go to for advice, guidance, and accountability or simply as a sounding board can be just what you need to help you make the transition into entrepreurship easier and smoother. Good coaching and mentoring can really help you fast track your transition.

While there are many advantages to being an entrepreneur, it`s important for you to also consider the downside of self-employment. Become a business owner armed with as much information, skills and tools you can to ensure a successful transition from employee to entrepreneur.

Stopping Employee Theft in Your Coffee Business

Regardless to how good of an employer you are, and even if you treat your employees well, understand that employee theft is a reality, and you need to control it. While it may only be a very small percentage of your staff that might steal from you, it can have a significant financial impact on your coffee business. If it goes unnoticed, employees will usually become even more brazen in their activities.

When it comes to theft, your employees are likely to fall into one of the following four categories:

Mr./Ms. honest – these are people who would never think of taking anything if it doesn’t belong to them. If they happen to go home with one of your ballpoint pens, they’ll bring it back the next day, and feel guilty that they took it home, even though it was unintentional.

Incidental theft – these are people that will take home your pen by accident, and will keep it. And, they may scarf a piece of cheesecake occasionally when you aren’t looking, even though they know they shouldn’t. Because these items have minimal value, they have no great sense of guilt related to their activities.

Theft because of need and opportunity – this is when you have an employee who is perhaps living on the edge financially, and because they have the need, and because your security may be lax, they’ll take advantage of an opportune situation to take something.

Compulsive theft – this is the person who is always looking for something to steal, and they have absolutely no conscience about it. They typically rationalize the theft in their own mind. They consider you to be the rich, fat cat, and feel that they are over worked and under paid, so stealing from you is justified.

Employee theft probably exists to some extent within your operation, whether you are aware of it or not. You can most likely live with incidental theft, provided it doesn’t get out of control. Theft related to need and opportunity is, in reality, your fault. These people would probably not steal from you normally, but a lack of security procedures has created the temptation and means for them to do so. Compulsive theft must be discovered, stopped, and you must eliminate the person(s) responsible.

Losing product due to theft:

Your employees may have no desire or need for a sleeve of 12oz. paper cups, Java Jackets, or a roll of toilet paper… but they might like a frozen cake, gallon of chocolate sauce, 6-pack of beer, or a bottle of wine.

There are some simple things you can do to greatly reduce the chance of being ripped-off. First, don’t allow your employees to store their jackets, backpacks, and purses near where you store products. This makes it incredibly simple for someone to slide something into their bag or jacket pocket when no one is watching. I always had my employees store their personal belongings in the cabinet under the cash register (where someone would always be watching), or in my office, under lock & and key.

Second, keep the back door of your store locked with a key at all times (you or your supervisor being the only ones having a key). If customers regularly enter through your back door, this may not be an option. If your back door is an emergency fire exit (and it probably is), you’ll need to install an alarmed breaker-bar. The whole point is that you don’t want your employees to be able to flow in and out of the back door without you knowing about it. Carrying product out the back door to their car, a hiding place for later pick-up, or an awaiting friend, is one of the most common ways products will exit your store.

Once you have made it more difficult to stash things in their personal belongings, or carry them out the back door, employees may resort to hiding items in the trashcan. Of course you will unlock the back door to let them take out the trash. If they have hidden something in the trashcan, a dumpster-diving expedition will certainly be planned for after-hours to recover their treasure.

Periodic trashcan checks should eliminate this problem, or make it a far less appealing option to anyone considering this method to smuggle things out of your store. Buy a long handle 3-prong garden rake. When employees ask to take out the trash, accompany them, and have them hold the can up on the edge of the dumpster while you rake out the trashcan contents. What you are looking for are things that might have been hidden in the trash, but you can tell your employees that you are merely making sure that small wares aren’t being accidentally thrown away. During the 15-years I owned and managed restaurants, I discovered everything from six-packs of beer, bottles of wine, and packages of steaks hidden in the trash!

Another situation that will create an ideal opportunity for employees to steal from you is having only one person working in your store. If your baker comes in each morning a hour before you or the next employee, or if one person is left to clean and lock-up the place at the end of the day, opportunities for theft abound. As the old saying goes: when the cat’s away…

Always try to have at least two people in your store at all times. If there is not justification for having a second employee on the clock, then you will need to be that second person. If this requires you going from a 60-hour workweek to 80-hours, then this may not be a tolerable option. If this is the case, then at least invest a couple of hours more each day for a week or two to do some detective work.

During those times of day when only one employee is working, park at the far end of the parking lot, or across the street, so that you will reduce the chance of being noticed by your employee. If they are familiar with your vehicle, use your spouse’s or friend’s vehicle for a few days. Watch carefully (with binoculars if necessary). I know this all sounds a little CSI – like, but better to rest-easy, feeling fairly assured that your employee isn’t carrying away your store when you’re not watching. If I had the time, I could tell you countless stories of my experiences in catching employees red handed, loading the trunks of their cars.

If you suspect that theft of product might be occurring, but you’ve seen no direct evidence of it, then conducting a daily key item inventory may shed some light on the situation. Write down a list of 15 to 20 products that you think would be most appealing for someone to steal. In your coffee business, this might include items such as coffee, syrups and sauces, smoothie puree, biscotti, cookies, and desserts, sandwich meats & cheeses, and of course beer & wine (if you serve those from your operation). Then take an inventory of these items every day. Your employees don’t need to know what you are doing, and if they ask, simply tell them you are taking an inventory for ordering purposes.

What you are looking for are anomalies in usage. For example, let’s say that from your daily inventories you assess that you use about half a gallon of chocolate sauce per day. Then, one day you notice you used 1 1/2 gallons of chocolate the previous day. This should send up a red flag! Why did you go through an extra gallon of chocolate? Were you significantly busier yesterday, or did you featuring several drink specials which contained chocolate sauce? A quick review of individual item sales from yesterday’s cash register report should provide you with the answer. If you average one ounce of chocolate per beverage, then using 1 1/2 gallons means you should have sold approximately 192 beverages containing chocolate (128 oz. per gal. x 1.5 = 192). If this was the case, no problem. But, if you discover that you only sold 64 beverages containing chocolate, then 128 oz. (or 1 gallon) is unaccounted for and missing! A good indication that it probably walked out the door. If this happens, keep track of who was working on the day of the shortage. If this happens continually, eventually you will discover that the same person or persons were working every time.

Theft of money by employees:

Hopefully, none of your employees will have the desire to steal products from you, but some will be tempted by the lure of cold, hard, cash. Everyone could use an extra $20 a day. Employees who steal money from you will definitely hurt your bottom line, and must be eliminated.

The first way to reduce cash theft is to have a cash handling policy in place that will discourage theft. If multiple employees are using the cash register, and no one person is responsible, then I can almost guarantee that your cash drawer will keep coming up short on a regular basis. The fact that no one person can be held responsible for the shortages, will make grabbing a bill or two easy and appealing.

Implement a policy that one, and only one person is responsible for the cash register for the entire shift. They should count the drawer at the beginning of their shift to verify that they are starting with the designated change bank. Then, they should be the only person to ring up sales and make change. Even you, the owner/manger, should keep your hands out of their cash drawer. Finally, at the end of their shift, they should set aside the amount they started with in the change drawer, and total all the remaining cash, checks, and charges, and balance against what was rung up on the register. If they started with the right amount of money in the cash drawer, rang everything up, took all the money, counted back all the change, and they end up short… who’s fault is it? It can only be theirs. By implementing this simple policy, I once took an operation that was coming up $100 a day ($3,000 a month) cash short, and reduced it to $3 a day, in just 30 days! That’s over a $2,900 bottom line improvement, (in case you didn’t do the math)!

The other common method that a cashier might use to steal money from you is by using a method called, building a bank. This is the process of not ringing up items on the cash register, while still taking money from the customers, and then pocketing that money. Typically, they will obscure the view of the cash register display on the customer’s side with something like a flower, retail merchandise, or by turning the display so that it cannot be easily seen. Then, they will pretend to ring up an item, but will hit the no sale key instead, popping the drawer open so they can take the cash and make change, but in reality, they haven’t rung up anything. The other thing they might do when it is busy is to just not shut the drawer between transactions. They simply convey verbally the cost of items ordered by customers and take the cash, but once again, nothing has been rung up.

A cash register that prints out the order on a remote receipt printer to the person who will be preparing the item, can eliminate this problem. Quite simply, if the item isn’t rung-up, it won’t print out. If your barista or cook won’t prepare anything without a receipt (and they shouldn’t!), it will force your cashier to ring everything up.

If you observe that the cash register’s display has been blocked from the customer’s view, or there are an excessive number of no sale indications on your cash register’s detail tape, or notice that your cashier is not shutting the drawer between transactions, beware! While these may not be indisputable proof that your cashier is stealing from you, they should certainly heighten your vigilance to find out if something is going on.

If your coffee business only warrants having one employee working at a time, perhaps because you own a cart, kiosk, or low volume drive-through operation, then how do you go about keeping your employee from building a bank and stealing from you? The best solution I’ve seen is to turn your customers in to watchdogs. Affix a sign to the front of your cash register, in plain sight of the customer, that reads: If you don’t receive a receipt with your order, it’s FREE! This will force your cashier to hand each customer a receipt for their purchase. If they are building a bank, this means they will have to hand the customer a receipt that says – NO SALE; something they probably won’t fell comfortable doing!

The financial impact of theft of money can be extremely damaging, for example: Let’s say you have a cashier who is skimming off $20 a day by not ringing things up, and then pocketing the money. Not only did you loose the stolen $20, but the $7 of ingredients that were probably used to produce the ordered products; ($20 x 35% ingredient cost = $7.00). So in reality, you lost $27, and it will take an additional $41.54 in sales, to recover this loss; ($41.54 x 65% gross profit = $27). $27 a day lost to theft, X 21 days worked by the employee = $567 lost cash & product per month; $872 extra sales required to offset this loss. (Annual loss, $6,804; $10,468 in additional income required to offset loss.) You must stop theft of money!

Theft of money management:

If you have a manger running your operation for you, this can really create an opportunity for cash theft. Just about anyone who has ever run a food service operation (self included), probably felt that they were over-worked and under-paid. Some are tempted to grant themselves an unapproved raise. Your manger has the control key to the cash register, which means they have the ability to back off items that were sold. You would be wise to check your cash register detail tapes on a regular basis. If you see multiple items backed off in groups, or more worrisome yet, all backed off at the very end of the shift, beware!

A good way to keep this from happening is to establish a policy that no over-rings are to be backed off of sales on the cash register with the management control key. Instead, when the cashier makes an over-ring, they should take the receipt, write over-ring on it, sign it, and put it in the cash drawer. At the end of the shift, the total of all over-rings should be manually backed off of the sales total indicated on the cash register report.

Many years ago I had a manager that was stealing money from me in another creative way. This manager, who opened the store each day, would reset the cash register by Z-ing it out after the first half hour of business. He would then pocket the proceeds earned during that first half hour. Because additional sales were generated during the second half hour, the cash register hourly sales report would always show sales for the first hour of operation, thus eliminating any suspicion that something might be going on.

It wasn’t until I was doing a routine audit of cash register Z tapes that I noticed something wasn’t right. When you run a Z report, which resets the cash register at the end of each day, a multi-digit number will usually be printed somewhere on that tape. The next time you Z the register, that number will advance by one digit. I noticed that even though the tapes were sequential in date, every other number was missing. This tipped me off that the register was being Z-ed twice a day! When I confronted my manager with the tapes, his look of panic spoke volumes.

If you are doubting the honesty of any of your employees or managers, one way you can verify or eliminate your suspicion is by baiting the cash drawer. Slip an extra $20 bill in the drawer sometime during the day when they aren’t watching. If they don’t end up reporting at the end of their shift that they were $20 cash-over, I’ll do it a second time (just to make sure). If they don’t report it a second time, you should have no doubts that they are indeed, dishonest.

NEVER accuse an employee or manger of stealing unless you catch them red-handed (actually stuffing money into their pockets). Even though the circumstantial evidence may be overwhelming, unless you actually catch them in the act, they are likely to deny your accusations, and will probably file a complaint against you with the department of labor! The brief moment of satisfaction you will gain from letting them know you are aware of what they’ve been doing, will be quickly overwhelmed by the legal predicament you will find yourself in. You will be far better off to not make accusations. Simply terminate their employment. In many states, you do not need to provide a reason as to why you are letting them go. When they ask for an explanation as to why you are firing them, simply say: I don’t need to give you a reason, I’m just letting you go, goodbye!

Finally, don’t over look technology to help you with security. Surveillance cameras linked to a DVR (digital video recorder) can provide you with peace of mind, or evidence of theft. These systems have become very affordable, and many are easy to install. The value of these cameras go beyond having a video record of operations. The mere fact that employees understand that their activities are being video recorded, will usually discourage them from doing things that they might not think twice about, if no one was watching.

I think it’s important to not be paranoid about employee theft. Certainly, you don’t want to be constantly obsessed with the suspicion that everyone is stealing from you. In reality, the majority of your employees are probably honest people. But, you would be wise to establish some simple safeguards, and maintain a watchful eye.

The Employee Cum Entrepreneur

Autonomy is only a piece of the pie. Many of us crave the entire banquet. Some dream of running a firm of their own, others dream of having retail outlets, and some others want to explore their craving for art and craft.

Sometimes we want to ditch the employee tag and sometimes we only want a side hustle. Either way, or whatever the field, there are some basic things that must never take for granted. These little bits of knowledge make the difference between success and failure in your entrepreneurial adventure no matter how fantastic you are as an employee.

The first question usually is: ‘Should I dare to do this in the first place?’ If you did not have a job many people would encourage you to give it a try, but the song changes when you are employed. A business venture could easily be seen as a waste of money; when there are school fees to pay. So what is the wise thing to do especially in this economic climate?

Koku Konu is an architect who builds high rise buildings across West Africa: banks, and skyscrapers. Then his father passed on leaving his accounting firm behind. Konu opted to take that up as well. This meant restructuring and building Island Nominees Ltd and for an architect that meant quite a bit of learning; from the scratch.

This made him the perfect person to ask: Should you really bother?

Konu’s response is: “If anybody has a desire to pursue self-employment; invariably that desire doesn’t go away until you test it. So if anybody feels like going into self -employment, irrespective of what is going on with the economy, go ahead. But of course that is just the beginning; you will also access your risks, calculate your exposure and your chance of success, but it’s your entrepreneurial spirit; the spirit that is in these people that makes the difference and they are the ones that would battle against the odds. They are the ones people look up to; the ones who come up with something.”

Looking at the number of failed businesses around us can be very discouraging for someone thinking of taking the plunge. Konu says: “Statistics are a bizarre thing, I don’t know where these ones come from but if you tell me that some people fail, I’d say yes. And yes failure does discourage people. But again the lure of success is always there. Failure cannot be discounted, it does put people off. But the true entrepreneurs do have a knack to overcome seemingly impossible huddles. That is the hallmark of an entrepreneur.” Then he adds: “We all know entrepreneurs fail but it’s the ones that succeed that we tend to look towards. So if you have the entrepreneurial drive and want to go into self employment, irrespective of the economy you find yourself in, you should go ahead and take your risks.”

Now we all know that being an employee requires you to apply yourself to your own duties, but being an entrepreneur is a different kettle of fish. The issues of leadership and management come to the fore. Leadership basically means climbing up the tallest Iroko tree with your binoculars and guiding the troop: having the bird’s eye view and ensuring you are all in the right jungle facing the right horizon. Leadership is more about the vision and the overall goals. Management on the other hand brings it down to the day to day planning and activities. Konu, speaking from his own experience says: “In my role as the first son of my father, I ‘administer’ the company. It’s a small title but a wide role because it starts from the minute eye of the processes and systems you put in place (management) to the bigger picture and how you develop the company (leadership) and how you get to the target audience, and so forth.

So you start from small things like: ‘Do we have enough pens?’ to the bigger picture like: ‘Where are we in the scheme of things?’ that’s what I do essentially. I don’t have any part in the technical dispensation or any engagements, nothing like that, but I do programme, I do plan, I do implement, I strategise, and I am in touch with the top level of our clients on administrative basis.”

If you have listened to a few management experts then you must have heard at least one of them talk about the mindset of a businessman vis a vis the mindset of a ‘professional’/employee.

Konu says this “It is down to stereotypes. When you are an employee, your focus is executing your duties and the economic performance of the company is at best a secondary concern. But when you start your business; and you are a business the economic performance of the company is your primary concern.”

Now, Konu was making it all sound too easy; sitting at the conference table of open office with an easy smile. We had to ask about his personal hurdles.

“Well, I wasn’t particularly equipped to deal with the challenges of leadership and management. I didn’t have any formal training for it. I didn’t do an MBA, I hadn’t studied business formally, I had never taken any business courses, but I had always had an acute interest on how things work. I suppose that has to do with my architectural background. As an architect you are taught to design things. The way you design something determines how it is going to work. The principles of design apply not only to products, buildings, hairstyles, and fashion, they apply to processes; how to achieve a process. You have to design a process to make sure that you get the end result. My challenge was not being formally prepared because of my background, but I was helped along.”

Going by that is it safe to deduce that the way a banker would run a boutique would be different from the way an auto mechanic would run it? We would let you draw your own conclusions on that but in facing the challenge of restructuring and building Island Nominees Ltd, Konu did say: “Because of my background in design, I saw it as a ‘design’ issue and not really a ‘management or leadership’ issue.

Out of every five entrepreneurs you meet three would announce to you that their biggest challenge is the country’s infrastructure or lack of it. Clara Okoro, CEO of Brandworld and Publisher of Ice magazine did not bat an eyelid when she announced that her biggest challenge was “NEPA”. Bringing this up with Konu, he obviously took it all in his stride. But it was the way these infrastructural ‘failings’ affected staff welfare and productivity that was more prominent on his mind. “The main infrastructure problem that affects businesses is sparse electricity and then the roads and traffic. It affects the social wellbeing of your employees; if they get harassed every day coming in. If they can’t get to work easily because there are challenges every day it could be difficult for them.”

Speaking of employees, how do you build the perfect team? Donald Trump says he usually hires people he already knows; like people on the other side of a deal who had impressed him. In a recent interview Femi Aderibigbe (aka Kwame) CEO of Nigezie and a judge in the ‘Project Fame’ reality and talent hunt TV show, pointed out the “mindset” of the people you have to work with is the biggest challenge for him as an entrepreneur.

Konu for his own part had this to say: “Getting the right staff is an ongoing thing. I cope with the challenge all the time. You may have the right people in 2010 but your needs, developments, and programme may change by 2012 so you will need to adjust your team. The way I cope with it; the way I would advice anybody to cope with it is to craft the job description first and then find the people that fit into the job description and not the other way round. Some people create a position because they know this person has some skill: ‘Oh! Let’s use him for that.’

That is not the way to structure your company. You need to have your structure in place first. Do you need a finance director, or do you need a bookkeeper? These are two different skills. So have your structure in place. Know exactly what it is you need?

Have an idea of your job description, and then seek people to fill that position. Try not to do it the other way round like everybody does because; usually the person has skill ‘A’, which you are picking up on but doesn’t have the commensurate skills. That is what I would say for staff selection.”

Believe it or not ‘number’ is a weighty factor. It can make the difference between success and failure. Konu agrees with this: “Also I would say no matter how you start, start small. You don’t want to build a company with over a million employees overnight. If you check all the thriving companies out, you would find that they all started small. Every company starts with an idea, and people getting together. When it grows to over 10million employees overnight, it didn’t start that way. These are the most important things. Define your job descriptions and start small.”

In every populated metropolis the people get to spend hours in traffic. We work long hours and we get home late. Time management is already a major issue with us, so how can we oversee a budding business ‘on the side’?

Well here are Konu’s suggestions: “Time management challenges? Of course I face it. I face it all the time. Now for people who have a job and are starting up a business on the side and are facing time management issues, I would tell you how I deal with my time management issues.

I use Outlook (MS Word Outlook).I come in and I schedule all the jobs I have to do when I am desk bound in the office. Then I get on with it. Outlook helps me order my day. It is the modern day filer-fax. I also have a very sophisticated method of recording my time usage. I log in the number of hours I spend on every task and I ascribe costs to them. At the end of the month I see how much time I have spent and how much it has cost me. And if the client is not worth it and I have spent too much time, then I have a red alert: I am spending too much time on this, and it is not paying.

That applies to everybody in the firm. We collate that annually and produce a report which shows the wasted time and the monetary effect of that wasted time. Also there is idle time. Coming to the office and doing nothing is idle time. The fact that you are here does not mean that you are productive. I have a sophisticated system which I developed over time. But I don’t expect beginner to start off like that but I do expect you to order your day. I always instruct my employees that the first thing you do in the morning after you have communicated with your maker, if that is your wish, is to draw up your to-do list. You can’t beat it. You can do it manually; scribble it down or you can do it electronically.

If you are an employee and looking to start something on the side, you do have the benefit of social media, and internet and mobile phones. Twelve years ago you had to go everywhere and rely on land lines.”

And for the world’s ‘oldest problem’: The issue of money management. Biodun Caston Dada is the CEO of Maverick and publisher of Acada magazine; a publication credited as being one of the longest running soft-sells as well as the widest distributed one – also reaching the most targeted age group: 14yrs-30yrs. He has had quite a bit of money management experience and he has announced that his watch word is “Cut your coat according to your cloth, not your size.”

Konu says: “What we advise people who are starting their own business is: Don’t spend a penny until you know how much you are going to spend at the end of the day. It wouldn’t cost you a kobo if you took a day to think about it. It is very important. Entrepreneurs naturally do not follow that instruction because the spirit of entrepreneurship itself takes you to the point where you will not listen to advice. Refusing to listen to advice has led people to achieve feats that they were once told were impossible. They defied the odds. Now you have to have that doggedness in you as an entrepreneur. But the key is to know which advice not to listen to. Deciding which advice to take and which advice to discard could be very complex but it could lead to your success.

But there are some basic things everybody would tell you. One of which is that financial management is key: You must simply record what you spend and what you earn. That is the simplest way. You don’t have to have any fancy accounting system. You set up on your laptop everyday what you spend and what you earn; log in your income and expenses. It would give you an idea of how practical your venture is.

If you spent N400, 000 and only received N50, 000, which means you have a shortfall of N350, 000 and you know it. Your mind is already keyed into that fact. You don’t have to do anything fancy like cash flows or budget forecast or profit & loss. It is a simple record of what I spend and what I get in. At the end of the month, I look at my books and say: I don’t have enough money. That instils financial discipline from the start.”

Truth be told; that is easier said than done. This is Lagos: we are always buying fuel. Our ‘miscellaneous expenses’ are higher than the fixed expenses. In fact the ‘fixed’ expenses stopped being fixed a long time ago. Besides, starting a business is like setting sail in the open sea. Konu agrees having been there himself and admits this: “Entrepreneurs by their very nature are adventurous and so it is a good idea to get someone more pedantic to handle your accounts. In large organisations they are called the account department; accountants but for a small business you would have to find somebody to do it for you. You should have someone to ginger you up, and demand for all your receipts; perhaps a friend, an associate or an assistant. You would have to instil financial management from the very beginning. Record what you spend and what you earn.”

Continuous learning is giving great emphasis when we are on the job. Should that same emphasis come to play when we are on the PP (private practice) beat? Konu says yes: “When you are starting up, the first thing is the initial testing and research of the idea. Know your subject before you get into it. But you must continue. You cannot say you know it all and even if you did know it all in 2010, by 2012 things have changed. It is the same reason doctors get re-certified. It is without doubt very important.”

So the fact that you did a three-month course in catering while you awaited your JAMB result 25 years ago does not mean you are ready to start a PP on small chops. Another three week brush-up course this month would not hurt and it would not absolve you of the need to do a three-day course before the Christmas rush.

Another question arises when we take a look at the competition; mostly people who are already doing the things we are thinking of doing. Is it being overly shrewd to snoop out the competition? We say ‘no’. You cannot know too much about the other players. You learn from their accolades as well as their mistakes. You learn about their strengths and challenges and their plans for the near and distant future. The more you know, the better equipped you are to make informed decisions. However, we do not recommend that you send a spy to steal their private documents; if you try that, you are on your own.

Konu for his own part has this to say: “Why would you buy a car without testing it? The more information you have about the market and its players, the better your decision making would be. You must take cognisance of the competition. I always tell people one thing; ‘respect but not fear’. Respect the people that were there before you, but do not fear them.”

In conclusion let’s get a little ‘dreamy’. We asked Konu that if wishes were horses what is the one thing (other than ‘NEPA’) that if the government made available would help budding entrepreneurs and he said: “Statistics.”

You would probably have your own answer to that question, but Konu explains further saying: “If statistics were available, it would help in the decision making. Every time, a person has a business proposal he or she would have to conduct his or her own survey. I think the generation of statistics would help entrepreneurs a lot. The search for statistics is often defeatist. People often do not have the resources to conduct their own statistics. It is the government that would conduct surveys on how much power or fuel the country consumes in a day. That informs my decision on whether I want to open a petrol station or a supermarket. Statistics is what I have found to be a major challenge from my personal experience.”