Q. Lately I have been having a problem with employee turnover in my business. How can I change this trend? — Lincoln
A. Chances are the answer is not going to come from any one source such as a newspaper advice column, but I do believe there are some indicators that all business owners can evaluate to help employee turnover. Despite the obvious cost associated with turning employees, your employees also can provide your business with a substantial competitive advantage. Therefore, as the primary decision maker, you have to stay abreast of the employee situation.
Let's assume the compensation you pay is reasonably similar to others in your industry. If this is the case, other factors need to be considered. One of these considerations is having clear expectations. As a rule of thumb, most people want to do well at a job, but clearly defining what is a good job and what is a bad job must be defined by the owner.
This leads to giving feedback. Not just verbal feedback from the owner every month, but receiving real-time feedback from the tasks of the job. The employee should know if he is doing a good job or not, in real time, without verbal confirmation from the owner. The owner should validate and acknowledge the good job only by reconfirming what the employee should already know.
It is up to the owner to have an internal system, allowing all employees to know who is doing well and who is not. Once this system is established, the owner or leadership should recognize these achievements.
This recognition can come in many forms — more money, promotions, awards, employee of the month, more responsibility, or a handwritten letter acknowledging the good job. Regardless of the method, the system needs to be implemented into the business and then valued and led by ownership.
Q. I have been in business for 14 years, and during the past few years, sales revenue has been steadily declining. Is there something specific I can do to change this problem? — Lincoln
A. The most specific answer is to ask the customer. I know it may sound simple, but too many times businesses guess at what customers actually want. These assumptions can be expensive and can take a lot of time to confirm or lead you in the wrong direction.
If you can identify specific customers, either current or past, and have a nonsales-related conversation about their needs, you may find some valuable information to change concerning your business model. These conversations should not be "sales"-driven. You should not try to sell your product or service or try to get this past customer back. You can even tell them that sales have been falling and you are trying to find out why.
These conversations need to be led by ownership and should not be delegated to employees. There is no script to this conversation and the questions should be nonleading, open-ended conversations.
Declining sales can be the result of various aspects of your business; technology, pricing, distribution, customer relations, public perception or marketing, to name a few. This may lead you in places that you may not want to go, but knowing and confirming the needs and wants of your customer can help you as an owner to make the necessary changes to your business.
Q. I want to buy an existing business but am not sure what is a reasonable offer. How should I approach this situation? — Grand Island
A. Knowing the value of a private business can be challenging. Regardless of the amount offered, the reasoning behind the offer should be supported by a standard methodology. These standards are set by national organizations such as the National Association of Certified Valuators and Analysts that will confirm that similar methods are used in valuing a private business.
If a standard is not used, then any professional can value the business using any method. Unfortunately, this is very common: The seller is using one valuation method while the buyer is using another. Although much of this "jockeying" is used in the negotiating process, if a similar standard is used, then the result should be fairly close regardless of the person performing the valuation.
I would suggest talking to the seller and agreeing on a standard of valuation and then employing a valuator certified by a nationally recognized group to use the standard that is settled upon. This may result in multiple valuations being performed, but the result will produce a reasonable indicator of a business's true value.
Zack Zimmerman is associate director of the Nebraska Business Development Center in Lincoln. The center helps to start, sustain and grow small businesses. If you have a question for Zack about establishing or growing a small business, email him at email@example.com.