REPOST: The Two Biggest Money Problems That Can Ruin a Business Partnership

Alliances and partnerships can be an important path to growth for business. However, according to Robert J. Steinberger, 80 percent of business alliances make this relationship critical because of money. Don't let money matters destroy your relationship as this article asserts:

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The day you enter into a business partnership is much like the day you say “I do.” Both events create a contractual relationship that can be extremely costly to untangle, and most do need to be untangled.

San Diego-based attorney Robert J. Steinberger says 80 percent of business alliances fail for one of two reasons: “They are undercapitalized, or the parties involved cannot agree on how to run the business, including issues around money.”

I certainly didn’t expect to be on the wrong side of this stat. I co-founded a business I knew would be successful, but money matters tore the relationship apart. I assumed my partner and I both understood the responsibilities of equity ownership and the way distributions would be made. Then I realized she expected to be paid monthly, and as a percentage of revenue, not earnings. That was the beginning of the end.

Maybe it’s one partner wanting to purchase new equipment, while the other believes it’s a waste of money, or one using an increase in earnings to supersize lifestyle, while the other prefers to reinvest in the business. Whatever the case, varying opinions about money can sabotage the partner relationship, as well as the profitability—and, consequently, the value—of the business.

When you enter into a business partnership, you’re literally tying your fortune to that person. Therefore, it’s important to discuss your perspectives on money upfront. 

The two biggest monetary issues that sink partnerships are compensation and financial infidelity.

Disagreements over salaries can stall a business right out of the gate, so it’s important to get on the same page before anything is formalized.

“Discuss the expectations of the parties,” Steinberger says. “What type of personal overhead does each party have to have? Is each party willing to take less money out of the business to help it grow? From there, you can execute employment agreements, which provide for a base salary and allow for quarterly or semiannual distributions or commission income to be tied to performance.”

Financial infidelity is more difficult. Suspicions that your partner is stealing money from the business can be devastating. However, accusing your partner of the act, while failing to establish and document the allegations, could result in defamation claims and create a highly contentious relationship going forward. 

To avoid this scenario, create a process of checks and balances wherein one partner oversees the day-to-day accounting, while another is responsible for account reconciliations, including (but not limited to) banking, credit cards, trust accounts, accounts receivable and accounts payable.

You can also prevent fraud by requiring dual signatures on checks that exceed a specific amount and/or establishing limits on bank withdrawals or credit card transactions.

Most important: If you and your partner truly want to put your trust in one another, conduct comprehensive financial background checks. Poor credit scores, tax liens, judgments or bankruptcies are all red flags that need to be discussed before signing any agreement.

Bertrand Management Group is a business-consulting firm that helps clients develop strategies for precise business goals. To know more about the company, like this Facebook page.

Best of the best: Finding the perfect employee

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While perfection is subjective, there are many ideal traits that hiring managers look for when interviewing possible new employees. Regardless of the position they are eyeing, ideal employees share some common traits that employers should take note of. These qualities are:

Action-oriented. An ideal employee knows what he wants to do and works to get it accomplished. He will not sit idly and wait for opportunities to find him but rather he will get out there and make things happen. He is focused on achieving his goals, and this will reflect in the way he works.

Confident. Modesty is important, but confidence helps employees in communicating better. There is a fine line between being self-confident and being arrogant. An employee should know when to take the lead and when to stand down. He isn't all talk; he takes action. He doesn't shy away from challenges.

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Intelligent. A manager should hire someone who knows what he's doing, who makes decisions based on the situation, and who does the right thing. Intelligence isn't measured by the grade point average, but it's a good place to start.

Adaptable. A working environment can be toxic with stress levels high, people always running around the place, and deadlines looming darkly over the horizon. An ideal employee can quickly adapt to such environment and whatever role he has to play. He is capable of showing grace under pressure. Most importantly, he knows how to get along with his colleagues.
 

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REPOST: How To Keep Your Employees Motivated: 6 Tips For Creating Happier Employees

Having loyal and committed staff members can be a challenge to employers. It is important to keep in mind what works, and what doesn’t to motivated them to do their best. Fortunately, this article shares that employees can be motivated by many things other than money.

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This week’s post is especially intended for entrepreneurs, small business owners and managers. Every business owner and manager knows that motivated employees are more productive and also, they do more quality work. Therefore, you need to keep your employees motivated and make them feel excited to come to work every day.

There are many ways to keep your employees happy and motivated without raising their pay. Below you can find some of them:

• Create a Pleasant Work Environment: Make sure the office looks nice cosmetically. Having plants around the office will increase positive feelings as well as help reduce stress, lower blood pressure, noise level and humidity. Also, neutral tones and earth tones are the best for an office because these colors are calming and warm. In addition, a softer light is much better than fluorescent lighting.

• Recognize the Achievements of Your Employees: When your employees accomplish their goals or achieve something, take the time to appreciate them. Write an email or a personal thank you note for their accomplishments and you can even give them a small gift like a gift card or tickets to a sports game. If a team achieves something, you can reward them with a nice lunch.

• Coach Your Employees: Feedback is great for motivating your employees. Nobody likes to be micro-managed. Instead they prefer someone who will motivate them and lead them towards a goal. If you notice that the performance of one of your employees is weaker than others, give him/her constructive feedback so s/he can also improve her/himself. Let your employees know that you care for them.

• Encourage Training: Encourage your employees to learn new skills and go to training sessions. Motivate them to get professional certifications that will be helpful for their job.

• Be Clear in Your Communication: You always have to be transparent when communicating with your employees. Even if the news are bad, you should still clearly talk with your employees and explain them what is going on within the company. Create time to listen to your employees’ concerns and do your best to solve them. Keep an open channel of communication and get their feedback when necessary.

• Casual Fridays: If your company has a dress code for business, making Fridays a casual dress day will boost your employees’ morale and motivate them. You can use holidays to create theme days as well. For example, you can ask your employees to wear something orange on Halloween or green on St.Patrick’s Day. This will let them feel the spirit as well as create a more positive work environment. 

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