Business Education

Caught Red-Handed! Our Secret Strategy for Dealing with an Employee Poaching Talent for a Rival

When a trusted employee starts poaching talent to launch a rival business, it’s a gut punch that tests your leadership and strategy. This betrayal threatens not just your team’s cohesion but your company’s future. How do you respond decisively while protecting your business and maintaining morale?

What to Do When an Employee Is Poaching Talent to Launch a Competing Business

Every small business owner hopes to foster ambition—but not when it’s weaponized against the company. Discovering that a trusted employee is quietly recruiting your team to join their secret startup is tough. That’s a breach of loyalty, integrity, and potentially, contract. But emotional reactions won’t fix the problem. Strategic action will.

Here’s how to protect your business, your people, and your future.

Verify Before You Accuse

Rumors aren’t enough. If you’ve heard whispers or noticed unusual behavior—secret meetings, shifts in morale, sudden resignations—start documenting. Check whether company devices or accounts are being used for non-company purposes. But tread carefully.

Jumping to conclusions can backfire. You need facts, not suspicion.

Review Employment Agreements

This is the moment those dusty contracts matter. Look for clauses related to:

Non-solicitation (they can’t recruit your team)
Confidentiality (they can’t use your proprietary knowledge)
Non-compete (they can’t launch a rival business—depending on your state laws)

Even if you’re in a state where non-competes are weak, a strong non-solicitation clause gives you leverage.

Initiate a Private Conversation

Once you’re confident the behavior is real, talk to the employee directly. The goal isn’t confrontation—it’s clarity.

You can say something like: “I’ve heard concerns about side projects involving our team members. I want to understand what’s happening before making assumptions. Let’s talk openly.”

If they admit it, stay calm. This is chess, not dodgeball.

Act Swiftly, But Thoughtfully

Depending on what they disclose (or what you’ve confirmed), your options range from:

A formal warning
Legal notice
Immediate termination

If they’re still actively soliciting talent, letting them stay may do more harm than good.

Protect the Rest of Your Team

Your remaining employees may feel confused, even betrayed. Some may be tempted to follow the renegade. Communicate with the team—without creating drama.

Frame it this way: “Someone made a decision that conflicted with our values and agreements. We’ve taken steps to protect our team and mission.”

Reaffirm what your business stands for, and why your team is vital to its success.

Lock Down IP and Internal Access

Change passwords. Restrict access to sensitive files. Make sure cloud folders, CRMs, and communications tools aren’t bleeding into external channels. You’re not just protecting today—you’re preserving tomorrow.

Use It to Strengthen Your Culture

If an employee wants to leave and build something, fine. But if they feel the need to do it secretly? That’s a failure in trust—on both sides.

Ask yourself: Are you offering growth opportunities?

Is your team aligned with your long-term vision?
Do you encourage open conversations about ambition?

You don’t need to be perfect, but you do need to evolve.

Dealing with a covert talent raid isn’t just about closing ranks—it’s about opening eyes. With composure, clarity, and swift action, you can turn a breach of trust into a blueprint for resilience.

Want to Accomplish More?

Do you want your company to grow faster and earn more while spending more time with your family doing everything you started your business to do?

We can make that dream a reality. Give us 30 minutes, and we will show you how to get your life back. Skeptical? Good! Put us to the test.

You can call us for your free appointment at 480-636-1720, or, if you prefer, Waters Business Consulting Group to learn more about us and the services we offer.

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Reasons Why Small Business Loans are Denied

May 24, 2017 No Comments

Small business owners can easily find themselves in the unenviable position of needing capital, but, not having ready access to cash. It presents an age-old problem, buying equipment ties cash up, even though said equipment is considered an asset. Such assets can depreciate, which worsens the situation all the more. On the cash liquidity side, there are tax consequences to having a certain level of retained earnings. This is why debt instruments are a part of doing business. However, even profitable small businesses can be denied for a loan, and, there’s ample evidence to support this phenomenon. In the first two quarters of 2014, about half of applicant businesses received any funds, according to a survey conducted by the Federal Reserve Banks of New York, Atlanta, Cleveland and Philadelphia. Reasons Why Small Business Loans are Denied Unfortunately, present trends don’t show much improvement in the access to capital, or, in reducing operational costs. In fact, since November 2014, three out of ten businesses reported more difficulty in trying to reduce operating expenses, and, one-quarter reported unexpected expenses too hard to plan for, according to a study conducted by Nav (formerly Creditera), a business credit management company. If your company recently applied for business credit and was rejected, you’re not alone. So what can you do if your business credit application is denied? Start by trying to find out why. The Federal Trade Commission suggests submitting a written request for the reasons within 60 days of the denial, and the creditor must give you the specifics in writing within 30 days of the request. Consider discussing any concerns you have with your lender, and you may be able to resolve the issues. —Washington Post Within the same survey, about 20 percent of participant companies considered closing their doors, citing two primary reasons: lack of growth and issues with positive cash flow. These factors are likely why 53 percent of all companies applied for lines of credit or loans over the past half-decade, with more than one-in-four attempting to access capital numerous times. During the same five year period, one-fifth were denied and of those, 45 percent reported being turned down more than once. Twenty-three percent of all those denied loans or lines of credit did not know the reason why their applications were denied. So, why is this happening and what makes it appear so prevalent? There are reasons why small business loans are turned down, and, it’s actually not complicated. Here are some of the most common reasons small business loans are denied: Having no credit or even bad credit. Some business owners do not realize they have two credit scores: their personal credit and their business’ credit. What’s worse, some owners have relied on personal lines of credit and have seriously driven their DTI or debt-to-income ratio into dangerous territory. Making payments on-time, keeping a low balance, and not seeking to continually open new credit lines are all necessary to improve both personal and business credit. Too little collateral. Since most business owners aren’t willing to sign a personal guarantee, leveraging their personal vehicles and home to secure a loan, there’s little to nothing left to pledge as collateral. Lenders aren’t keen and will not provide financing that constitutes an unnecessary risk. Anemic cash flow. After all other expenses are paid, lenders want to see demonstrable proof there’s enough cash to repay the loan. Too tight a margin and banks won’t be willing to approve a business loan. Lack of strategic planning. It’s often true that business owners don’t understand the loan process, including the application itself, and all necessary documentation and that can lead to being turned down. Applicants must provide a clear forecast and show a realistic, actionable plan. Under capitalization on loan applications. There are sometimes more assets available to claim than applicants realize and as a result, their loan application makes the organization appear under capitalized. Some assets aren’t immediately clear, which means all potential assets ought to be identified. Another reason businesses might have trouble securing debt instruments is industry-specific difficulties. For instance, a construction company that’s operating in a locality where people are moving away from, or, a taxi company that’s facing tougher licensing regulations or an industry disruption as we have recently seen with Uber. The best solution in the short term is to reduce your Cost of Goods (labor and materials) to improve Gross Margins and reduce Expense Overhead to increase Net Profits which will help with cash flow and operating capital. Also, negotiating terms with your Receivables and slowing growth will allow for an influx of cash. Where possible, attempt to self fund your growth. If capital is required for growth, pursue alternative lending sources other than banks. There are several available and feel free to contact us if you are in need of alternative lending sources. Want to find out about what a business coach can do for you? [shareaholic app=”follow_buttons” id=”26833294″]

I Just Learned One of My Best Employees Criticized My Business On Social Media, What Should I Do?

March 1, 2021 No Comments

You’ve just discovered one of your best team members has criticized your company on social media. So, you’re wondering what to do about it. Well, that depends if the comments were overall positive or negative. If the former, there’s quite a bit you can do. However, if it’s the latter, there’s relatively little you can do. Read on to learn more about how to deal with employees who criticize their organizations on social media. Dealing with Negative Employee Comments about Your Business Let’s begin with a negative situation. You’ve recently found out a great employee (who you like and trust) has made some really disparaging comments about your company — maybe even directed at you personally — on social media. Now, you’re wondering what to do about it. If the comments are negative and harmful to your business’ reputation, you most definitely need to address the situation immediately. Criticism in the workplace can be constructive if an individual is pointing out concrete inefficiencies and offering suggestions for positive improvements; or criticism can be destructive, when one person tears down and negatively critiques the actions of others while offering no suggestions for positive improvement. —Houston Chronicle Small Business This is a difficult conversation to have, there’s no doubt about it. But, a stern warning might be enough to move past the moment. It’s probably also necessary to talk about his or her future and potential separation from the company, should the behavior continue. While it’s a hard thing to do, derogatory comments simply are not acceptable. So, invite him or her to vent their grievances in private instead of on social media. Dealing with Positive Employee Comments about a Your Business If this is a situation where the comments were critical yet constructive or positive, it’s an entirely different set of circumstances. Since it’s a totally opposite attitude, you might still be personally hurt or feel undermined, but it’s far better than dealing with a completely negative scenario. Here are some effective methods for dealing with a good employee who publicly criticized your business on social media: Make him or her understand the proper context. The very first thing you need to do is to let him or her know that it is not acceptable or appropriate to criticize the company on social media. Instead, the appropriate time and place is right in the workplace, where discussions are private and between colleagues, where such input belongs. Let your employee know your door is always open. Of course, it’s up to you to open your office door and make all your employees understand they have an open-ended invitation to speak with you at any time they feel it is necessary. (Obviously, you’ll need to set some boundaries to ensure there’s mutual respect and interactions remain overall positive.) Solicit feedback from all your team members regularly. While this might be super-obvious, it’s most definitely worth repeating. You cannot operate in your business in a vacuum. It’s not a good dynamic and worse yet, when you don’t listen to the people around you who are in the trenches with you, it’s only going to erode the environment and worsen over time. What other suggestions do you have? How else would you handle such a situation? Please take a moment to share your thoughts and experiences so others can benefit from your unique perspective! Interested in learning more about business? Then just visit Waters Business Consulting Group.

How to Deal with Bad, Fake Reviews

August 26, 2020 No Comments

You work hard to give your customers a great experience and earn their trust. You’ve built a great reputation in your industry, but out of nowhere, comes this scorching online review. Aside from its negative connotation, you’re baffled by the fact that you have absolutely no idea who this person is or any recollection of this particular transaction. You quickly conclude that it’s a fake. Even so, others will surely see it and that’s just not good for business. So, what can you do about a bad, fake review? Why Online Reviews Matter Online reviews matter. They matter because people use them to judge the quality of a product or service. This is especially true on the internet because there’s no interpersonal input. Let’s face it, it’s a whole lot easier to read reviews than call and email dozens of people to get their feedback on something they might not even have purchased before. These attacks can have huge consequences for a company’s bottom line. Eighty-five percent of people trust online reviews as much as a personal recommendation and every one-star increase can lead to a 5 to 9 percent increase in revenue. Online reviews are also an important ranking signal in Google’s algorithm. —Forbes This is widely understood and is the exact reason why nefarious individuals write bad, fake reviews. They are obviously trying to discourage others from doing business with the victim company. It’s probably a rival but it could be just about anyone — even someone who is just engaging in a malicious prank. How to Deal with Bad, Fake Reviews Regardless of who it is, you can’t let a bad, fake review hurt your reputation. You must do something about it. But, that doesn’t mean angrily snapping back. Here are a few helpful suggestions for how to deal with a bad, fake review: Report the fake review. If you are certain it’s fraudulent, then contact the website where the review was left, whether it’s Facebook, Google, Yelp, or another. You’ll have to go through a process and it might take a bit of time and effort. So, be prepared for dedicating some resources. Look for more bad impostors. Although you spotted this one, that doesn’t mean it’s the only one floating on the web. Search around to see if there are more because if it’s a concerted effort, chances are excellent there are more. (It might even be duplicated word-for-word on other sites.) Respond, but do so strategically. When you do reply, write something like, “We take our customers’ experiences to heart. Unfortunately, we have no record or recollection of any transaction. If you’ve done business with us, we’ll be more than happy to look into the matter. Please contact [name] at [email] so we can mutually resolve this issue.” This probably won’t cause the fraudster to respond, but it does show you’re willing to take the matter seriously to others. What other suggestions do you have for dealing with bad, fake reviews? Please take a moment to comment so others can learn about your thoughts and experiences! Interested in learning more about business? Then just visit Waters Business Consulting Group.