Business Education

How to Handle Employee Requests for More Hours When Your Budget Is Limited

A few good, loyal employees have recently started approaching you seeking more hours. You want to accommodate them because these requests stem from a real need. (Though not necessarily a team player’s desire to contribute even more to your growing business.) Regardless, as a small business owner, you also face the tough challenge of balancing employee satisfaction with your company’s financial health. It’s a delicate tightrope walk, to say the least.

1. Understanding the Request and Your Budget

Employees often request additional hours for valid reasons. Sometimes, it’s about personal finances; they need more income to cover living expenses or unexpected bills. Other times, it’s a desire for more responsibility or to feel more useful within the company. They might feel they have more to offer than their current schedule allows.

Before granting their request, a thorough budget review is vital to making an informed decision. Look closely at your variable costs, like supplies and utilities, versus fixed costs, like rent. Understand your cash flow; where does money come in, and where does it go out? This view helps you see your true financial limits.

Next, create a clear, updated budget. It should detail all current labor costs and show how much room you have for extra hours, if any. After all, adding hours means more than just paying a higher wage. So, consider overtime pay rules if hours go beyond a standard workweek. Factor in payroll taxes, workers’ compensation insurance, and any benefits that might kick in with increased hours. And remember, there is also administrative work tied to more hours, like processing payroll changes.

From here, you’ll be able to calculate the total cost for each extra hour an employee works. Add wages, taxes, and any other related expenses to get a truly realistic picture.

2. Open Communication: The Foundation of Resolution

When an employee asks for more hours, approach them with empathy. Listen to their request without forming an immediate judgment. Your goal is to fully understand their situation. Schedule a private meeting to talk about their request. Choose a comfortable, quiet setting where you both can speak freely.

Focus on hearing the employee’s perspective and understanding their goals. Show them you value their work and their dedication to the business. Letting them speak freely builds trust and shows you care. Imagine an employee needing extra income due to a sudden emergency, like a medical bill or car repair. Understanding this helps you explore temporary solutions or alternatives, proving you’re on their side.

Still, be honest about your business’s current financial limits. You do not need to share all your detailed financial data. Just explain that the budget cannot stretch further right now. It’s important to set clear boundaries. Plainly state what is financially possible and what is not. Briefly explain your reasoning, focusing on the big picture without giving too much detail.

3. Exploring Creative Staffing and Scheduling Solutions

Flexible options can sometimes give employees what they need without raising the payroll. Consider remote work if their job allows it. A compressed workweek means they work more hours over fewer days. Job sharing could also fit some roles, allowing two part-time people to fill one full-time spot. Ask your employees what flexible work options they prefer. This might uncover solutions you hadn’t considered. Like cross-training.

Cross-training employees means teaching them new skills. This allows them to handle different tasks as business needs change. This can lead to more consistent hours for them over time without a direct increase in pay. It also makes your team more versatile. Also, look for skill gaps in your team. Then, create a plan to cross-train employees in those areas.

Review your current work schedules. Look for ways to make them more efficient. Are there tasks that could be done by existing staff without adding hours? Maybe you can redistribute work to better use the hours you already pay for. A retail store, for example, might rearrange shifts to better cover busy times using its current staff, rather than adding new hours.

Using part-time employees or freelancers can be a smart move. They can handle specific tasks or seasonal spikes in demand. This is often more budget-friendly than hiring another full-time person. It offers flexibility without the ongoing cost burden.

4. Alternative Forms of Recognition and Compensation

Valuable recognition does not always equate to higher compensation. Offer increased autonomy in their role. Provide opportunities for special training. Publicly acknowledge their hard work and dedication. These actions build loyalty and boost morale without touching your payroll budget.

Start an employee recognition program. Reward good performance and strong dedication in ways that don’t cost a lot of money. If your budget allows for potential future growth, tie extra pay to business success. When the company does well, employees get a bonus. Or, offer a small share of profits when certain goals are met. This motivates them to help the business grow. Research shows that incentive-based pay truly boosts employee motivation and output.

Investing in an employee’s skills helps everyone. Offer access to online courses relevant to their job. Pay for workshops or industry certifications. This benefits the employee by growing their career. It also helps your business by having a more skilled team. It is a valuable form of compensation that pays off for both sides. Fund online courses, workshops, or certifications related to their job. This shows you care about their future.

5. Planning for Future Growth and Increased Capacity

Think ahead about what needs to happen to allow for more hours. What financial conditions would make it possible? Create different scenarios for your budget. This proactive approach helps you prepare for the future. Outline specific revenue targets or cost savings goals. Reaching these benchmarks could open up the budget for additional staff hours.

Keep a close eye on your business’s performance. Monitor key metrics, such as sales figures and customer acquisition costs. Tracking these Key Performance Indicators helps you find opportunities to expand and shift your budget. This data shows you when you can afford to invest more in your team. Define the most important KPIs for your business. Track them regularly, looking for trends and opportunities.

Having a financial cushion is smart. A contingency fund helps you manage unexpected events, both good and bad. This fund provides the flexibility to increase staffing when a sudden opportunity arises. It also protects you during slower times.

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, send us an email. You can also visit us at Waters Business Consulting Group to learn more about us and the services we offer.

Like this article?

Relocating a business can seem like a high-stakes gamble, but for many small business owners, it could be the most strategic move they ever make.

Strategies Entrepreneurs Can Use to Grow a New Company Fast without Making Fatal Mistakes

November 17, 2023 No Comments

Strategies Entrepreneurs Can Use to Grow a New Company Fast without Making Fatal Mistakes Starting a new company is an exhilarating journey filled with opportunities, challenges, and risks. Entrepreneurs often find themselves on a tightrope, balancing the need for rapid growth with the necessity of avoiding critical mistakes that could derail their venture. Due to this precariousness, we’ll take some time to explore essential strategies that entrepreneurs can employ to grow a new company swiftly while sidestepping potential pitfalls that could prove fatal to their business endeavors. Remember, Failing is Not Only Normal, it’s Also Informative Failure is a normal part of the entrepreneurial journey. Everyone makes mistakes. The important thing is to learn from your mistakes and to keep moving forward. Don’t let the fear of failure hold you back from pursuing your dreams. Growing a new company fast is a challenging task, but it is possible to do it without making fatal mistakes. Here are some strategies that entrepreneurs can use to achieve this goal: Market Research: Knowledge is Power One of the most common mistakes entrepreneurs make is diving into a venture without conducting thorough market research. Understanding your target audience, analyzing competitors, and identifying market trends are crucial steps in building a successful business. By gathering valuable insights, entrepreneurs can make informed decisions, identify gaps in the market, and tailor their products or services to meet customer demands effectively. Build a Solid Team: Collaboration Breeds Success A company is only as strong as its team. Entrepreneurs should focus on recruiting individuals who not only possess the necessary skills and expertise but also align with the company’s vision and values. Building a diverse and dedicated team fosters creativity, innovation, and effective problem-solving. Strong teamwork ensures that the company can navigate challenges collectively and capitalize on opportunities collaboratively. Scalable Business Model: Plan for Growth Happy customers are the backbone of any successful business. Entrepreneurs should prioritize building strong relationships with their customers, understanding their needs, and providing exceptional customer service. Implementing feedback loops, actively listening to customer concerns, and addressing issues promptly not only enhance customer satisfaction but also foster brand loyalty. Satisfied customers are more likely to become advocates, promoting the company through word-of-mouth and positive reviews. Financial Prudence: Manage Resources Wisely One fatal mistake many entrepreneurs make is mismanaging finances. Effective financial planning, budgeting, and cash flow management are vital for the survival and growth of a new company. Entrepreneurs should avoid unnecessary expenditures, negotiate favorable terms with suppliers, and monitor financial metrics closely. Seeking professional advice from financial advisors or accountants can provide valuable insights into managing resources wisely and avoiding financial pitfalls. Continuous Learning: Stay Ahead of the Curve The business landscape is constantly evolving, driven by technological advancements, changing consumer behaviors, and emerging trends. Entrepreneurs must commit to continuous learning and staying updated on industry developments. Attending workshops, industry conferences, and networking events can provide valuable knowledge and insights. By embracing a growth mindset and adapting to change, entrepreneurs can position their companies at the forefront of innovation and remain competitive in the market. What We’ve Learned Growing a new company rapidly while avoiding fatal mistakes requires a combination of strategic planning, adaptability, and a customer-focused approach. By conducting comprehensive market research, building a strong team, creating a scalable business model, nurturing customer relationships, managing finances prudently, and staying informed, entrepreneurs can set the foundation for sustainable growth and long-term success. Embracing these strategies will not only accelerate the company’s expansion but also ensure its resilience in the face of challenges, allowing entrepreneurs to build thriving businesses that stand the test of time. Do you want to grow your company in 2024 but you are not sure what is required to make that growth happen? Attend our “Planning for Growth” half-day workshop where you will get amazing details specific to your business for what’s needed from your marketing, your sales team, your production team, and your financial performance to enter 2024 with confidence you can indeed grow as planned. You will have the clarity you’ve always wanted but didn’t know how to create. It’s a $1495 value we are offering in November for only $99. Contact us for dates and times. We offer a 100% money-back guarantee if you don’t leave the workshop confident that you know what to do to grow your company in 2024. So, go ahead and contact us by phone or email! By phone 602-435-5474 By email: SteveM@WatersBusinessConsulting.com Don’t wait! This is a great opportunity to propel your business forward!

Microsoft will Ditch its Own Tech in Favor of Rival Google — Here’s What it Means to Your Business

January 14, 2019 No Comments

If you haven’t heard this news, that’s okay. It’s really a niche story but it does make a very important point. Here’s the short version. Microsoft tried to create its own web browser to replace Internet Explorer. It’s known as “Edge.” And, the code behind it has proven too troublesome. So, the software giant will build a new web browser-based on the technology Google uses to power Chrome. What it Really Means to Reinvent the Wheel Let’s get to the real meat of this cliché. Like many other adages, it’s a truism. The reason people say it is precisely because it is an unavoidable fact. It makes a very blunt point. That is, the wheel already serves a purpose and there’s no need to try to come up with something better because it works so well. The general public typically has a distorted view of entrepreneurship. They think of visionary leaders who created something no one had ever seen before and became household names in the process. While it’s true that some figures have achieved this level of notoriety, the reality for 99 percent of entrepreneurs is very different. Their success is based not on creating an earth-shattering new product from scratch, but on learning what their customers want, making user-centric adjustments to existing products or services and providing it for them. —Inc.com We’ve all heard the saying more than one time. But, it still alludes business leaders who believe they can do “it” better, whatever “it” might well be. Call it hubris or stubbornness, it can get the best of the best. How Entrepreneurs can Avoid the Reinventing the Wheel Trap So, how does one avoid the temptation to reinvent the wheel in business? It’s not simple because the urge is so very strong to come up with the next big thing. Here are three ways to avoid the reinventing the wheel trap: Take a step back. If you feel the compunction to try to reinvent the wheel, take a step back look at the big picture. Take a deep breath and think about how to incorporate what you need that already exists instead of trying to come up with something new. Ask for team member input. Okay, here’s another cliché, “two heads are better than one.” And, it’s also a truism. Getting different perspectives and points of view can really work wonders. Apply your existing resources. You might already have the tools on-hand to accomplish what’s needed. Put those to good use rather than putting a lot of extra time and effort into something which might not pay off. How do you avoid the urge to reinvent the wheel? What practices work best? Which steps can other entrepreneurs take to avoid this mistake? Please, comment and give us your experiences! Interested in learning more about business? Then just visit Waters Business Consulting Group.

How Entrepreneurs Can Establish Good Business Credit

June 1, 2018 No Comments

When you open a small business, you have the opportunity to build credit separate from your personal credit. The better your small business’ credit, the better terms you can get with supply vendors and lending institutions, like banks. This means being able to borrow at a better rate to finance expansion in the future. Why Building Good Business Credit is Important Like personal credit, business credit is monitored and reported by credit bureaus. “The major business credit bureaus that compile and provide copies of the reports are: Dun & Bradstreet, Experian Business, Equifax Business, and Business Credit USA,” according to one credit expert. By having a business credit history separate from your personal one, you can minimize the effect negative events on one might have on the other. For example, if you have some financial missteps that impact your personal credit history and score, they shouldn’t impact your small business credit if you have established a clear separation and vice versa. —Biz Filings.com Building business credit is essential to a company’s reputation and success. Establishing good business credit is done through a combination of practices. Your small business will have to observe these to build a solid commercial credit record. How Entrepreneurs can Establish Good Business Credit When you start a company, you’ll probably need corporate credit for a number of things. Keep in mind, though, these are ultimately your personal responsibility. So, make sure you understand the terms. Here’s how entrepreneurs can establish good business credit: Secure a debt instrument in the business’ name. A “debt instrument” is simply another term for “loan” or “line of credit”. It means you are borrowing money in advance or taking on debt to purchase necessities for your business, like fixtures, equipment and supplies. Apply for a business loan, line of credit, or vendor credit that does not check your personal credit score or history. You are attempting to obtain credit in the business’s name only. Commercial lenders may waive personal credit checks in lieu of providing collateral or a down payment. Another method for securing a debt instrument is to apply for a credit card in the name of your business. Terms and reporting procedures will vary by credit card companies, but in general, the monthly payments will reflect on your business’ credit profile. Build your credit history. Make credit line and business loan payments on time. Schedule automatic payments debited from your business checking account for business loans and lines of credit. Or make payments on recurring credit lines or loans at least three to five business days in advance of the due date. Get in the habit of making payments larger than the minimum due. Check your business’ credit files for errors. Request copies of your business credit report from each of the corporate credit monitoring bureaus, six to 12 months after securing a commercial loan or line of credit. Review each report for accuracy and dispute any errors directly with the agency reporting the erroneous items. If errors are disputed to no avail and are not legitimate, consider having your attorney contact the reporting agency to resolve the situation. Like personal credit reports, business credit reports may be adversely affected by incorrect trade lines being reported. How have you established business credit? What mistakes would you avoid? Please share your thoughts and experiences! Interested in learning more about business? Then just visit Waters Business Consulting Group.