We tackle the hard job of getting your employees to give their best everyday in the office. How do you motivate your good employees to be great? In the second segment we talk a business owner through the process of paying quarterly taxes, and in the final segment we discuss business that only accept credit cards (remember when business only accepted cash?). Should your small business move to a credit card-only payment method?

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Show Notes


Elizabeth: Welcome back to another episode of Small Biz Ahead: The Podcast. Today I wanted to start off by talking about a CareerBuilder survey that just came out that said 1 in 5 employers, which is 19%, think workers are productive less than 5 hours a day.

Gene: First of all, 1 in 5 is 20%. Just want to make sure that we’re clear. It’s not 19%.

Elizabeth: I know, but they specified it was 19%.

Gene: This puts all of their findings into question right now if they can’t do a simple calculation like that.

Elizabeth: I would say workers are probably productive 6 hours a day.

Gene: They’re productive how many hours a day? I got misdirected.

Elizabeth: They think less than 5.

Gene: 20% of workers are productive less than 5 hours a day. Okay.

Elizabeth: I really think it’s closer to 6. I think people take an hour off for lunch and then they go walk around or they chat with co-workers or they check their phone or something. I think managers just have to be okay with 6 hours a day.

Gene: I think it depends on how you define productivity. Some people when they work from home are super productive.

Elizabeth: Oh my god. I’m crazy productive.

Gene: Me too. It’s great. I have clients and people that run businesses complain about their employees spending too much time chatting. I think that that’s all part of the culture of a company and it’s all part of the relationships people have.

Elizabeth: I think it’s okay.

Gene: I don’t think there’s anything wrong with that. Right? If they’re working 5-6 hours a day and let’s say the other 2 hours a day they’re spending chatting with their workmates or whatever. I don’t know if that’s such a bad thing. It’s all part of the company’s culture and is probably a better thing than my company where my employees aren’t even … Everybody works from home.

Elizabeth: In every job I’ve ever had, I’ve always had a coffee crew. That’s the people that you get in.

Gene: Everybody goes for coffee together.

Elizabeth: You do like a half an hour’s worth of work and then you all go down and get a coffee together. I have that now with my 2 workers, Sandy and Danielle, shout out to my coffee crew. We don’t talk about work 100% of the time but honestly, a lot of times someone will bring something up.

Gene: Something comes up.

Elizabeth: We’ll be like, “Oh. You’re working on that? I’m working on that.” We solve problems on that. I know our managers have no problem with that at all.

Gene: The issue is, though, that we’re here at The Hartford, which is a giant company.

Elizabeth: I even did this at small businesses.

Gene: Yeah but if you’re a business owner, everything is about productivity and profitability. Overhead. When you see employees that are chatting away, your natural first thought to yourself is “This is costing me money. Get back to work.” I think as business owners we have to realize that it’s not a bad thing. Obviously, if there’s too much of it, that’s a bad thing. 15-20% of the day spent building relationships with the people around you that you’re working with, I think long-term benefits your company. I really do.

Elizabeth: You know there’s a big difference between an employee who walks around all day and gossips with people and tries to cause trouble than 3 or 4 people who go stand around the water cooler and talk about their weekend. There’s a huge difference.

Gene: That’s right.

Elizabeth: As a small business owner, you know the difference.

Gene: I agree with you. I agree with you.

Elizabeth: I think it’s fine. If people are there in the office for 8 hours and they’re giving you a solid 6-6.5 hours of work, that’s a lot of work. They got a lot done.

Gene: I agree.

Elizabeth: I will say, though, to agree with you. The days I work from home, I work from home one day a week.

Gene: You crank, right?

Elizabeth: I get so much more done. I work longer hours. It’s crazy.

Gene: Some people can do that really well from home and other people can’t. That’s another challenge for a business owner. When employees ask you if they can work from home or if they can be remote, some people do it better than others. You’ve got to be good and have a good policy that gives you the ability to recognize those people that can be productive at home and those that are probably better off coming in the office.

Elizabeth: It’s crazy too because I put in more hours. I will take time out to make myself lunch and then I’ll think, “Oh I’ve got to make up for that time later.” I’m doing that in the office too. I’m going down to the cafeteria or I’m going in to the break room and getting my lunch and bringing it back to my desk. It’s just so funny. I think bosses and managers just need to realize that most people have the best intentions and not get too worried about people checking their phone or chatting with co-workers.

Gene: Then get back to work.

Elizabeth: Then they get back.

We’ll be right back with our first question. This is about separating the good employees from the great employees.

QUESTION #1: Making Good Employees Great

Elizabeth: We’re back with question number 1. This is from Jeremiah from Asheville, NC. This is our second question from Asheville.

Gene: It’s funny that you brought that up because we talked about Asheville before and what a great little town it is and how much I love it.

Elizabeth: It’s kind of a booming area. There’s probably a lot of new businesses popping up there.

Gene: I love it there.

Elizabeth: This is what Jeremiah writes:

“I have wonderful employees. Some are great. Some are good. How do I get the good ones to be more like the great ones who go above and beyond each and every day?”

Gene: Wow. Okay Elizabeth, you want to take that one?

Elizabeth: I think this is a question for Gene.

Gene: First of all, it’s a very tough question to answer because we all want our employees to be great employees. That’s just not reality.

Elizabeth: What’s wrong with having a bunch of good employees?

Gene: That is correct. The problem is not with the employees. I think the problem, Jeremiah, actually is how you are perceiving your employees. If you’ve got some great employees, be grateful. That’s awesome. We all want to have great employees. If you just have great employees and then you have good employees. You don’t have any bad employees? Dude, you should be very, very grateful as well. A lot of us have some bad employees that we’re trying to deal with and how to handle.

You realize if you’ve been running a business long enough that there are some people that are always going to rise to the top. Some people that are happy being in the middle.

Elizabeth: Doing their job.

Gene: Doing their job. It’s just built into people’s DNA and you’re not going to change them. If they’re working at a sub level, okay then you have to make some changes. If you’re getting good productivity out of an employee. A good employee. To try and make them into a great employee is almost like trying to have a singles hitter and turn him into a home run hitter. There’s only so much that a person can do within their DNA.

Elizabeth: That’s exactly what I was just thinking actually. At my previous job, I had 4 people reporting to me. One of them was great. I considered him great. He would just anticipate things that I wouldn’t even think of and get things done. He was so dependable. He was always there. He innovated. He was just fantastic.

Then I had 3 good employees. They did their jobs. They came in. They did their jobs. They did what I asked them to and they went home. They weren’t the type of people to anticipate things. They didn’t think ahead. They just did what was required of them.

Gene: The big question you have to ask yourself is, “Are you making money off of those employees?”

Elizabeth: Yes.

Gene: If they’re producing profit for you because of whatever they’re doing their jobs, then that’s great. That doesn’t mean that people can’t try to be a little bit better. That you can’t try and coach them or counsel them or help them be that much more efficient or productive. I don’t think you want to set our expectations too high. Be grateful that you’ve got a few great employees.

Elizabeth: My good employees I just felt like I would never get them to be up to the great level because that employee, the great one, just had that in him. That’s the way he did his job. Whereas the good employees did a good job. They were good.

Gene: There are only so many great people like Elizabeth and myself in this world.

Elizabeth: They can’t all be us.

Gene: I’m sorry there’s just not a room for everybody. That’s the fact.

Elizabeth: All right we’ll be right back with question 2. This is about taxes and quarterly taxes. Gene’s going to take this one for us.

Gene: Oh no.

QUESTION #2: Paying Taxes Quarterly

Elizabeth: We’re back with question number 2. This is from Ethan in Logan, Utah. Ethan asks:

“Is there any benefit to paying your taxes on a quarterly basis instead of a yearly one?”

Gene: First of all there are rules for paying it on a quarterly basis as opposed to a yearly one. The rule is generally that whatever money you made in a prior year, you need to make sure that you are paying in 100% of the taxes that you paid last year, or 90% of your expected liability for this year. That’s what the rule is. The rule is, with the way the IRS has it, is if you are going to be making estimated payments they require you to make these estimated payments on a quarterly basis. January 15th. April 15th. July 15th. These are quarters that you have to pay. If you don’t pay, you’re potentially exposed to fines, penalties and interest. It’s not even a recommendation. It’s a rule.

One recommendation that I have for you for your quarterly taxes … I just did that this year as well is that your accountant is going to tell you, if you’re running a business, here’s how much money you made this year and here’s how much taxes you paid. Here’s your quarterly taxes for this coming year. Make sure you pay this every quarter. Whatever the accountant is telling you, that doesn’t necessarily mean that is written in stone. If you think that this year is not going to be as good as the year before, then maybe halfway through the year I strongly suggest that you get together with your accountant and redo your estimates for your income for the current year. You might want to adjust your quarterly payments.

Elizabeth: You’ve paid in let’s say March and June and then you meet with the accountant, him or her.

Gene: Right. You paid in maybe January and April and then you meet before your July payment and you go over the numbers. You’re like, “Unfortunately this year isn’t going as good as last year. If I want to pay at least my 90% of my current year, it’s going to be lower.” The last thing you want to do is overpay the government, right? The government’s got plenty of money. You can adjust a quarterly payment. You can skip a quarterly payment if you think, and your account advises you that by skipping it you’ll still be on target with the required minimum estimated payments for the year.

By the way, it works the other way around, Elizabeth. If you’re having an awesome year and things are booming, it might be you owe more. If you’re paying the minimum from last year, you won’t be subject to any penalties and fines. It’s just that if you should be paying more during the year and you don’t, then when it comes time to pay up, whenever you do your taxes. March or April. You’re going to be stuck with a big tax bill. Hopefully you haven’t spent it.

Actually paying in by the quarter if you’re expecting to be paying more money is a good thing to do for your cash flow so you’re not walloped with a big surprise bill.

Elizabeth: Could you potentially run into cash flow issues then? Let’s say you’re down from last year. Your revenue’s down but you’ve made a bunch of tech improvements in your business. You’ve spent $20,000 and you’re not going to see the benefit of that.

Gene: About cash versus accrual and all that, which you have to understand. Basically you spend a bunch of money. Technology is a great example or equipment that you buy. You spend $20,000 on equipment so your cash is gone, but by the way you might not be able to deduct that equipment this year. You got to wait. Now you owe taxes but you spent all the money on a capital item. That’s only one of a few examples.

This happens all the time with clients. They owe taxes from the prior year but they don’t have any money sitting around because they’re out buying inventory or whatever they’re doing with it. They’re using their money for working capital. You have to be aware of that. Whatever you owe in taxes is based on what you earned in the prior year. You have to make sure that you’ve got the money sitting around to pay that bill, or at least have working capital available to do it.

Elizabeth: That’s why you always say business owners have to be working with an accountant.

Gene: Yeah. I am a big proponent of working with an accountant during the year. I do a lot of TV stuff and it’s always at the end of the year. These TV producers will be like, “Hey Gene, can you come on in? Let’s do a year-end tax segment. Ways to save on your tax.”

Elizabeth: That’s something you need to be thinking about.

Gene: Yeah I’m like, “It’s December 30th. You know what I mean? What are we going to talk about saving taxes now? You should have had me in in June.” Then if I actually reach out to a TV producer in June and say, “Hey, we should do a tax.” They’re like, “Taxes? Nobody cares about taxes now. It’s June. Come on back on December 28th.”

You should care about your taxes in the middle of the year. You should be working with an accountant who can just take a look at QuickBooks or whatever accounting system you’re using. Take a look at what you’re making and make an estimate for your tax and make sure you’re on track. Make some suggestions. It’s called tax planning. I think it’s a really important thing for all business owners to do.

Elizabeth: Great. We’ll be right back with our word of brilliance.


Elizabeth: Okay everyone, we’re back with Gene’s Word of Brilliance.

Gene: Sweetgreen. Have you ever been to a Sweetgreen?

Elizabeth: Yes I have.

Gene: What did you think of it?

Elizabeth: I bought a $16 salad.

Gene: I had the same impression. I was like, “Wow. That was a really expensive salad.”

Elizabeth: This was years ago so I don’t even know if this is still on their menu, but I got a specialty ingredient on a salad. Truffle or some type of sushi that I didn’t even know I was ordering. I think it was like a kale Caesar salad. It was seriously over $12.

Gene: There’s a few Sweetgreens around where I live and they’re always packed. They’re a very popular chain. They are a salad store. They just announced that they are not going to take cash in 2017. They are going to stop taking cash this year. What do you think about that?

Elizabeth: For me, that would be fine. I’m always trying to get airline points on my credit card so I pay for everything with my credit card anyway.

Gene: Good point. First of all, I pay for everything with a credit card as well. I hate cash. Carrying it around. They’re responding to their customer demands. This is a company that is looking at their data and they’re saying, “Listen. Most of our customers are paying by credit card so we’re just going to accept credit card.” Plus they also found as well that by accepting just credit cards and they have touchscreen tablets that their employees use. Much faster transaction than doling out change.

Two thoughts to take away. Lesson from Sweetgreens. Number one is take a look at your business. If you’re a merchant. You’re a retail store. This is a big national chain that’s doing this. They’re stopping taking cash. Perhaps maybe you should stop taking cash this year as well. If you look at the number of transactions. Just turn it into a cashless business. Maybe it’s a better customer service for your customers. That’s one.

Or the opposite. I am a big believer in accepting any form of payment as long as it’s payment and making sure that your customers …

Elizabeth: You just want to get paid.

Gene: I want to get the money. I hate it when I go into restaurants and they don’t accept credit cards. That drives me insane. Then I have to go to an ATM and spend $3.50 transaction fee to pay for my stupid restaurant bill. You know what I mean? If I’m a cash guy, I might also hate going into Sweetgreen and I can’t pay for cash here?

It might be, depending on your business, the lesson is that you should be accepting all forms of payment, even if it’s bitcoin, depending on what your customers are going to …

Elizabeth: Maybe not bitcoin.

Gene: Maybe not bitcoin. In Sweetgreen’s situation, though, they looked at their customers and they’re like, “Listen, it makes sense for us to go non-cash.” You might want to look at it too. Make sure you’re giving as many options as possible to your people.

Elizabeth: I’m going to take this opportunity to rant about my hair salon again because I feel like I’m always talking about them. They accept credit cards and they have Square. They have Square but they will only take tips in cash. I’ll come in with a stack of 20’s and maybe the tip should be $12.

Gene: That’s so annoying. That would drive me nuts.

Elizabeth: They never have change.

Gene: By the way, meanwhile, tips if you use Square … There are coffee shops that use Square. As part of the process when you go to pay for your transaction they have a tip screen that comes up. $1, $2, you just punch it. Boom. Okay. Done.

Elizabeth: I know. It drives me crazy.

Gene: They only take cash because they don’t want to pay their taxes. That’s why.

Elizabeth: I don’t mind giving the hair stylist cash, but I feel like they should then make sure every day that they have change. They never have change. I’ll say, “Okay well do you have change? I only have 20’s.” I’m not going to give her a 20 when the tip should actually be $12.

Gene: Of course. You know what it is? It’s adding on to you the customer. By the way, this demand service, customer service world that we live in. Now you’re like, “Oh I’ve got to go to the hair salon. I’ve got to stop somewhere and get change for a 20.” It’s adding on extra stuff to do during the day that your virtual assistant just does not have time to do for you. Right? That’s not a good thing.

Elizabeth: It’s a huge thing. It’s a huge pain. I usually end up writing her a check because I’m not going to give her $8 more because her salon isn’t thinking ahead. Every time I go I say to the woman behind the desk, “If you guys only accept cash you should always have cash on hand.”

Gene: Couldn’t agree with you more.

Elizabeth: I’m thinking of going to a new salon because honestly I always have to think, “Oh do I have cash on me? Oh now I got to run in.” It’s not like I can go to an ATM and be like, “I want a 10, a 5 and 5 5’s.”

Gene: What I would do, instead if you don’t have the change, each time give them a business tip, Elizabeth. Say, “Here’s my tip. Better lighting would be good to attract customers. You could upgrade your chairs to be more comfortable.”

Elizabeth: Have cash.

Gene: Always go in there with a good business tip.

Elizabeth: They’d love that.

Gene: I’m sure that will suffice.

Elizabeth: Great. All right. More wonderful advice from Gene here.

Gene: More nonsense.

Elizabeth: Thanks for listening. We’ll be back next week.