Dear Aunty B,

I started a wholesale business several years ago and while the first year was a struggle, I have been growing very quickly.

I now have 10staff but I am wondering what is the perfect number of staff for a business? Should I sit on 10 staff for a bit and consolidate, or should I resource up and go for 20 staff?

Confused,
Chatswood

Dear Confused,

Of course 10 is the perfect size, but I am a woman so you would expect me to say that.

Look, the moment you move beyond 10 staff, your life starts to change.

On the one hand, 10 staff are a delightful number of people to manage (usually). You are close to the coalface, still dealing with customers, still providing terrific service. You know your niche and you are in control!

On the other hand, you are chained to the wheel, forced to spend every day working in the business instead of on the business. A staff member is sick, often it is you who take their place.

You have to work at a relentless pace with limited resources and people, and you have to be jack-of-all-trades because you are overseeing all function.

You are always worrying about the wages bill because the level of profitability the business is capable of producing at that size will always be capped. You are also reliant on a handful of customers, a handful of suppliers and a handful of staff. That means the financial risk is always very real. You stop, the business winds down.

You also have to keep growing or you become a me-too business and will get squeezed out of the marketplace.

So is 10 a bloody awful size?

Well just try growing to 20.

Many of the things you loved about work such as creating jobs, training people and them develop – you have to let go of a bit. Once you get towards 20 staff you need the same infrastructure you need for 50. You also start to need economies of scale.

And a whole lot of other things start once you have more than 20 employees, but that’s for another column.

But can I give you a warning?? Throw off your confusion. Decide quickly if you either want to stay small with all its advantages – and disadvantages – or you are going to grow quickly with the aim of getting acquired or becoming a big business.

The last thing you want is to grow and then plateau. It can be hard to take off again both physically, financially and organisationally.

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Dear Aunty B,

I am not sure where you are based Aunty B, but in Melbourne we have had some unseasonably fine weather. While we have all been enjoying the sunshine, it has created a huge problem in our office.

Some of the female juniors who were hired in winter are shedding their Melbourne black, which has brought along an early spring in the young males.

Suddenly there is bare flesh around every corner, productivity has dropped and the atmosphere is positively frisky!

My dilemma is this Aunty B. Do I turn a blind eye? And if not, what on earth would I say? And how do I tell one particular Gen-Y (who has turned out to be a Gen-DD) that she really does need to file things away?

Craig,
William St, Melbourne

Dear Craig,

You are single aren’t you? And you still live with your mum. Because it sounds to me mate that you are missing out. What you are observing in the office is called life. I suggest you stop resisting it and start embracing it (out of hours of course.)

Now don’t you pretend you are not enjoying the scenery. Because I can tell from the salacious descriptions in the email that it is not a blind eye you are turning.

Is Gen-DD such a problem? Has productivity really dropped? I don’t think so. I think you are just finding it hard to concentrate. Refocus everyone with a new strategy and blinding vision. Set some ambitious goals.

Of course there are limits on office dress. I was once forced to work in close proximity with a hippy who liked to crochet his own shirts – I kid you not.

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Dear Aunty B,

I have a small company that was started about three years ago. We are growing rapidly and cash flow has started to be an issue. I was wondering if anyone knew of options that are in between a credit card and venture capital. I do not want to give any portion of the company up and I already have two company credit cards.

A business loan would be ideal, however, they are difficult to get. Westpac has an unsecured line of credit for business purposes and I have applied for this however I was rejected. The primary assets of the company is stock. Are there any non-mainstream lenders that specialise in business loans that are not ridiculously expensive?

Regards,
Patrick

Hi Patrick,

Fortunately for you I am sooo well connected. I hit the phones and called a good contact at the NAB and guess what? He likes the sound of you but it’s a bit like a blind date isn’t it? He needs to know you better before he makes a hand-on-heart call.

So get prepared. Here are some questions he will ask:

1) What is the turnover of the company?
2) What are the current credit limits on the cards and how much is owed?
3) Does the business owner have a property (ie, a home loan elsewhere)?
4) What are the additional funds required for there might be a better option?

But on the surface he says the potential options for finance would be:

a) A NAB 'business access card'. This is essentially a line of credit facility (overdraft) and a credit card all in one; ie, when additional funds are required, the client can transfer the funds from their card into the business account. Once the client is able, they can then transfer funds back into the card facility to reduce interest paid. (This sounds good, Patrick!)

b) A NAB business mortgage overdraft. If the client has a property we can potentially secure a loan against their house (provided we have the first mortgage). The benefits to this are that the interest rate is kept to a minimum AND it is a lot easier to obtain a fully secured loan. (Hmmm, property. This one’s a bit predictable.)

c) An unsecured business instalment loan. Based on the financials of the business, we may be able to offer a three to five-year instalment loan facility (much like a personal loan but obviously for business). Hey … now we’re talking.

So Patrick, the person to ring is Matthew Van Der Riet on (03) 8634 4096.

Good luck and let us know how you go!

Cheers,

Aunty B

What are you waiting for? Email your questions, problems and issues to auntyb@smartcompany.com.au right now!

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Dear Aunty B,

We used to pay a lot more for our products and so we charged a lot more. We've recently found a cheaper supplier for the same quality and want to pass the savings on to our current and future agents. (We really need to, in order to remain competitive.)

Our newest agents who have recently paid the higher price will be justifiably peeved! They are aware that our costs have dropped. (Good news spreads fast!) How do we handle this?

Thanks,
Cookie

Dear Cookie,

It's great to see a market-sensitive operator who has an eye to longer-term relationships. Hopefully this extends to the quality of the agents that have joined the distribution team.

Uncle Col has a suggestion: He says the key is to pass on the lower the price in two stages.

Lower the price by 30% of what is possible to those agents who have paid the higher price as soon as they make their next order and give them a ‘team member bonus’ discount of a further 15% that is based on their sales volume.

At the same time announce that you intend to make a further price reduction to help all existing and new agents to expand their market share at the start of the next calendar year.

Use the two-step process to give everyone the sense that you value their contribution to market development and tell them all that the second price reduction can only be achieved if there is an overall increase in total sales.

Also, make sure you tell them how you are addressing marketing and product development to help achieve this higher sales target.

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Dear Aunty B,

I am distraught. I started a recruitment company four years ago and for the first few years it struggled, but I went out of my way to pay my sidekick a big salary (I paid myself a third of what she was getting for the first two years!)

But several weeks ago she told me she was leaving to go to a competitor. I let her work out her last few weeks and now I am worried she might have spent that time undermining the business.

My business partner thinks I have been stupid and keeps telling me that I should have marched her out as soon as she resigned. However when I raised my concerns with her, she assured me she would never steal clients or take confidential information with her. She also signed a standard employment letter when she joined which stipulated she was not to take confidential information with her. She never signed a restraint of trade letter though.

She has always been very trustworthy so I went against my business partner’s advice and asked her to work out her contract.

Now I think my business partner is right.

Should I have marched her out? What is my protection?

Duped,
Hobart

Oh you poor thing. You are feeling betrayed – and rightly so. And this is muddling your thinking. Now take a deep breath because everything is going to be fine!

If you have built the business to this level, then I am sure you are a good judge of character. And if you think the Betrayer is trustworthy, then you are probably right.

Feeling a bit more calm? Then good. Because now you can go and tell your business partner to stick it! This is a time you need support, not some annoying business partner meddling in your decision making and undermining you when you need some support.

And you can remind your business partner that you have the law on your side.

Common law prevents your staff from disclosing a company’s confidential information. And this covers a wide range of things from client lists to marketing strategies. Yes, this protection leaves the moment they walk out the door, but if you can find any proof that the staff member was knicking stuff, you can threaten them.

Of course you should have made your staff member sign a restraint of trade letter ensuring they do not work in the same city or take clients etc, but you know that now so I won’t stick the boot in.

Maybe what you could do now is get your lawyer to send her a letter just reminding her that she did sign the original letter and outlining the obligations.

If you are feeling uneasy, send a letter to the Betrayer reminding her that she did sign that letter and you will take action.

Then go and book yourself in for a massage and stop worrying. You will have great spies if you are in the recruitment business, and you will know soon enough if she is going to betray you.

If anyone else has any advice for our Tassie friend, send it in.

Oh and for next time…

Protection checklist

• Have labels or passwords on commercially sensitive information.
• Restrict access, for example secure storage in a designated area.
• Tell staff which information is confidential and that restrictions apply to its use or disclosure.
• Make sure all diaries and mobile phones are company property, returnable when staff leave.
• Make sure your employment contracts refer to confidential information and include an individually tailored restraint of trade clause.
• Get contractors to sign a confidentiality deed.
• Have a formal policy on use of confidential information, including its use at employees’ homes.
• Maintain contact with your customers.

Source: Paul Kirton, principal, macpherson+kelley lawyers

What are you waiting for? Email your questions, problems and issues to auntyb@smartcompany.com.au right now!

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Dear Aunty B,

I have 8000 emails in my in-box. How can I clean up my in-box – or better still get someone to do it for me?

Tony, Perth

Dear Tony,

Repeat after me: “Just because I have thousands of emails in my in-box doesn’t mean I am important – it means I am stupid and disorganised.”

Now Tony, it is your mess and you need to clean it up. I bet your mobile phone has run out of memory and you never bother to back up your computer either. How can you live with that chaos? It’s like having every single piece of work you’ve ever done piled up on your desk. How do you expect to find anything? It’s time to start over. The trick is to let the computer do the work for you.

Step 1
Be brave and move everything except this week’s emails in the in-box into an archive folder on your hard drive and start all over again. Keep a copy on CD for extra backup. If you can’t do it, ask anyone else in your office to help.

Step 2
Start using desktop search engines such as Google Desktop, or Copernic Desktop Search. They can find old archived emails in seconds if you need them in the future. (I can’t live without Copernic Desktop Search – it’s free and only takes a few minutes to install. It really is my filing system and address book.)

Step 3
Set up work folders so that all incoming emails are moved into the appropriate folder.

• Folder 1: To do/reply.
• Folder 2: Emails I need to keep sorted into relevant subcategories.
• Folder 3: Favourites/star emails.
• Folder 4: Finished work (to be archived).

That way the in-box is always kept clear; it’s maintained as a waiting room.

Step 4
Start being ruthless with your in-box. Set aside a minute or two every day to permanently deleting cr*ppy emails. If the in-box starts piling up again, do another dump into your archives.

Sorted.

What are you waiting for? Email your questions, problems and issues to auntyb@smartcompany.com.au right now!

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Dear Aunty B,

I have just expanded from six staff to 15 in the last year. I have always had an open-door policy. Lately the interruptions have got so out of hand (and so trivial) that I feel like I cannot get any work done until everyone has gone home for the day. Then of course I am in trouble with the wife, whether I work back or take work home. Is it time to shut the door?

Greg, Melbourne

Dear Greg,

If you haven’t already, it’s only a matter of time before you bite someone’s head off, and you’ll always come off second best. Now of course as you get bigger, you are going to have to delegate more.

But Greg, an open-door policy is all about equality in the office, the right of everyone to come and see the boss, the right for all staff to be listened to and to have informal interaction with their leader.

Does it have to be literal, to be enforced at all times? I don’t think so, unless you want to go insane. This is an issue about time management, priorities and productivity. Only you can measure whether you and your business can be more productive by literally closing the door on staff for parts of your day – and it’s highly likely that you need some balance in your day.

Work out which parts of the work day are ideally interruption-free and tell staff at the next meeting that you would like this time to yourself.

Flight Centre’s founder Graham Turner has an interesting approach. He schedules all the meetings and chats for the mornings and leaves the afternoons for other aspects of the role (call it executive “me” time if you like and everyone needs a bit of that). Before you hole up in your office for me time, get into the habit of walking around the office, do a quick check on how everyone is going before retreating to your lair and, shock, horror, closing the door [cue horror-flick sound effects] and getting on with the job.

An old boss of mine had a traffic light on his desk. Green means approach me, amber means approach with extreme caution, red means LATER! Sounds stupid, and he was a bit of a dill, but it actually worked really well and ensured staff didn’t get into the habit of always thinking they should be racking up face-time with the boss (there’s always staff who are desperate to suck up/lobby/self-promote or simply avoid sitting at their desk). The trick is to train staff not to automatically interrupt you because you are there.

If you manage eight staff or 25, a huge part of your job is managing people whether you like it or not. That means being accessible to staff so that they can do their job. It is not an extra hassle in your job, IT IS YOUR JOB. Get used to it.

A boss who constantly avoids his staff saying he/she is “too busy” is going to lose staff and lose their trust. Going too far in the other direction can be just as damaging to productivity. Duh!

What are you waiting for? Email your questions, problems and issues to auntyb@smartcompany.com.au right now!

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Dear Aunty B,

I work in a small fourth-generation family business, in regional Queensland. We have 25 employees, some of which work on a “piece-meal” rate, where they get paid per tonne of production.

The owner of the business pays these workers annual leave and superannuation, but when it comes to sick pay, she considers them to be “contractors” and will not pay their entitlements. Apparently, under WorkChoices, we have to spell out exactly what these employees are entitled to – and it looks like personal (sick)/carers leave is “set in stone”.

When I approached the boss and told her that we may be in breach of the legislation, she stated that because we are “in the bush” nobody will bother us and if we are caught doing something wrong, she will assume all responsibility for the breach.

However, I’m the one that processes the pays! All the other employees, who are on hourly rates, get all their entitlements such as reasonable time off to go to the doctors or stay in bed sick while 10 of our employees get “docked” if they have to look after sick kids or attend the funeral of an immediate family member (as has happened in the last month).

My boss is very dictatorial and is not even willing to try and clarify what our obligations under WorkChoices are. I’m seriously thinking of quitting and leaving them to it.

What should I do?

Pissed off with the boss,
Queensland

Oh, charming. Now I am a help line for employees!

But Pissed off, I do feel sorry for you. It's rare in the 21st century to find so many horrendous practices in so few sentences. Is your boss still looking for Lassetter's Reef in her spare time? My advice to you would be to get some serious advice quick smart, and get out if your boss ignores it.

There has been plenty of news recently about people getting in trouble for calling other people contractors when those other people might really be employees. My legal adviser (Arnie B) tells me that it's not simply a matter of calling it a rooster when it quacks like a duck.

Figuring out if there is truly a contractor relationship is not a simple exercise. If you have had access to any form of written or electronic communication recently, you may also have noticed that it is now compulsory to give all employees a Workplace Relations Fact sheet. Once you do this and employees get wind of their legal entitlements, my guess is that the rest of your boss's "piece-meal" practices will rapidly crumble.

Aside from failing to give employees their minimum entitlements, your company may be exposed to breaches of anti-discrimination legislation in relation to people who are sick or who have family or carer responsibilities – and that's where you come in! You might be personally liable for that discrimination too; otherwise you'll just be the star witness for the prosecution.

They used to say "the bush has ears". Now it also has fax machines and email and the Workplace Ombudsman. So, my friend, leave. Besides who wants to work for Dictatorial Boss?

What are you waiting for? Email your questions, problems and issues to auntyb@smartcompany.com.au right now!

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Dear Aunty B,

I run a smallish (55 staff) retail business. I keep thinking the next financial year is going to be better. But once again I have hit a flat bit when I need new customers.

I am making a comfortable net profit but I never seem to get to the point where I can just sit back and think, “made it”.

Do I ever get to make it Aunty B? Or am I doomed always to be pushing rocks up hills?

And what is success? How do I get out of this situation where I am always lying in bed worrying about the future?

Worried,
Brisbane

Hi Worried,

Are you a sap? You want to swap your life with some miserable wage slave? And be at the beck and call of idiot bosses? And never make a capital gain or create a job?

Nahhh. You love what you do.

Now let’s recap. You are making a profit when millions are not. And you are making a comfortable profit???

You, my friend, are actually a fantastic success. In fact, you are striding along the stage of entrepreneurial success!

Parading upon the catwalk of having made it. Enjoying the accolades of being a self-made entrepreneur! You, my friend, are the envy of every employee in the country.

So get off your backside and go and market. Have a good look around for new distribution channels. Give the sales team a bit of a shakeup. Get rid of any troublesome clients who drain you of energy and go and find clients who share the vision.

And when you are in the middle of all that frenetic activity and driving your staff mad again, that is when you will pause, smile and think: “This is life. This is fun. I wouldn’t swap this for anything.”

Comment

Rod Drabsch from Rods and Relics writes: Hello again Aunty B. Who the heck does Worried think he/she is? I’d swap for their predicament any day. Smallish (55 staff)??? Smallish is ME…. 1 staff member. Having staff usually means success, you're making money. I think they maybe need to struggle for a while or go on to wages and see how you fair then. As critical of you, Aunty B, as I have been, I have to agree with you on this one. If they can’t delegate a bit more, to free themselves up to do the important things, what are they doing with 55 staff? Just my 2 bob’s worth.

What are you waiting for? Email your questions, problems and issues to auntyb@smartcompany.com.au right now!

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Dear Aunty B,

We work in large open-plan office and I see myself as more of a team leader than a boss. But increasingly my staff will make excited noises while staring at their computers and it is not because we have just landed a customer or done another deal. It is because one of their friends has just landed a job in London. Or another friend is coming home from overseas early. Or another friend has just posted a photo with their arm around some popstar and they like to announce it to the office.

I just read about Kerry Stokes’ business banning employees from accessing online networking sites and I would love to do that, too. However, I also read about all these management experts who say staff will leave.

What do you think? And I would love to know if any of your readers blocked access and what was the attitude of their employees.

Thanks Aunty B.

Dear Great Team Leader,

Am I glad I don’t work in your office! Because your job, boss, is to make sure hard-working staff don’t have to listen to the rubbish that comes from nit-wit employees who spend most of their time on Facebook! Really! You need to come to your senses.

As for those management experts who say staff will leave if you crack down on their use of social networking … has the world gone mad? Who wants Facebook addicts anyway? Let the management experts employ them.

If I were a hard-working employee and was constantly interrupted by a colleague with the latest antics on travelling friend, I would expect my boss – sorry – Great team Leader to take action.

On the other hand, if hard-working staff spend a small amount of time on networking sites or email organising personal events, then what’s the problem? People work long hours: they cannot run their households without a few calls and emails during the day as, unfortunately, most service providers are part of the nine-to-five Industrial Age.

So Great Team Leader, lead your team. Remind them that emails and computer use is monitored. Have a few words to the main offenders and give them a pile of work as they are obviously not busy enough. Rev up your managers to keep a closer eye on the situation. And lead by example.

Set the culture that encourages staff to work hard but with the flexibility for some time management of their personal lives. After all, it is always about balance.

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