Do You Need To Apply for an SBA Disaster Loan?

Everyday more businesses are forced to close their doors to keep up with the ongoing health and safety standards and revenue is plummeting.  The government is working to provide economic relief to American businesses, and some of the relief solutions are already available.  The SBA (Small Business Administration) has extended their disaster loans to small businesses and private non-profits affected by COVID-19.

The loans are low interest and long-term.  The repayment plans go up to 30 years and the interest rates are 3.75% for a small business and 2.75% for nonprofits.  Disbursement from the loan is meant to pay for things like fixed debts, payroll, accounts payable and any other bills that your business cannot afford to pay because of a loss of revenue that can attributed to COVID-19.

To apply for a disaster loan from the SBA, here are a few things you’ll need to consider

Lenders at the SBA are looking for the “5 C’s”.

Capital

You will need some working capital to make a down payment on your disbursement. This assures lenders that you will also be making loan payments and handling your disbursement responsibly.

Credit

Often, the owner of the business’ credit history will be a factor in whether the business is accepted for a loan. Owners with solid credit scores and a history of paying off debt will attract lenders.

Capacity

No matter how long-term your repayment plan, you will have to illustrate an ability to pay off the loan eventually. The lender will generally take things like your annual revenue during a good year into account.

Collateral

You will need property to guarantee the loan. That is, you’ll need to have an asset that the lender can rely on for repayment in the event you default on your loan payments.

Character

The character of the business owner taking out the loan is also important to lenders. They will generally look at your past business experience to determine what kind of businessperson you are. For example, have previous enterprises of yours gone bankrupt? Have you been sued? Lenders will look at these factors and more when deciding on your character

The SBA’s decision is faster when your application is submitted online.

The SBA recommends that applications are submitted through their secure website for the quickest response times. However, paper applications can be mailed to the SBA. Because the SBA is a government entity, the paper application can also be dropped off at a local disaster recovery center.

Submitting your application online does not mean you are more likely to be approved for a loan. However, your application will enter the queue for review immediately after submission, so it does mean you are more likely to get a decision sooner. Those awaiting a response on a paper application will have to wait for the postal service. Keep in mind that postal delivery can be delayed several days by a disaster.

There is a deadline for each disaster.

The deadline for applying for a disaster loan for economic injury is 9 months after the day the emergency is declared. The SBA may elect to issue extensions, though. Any extensions or changes will be listed on the SBA’s website and we advise you to check the website regularly for updates.

There are required documents you’ll need to add to your application.

All required documentation included with your application needs to be complete and accurate. It also needs to be signed by each principal owning 20% or more of the business. These principal signatures need to be collected once each for any owner who has more than a 50% ownership in the business and any affiliate businesses.

The required documents include:

This form gives the IRS permission to provide the SBA with your tax return information.

  • Current financial statement
  • Current schedule of liabilities, including all fixed debts

The SBA does have a format they recommend for the schedule of liabilities on their website. However, the document can be filled out in whatever format you’d prefer to use.

  • A copy of your most recently filed federal income tax return
  • IRS Form 8821

This is a Tax Information Authorization Form, which gives authorized organizations permission to access your tax information. IRS Form 8821 only needs to be included with online applications.

This form is used by the SBA to analyze your ability to repay the loan. This is used to determine your character and creditworthiness.

Each of these forms needs to contain correct information and be signed and dated to ensure quick processing.

Applying for a disaster loan can be overwhelming. Consider hiring an outsourced accountant from MCDA to help you compile your records and ensure that your application is accurate. A professional accountant may mean the difference between rejection and acceptance of your SBA Disaster loan application.

MCDA will be running a discounted rate special for all of our professional accountants helping small businesses with SBA loan applications.  Call us today for a free consultation and to book your appointment.

 

Selecting The Right Accounting Software for Your Business

Let’s face it, we can all benefit from accounting software in our business. The shoebox full of receipts and closet full of other financial junk just isn’t going to get it done. The accounting software your business chooses is a very important choice.  It will record transactions, will estimate your income taxes, payroll taxes, can handle your purchasing and inventory, lets you know your bank account balance, and can give you the ability to pay your employees.

In addition, good accounting software allows you to send invoices and manage receivables, lets you see and analyze sales trends, and give you the ability to generate balance sheets and income statements.  All critical components to managing your business effectively.

There are plenty of options out there when it comes to accounting software for your business, but here are a few questions to ask yourself before you just grab something because its popular

Will we be using this in 3-5 years? – If you’re currently looking for an accounting solution, you might have kept your financial information in that shoebox or closet but hopefully at a minimum on a series of spreadsheets in the past. Now think about how often the spreadsheets went from a business solution, to a problem. It is easy to outgrow an accounting software, especially when your business is in its infant stages. Make sure the software you choose can grow with you and the cost of scaling services is manageable.  We offer a great list of software to get you started – Email us today!

Will it interface with other software your business uses?– Does your company already use a point of sale system, tax preparation software, or a CRM? The accounting software you choose should be able to interface with them, or better yet, the current software may have an accounting upgrade available.  The more you can roll into one piece of software the better.  Depending on your size of business you may want to explore an ERP system.

Will the software offer customized options for my industry? – Many software options, like Quickbooks for instance, are a one-size-fits-all solution. This isn’t a bad thing at all, but if your business is in a specialized market such as a restaurant or law firm, financial management software that is customized to the unique demands of your industry may be a better option.  When it comes to customized solutions beware that you aren’t dumping money into a customization that really isn’t needed.  Consultants and software companies are quick to convince you that you need it to make that extra buck.

How many users will you need? – Most accounting software solutions allow for a few logged in users at a time and charge to open up additional user profiles. The default may work for now, but as your business expands, you should be sure you can afford the cost of adding users. Do you have the ability to give your customers and clients access to things like 1099’s and invoices?

How easy is it to use? – You shouldn’t need to be one of the world’s greatest financial minds to be able to pull an accounts receivables report from your accounting software. Pay attention to the user interface and how it feels. Are you able to use the software on your mobile device?  Ask for software demo’s, a good software company will offer a demo and you should be able to play with it and make sure that you are comfortable.

How secure is the software? – What security measures do you need to already have in place to keep your data (and your customer’s data) secure? How is information backed up? Is there an option to use the software with cloud-based computing?  Data breaches are a daily occurrence, beware, and protect your business!

Does it leave an adequate audit trail? – Knowing the source of a transaction and being able to trace revenue is important in case your business is ever audited. On the other hand, the lack of an audit can look suspicious.  At MCDA we have been consulted for numerous forensic accounting audits and you would not believe how many businesses out there do not have an adequate audit trail.  Again, protect your business!

What kind of customer service and user support do the software publishers provide? – Inevitably, there will be a feature that doesn’t work properly, or there is something you will need to unlock – meaning you either need to become an expert yourself, or call one and have them provide support.  Another very important question to ask is if they outsource their customer support.  Some companies will outsource to a call center and they have to “escalate problems” creating a severe delay in providing you the support you need.

What is the total cost? – When you buy the base software package, are you buying everything your business needs, or will you need to pay for additional features?  Some base programs may be free, but if you find you’re having to add too many mission-critical features, there may be a solution available that is, overall, cheaper and more complete. Also, is it a subscription-based package?

There are a lot of questions that need to be answered to find the accounting software solution that best fits your business. Customized accounting software will pay off greatly with tighter control of your finances and the ability to do more with your financial information. MCDA may help you answer these questions and assess your accounting software needs to get the best solution for your money. Call us today for a free consultation!

 

HR6201 Leave Summary Effective April 2, 2020

Paid Family Leave

Effective April 2, 2020 FMLA provides workers with up to 12 weeks of job-protected leave when they can’t work—either onsite or remotely—because their minor (under age 18) son’s or daughter’s school or child care service is closed due to a public health emergency. The FMLA defines “son or daughter” as a biological, adopted or foster child; a stepchild; a legal ward; or a child of a person taking the place of a parent.

The first 10 days of leave can be unpaid. An employee can request to substitute accrued vacation, personal or sick leave during this time, but an employer may not require an employee. For the other 10 weeks, eligible workers must receive two-thirds of their regular rate of pay, which will be capped at $200 a day (and $10,000 total).

Paid Sick Leave

Effective April 2, 2020 many employers will have to provide up to 80 hours of paid-sick-leave benefits if an employee:

  1. Has been ordered by the government to quarantine or isolate because of COVID-19.
  2. Has been advised by a healthcare provider to self-quarantine because of COVID-19.
  3. Has symptoms of COVID-19 and is seeking a medical diagnosis.
  4. Is caring for someone who is subject to a government quarantine or isolation order or has been advised by a health care provider to quarantine or self-isolate.
  5. Needs to care for a son or daughter who’s school or child care service is closed due to COVID-19 precautions.
  6. Is experiencing substantially similar conditions as specified by the secretary of health and human services, in consultation with the secretaries of labor and treasury.

Paid sick leave must be paid at the employee’s regular rate of pay, or minimum wage, whichever is greater, for leave taken for reasons 1,2,3 above. Employees taking leave for reasons 4,5,6 may be compensated at two-thirds their regular rate of pay, or minimum wage, whichever is greater. Part-time employees are eligible to take the number of hours they would normally work during a two-week period. Employers cannot require an employee to use other paid leave before using the paid sick time provided in the new legislation.

Under the legislation, paid sick leave is limited to $511 a day (and $5,110 total) for a worker’s own care and $200 a day (and $2,000 total) when the employee is caring for someone else.

8 Key Skills of Effective Management

Reflect back and think about the best manager you’ve ever had; one that helped you develop your skill set, or inspired you to push through adversity, and genuinely impacted your life. In reality both inside and outside of the office.

Once you have been lucky enough to experience the benefits of a great manager, you know that being a manager is more than advancing your own career – it’s a great opportunity and even greater responsibility to empower your team to succeed and take on challenges.

Being an effective manager requires a unique skill set, and each of these skills cane learned and developed.  Whether you are a new manager or a seasoned professional, there is always room to continue straightening the abilities that will help you effectively lead a team.

Here are the 8 skills that are key to being a successful manager:

  1. Communicate Clearly
  2. Manage Your Team’s Time
  3. Facilitate Teamwork & Collaboration
  4. Delegate Tasks to Promote Development
  5. Solve Problems With Your Team
  6. Set Team Goals & Analyze Results
  7. Develop Your Emotional Intelligence
  8. Be Tactful in Your Transparency

 

A Detailed Look Into the 8 Key Management Skills

1. Communicate Clearly

Despite the many miracles of modern science, your team won’t be able to read your mind, no matter how hard they try. Knowing that, it’s up to you to create open lines of communication, for everything from project-specific items to personal well-being and career goals. Not only will this build trust with your employees, it allows them to thrive individually and boost their contributions to collective goals.

Make sure to schedule weekly team meetings and monthly one-on-ones, and regularly ask for feedback on how you’re doing in your role and how you can better support your team. And of course, always listen first. Communication is a two-way street, and when you communicate clearly with your team and show them that you value their input, they’ll do the same with you.

2. Manage Your Team’s Time

a person pouring water into a timer that has a plant growing out of it

Whatever your management style, time management is about more than work-back schedules and checklists. It’s providing adequate time to think through problems and execute solutions, while pushing back against unrealistic expectations from clients or project owners.

Yes, there will always be last-minute requests or urgent projects that don’t come with the luxury of time. In those situations, be sure you’re bringing your team on board right away to figure out how best to gather up the time that you do have.

3. Facilitate Teamwork and Collaboration

Accepting the fact that you can’t be hands-on with every project can be tough. Sure, you might be able to finish the task faster if you have more experience, but do you really need to be at every brainstorming session? As a manager, it’s your job to take a step back when it comes to completing tasks, and still making yourself available for buy-in and checkpoint meetings to approve project directions and ensure things are rolling out smoothly.

Knowing when you can or should be involved is just as important as knowing when you can’t or shouldn’t be involved — and making this distinction will help you avoid micromanaging. If you want your employees to learn to ride a bike, you have to take off the training wheels.

4. Delegate Tasks to Promote Development

Delegation is about more than dividing the workload — it’s another opportunity for you to continually help your team members learn, develop, and grow. To make teamwork, well, work, you need to be able to recognize the strengths and weaknesses of your employees. By understanding their abilities and considering their professional development goals, you can delegate tasks and structure team projects in a way that contributes to each employee’s evolution. It’s all about making the most of their individual skills, while also providing the opportunities to continue building on them.

5. Solve Problems With Your Team

Inevitably, you and your team will face challenges and difficulties. Being able to quickly analyze the situation and envision potential steps forward will drive your ability to make effective decisions. It’s important to adopt a forward-thinking mindset so you can begin to spot issues before they arise.

Solving problems independently can be necessary in a crisis, but it’s also essential to involve your team in the day-to-day process. Not only is it an opportunity for your team to talk openly about tough situations, but coaching them through different approaches to overcoming adversity will enable them to take the lead on future problems.

6. Set Team Goals and Analyze Results

As a manager, you’re sandwiched between your team and your superiors, acting as a go-between. You have to help your team turn the company goals into tasks, and then show your superiors how you team’s tasks led to results. By setting objectives and key results at the start of project planning, it will be easier for you to demonstrate your team’s success down the line.

As important as setting goals, is analyzing them. Measuring goals is of course a good first step, but then you should always consider their meaning. Why did your team succeed (or not)? What worked well that you can try again, and what new ideas do you want to test out next time? Schedule meetings with your team to go over outcomes and pinpoint learnings.

7. Develop Your Emotional Intelligence

Summer Perks for Employees – Two They Want and Two They Don’t

Employees often look forward to summer as the time to sort of slow down and schedule some of their hard earned time away from work.  Employers, however, still need to get the work done and summer’s dip in productivity can create a challenge.  Making the season work for both employee and employer can mean some compromise and communication.

Recruitment and retention of your employees starts with knowing what they want.  It’s very important to listen to learn what motivates them the most without sacrificing productivity.  It is also very important to know your market – most importantly what your competition is doing.

 

WHAT EMPLOYEES WANT

In a recent survey by a large staffing firm a staggering Fifty-two percent said flexible scheduling, followed by 27% who would love to be able to leave early on Fridays. Flexible schedules align with several company policies, with 54% of senior managers saying they offer the perk, but just 32% of companies offer summer Friday hours.

WHAT COMPANIES WANT

Instead, 53% of companies cited a relaxed summer dress code as a perk they provide, and 48% noted a company picnic or potluck—two perks that employees care least about. Just 11% of employees said a relaxed dress code during the summer was their top priority.  I think that is directly related to so many businesses already offering a very relaxed and casual dress code. And holding a company picnic or potluck was bottom on the list of desirable summer employee perks, with just 10% of employees saying this would make them happy. Employees want flexible schedules or reduced hours instead of an ice cream social.  Employees are looking for a break from work away, not a break from work with work people.

IMPLEMENTING SUMMER PERKS

If you decide to implement summer perks around schedules, sit down with different managers before you get too far into the season and set policies for the organization. Another option is to leave it up to each department depending on their needs.

Some companies mark the official start of summer as when the school year ends, while others create summer policies that run Memorial Day to Labor Day.

Flexible summer hours will depend on what your company does and if you have peak hours that need to be covered. One way to cover peak hours is by rotating schedules with certain people coming in later and staying later, and others coming in early and leaving early.

Letting employees leave early on Friday might be a bigger hurdle to pass in some organizations.

It doesn’t surprise me that managers put leaving early on Friday further down on the list because it could mean fewer hours of production. It’s also more of a change than some of the other summer perks that already exist in organizations. It’s easier to jump into something in existence, since it’s something that’s known and you have less adjustment.

Managers shouldn’t worry, though, as employees often compensate by increasing their focus, setting goals, and getting more work done in a shorter amount of time. Managers can also make it an ad hoc policy with parameters, such as certain tasks getting done or goals being hit.

Offering summer perks that workers actually want is smart business, as it can improve employee morale and make your company a more attractive place to work. These perks come at little cost to companies but often go a long way in keeping staff happy and engaged.

What Is A Brand Ambassador And How Can You Use One?

Consumers are tired of being marketed to, especially on social media. In fact, 74 percent of millennials and generation Z consumers don’t want to be targeted by ads in their newsfeed, according to Lithium. What’s more, 56 percent of these consumers are cutting back on social media as a result of advertising.

The answer? Brand ambassadors. Brand ambassadors are consumers who love your product or service, and share their love with your potential customers. They typically share their appreciation on social media or their blog, but brand ambassadors also work in-person giving out samples or speaking about products at events.

WHY USE BRAND AMBASSADORS?

These advocates humanize your brand and add authenticity to your marketing efforts.  Hootsuite also suggests that brand ambassadors can help drive traffic to your website, increase your brand presence in targeted regions, and provide positive word of mouth. The key is choosing the right brand ambassadors.

To figure out if you could benefit from a brand ambassador, first consider if your organization is ready for the broader reach and increased attention.

CONSIDER THESE FIVE FACTORS WHEN SELECTING BRAND AMBASSADORS

When choosing ambassadors, consider these important qualities:

  1. Passion: How passionate are they about your brand? Have they already been acting as ambassadors, sharing their love for your brand on their social media channels? Have they reached out on their own about working with you?
  2. Product use: Have they already purchased your products? Customers are the best place to start your search for ambassadors “Do you notice that some of your customers rave about you on social media without any prompting from you? They might be a natural brand ambassador that can carry your new product into spaces you couldn’t reach on your own.”
  3. Influence: How influential are they within your target demographic? You can determine this by looking at their follower count and calculating engagement rate per post.
  4. Authority: Do they have a trustworthy brand and provide accurate information and honest opinions? In a world filled with “fake news,” consumers are looking for brands they can trust.
  5. Creativity and authenticity: What does this person bring as an ambassador? Do they have unique ideas they’ll be applying? Do they come across as authentic in their interactions?

Also, consider how you’ll compensate the individual. Will you send them new products? Can they make requests? Is there a minimum number of posts they need to do each week or events they need to attend?

As you begin to look for ambassadors, consider the many ways you can use them to expand your reach and take your business to the next level.

Create Content for Social Media

One of the most common ways to work with brand ambassadors is social media posts. This type of agreement helps you generate user generated content.

Instead of using a stock photo or product image in your Instagram post, for example, you might repost an image from your brand ambassador. The value is two-fold:

  1. You save time and money by creating less content on your own.
  2. You can post natural, relatable images of your product in use, which helps humanize your brand and higlights the benefits of your product. 

Promote New Products

Build brand ambassadors into your product launch plans. Ambassadors can help drive initial sales, especially when they’re posting on social media. For example, ship new products to all ambassadors for an Instagram live unboxing paired with a discount code for their followers. Or, ask ambassadors to facilitate a giveaway with their audience using branded hashtags.

Or, invite event ambassadors to promote the new product at industry events. With free giveaways you can drive brand equity, authenticity and take advantage of face-time with potential customers. 

Write Authentic Blog Reviews

Collective bias found that 75 percent of consumers trust product endorsements by non-celebrity bloggers, which explains why the mommy blogger industry was one of the first to explode in online influencer marketing, with moms endorsing the products they love for their families and kids.

Brands can make use of this influencer marketing by selecting ambassadors who have built a large online following. These ambassadors can include your brand in “product roundups” or holiday gift guides, or refer to them in a variety of posts, as specified in your brand ambassador contract. In many cases, you end up with a mix of blog content and social media posts, expanding your reach exponentially.

Note that many influential bloggers charge for this work, so you may need to pay a one-time fee if the relationship is not on-going.

Target Specific Regions

If you want to target or expand into specific regions, look for local ambassadors to promote your brand. These ambassadors can provide support both online and offline, at events and on social media. In this case, you’ll still want to keep all the standard qualifications in mind, in addition to looking for people who have a strong influence within that specific region, not just online.

There are many ways to use brand ambassadors to promote your products and drive trust and brand equity for your business. Keep these ideas in mind as you determine how to best use brand ambassadors for your marketing efforts.

 

Has Your Small Business Stopped Growing?

Has your small business stopped growing? I might know why.

And more importantly, if it turns out the textbook answer I give is right, the answer suggests concrete steps you can take to restart your growth.

One caution up front though. We need to use a bit of math in the discussion that follows. However, don’t worry. We are not going into the weeds on this one. The following discussion is light reading.

Small Businesses Often Grow Linearly

To start, let me propose that small businesses grow “linearly.” Or we might also say “arithmetically.”

But all that means is, you and I gain customers or clients one at a time.

Further, this arithmetic growth makes sense.

If you think about just one common element of marketing your business—your sign—it may be that every week, a hundred people drive by your business and see your sign.

Then maybe ten of those people call you. And then a subset of those callers sign on and become your customers.

Over the course of a year, this linear or arithmetic growth means you grow your business by, say, 100 customers.

Probably most of the other growth in your small business works the same way.

Web traffic and web advertising grow your business one click at a time. Cold calls you or a salesperson makes grow your business one successful sales call at a time. Conferences and trade shows, well, you get the gist of this.

Small Businesses Shrink Exponentially

Now consider this: Probably you lose customers or clients at some percentage rate. Or we might say probably you lose customers or clients “exponentially.”

Note: You’ve heard of exponential growth. What we’re talking about here is exponential decay.

In other words, if you or I have 100 clients or customers, we might lose ten of these folks. But really, the best way to express that attrition, that “exponential decay,” is as a percentage like 10 percent attrition. Or 10 percent decay.

The percentage by the way reflects the reality that attrition connects to the size of the business.

A business with 100 customers might lose ten people, and that means 10% attrition or decay.

But a similar business with 1,000 customers doesn’t lose just ten people. Probably it too loses some percentage like 10%.

This is all pretty basic. No earth-shattering insight here. No mind-numbing math, thankfully.

All we’ve really talked about is gaining customers or clients at some rate that can expressed best as a steady arithmetic increment (like 100 new customers a year). And then also we’ve talked about losing customers or clients at a steady percentage rate like 10%.

Growth and Decay Eventually Balance

And now we get to the textbook reason some small businesses stop growing.

At the point where the linear growth balances out with the exponential decay, growth stops.

The precise formula? Your or my business stops growing at the point equal to the arithmetic growth divided by the decay rate:

Maximum Customers = Arithmetic Growth / Exponential Decay

With arithmetic growth of 10 clients or customers and an attrition or decay rate of 10 percent, for example, the maximum size of the business equals 100 clients or customers (calculated as 10/.1)

With arithmetic growth of 100 clients or customers and an attrition or decay rate of 10 percent, the maximum equals 1,000 clients or customers (calculated as 100/.1)

Calculating the Theoretical Maximum Revenue

By the way, if you can express your arithmetic growth in dollars, you can use this same formula to calculate the maximum revenue potential of your business.

If your business arithmetically grows by $125,000 a year and your attrition equals 8%, the maximum equals $1,000,000 of revenue (calculated as $125,000/.08).

Key Takeaways from the Calculus of Growth

I promised this blog post would be short and sweet. So let me just throw out a handful of final comments.

First, the clean math described in the preceding paragraphs simplifies stuff a lot. The reality will be more complicated.

Second, the formula described earlier suggests that our company growth will slow over time and even stop eventually. Why? Because if we just keep growing the same way: with signage X people see a day, a website that attracts Y visitors a week, a sales guy making Z sales calls every month, eventually growth and decay balance.

Third, you and I do have a way to continue growing—and that is to grow the way we grow. In other words, more signage, more website traffic, and more sales calls.

Other Resources You Might Find Interesting

If you are interested in other resources for growing your small business, contact us today!  Our experienced consultants and business development specialists can streamline a plan to grow your business.  We offer free consultations both online and in person!

Why Your Company’s Team Building Weekends Failed – And How to Make Them Successful!

Somewhere out there right now there is a group of office staff strapping on some sketchy safety gear and preparing to climb some random cliff together.  Somewhere else out there there is a group of office staff engaged in a retreat designed to foster some sense of teamwork.  Then there is another group locked in a room focused on a collaboration to build a robot out of some ghetto supplies.  What do they all have in common you ask?

The common theme here is team building, and it has come to describe a way of doing business that considers the strengths and weaknesses of each member of a work-related team. The basic premise of team building weekends is to bring a group of team members together and, by exposing them to various hardships, events, or activities, cement them into a team that is well-equipped to work together toward a common objective.

The only issues with team building weekends is that they usually aren’t effective. Once the team returns to the office, they fall back into old habits, leaving that fun team building activity nothing but a fond memory. The gap is not with the concept of team building, but in the assumption that it can be achieved within a weekend, no matter what those few days entail. It’s not that team building weekends are a bad idea – it’s that they’re expected to do a job that should be undertaken in your office every day.

The purpose of a team building event should be to introduce, reinforce and reward, not to single-handedly forge a group of coworkers into a team. If it’s used to replace the work your company (or you as a manager) should be doing every day, then you’re missing out on some important points – and the benefits of dragging everyone away from their loved ones for a weekend of team building activities.

So how do you forge the bonds of a team if not by dipping them into the crucible of a team building weekend? The answer is simple: you can’t just talk the talk – you have to walk the walk. If you want to instill your staff with the principles of teamwork and collaboration, then treat them as a team, with you as an important member of it.

Effective communication is essential to building a team.

One of the biggest mistakes that management teams make is the failure to communicate. Your company doesn’t have to be an open book to all employees, but sharing goals and intentions gives employees a sense that they are a part of a larger team working toward the common goal.

Build teamwork into the workflow.

Again, to reinforce teamwork, your team members need to be treated as a group. Initiate each project with a team meeting to define and/or redefine project goals. Design your office in a way to facilitate teamwork by creating a central area where team members are comfortable grabbing coffee or other beverages during the day. This presents  moments for your team members to catch up with each other and exchange insights. Facilitate regular team meetings where individuals can report progress, delays, and micro, daily objectives so that no one feels left out of the loop. (Take a look at the SCRUM method)

Make recognition of achievement a priority.

Recognizing achievement can play a critical role in helping your team members feel part of a team. This activity doesn’t need to be formal.  In fact, informal and unexpected recognition at spontaneous opportunities can be powerful. Leveraging micro moments such as mentioning positive client feedback in the hallway or over a cup of coffee, passing on praise for individual work performance improvements, or recognizing a job well done on an important proposal are all opportune moments for achievement recognition.

Make time to play as a team, too.

Whether the play is a softball team, a bowling league or a semi-annual weekend where the team members can really stretch their wings, teams work best when they have something in common besides their work. A trek up a mountainside builds shared memories that help cement the bonds that have formed throughout the year.

These are all effective ways to build camaraderie and teamwork within your organization. Often times, these changes may be part of a larger culture change for your company.

Dealing With Employee Conflict at Work

Conflict is a natural part of working in groups and teams.  But not a fun one at all.  As a leader, it’s your job to provide guidance to a diverse group of people with different skills, motivations, and you guessed it…personalities, toward a common goal.  Except it is not their workflow you end up managing, it’s also their emotions!

Dealing with conflicts between employees is a stumbling block that trips up managers of all levels and experience every day.

Furthermore, it’s only one of the many situations where intellect and technical expertise aren’t going to do you much if any good.

Enter Emotional Intelligence (also known as IQ’s counterpart, EQ), a key skill-set that’s increasingly being recognized as the main ingredient in successful leaders. Similar to how IQ represents the measure of a person’s intelligence, EQ gauges the understanding of one’s own emotions, as well as those of the people around them.

EQ breaks down into five domains: Self-Awareness, Self-Regulation, Motivation, Empathy, and Social Skills. Each of them helps you in different, critical ways to deal with people, relationships and situations in your role as a manager.

Here is my promise:  They can all be learned – I swear!

My goal today is to get you started on the path to building or improving your level of emotional intelligence with a specific focus on its use in conflict resolution. We’ll go over some useful strategies and approaches that should set you up to deal with conflict on your team in a meaningful and long-lasting way.

12 Tips To Dealing With Conflict At Work

  1. Improve your social skills
  2. Don’t avoid conflict, and don’t expect to eliminate it entirely
  3. Set clear expectations, define acceptable behavior
  4. Evaluate if the conflict is “Hot or Cold”, then act accordingly
  5. Learn to spot the 3 styles of conflict
  6. Focus on the problem, not the people
  7. Encourage active listening
  8. Change the scenery
  9. Get the whole team involved
  10. Get commitment for realistic change
  11. Shake things up
  12. Partner with HR

Improve Your Social Skills, Improve Your Conflict Management Skills

The five domains of emotional intelligence cover a lot of ground. To make sure you get the most out of our content, we’ll look at them individually and narrow down the focus of each to target scenarios our community most commonly asks for advice on. Near the very top of that list: conflict resolution in the workplace – specifically between two team members.

5 domains of emotional intelligence and their description: Social Skills, Motivation, Self-Awareness, Empathy, and Self-Regulation

According to Daniel Goleman who (literally) wrote the book (A great read if you want to get the book) on emotional intelligence, when it comes to conflict resolution, managers with strong Social Skills will always have an edge.

Considering two hallmarks of Goleman’s Social Skills domain are the ability to influence people, and the ability to find common ground with almost anyone, it’s little surprise that managers who are strong in these areas also make for strong mediators.

Below we’ll dive into some of the most effective ways a manager can deal with conflict on their team. It should be noted that the sharper your Social Skills and overall EQ, the more easily you’ll be able to put these techniques into practice.

If you’re looking to develop those Social Skills and become a conflict manager by building on what you learn in this post, contact us today for a free 1 on 1 consultation.

How To Minimize Conflict On Your Team

The key word here is “minimize”. In fact, that brings us to our Golden Rule of Conflict Management – one of the most universal pieces of advice you’ll find on the subject, and also the simplest.

GOLDEN RULE: Don’t avoid conflict! And don’t expect to eliminate it entirely from your team, either.

Any reputable source will tell you, like breathing, conflict is just a part of life. Not every member of your team is always going to get along and it’s crucial you accept this. Sometimes problems simply need to surface before we can move past them. For that reason, it’s best to frame conflict as an opportunity– for the employees involved in it, for your team as a whole, and also for yourself.

Proactively addressing conflict head-on, gives your team the chance to prove to themselves – and each other – that they can overcome differences while strengthening themselves as a unit at the same time. As their manager, you gain experience in the wonderfully uncomfortable process of identifying, understanding, and resolving conflict. And that’ll make it just a little bit easier the next time. And the time after that.

With that out of the way, here are a few things you can do to minimize conflict before it starts, while laying the groundwork for easier resolution later.

Set Clear Expectations, Define Acceptable Behavior

Whether you’re trying to hit the “reset” button with your existing team or inheriting a new one and looking to start on right foot, it’s never a bad idea to lay down some pre-existing ground rules to help define acceptable and unacceptable behavior.

While it may seem obvious, explicitly stating that behaviors such as yelling, rudeness, bullying, shunning, etc. are simply unacceptable and will not be tolerated, may help an employee think twice before getting carried away. The more you can influence your team to identify with a culture of respect, the easier it will be for them to productively iron out their own wrinkles.

Forbes suggests that the majority of conflict in the workplace stems from two main issues – poor communication, and poor control of one’s emotions. An employee’s emotions are obviously beyond your control, but how your team communicates isn’t, so start there:

“If you reflect back upon conflicts you have encountered over the years, you quickly recognize many of them resulted from a lack of information, poor information, no information, or misinformation.”

To avoid the same pitfalls, make effective communication easier from the start by laying down a clear framework. Establish a foundation of respect by crystalizing the roles of every team member for the group. Underline the value they each bring to the table in achieving your mutual goal, and make your personal respect for every role clear.

Outlining expectations, swim lanes, chain of command, and laying out clear procedures for how to flag and address conflict early can often help nip problems in the bud before they can escalate.

It’s also on you as manager to keep your eyes peeled for potential conflict areas, so you can step in as soon as there’s smoke. Catching and dealing with these moments quickly, and in a fair and diplomatic way has a big effect on preventing certain conflicts all together, while reducing the severity of the ones that do crop up.

3 Questions To Help Understand And Resolve Any Conflict

Acknowledging that a conflict is taking place on your team is one thing. Understanding who the participants are and the root of the conflict itself is another thing all together.

There are a million different reasons an argument might take place. While you’ll probably never know all the details, it’s still your job to get the lay of the land so you can decide how to deal with each situation.

Start by trying to better understand the conflict by asking yourself these three questions:

Is The Conflict Hot Or Cold?

The Harvard Business Review categorizes conflict you’d likely encounter in the workplace under two banners:

Cold Conflict: Very little outward emotion here. Think cold shoulders, little-to-no dialogue, closed-off body language, muttering under the breath, and lots of passive aggressive behavior. Hot Conflict: Hot conflict is no longer “under the radar”. Think volatile language, shouting, appearing out of control, and possibly even physical aggression or threats.

As HBR states, once you’ve identified the type of conflict your dealing with, it’s the manager’s role to step in, take control of the thermostat, and find the sweet-spot:

“Conflicts that are warm – that is, already open for discussion but not inflamed with intense hostility – are far more likely to be productive. So, if you’re dealing with cold conflict, you need the skills to ‘warm it up’. If you’re dealing with hot conflict, you need the skills to ‘cool it down’.”

Cooling Down a Hot Conflict

Bringing two people together who are embroiled in a heated conflict can be dicey. If the conflict is too hot at the time, don’t be afraid to let things cool down a little before attempting to resolve it.

Once things have cooled, try setting clear and concise ground rules that each participant must agree on ahead of time. These can include everything from setting three-minute time limits on each person’s speaking-turns, or getting them to come to the table each with a suggestion already in mind on a mutually beneficial way to move forward.

You can also put those Social Skills to the test and try to defuse some of the aggression by finding the common ground between participants. Open with a question about how stress at work has personally affected each of them over the past month to humanize their situations, get them relating, and on the same page.

Warming Up a Cold Conflict

While it’s usually easier to bring these two parties together, the focus once you do will be on starting a constructive dialogue between them in which they both participate.

The goal here is to get them talking as you lead the conversation. It’s also worth noting that cold conflicts typically involve a lot of repressed emotions. As the conflict warms and those emotions start surfacing, you’ll want to keep an eye on the temperature to make sure it doesn’t overheat as feelings begin pouring out.

What Are The Conflict Styles Of The Employees Involved?

While conflicts can be seen as hot or cold, so too can an individual’s approach to conflict. The ways in which a conflict – and its resolution – play out have a lot to do with whether the people involved are conflict avoiders, or conflict seekers.

As a manager, it’s your job to observe and know your team so you can more easily generate a game-plan if conflict arises. Understanding whether the stakeholders are avoiders (uncomfortable butting heads with coworkers) or seekers (willing or eager to engage in disagreements) can give you a window into how the conflict might play out, and the different strategies you can employ to help solve it.

The Harvard Business Review offers some great insights in their breakdown of avoider/seeker combinations and how to approach each one.

Conflict combination of two avoiders

Problem:

  • No one addresses the issue
  • Suppressed feelings that explode later

Solution:

  • You’ll need to take the lead
  • Take a sensitive approach to the situation
  • Don’t let them shy away from the problem

Conflict combination of an avoider and a seeker

Problem:

  • No one holds back
  • Discussion can get heated quickly
  • Each could feel disrespected

Solution:

  • Suggest they both prepare for the conversation
  • Be ready to take breaks if things get heated
  • Shift to a neutral setting – getting a coffee / taking a walk

Conflict combination of an avoider and a seeker

Problem:

  • The Seeker may bulldoze the Avoider
  • The Avoider may respond with a passive aggressive approach
  • The Avoider may agree too easily with what the Seeker wants

Solution:

  • Ask the Avoider to be honest, participate, and not hide their opinions
  • Explain to the Seeker in advance that you expect a calm demeanor and tone during the conversation
  • Encourage the Avoider to be direct and to the point
  • Encourage the Seeker to be patient should the pace of the conversation slow.

How Can I Focus On The Problem, Not The People?

Once you have a clearer idea of the temperature of the conflict and the conflict styles of the people involved, it’s time to shift your focus toward understanding the problem.

There’s a good chance that the incident you’ve just walked into the middle of isn’t even representative of the real conflict. In fact, the source of the real conflict might be something that occurred over a month back, but left unresolved was allowed to fester as bickering continued, got more personal, and stress levels rose.

So, before you assume the conflict you’re dealing with is actually about a team member ‘typing and breathing too loudly’, ask questions like, “When do you think the problem between you two first started?” and work to reveal the root of the issue, so you can best resolve it.

6 Surprisingly Effective Conflict Management Strategies

Now that you have a better idea how to consider and approach conflicts, let’s add a few more tactics to your arsenal for resolving them.

Every conflict is unique and what works for one may not work for the other, so flex those social skills, understand where each stakeholder is coming from, and work to influence a positive change over the situation.

  1. Encourage Active Listening

    If you’re mediating a conflict between two employees, you’re going to need them to empathize with each other on some level before resolution becomes reality.

    In advance of sitting them down, encourage each to brush up on the finer points of active listening so they can come prepared. Active listening is all about really opening yourself up to what another person is saying, and not just waiting for your turn to talk – which most of us do.

    Active listening involves giving the other person the chance to express their opinion, having the control to not react impulsively to anything that’s said, and repeating back each other’s main points as a show that statements have honestly been heard, and more importantly understood.

  2. Change The Scenery

    Changing the scenery, like a coffee shop, as a Conflict Management Strategy

    Sometimes a simple change of scenery can go a long way. Since the conflict started in the workplace, a little separation from the setting can often calm the nerves and get conversation flowing.

    If based on the stakeholders, you believe there’s an opportunity for them to resolve things on their own, suggest they grab lunch together at a restaurant away from the office. If you think the situation needs a third party, join them. A more relaxed backdrop will probably help things feel less formal, and ideally more social and friendly. Put the bill on the company dime if possible and help show that the effort they’re putting in is appreciated.

  3. Get The Whole Team Involved

    As Forbes points out, sometimes a conflict between two people has the potential to pull others into its wake and create divisions within your team as a whole.

    If that’s the case, don’t be afraid to counter this by having the resolution come from the team itself. Positively dealing with conflict is often what leads to team-wide improvement, so implicate everyone and get them invested in brainstorming a solution that will help them work better together as a unit, while also avoiding similar conflicts in the future.

    Conflict solutions that come of out a team brainstorm often also have a better chance at sticking, since everyone was aware, present, in agreement, and therefore on the hook for honoring the resolution.

  4. Get Commitment For Realistic Change

    The best resolutions tend to be the ones that come from the stakeholders themselves. Conversations can take place, and opinions can be communicated, but unless the two parties can commit to making certain changes, there’s a good chance the conflict will flare up again.

    Have each participant (or the whole team depending on the situation) come to the table with a few concrete ideas each on how to positively move the issue forward.

    While you may have to help shape these ideas as they emerge, Fast Company suggests trying to make the solutions process-related (we need a better way to make sure everyone is heard) vs. personal(Janet needs to do a better job of speaking up), which helps also make them more easily actionable.

    At the same time, get the stakeholders to agree on a maximum of three of these actions to create change that’s realistic, attainable, and not overwhelming.

  5. Shake Things Up

    Sometimes, it’s good to accept that things won’t always work out the way we want them to. Maybe you’ve tried everything on this list. Maybe you found another list and tried that too. But the change you’re looking for just isn’t materializing.

    In these moments, it’s important to appreciate that you could be doing all the right things, but some people just weren’t meant to work together. If you’ve come at the conflict head-on and run into a wall every time, the moment for expending more resources, energy, and time may be over. Consider exploring possibilities of reassigning a team member elsewhere within your organization if you truly believe it may be a better fit for them, and for the rest of the group.

  6. Partner With HR

    As a manager, working out conflict within your team should generally be your aim. You’re the closest to them and you probably understand them, their grievances, and motivations better than an outside third party.

    But there are times when everyone can benefit from a little backup, and connecting with HR, whether for advice or intervention can be exactly what the situation requires. Start out by using them as a sounding board to get an objective opinion since you might be too close to the conflict to see it from a certain angle. And if the employee conflict is particularly difficult, don’t be afraid to hand over the reins, or agree to tackle it together. You may even learn a different approach for the future!

Have A Conflict Management Style That Works For You? Share Your Story With Us!

What to do when Ex-Employees Damage Your Reputation

As a business owner, you try to hire good people. You screen them, train them, encourage them, and do whatever you can to help them succeed and become an integral part of your business.

So it’s extremely frustrating when one of them posts disparaging comments online after he or she has left your company. It can take years for you to establish a reputation for having excellent products and services, but a single disgruntled employee can ruin that in a matter of seconds.

On one hand, people who read your ex-employee’s online comments may form inaccurate opinions about your business, which could damage your reputation in the marketplace. On the other hand, an ex-employee who damages your reputation can ward off top talent from wanting to join your business in the future.  Top candidates will always do their homework during the recruiting process.

In a recent study conducted by Allegis Group a whopping 69 percent of respondents claimed that they wouldn’t accept a job from a company with a poor reputation, even if they were unemployed!  of those that already had jobs, 31 percent said that they wouldn’t be willing to leave their current company for one with a bad reputation.  That is powerful!

So though only 16 percent of employees say that they’ve posted negative comments about their employers online before, these disgruntled workers can leave a real stain on your reputation. What’s more, it can be difficult to recover from such a blow to your image. As such, you’ll need to be hyper-vigilant when it comes to ex-employees and the things that they say about your business online.

Look out for the different ways ex-employees can hurt your reputation

The rise of the “internet review era” has given disgruntled ex-employees a platform through which they can voice their grievances with your business and, ultimately, damage your reputation. When your former employees are looking to get their opinions across to the masses, there are several tactics that they can use to retaliate against your business. Watch for the keyboard warriors.  Here are a few common ones that you should look out for:

Giving poor LinkedIn references

Encompassing a member base of over 400 million individuals, LinkedIn has become the place for professionals looking to network with others—and the place where your ex-employees can share negative thoughts about your business. This platform makes it easy for prospective employees to find those who have worked for you in the past and ask them about their experiences at your business. These private exchanges allow your ex-employees to share their true thoughts and opinions, however negative they may be.

Leaving bad reviews on Glassdoor

Online company review site Glassdoor has become the bane of existence for many businesses, who often see their Glassdoor pages inundated with negative reviews and ratings from ex-employees. These individuals can use this platform to share what it was like to work for your business and highlight other grievances about you, your managerial staff, and even your business structure. And though Glassdoor requires its reviewers to create accounts before posting, your ex-employees’ comments will appear on your business’ page anonymously (Of course!). This makes it easy for disgruntled former employees to attack your business. Enough of these bad comments can do some real damage on your reputation.

Slamming you on social media

Social media sites like Facebook and Twitter are favorites among the community of ex-employees that are looking to badmouth their former employers. Using hashtags (think #hatemyboss, #bademployer, and #hatemyjob), your ex-staff members can get the word out to any other user that they aren’t happy with their experiences at your company. Bad comments spread more quickly than good ones, so social media can make a swift impact when it comes to your online reputation.

Posting other malicious reviews

Ex-employees can negatively impact your business’ reputation by sharing particularly malicious reviews on the leading online review platforms. You must remain vigilant when it comes to these comments, which can be much more harmful than those posted by consumers or even competitors. Your ex-employees leave your company with knowledge of inner company workings and other information that they can share with countless others online.

You can easily spot these malicious reviews by looking for several characteristics. If you see comments that feature industry vocabulary or other terms used at your business, then you’ll know that an ex-employee wrote that review. Also, angry former employees won’t usually be open to discussion when you respond to their negative reviews.

What should I do if this happens to my business?

When ex-employees start to damage your reputation, you’ll need to nip the situation in the bud before it makes a lasting impact on your business. Thankfully, there are a number of strategies that you can use to rectify the situation and turn your reputation around. Here are some suggestions:

Stay calm

The absolute worst thing you can do is to fly off the handle upon reading a disgruntled employee’s comments about you and your business. Responding with inflammatory or condescending prose, contacting the person directly, or filing a lawsuit will only serve to encourage the offender while simultaneously exacerbating the negative image of your company. It’s okay to be angry about the knock to your reputation—but it’s unwise to let your emotions get the best of you.  Easier said than done, I know.

Prevent it before it happens

You can prevent ex-employees from lashing out against your business and ruining its reputation well before they even become ex-employees. To protect your own interests, you should have a “prevention plan” in place that will ensure that no employee leaves the company feeling slighted.

This plan should start when you are onboarding new employees. Give all new hires documentation that clearly outlines their role and responsibilities in the business—and tells them what actions you’ll take if they don’t meet expectations. This plan should also involve regular employee evaluations, which will provide a benchmark for any improvements that they need to make. If they fail to amend their shortcomings, then it’ll come as no surprise when you let them go.

Even so, you should handle any employee severances with great care to prevent them from retaliating against your business. Never let an employee go without warning—this can incite them to air their grievances online and/or seek legal action. The way you approach this situation can shape the image that your ex-employees have of your business and prevent them from tarnishing your reputation.

Flag negative reviews for removal

Many review sites, like Google+ or Glassdoor, have mechanisms that allow employers to identify reviews which they feel may be inaccurate. Usually, this is a link next to the review labeled “Flag as inappropriate” or “Problem with this review?” Selecting this link is an easy way to demonstrate to the cyberworld that the reviewer is disgruntled. Just don’t make a habit of flagging every negative review about your company—otherwise, you’ll be “flagged” by the review site itself.

When flagging isn’t enough to remove these negative reviews, you can also submit a written request to the website where your ex-employees posted them. In your letter, you should explain why you want the materials removed, mention any site policies the review has violated, and disclose what you have already done to petition for the removal of the content.

If the allegations being issued by the disgruntled employee are patently and objectively false, you do have some legal remedies. You can seek out legal advice about filing a libel lawsuit, notify the review sites involved to report the deceptive information, and possibly even contact the Federal Trade Commission about the review site publishing fraudulent reviews.

Respond to the ex-employee’s comments

Taking the high road is always the best option when responding to disgruntled employees. Start by thanking them for taking the time to write a review, whether you agree with what they said or not. In the remainder of your response, you should use calm, neutral language, express concern for the former employee’s plight, formally state the relevant policy regarding the topic in question, and point out that privacy laws prohibit you from discussing internal company matters. Finally, don’t get into a back-and-forth response war with the reviewer; that can only make you look bad. Keeping a level head and addressing the situation with maturity can go a long way towards repairing your reputation.

Increase your positive reviews

Another tried-and-true strategy for dealing with negative reviews is to drown them out. In other words, find ways to solicit positive reviews about your business from customers, peers, clients, or even other employees. The more glowing reviews you receive, the more that the disgruntled ex-employee’s remarks will appear isolated and irrelevant.

Make your own adjustments

Sometimes, a disgruntled employee is just a jerk. But often, there may be a legitimate root cause of the person’s ire. Though you don’t have to acknowledge that the ex-employee is right, it would behoove you to take a closer look at the issue(s) that he or she brought up in the negative review. That way, you stand a better chance of avoiding future bad reviews by angry former employees. It may be a matter of clarifying a certain policy or improving communication within your workplace.

Monitor your online reputation

Monitoring the internet for negative reviews is the best thing that you can do to protect your reputation from the wrath of former employees. You should regularly check all of the most visited company review sites, including Glassdoor, Indeed, and Jobitorial.

Formal reviews aren’t the only method that ex-employees can use to vilify your business, however. It’s crucial that you also monitor news and blog posts about you—former employees can make disparaging comments on posts such as these. Try using online monitoring tools to keep track of what’s being said about your business online. Google Alerts, TrackUr, and SocialMention are a few that’ll help you stay in the loop.

The bottom line

No business owner likes to have his or her reputation take a hit—especially from a former worker. But keeping a level head and addressing negative comments and reviews promptly can go a long way toward repairing any damage your business’s reputation may incur.

If you need help fixing a reputation that an ex-employee ruined, why not let MCDA help? Schedule a free consultation and get the personalized advice you need to take back your reputation.