Most small business owners tend to handle the bookkeeping and filing of taxes for their enterprise by themselves. And this can cause a huge setback to the business operation. Since you cannot depend on the IRS to be merciful when it comes to tax regulations, especially on business – big or small, you should take it upon yourself to ensure that you observe these tax laws in your area.

You might find some of these tips redundant, but it is important to reiterate them to ensure that you do not breach any laws. In the end, it’s all about what can provide added efficiency to your business.

Tax Do’s

1. Exploit tax deductions on your business expenses. The expenses of your business are not just attributed to rental fees or business equipment. You can also get deductions from your personal income tax in case of business losses. Also, you should take advantage of tax deductions from your transportation costs for business trips.

2. Charity pays. Did you know that you can also avail of tax deductions when you donate to charitable institutions? That’s right. Here is an added incentive to taking your business’ social responsibility to the next level.

3. Always file taxes on time. There are different deadlines set for various kinds of companies and so you need to be on top of these deadline schedules to avoid delay. A tax accountant in Oakville Ontario Canada can help you monitor these schedules and organize your tax records to ensure you can avoid penalties when you fail to meet deadlines.

4. Perform quarterly or annual review of your accounting. This is a critical accounting practice that any sized businesses should address as it helps to ensure updated information on your accounting department. This also provides you with the opportunity to assess if the current system in place is suitable for your tax accounting needs or if you need to make appropriate changes.

Tax Don’ts

1. Not keeping receipts for minor business expenses. Although the IRS won’t require you to present receipts for meals or other minor expenses for your business, you should refrain from throwing them away. This is important for documenting your tax report, as well as for your business inventory so you know where your business income is going.

2. Failure to capitalize on tax deductions. Some businesses purchase equipment or supplies in a huge lump. Even if you can afford to do so, you might want to be extra careful because they are considered depreciating capital expenditures. Buying supplies such as furnishings or computers require you to report and classify the purchase properly. If you fail to do that, you might not be able to claim the deduction you deserve.

3. Refusing to work with tax professionals. Some small business owners opt out of hiring tax professionals in order to save. But doing so can be fatal, especially when you have limited knowledge on tax accounting.

Keeping note of the above small business tax recommendations will help you stay focused and (hopefully) save income down the road. If you apply them, whether doing your own tax accounting or letting a tax professional handle it, you’d be on your way to meeting your financial goals.

The real estate market continues to attract aspiring entrepreneurs. Even after the economic downturn and difficult conditions, real estate continues to be one of the safest investments you can make. Many people rode the boom in the late ’90s to a career in house flipping, essentially buying a property that needs work, fixing it up and quickly turning it around for sale at a tidy profit. It’s an attractive career choice, one that will keep you in charge of your time, your finances and your level of commitment. But even though it can be a fantastically profitable business strategy, it doesn’t work for everyone. It takes a lot of money invested up front, and unforeseen challenges or expenses can leave you in a devastating hole. That shouldn’t deter you from giving it a shot if a career flipping houses is your dream. So here are five tips every aspiring house flipper should keep in mind as they launch their business.

Create a budget, and stick to it no matter what. Any new business, regardless of the industry, will have a tight profit margin at the beginning. So with house flipping, where any small mistake can quickly eat up that margin, creating a budget is incredibly important. Understand the basic operating costs you face, as well as the costs of any particular project inside and out, and know what you need to do to bring the job in at the right price.

Determine what house purchases are best for you. You may be tempted to diversify, but it is a good idea to stick with one type of house at first and expand once you have a track record of success. Focus in on one neighborhood or area and a specific type of house, and perfect that work. Do the research to determine what sorts of houses are selling the fastest, and what elements in particular seem to lead to a quick sale. Understand the average cost of a home in your area of choice, and don’t overspend to pick up a property, even if it’s incredibly enticing.

Keep it cosmetic at first. You may think you are ready for any size project, but to optimize your chances of success you should start your house flipping career with properties that only need cosmetic work. Target old or ugly houses that are otherwise in reasonably good shape. Houses that primarily need work outside, such as new paint or siding, or upgraded landscaping will be the quickest and easiest jobs to tackle. With interiors, look for homes that have cosmetic issues such as old carpeting, holes in the walls, or stains. You’ll easily be able to handle these challenges, regardless of your construction experience, and it will help you put some quick successes into your business.

Maintain your personal credit. House flipping can’t happen if your personal financial history is spotty. You’ll be applying for financing several times a year, and you’ll need to secure the best possible deals in order to keep your business afloat. Regularly check your credit, and resolve any mistakes or issues you find as quickly as you possibly can.

Avoid major structural issues. You may have found an incredible property that you can’t pass up, but reconsider if the job will involve a major remodel. Roof, plumbing, electric or foundation issues can eat through your budget, and may not always get resolved the first time through. These will also require loads of permits and paperwork, and will affect the future home insurance rates, so keep things simple at first and you’ll be much better off. Feel free to expand into these areas as you gain experience, but only once you’ve built up enough capital to survive unforeseen incidences.

When it comes to entrepreneurship, two words that a company owner does not like to hear in the same sentence are “struggling” and “business”. Yet, the statistics reveal that many businesses are continuing to hear those words annually.

According to the Small Business Administration, while 7 in 10 small businesses will survive their first two years, only 51 percent will keep their doors open past five. This is definitely better than some of the previously reported numbers (95 percent would fail within five years), but if you’re headed towards being a part of that 49 percent that doesn’t make it, it’s a pretty safe bet that you’re looking for some surefire ways to not go under—to not be another business failing statistic.

They say that if you seek, you will find. Here are five top strategies to save a struggling business; five ways to get your business into the 51 percent side of start-up business success.

Get back to the basics. Studies reflect that one of the main reasons why business fail is because they started for the wrong reasons to begin with and as we all know, when a foundation is shaky, it’s hard to build anything that’s solid and lasting. If you did it because you had something to prove, that’s really not the best kind of motivation. Businesses should be started, first and foremost, as a way to provide a service that’s needed. If you’ve lost sight of that somewhere along the line, get back to your initial vision to see what should be done.

Communicate with your staff and customers. Business owners tend to put a lot of blood, sweat, tears and ego into what they do. So much so, that they may have gone along for months (years even) believing that every idea they had would be effective—that it was simply a staff’s job to implement them and the customer’s duty to appreciate them. The real truth is that your staff and customers can provide some pretty good insight and relevant suggestions because they are looking from an “outside in” perspective. Bottom line, if your business is currently suffering and you’d like to know why, ask. Hold more staff meetings and send out consumer surveys either via your website, Facebook fan page or Constant Contact newsletter. Chances are, they’ll provide you with some food for thought that you wouldn’t have even considered on your own.

Narrow your focus. Some of the most successful businesses are that way because they have mastered the concept of niche branding. It’s one thing to have a clothing store. It’s another to have a vintage boutique. It’s one thing to own a coffee shop. It’s another to own one that specializes in vegan recipes. Sometimes the issue is not that people are not interested in what you have to offer; it’s that you’re offering too many things and it starts to feel more like a “grocery store” than a “specialty market”. Whatever it is that your company offers, take a moment to think about the things that you do really well, what competitors already exist in those markets and restructure from there. Better to have too many people to serve based upon the niche that you provide than not enough based upon a generalized concept.

Rethink your marketing strategies. You might be surprised how many businesses end up closing down that people never even knew existed to begin with. Sometimes this is due to the lack of a marketing budget, but more times than not, it’s because the advertising plan that was put into place was antiquated, at best. Are you in social media? Do you have videos posted up on YouTube? Is your business listed on LinkedIn? A bright sign, a few flyers and a mention on Craigslist (usually while you’re looking for staff or interns) are all ways to start letting people know about your company, but to keep a business going continuously, effective marketing has to be implemented on daily basis.

Relocate. Do you know one of the main reasons why businesses fail? It’s because they picked a horrible location to begin with. No matter what kind of company that you have, you must think about how convenient it is (or not) in relationship to your customers. Indeed, there’s nothing more annoying than going to a restaurant that has no adequate parking or walking into a store that is in an unsafe part of town, or even worse a store that has two that are basically just like it on the same block. If you need to rethink where you are and relocate to somewhere else, or even if you need to close down for a season and operate either out of your home or online, that’s nothing to be ashamed of or embarrassed about. Everything in life requires transition in order for it to continue to flourish and grow.

If you’re contemplating leaving your job to start up your own business, the question is not a matter of if you should take risks, it’s more about asking yourself if you’re ready to do so. The truth of the matter is that no one can step out into the world of entrepreneurship without there being some considerable challenges ahead of them. The good news is that with a clear plan, a disciplined budget and a lot of patience and determination, you can end up with a lot of success…even if it was a bit risky, initially.

Make a Personal Commitment. And Honor It.

Most of us have read the statistics. There are a majority of companies that don’t survive its first year, let alone its first five and for a new business owner, that fact can be pretty disheartening. But here’s the silver lining: Now that you know that a lot of new businesses lack in longevity, that should one, provide you with the incentive to “beat the odds” and two, encourage you to do some research on why a lot of companies don’t make it. Some of the main reasons include poor business planning, a lack of marketing, not enough start-up capital, a lack of research regarding competitive businesses within the genre and poor locale selections. A lot of times, it’s the ignorance about what it truly takes to run a company that causes its downfall. Once you know what you’re working with, make a commitment to see it through no matter what. There’s a lot to be said for diligence. It’s payoff, more times than not, is pretty big.

Be Willing to Go Without

There’s nothing like the freedom that comes with being your own CEO; however, if you ask any successful business mogul, they will probably tell you that the phrase “blood, sweat and tears” is pretty literal when it comes to running your own enterprise. Therefore, one of the biggest risks you’ll be taking is making big sacrifices especially when it comes to your money and your time. If you’re a single person with an active social life, a lot of the “wining and dining” will need to be placed on hold. If you have a family, your decision is going to affect them whether they are going to be “in the family business” or not. When you find yourself working 12-15 hour days, while not (initially) bringing in the big bucks, when it comes to the livelihood of your loved ones and keeping them content, that within itself is taking a risk. Indeed, as you are pursuing your dream, make sure to make choices that will not make life a nightmare for your family. Yes, everyone’s life is about to change, but try and make that transition as comfortable as possible. If you have to work six days per week for a while, use that day off to get rental cars and make day trips with your spouse and kids. Understandably, you may want that “off day” to rest, but remember they wanted your presence all week long. Indeed, in starting up your business, make sure that the person that goes without the most, is you.

Try New Things

Something that can be challenging for new business owners is to be open to trying things differently than how they initially planned it. Read books, do online research, networking on social media sites like LinkedIn and Facebook and attend seminars that address topics related to business and marketing. You might want to even take a few online classes. Remember, one of the definitions of risk is “exposure to the chance or injury of loss”, but the more that you know and the more open you are to learning more, the greater probability there is for lowering that risk. When it comes to starting a new business, it’s always chancy, but it becomes a dangerous chance when you don’t explore options other than your own.

How to Recruit Highly Qualified Employees as a Small Business

As March Madness wraps up around the country, it is worth noting that the teams that made their way through the tournament were not always the most famous or the best funded, leading pundits to ask: how is it that teams with vastly different resources are able to compete equally on the court. Often the answer lies in how well a team can recruit fresh talent. When it came to recruiting new talent, smaller schools demonstrated their ability to compete with and even prevail against much bigger and better funded schools through a culture of confidence, savvy selection and structural flexibility. Small businesses can benefit from these very same recruiting strategies when seeking the best, most innovative candidates to fill positions.

According to the U.S. Bureau of Labor Statistics, the United State unemployment rate in February this year was 8.3%; down from 9.6% during the same time in 2010. While the employment situation is starting to improve, the leverage remains with employers, as there is still a vast pool of available talent. Essentially, it is a buyer’s market, whether the company is seeking highly experienced industry-insiders with accounting degrees and CPA licenses, fresh faces with undeveloped potential, or non-traditional candidates from related fields. By thinking strategically, smaller companies can access top talent and confidently position themselves as more attractive to potential employees.

Entice the Self-Selectors to Select You
Clearly, large companies benefit from robust human resources departments that can marshal lots of man-hours into recruiting campaigns and then handle the massive interview-pool that results. Yet, large HR departments are usually run in structured, impersonal ways, and this often comes through in the dry, impersonal, bullet-pointed job ads that imply a similar corporate culture.

Smaller businesses don’t often have an HR department, so the person that composes the ad to recruit new talent and conducts the subsequent interview is very often the same person who will be managing the new hire. This can be an enormous advantage. When looking to hire new talent, managers and supervisors of smaller organizations often have the freedom to give their ads some personality by allowing their own experiences, quirks and preferences to come through.
The trick is to get job candidates to self-select based on the unique attributes that set a small business apart from other larger businesses. The resulting pool of candidates is certain to be smaller, and this is a good thing in terms of efficiency and time-management. In this way, candidates who self-select themselves for positions with smaller business have already handled the first round of cuts on their own.

Be Confident in Company Culture
In the past, winning a place at a large, traditional corporation meant job security and a portfolio of long-term benefits. Today, large companies cannot guarantee security, but they sure try to make up for it by offering less substantive benefits like fridges overflowing with sports drinks, snazzy cafeterias, and well-equipped exercise centers. Although small businesses can’t compete with these kinds of perks, they can offer something far more compelling by fostering an environment where individuality is encouraged and individual talents are allowed to shine.

In this respect, small businesses offer an enormous advantage to prospective employees. Working for a small business, a new employee will have more contact with management and more personalized mentorship in all aspects of professional growth. Many small businesses even engage in building employee morale through monthly dinners and team-building events that offer greater intimacy, sincerity, and personal connection than is possible for a large corporation to replicate. Job seekers that long for their creativity and talent to be recognized will be interested in a more authentic connection to their co-workers and the important decisions that guide successful ventures.

Consider the Source
Advertisement is one of the most fundamental components to connecting a potential rock star employee with a small business. While many job seekers still look for employment through major national forums like Monster.com and Career Builder, sites like Craigslist have long since been a common way for jobseekers to connect with local employers. While revenue generating sites are frequently in the news, Craigslist has quietly remained among the top 50 most frequently accessed websites for years with it’s consistently simple, no flash platform.
Social media sites like LinkedIn, Facebook and Twitter provide recruiters with forums in which to post job ads, as well as a place to establish new contacts or pursue existing networks of professionals.

Being Small means Being Flexible
Large corporate HR departments have the tendency to seek out candidates with the most common traits exhibited by eager business students: outgoing, extroverted team players. But what if this caricature of the “ideal” business candidate is actually wrong for many positions.
Clive Thompson recently wrote in Wired Magazine that the constant push to have workers merge their cubicles, brainstorm in groups and forever engage in team decision making is eroding the very innovative and radical thinking businesses would benefit from promoting. In scenarios reminiscent of high school, studies show that the group will often coalesce around the loudest extrovert, no matter how inferior or watered-down his or her ideas may be. In this scenario, Thompson argues, the very talented introvert with the game-changing idea might never be given a voice, despite the fact that it has long been recognized that some of the most innovative and radical thinkers in history often labored alone and unencumbered by Groupthink; Darwin, Einstein, Franklin and Edison, among others. Small businesses have the flexibility to recognize talent in unconventional packages and tailor workspaces and workdays to maximize the creative productivity of all team-members, whatever their personal quirks may be.

While in the past, large corporations seemed to have the advantage in recruiting highly qualified employees, these same companies now find themselves vulnerable through their inability to respond nimbly to market forces and to flexibly meet employee needs. As the speed of commerce continues to accelerate and U.S. companies are forced into greater competition with foreign entities, small businesses emerge as successful models of talent recruitment and retention. As commentators reflect on the scrappy underdogs who manage to overcome a lack of perks to emerge as winners in the recruitment game, it is clear that small businesses are fast becoming the incubators of talent and innovation in the 21st century.

Operating a small business is nothing short of a major balancing act, and your balance sheet is at the heart of it. While large corporations can easily afford the many types of insurance they need to keep their business running smoothly even when peppered by lawsuits, you probably don’t have that kind of cash just lying around. In fact, you may not have two nickels to rub together. And yet, that sad fact doesn’t make you any less liable should a member of the public be injured or have their property damaged while on your premises. So when it comes to investing a portion of your limited funds in this type of insurance, you may have to seriously consider whether or not you can justify the added expenses, especially if you don’t feel your business is at risk.

For example, suppose you run a business out of your home and you never have visitors related to your operation. Do you really need public liability insurance? In this case you may not. This type of policy is meant to protect the public as related to your business (or more specifically your place of business). It could also extend to any business dealings you have with clients, vendors, or partners on their professional properties (in terms of any injuries or property damage you could be responsible for). But again, if you work from home and you never have these types of interactions you can probably surmise that public liability insurance is unnecessary. That’s about the only exception, though. For pretty much everyone else it is advisable to secure this coverage. But why?

Suppose you are hosting a client for a meeting and he trips over a trash can on his way to the conference room. Even if he sustains only minor injuries you will be liable for his medical costs. And if he decides to sue, you could be on the hook for a whole lot more. Or what if a vendor delivering supplies throws out his back? If his employer doesn’t want to pay workman’s comp they could come after you for expenses. You may be able to keep others off your property (and if you don’t have public liability coverage you certainly should instate such a policy), but what about when you go to meet partners, clients, or vendors at their locations? What if you are in a warehouse to pick up products and you raise a lift before the technician has secured his safety strap, sending him tumbling out of the cherry picker? You could be liable for his medical bills.

Okay, most of these scenarios are fairly unlikely to occur. But accidents happen every day and if you’re considered liable you will have to pay one way or another. If you don’t want it to come out of your own pocket (or rather, your company’s bank book), then it’s time to start fielding business liability insurance quotes. It may be expensive, but you can practically guarantee that you’ll pay less than if you had to cover medical costs or settle a lawsuit. You only have to use it once to make it worth your while.

The biggest road block for many new business ventures is securing the startup funds needed to launch an enterprise. But if you’ve got a fantastic idea under your belt, along with some funding of your own and a killer business plan, you shouldn’t have too much trouble finding investors. Right? To be honest, the current economic environment isn’t exactly small business-friendly. For most lenders you simply present too big of a risk. However, there are still ways to get the money you need to get your business off the ground, and here are a few for your consideration.

1. Bank loans. Hello, Captain Obvious! Okay, so this is where everyone starts. But keep in mind that it takes the right lender and the right type of loan if you want your business to be successful. So you need to do some homework before you start knocking on doors. Ask around within your community and cold call some lending institutions to find out which ones have a good track record of approving loans not only for small businesses, but your type of business in particular. And make friends with agents; having an insider going up to bat for you when it comes time for a bank to approve or reject your loan application could make all the difference.
2. Personal loans. If banks are turning you down left and right, you may have no choice but to approach family and friends about helping you out. On the one hand this could lead to lower interest rates and more lenient repayment terms. But it could also backfire if you fail to create a contract that protects both parties or make payments in a timely manner. You could end up ruining personal relationships and it may not be worth the risk.
3. Small business grants. Federal, state, and local governing entities are often keen to support innovations in business, so you should definitely check out the Small Business Association (SBA) website to see which grants you may be eligible for. And don’t forget to look for grants offered by private groups (businesses, cooperatives, or even wealthy individuals) associated with your field.
4. Angel investors. Another good option is to seek out angel investors amongst local business owners. These people are generally looking to pass on some of their own good fortune in business by investing in your operation on both a professional and a personal level. In most cases you will not only get a good chunk of money, but also the wealth of experience they’ve spend years collecting. In short, you’ll gain an investor and a mentor.
5. Sell stuff. If you have stocks and bonds, you should think about liquidating them to make your business dreams come true. Or you could sell off some heirloom furniture that’s gathering dust in your garage. You can even sell other people’s valuables by hitting up estate and yard sales. You may not have access to the high-end merchandise you’d find at New York or Los Angeles garage sales, but you can still get plenty of loot that will nab you a healthy return without too much elbow grease. This could give you the boost of capital you need to move forward.

Could you imagine what it would be like to try and market a business if you weren’t online? To most of us, the very idea of that seems unimaginable and a big part that is due to how much the Internet has changed the way we interact with one another, we advertise our products, we generate revenue—in short, the way that we do business. Therefore, when it comes to the importance that social media has on our companies, it’s a proven fact that it has…a lot. If you are someone that’s not online much and still prefers to do things “the old fashioned way”, here are some reasons to rethink spending more of your business hours online.

Networking. It used to be a time that businesses had to pretty much rely on word of mouth for people to know about them, but since the early 1990s (when the Internet started to become all the rage), people have been able to connect with people, both locally and abroad, in ways that they never have before. Thanks for Facebook fan pages, Twitter accounts and websites like LinkedIn, you are now able to use your business to connect with prospective clients and other business owners. If you want to save a bit of time (Facebook does have a way of distracting people for hours on its site alone), there’s even websites like Hootsuite and Tweetdeck that houses all of your social media sites in one place.

Marketing. In the old days, there were billboards, phone and newspaper ads. These days, people opt for creating their own websites and really, when it comes to getting the word out about your company, it truly is one of the best ways to do it. That said, if you want to invest into something that will pay off for years to come, get a good web designer. If you are a somewhat tech savvy, you can build your own site on WordPress, or if your budget is tight, you can also create a blog (preferably in your company’s name) on Blogspot.com. Aside from that, another way to stand out is to create videos. You can even have people subscribe to a YouTube account that has all of yours in one place. If you are going to be blogging, be sure to use tag words so that you’ll be easier to find in search engines and if you want to do some free giveaways (always a great way to catch a lot of attention), Flowtown.com is a popular social media tool that more and more business owners are using to let people know about the promotions that they have available.

Promoting. One thing that cyberspace does, for better or for worse, is feed our cravings for instant gratification. That said, who doesn’t like feeling as if they are the first ones to know about something that’s going on? Another way that you can use social media for your business is to create special online groups or memberships where people can sign on and to check out “You saw it here” new developments. Pinterest and Flickr are two websites that people use to accomplish that; they are both pretty user-friendly and very popular.

Researching. If this is all new stuff to you and you’re feeling a bit overwhelmed, another great business investment is to contract a digital marketing agency to handle a lot of this for you. Basically, they are companies that are hired to do engine marketing, social media, web design and mobile marketing all in one place. If this information is something that you’re familiar with, they are still a viable option to consider because it’s not just their job to implement business plans for social media, but also to stay on top of the trends. However, if social media is something that you enjoy, it’s always great for business to read up on the newest developments that seem to make their debuts on a daily basis. The more that you do your research on how to be an effective online communicator, the greater your chances are of connecting to more people and driving up more business.

Connecting with your clients/customers. Something that is an art form within itself is good customer service and many would say that it’s becoming a lost art. In the midst of all of the media on the Internet, it pays not to forget that there’s also a lot of social activity that comes along with it. Social media is very important for a business because it gives you the opportunity to communicate with your clients or prospective customers oftentimes quicker and more efficiently than you would be able to by phone. With your website, blog, Facebook fan page and Twitter accounts, make the time to respond to the comments that may be made whether it’s questions about what your services provide, comments about how things can be improved or yes, even complaints that may occur from time-to-time. Social media is a great way to show that you care about your customers’ needs and that’s a surefire way to make them repeat clients. Both in the “real world” and in cyberspace.

You went into business for yourself in order to take full advantage of your skills. If you can do something better than anyone else, why not reap all the benefits by being your own boss? But though you may do one, or even several things very well, that doesn’t necessarily mean you do everything well. Chances are as your business grows you’re going to want to outsource some of the tasks that don’t fall within your expertise. In the past outsourcing was a strategy employed by large corporations, but technology has now made it possible for even the smallest of startups to reap the benefits of outsourcing. You can run a more efficient business, and grow faster than you would if you had to hire employees full time. But determining which parts of your business to outsource can be a tricky endeavor. Let’s look at some methods for determining how to best use outsourcing for your business.

Figuring out when to outsource is the first step in your journey. If you’re running a very small business or a start up, you should consider outsourcing right from the beginning. If you only have a couple of employees, and especially if it’s only you, you’re going to need business support before you can provide full time employment opportunities. Start by outsourcing your bookkeeping work, and find a virtual assistant. That will free you up to focus on tasks that generate money. As you expand, you can look to outsource web design, hire a ghost writer or a graphic designer, and even find a project manager through outsourcing.

Now that you know when to outsource, you should next determine what tasks are worth passing on. You can outsource almost anything, but that doesn’t mean you should. If it’s a core aspect of your business, you absolutely should keep that in house, even if it’s something you don’t particularly enjoy doing. Take a look at your business, and make a determination of your core values, strengths and weaknesses. Focus on the resources that you have, and make sure that you’re not outsourcing any of those. Remember that your business must become known as the best in the industry at something, or chances are you won’t be around very long. Outsourcing any of the tasks you want to be known for would do more harm than good in the long run.

Once you’ve determined your core competencies and set them aside, you can look at what kinds of tasks you can outsource. First, any highly skilled tasks that you cannot handle in house but are a must for your business, such as a CFO-level analysis of the records your bookkeeper is handling. Second, repetitive tasks that will always be necessary for running your business but could be handled by any number of people, such as data entry or shipping. And finally, tasks that take a very specialized knowledge base that no one in your company possesses, such as IT support for your network of computers. If your child needed tutoring, you wouldn’t spend a year earning a masters in teaching online, you would higher a teacher. Outsourcing decisions for your business should follow the same line of logic.

Each year your employees want raises, bonuses, and acknowledgement of their outstanding performance for your business. And each year you look out at the rest of the industry to try and determine how to best compensate your people. A business is only as strong as their employees, and people are what bring value. But how do you actually determine the worth of an employee to your company? Measuring performance can be a complicated challenge, and you want to make sure you get it right. Historically, performance has been measured by the financial bottom line of the calendar year, or by how your company met or fell short of organizational goals. But you may want to look beyond these measures to get a well-rounded picture of an employee’s worth.

If your employee is in a revenue generating position, that is of course a great place to start. But it’s not the only way to measure a person’s performance, especially when they have no control over the ebbs and flows of the economic climate. In this down financial time we find ourselves in, many companies aren’t seeing the same level of profits as in better years. But that doesn’t mean your employee did anything wrong, or did less than they possibly could. You can’t draw blood from a stone, and 2011 saw a lot of stones. So an employee’s true value can only be determined if you look beyond the revenue bottom line.

There are many ways an employee can help you grow your business that don’t obviously or immediately tie in to revenue generation. Did they refer or bring in any new customers, either current or potential? Were they able to identify ways to save the company money, and put those into effect? Did the employee suggest new ways your business could work more efficiently, and put it in practice? All of these things will help your bottom line going forward, but are more difficult to quantify than a simple set of numbers.

What about who they are as people? Do they get along well with coworkers, inspiring teamwork and effectiveness within the organization? Do customers like to work with them, and often come back for repeat business? Do their personality, appearance, and methods reflect well on you and your company? Do they do work in the community that also reflects well on your team? While the answers to these questions aren’t quite so obvious, people who not only get the job done but get in done in a positive matter will help the longevity of your business. They’re doubly important in a small business, where each person must often represent the entire company.

Looking at these other measures, you should be able to identify employees that have created significant value, regardless of the revenues they generated. It’s up to you to assign dollar values to levels of performance; those numbers will be different for each company. Sit down with the senior management team and come up with a list of your core values. Then determine what the top value-adding actions and behaviors are for your company. You won’t need an online school criminal justice degree to sit in judgment at your employee’s next review. Instead, you’ll have quantities attached to each of your core values, and will be able to effectively determine what your employee brings to the table.