2 Common Denominators To All Successful Entrepreneurs
1. They spend a lot more time attracting and selecting the right people
Expanding your business always starts with NOT attracting the wrong people! Successful entrepreneurs like Steve Jobs (Apple), Kevin P. Ryan (DoubleClick), Tony Hsieh (Zappos.com) or Richard Branson (Virgin Group) spend 60 to 80% of their time finding top players and avoiding trouble makers!
This is where they make the difference. If you hire the right people you don’t have to manage them. Most of your wasted energy, your trouble and your frustrations come from a minority of people who should not have been hired in the first place.
“We employ 200,000 people. So I can make the case – and I have for years – that the most important discipline at Starbucks is human resources.” – Howard Schultz, Starbucks
“I used to think business was 50 percent having the right people. Now I think it’s 80 percent. The best way to be productive is to have a great team. So I spend more time than most CEOs on human resources.” – Kevin P. Ryan, Double-Click
“One of the most important aspects of being a superior leader is hiring people smarter than you. Top leaders spend more time putting the right team in place to accomplish their objectives than they spend on planning, strategizing or many other components of their job.”–Bob Prozen, author of “Kiss Theory Goodbye.”
“I hire people brighter than me and then I get out of their way!” – Lee Iaccoca.
“I have participated in the hiring of maybe 5,000-plus people in my life. So I take it very seriously.” – Steve Jobs.
The tip is thus simple: as a business owner you must spend more time and energy to attract and recruit top players, so you can surround yourself with honest, dedicated and able people who share your core business values, while appreciating your performance standards.
Over 80% of your problems as a leader or executive come from having hired the wrong people. Be smarter in the hiring process and you won’t need to work so hard later!
2. They strictly comply to federal and state employment regulations
Too many small business owners tend to ignore the federal and state laws that monitor employment, mainly against discrimination. If you are not fully aware of AND prepared to show evidence of compliance to these regulations, you are liable to face costly penalties – in fact, selecting the wrong people could lead to losing your business.
There is, for example, a legal concept ignored by the vast majority of business owners, called Negligent Hiring, defined as: the failure to properly screen employees, resulting in hiring someone with a history of violence or crime – and who commits a violent or criminal act. It normally refers to an employer’s obligation to not hire an applicant that they know or should have known was likely to engage in criminal conduct against subject employees and even third parties.
What does it mean? Simply stated, if you hire someone who commits a violent act while employed by you, you will end up paying for his/her crime.
Increasingly, business owners are being held accountable for the acts of their employees. Multi-million-dollar jury verdicts are common, sometimes causing businesses irreparable financial damages. Ignorance of these federal laws can greatly affect your business. Cases in point:
- Employers lose negligent hiring cases 75% of the time. The average settlement of such claims is $1.6 million.
- The general civil caseload increased by 125% within 2 years. In contrast the employment discrimination case filings recorded a 2,166% increase.
- Annual monetary benefits for ADA (American Disability Act) cases handled by the EEOC (Equal Employment Opportunity Act) increased within a 6-year period from $0.2 million to $49.1 million.
- Even when an employer prevails on a summary judgment, he has spent an average of $50,000 in attorney’s fees.
Personnel selection does not start within the personnel department but right in the business owner or general manager’s office. And it involves legal issues which might make your life miserable if you are not well informed of the legal requirements associated with hiring new employees.
Be smart, hire hard… and you will be able to manage smooth!
Patrick V. Valtin
Author of the book: “No-Fail Hiring 2.0”
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