“Either do it or don’t do it. No more wishy-washy, half-hearted attempts. Either say ‘no’ to achievement or dig in and get to the bottom of the persistent incongruence between what you say and what you do.” – Dan Kennedy

It’s a common (and normal) temptation for the biz owner: Make some additional sales and revenue, and let expenses (that were perhaps too high in leaner times) creep back in. Some folks even do this as a way of signaling to themselves that they’re doing better … a sign of prosperity, if you will.

Well, I hate to be the bearer of bad news — but you’ve gotta stay moored to reality. Cutting that overhead NOW, when things are better, is much healthier … and one of the easiest paths to profit.

And what’s often the highest piece of overhead? Payroll.

So, I’ll take some time this week (and next) to suggest some easy, painless ways to keep that major cost under control.

1) Re-work compensation to link to specific goals.
We’re used to seeing salespeople compensated on a performance basis, but the important thing to realize is that ALL of your employees could go on such a compensation system. What are the production goals for your non-revenue employees?

A simple idea would be to SET these production-related goals, and somehow have them reported back to your employees on a daily or weekly basis. By seeing and tracking their own results, they become invested in increasing their performance (if they’re at all competitive and have a drive).

Plus, just the simple fact that they know somebody’s watching will increase efficiency.

Yes, it may cost some money (and time) on the front-end to implement this kind of system (which is best when mostly automated) … but it will be WELL worth it in the long run.

2) Never stop training.
Usually poor employee performance is NOT deliberate sabotage — it’s simply not enough time spent in training.

Often employers assume new employees know how to perform their job functions and, therefore, don’t do enough to continually orient them to their job.

Have you conducted a review of your employee performance … and asked THEM for feedback on how they could do better?

That’s a great training opportunity — and again, a nice way to keep them from seeing their job as a paycheck, but rather as directly contributing to the profitability of your enterprise.

A side-benefit: When you cross-train employees across each other’s responsibilities, it can also signal to them (positively) that they’re not as “essential” as they might think they are. They’ll work a little more productively to continually earn that regular paycheck, when they know that being replaced wouldn’t kill the business.

3) Hire slow, fire fast.
This is a somewhat “tried and true” adage…and it’s that way for the simple reason of its eternal truth.

Please…don’t hold on to people that aren’t contributing to the success of your organization. Firing someone is tough work for any small business owner, but if it’s got to be done, you’ve just got to do it. And do it NOW!

A quick tip: identify some clear benchmarks for a struggling employee to meet. If they continue to NOT meet these guidelines, you’ve got a safe standard to point to, if the firing ever gets dicey.

Now you can avoid poor hiring decisions by simply spending more time in the hiring process. This can be difficult, if you’re feeling the need for more help — but it really does pay off.

Develop an interviewing and screening “system” (i.e.–don’t go with your “gut”) to use when searching for new candidates, and have a few people in your company interview the candidate. Avoid “open-ended” questions, and ask your candidate to specifically identify successes and failures from their past.

4) Start by establishing clear deliverables and deadlines with every employee.
Then, set aside time on your calendar to “inspect what you expect”. As I’ve mentioned before, don’t just “assume” that because you assigned a project to an employee, it will get done satisfactorily! (You know what happens when you “assume”.)

Take time to inspect the results and to give constructive feedback to your employee. It’ll be a great way for both of you to make sure that your business is running on all cylinders.