What I've Learned: Hiring Talent

The first time I hired someone I was 23. The first time had to let someone go I was 24. I used to hire fast and fire slow, now it's the other way around. 

Hiring...

There is a lot that goes into it. Like where to recruit from, how much to pay, outlined job explanations, how much to pay, what training looks like, who's doing training, how much will this employee really cost, what to ask in first second and third interviews. I can keep going but you get the point. When you are hiring, be selective. There is someone out there with the skill set you are looking for that also wants to be at your company. I recently filled an Executive Assistant position at my company. It took 78 resumes, 23 interviews, 11 second interviews and 1 job offer. An important thing to remember here is that although the first applicant I extended an offer to did take the position, I had 2 others lined up just in case. You may be very analytical when making this decision, I am the go with my gut kind of guy. I just get a feeling. The items on the resume are important, but I also am aware of the way I feel about the person beyond their skill set. For example, is my company's mission something that has affected them personally in the past? Or will it in the future? Is it something I know they can get behind? Applicants will look for a benefits, salary and culture in deciding what job to take. I believe it should also be personal. Someone who doesn't believe in your mission is just looking for a job. As business owners we are looking for more than that. Hire slow. 

Letting go...

Have you even seen the movie Moneyball? If you have then you know what I am talking about. If not, then watch this scene. https://www.youtube.com/watch?v=fTjhHrcyiQI  Like Brad Pitt's character, my advice is to rip off the band aid. Letting someone go has never irked me, its a part of life. It happens in our professional and personal lives and at some point we experience both sides of the coin. My first time letting someone go was awful. They didn't blow up at me, they didn't take it like a pro, but they did weep inconsolably for about 20 minutes. I remember having to walk them out of the office and into the parking lot where her husband was waiting to pick her up. There had been a lengthy period of underperformance and absenteeism. While they were struggling I tried to help them as much as I could. Whenever they asked, I was there. We would get in early or stay late, rehearse scenarios, create scripts, you name it. The problem was that no progress was being made. There is never a good time to do this but you must do it before it begins affecting other things You cannot help everyone, every person you hire will not retire with you. You must be able to recognize when you want it for them more then they want it for themselves. At that point, let go. You cannot help them. 

Fire Fast

 

 

How do 529 accounts affect Financial Aid?

Let me share a story with you.

A couple I know is about to have their first child go off to college. They have been saving for years with a 529 account. Recently they have learned that the money they saved has to be listed as an asset and is going to affect the amount in grants their child will be able to receive. Not only that but each university is also allowed to make their own rules on how they allow 529 accounts to be applied. I would encourage everyone using a 529 to contact their respective universities, or current universities, on their process. 

This couple was able to transfer ownership to the grandparents, that way the did not have to list the money saved as an asset. The strategy going forward is to have their child apply for financial aid as any other student and have the 529 money pay for the final year of school. This is not a recommendation that everyone do in this way. But it is something to consider with your financial advisor. 

This commentary on this website reflects the personal opinions, viewpoints and analyses of the J Benjamin Financial employees providing such comments, and should not be regarded as a description of advisory services provided by J Benjamin Financial or performance returns of any J Benjamin Financial Investments client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. J Benjamin Financial manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.

 

 

 

Investment Principals for Entrepreneurs #6

Invest Wisely

We aren't just talking about the stocks and bond you put your money. We are talking about your future entrepreneurial ventures, the investments in your current business and your people. 80% of your resources should go toward the core business and 20% of resources towards new ventures. In other words, put your money into the product or customers that make you the most revenue. If you can provide them a higher quality service or product, they will remain your best asset. Investing wisely also means saving. In a previous post we talked about cash being king for the business owner. Don't forget that. Just because you have the money, does not mean you should spend it. Lastly, don't forget the people you have hired and trust to run your business. Take extra care of them and they will do the same for you.

This commentary on this website reflects the personal opinions, viewpoints and analyses of J Benjamin Financial such comments, and should not be regarded as a description of advisory services provided by J Benjamin Financial or performance returns of any J Benjamin Financial Investments client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. J Benjamin Financial manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.

Investment Principals for Entrepreneurs #5

Protect Your Assets

Work with a business attorney to structure your company so that creditors can't reach your money if the business runs into financial or legal peril. Work with a financial advisor to make sure your investments are setup in a way that protects them in the even your business runs into a hardship. In addition to structuring your business appropriately, this also involves transferring assets to spouses and children where possible and investing within retirement accounts and real estate, which in some cases are out of reach.

This commentary on this website reflects the personal opinions, viewpoints and analyses of the J Benjamin Financial employees providing such comments, and should not be regarded as a description of advisory services provided by J Benjamin Financial or performance returns of any J Benjamin Financial Investments client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. J Benjamin Financial manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.

Investment Principals for Entrepreneurs #4

Build Your Cash Reserves

As a business owner cash is extremely important. You seek to make it and save it. You save it for a number of reason like expansion, hiring, security, and more. We all know that if you are growing and need more staff then you potentially need a larger office space, more supplies, more equipment and more inventory. All of that requires cash. Then there is the bookkeeper and accountant. As the business grows the overhead grows. That is why cash is important. This is a good problem to have. What we want to be aware of though is saving enough to not have to reach into out investments to fund a function of the business. With investing compounding and time and your best friends. When you take away from them in the short term it can harm you in the long run. That is why you should be saving enough cash to make sure the business and personal spending is covered in case of an emergency.

This commentary on this website reflects the personal opinions, viewpoints and analyses of the J Benjamin Financial employees providing such comments, and should not be regarded as a description of advisory services provided by J Benjamin Financial or performance returns of any J Benjamin Financial Investments client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. J Benjamin Financial manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.

Investment Principals for Entrepreneurs #3

Build a No Touch Portfolio

The last thing you want to do is have to dip into your investments to fund something for your business. This will take away from the compounding feature of investing that is so important to growth. Invest and monitor your account but plan on never touching it until you are ready. Want a way to keep yourself honest with this strategy? Fund your retirement accounts and college savings accounts as much as possible knowing that, 1. This money is growing tax deferred until you need it for retirement. 2. You are decreasing your tax liability by funding these accounts. 3. You know that if you want to take it out there will penalties for doing so. You put in a lot of hours to be able to save and there is no way you will knowingly pay a penalty to retrieve those savings.

This commentary on this website reflects the personal opinions, viewpoints and analyses of the J Benjamin Financial employees providing such comments, and should not be regarded as a description of advisory services provided by J Benjamin Financial or performance returns of any J Benjamin Financial Investments client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. J Benjamin Financial manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.

Investment Principals for Entrepreneurs #2

Diversify Away From Your Business

When you work in a particular industry in can be easy to get over invested. You know the current and future economic factors for it, but that doesn't mean you should only invest there. There are other major sectors of the economy to grow your savings. For example: Health Care, Technology, Utilities, Energy, Consumer Staples, Consumer Discretionary, Financials, Real Estate, Manufacturing, etc. It takes all of them to make a solid portfolio. The results will come in ebbs and flows because no one sector wins every year. Like our moms told us, Don't put all your eggs into one basket.

This commentary on this website reflects the personal opinions, viewpoints and analyses of the J Benjamin employees providing such comments, and should not be regarded as a description of advisory services provided by J Benjamin or performance returns of any J Benjamin Investments client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. J Benjamin manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.

Investment Principals for Entrepreneurs #1

Consider Company Equity:

Entrepreneurs have a few additional items to consider when investing. Unlike most people who are employed by someone else, the self employed are building equity in their company. This leads to the possibility that their investment portfolios could be too heavy on stocks. The amount of equity an entrepreneur has in their company should be considered when choosing investments.

For Example: If a person has 100k of equity in their company and another 100k to invest, then the portfolio should be looked as 200k invested and 100k already in equity. Therefore, based on the individuals risk tolerance, the cash will most likely have a larger position in fixed income than expected.

If this money is going to be a portfolio that is 80% and 20% bonds that means 160k would be in stock and 40k into fixed income. However, the person already has 100k of equity in their company so of the 100k in cash only 60k would go into stocks and the other 40k into bonds.

This commentary on this website reflects the personal opinions, viewpoints and analyses of the J Benjamin employees providing such comments, and should not be regarded as a description of advisory services provided by J Benjamin or performance returns of any J Benjamin Investments client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. J Benjamin manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.