Small Business Development Center
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Category Archives: Employees

Work Hard to Build Trust With Your Clients

By Chemeketa SBDC

As a business owner, do you consider yourself a salesperson? If you don’t already, then you should. Anyone who is in business is in sales. And sales often boils down to relationships. You know the old adage that “People buy people” right? Building and maintaining relationships is a key skill for business owners.

Here are some guidelines to help form the trust bonds that underlie relationships.

-Put in the time and energy to deeply understand the real needs of your customers. You do this by actively listening and carefully paying attention. Customers want to know that their concerns are considered valid by the people they do business with. Give a customer your full attention.

-If you are a business that has other businesses for customers, show you care by learning about your customer’s business model, industry, stressors, customer base, and anything else that is relevant. You can do this by reading trade journals, attending industry events, spending time with industry members, and paying attention to relevant media. Make it your business to be up on their business.

-Never pretend to be knowledgeable about something you’re not, or pretend to care about something you don’t. Sincerity is a necessary foundation for trust. Faking it will come around to bite you, every time. It goes without saying that genuine relationships require honesty.

-Always provide excellent service. It goes without saying that customer service should be a cornerstone of your customer relations. But how many businesses consistently provide it? Yours should be one that stands out for that very reason. Resolve to create a business that is passionate and dedicated to your customers. Create an environment they won’t want to leave for any reason.

-Offer a sincere and wholehearted apology if the situation warrants one. We all make mistakes. Take full responsibility for yours.

-Continually pay attention to your good customers. Don’t take them for granted as you work on acquiring new ones. Treat them as special and important to you, because they are.

Marcia Bagnall is Director of the Chemeketa Small Business Development Center and instructor of Small Business Management Program. The Small-Business Adviser column is produced by the center and appears each Sunday. Questions can be submitted to Visit the SBDC at 626 High Street NE in downtown Salem or call (503) 399-5088.

New Year Offers Chance to Improve

By Chemeketa SBDC

The holidays have come and gone, a new year is here, and it’s a blank slate. A lot of people go through a slump in January and it’s hard to keep up the energy. Your business depends on your being motivated though, so you need to be playing to win every day. Here are a few tips on staying at the top of your game.

-Remember that you made the choice to be in business to begin with, and it’s still your choice (every day) to stay there. You are in control. You are the one who decides at the beginning of each day where you will go and what you will do. No matter what circumstances are swirling around you, you are ultimately the one who makes the decision to stay in or get out. Own it.

-Carefully limit the amount of media and economic news you watch and listen to. It seems that you just can’t read or hear a business story these days that doesn’t predict that the sky is falling and the world is coming to an end. Do you need to ingest those stressful messages on a regular basis? And will knowing how bad things are really help you run a more successful business? Do whatever minimum you need to in order to stay informed, and then spend the rest of the time filling your mind with motivational messages and helpful resource information.

-Pay attention to what triggers negative thoughts and emotions. Is it the economy? Unhappy customers? Bookkeeping duties? Maybe a couple dozen other things? When those things happen, what are your responses? And more importantly, what can you do to head off the negative responses at the pass? If you recognize the patterns you can change them.

-Choose to avoid negative people and spend more time with positive and supportive people. For the most part you control who you spend time with, so make choices to be with people who uplift you and make you glad to be alive. You know the ones, those who are pleased about your successes and wish the best for you. Resolve to stop complaining about things and hanging around people who complain. Don’t commiserate with negaholics. Who needs it?

-Practice gratitude and determine to thank at least one person in your life every day. Stop to appreciate how people are contributing to your life, and make sure they know you have noticed. Move on from there to spend a moment at the end of each day listing ten things you’re grateful for. Remind yourself why your life is good. This one tip alone can transform a dragging spirit into one that greets the day, motivated to be and give 100 percent.

Marcia Bagnall is Director of the Chemeketa Small Business Development Center and instructor of Small Business Management Program. The Small-Business Adviser column is produced by the center and appears each Sunday. Questions can be submitted to Visit the SBDC at 626 High Street NE. in downtown Salem or call (503) 399-5088.

Do Homework to See How Labor Costs Measure Up

By Chemeketa SBDC

What are your labor costs? It’s an excellent question for any business owner, and one that should be asked on a regular basis. This number also should be tracked over time to understand trends and inform you when corrective action needs to be taken.

As your company grew, you probably added staffers to perform specific tasks — naturally. When you started, you might have had a one-person office that answered the telephone, kept the books, did the correspondence, billing, etc. As you grew, you may now have a bookkeeper, receptionist and a customer service representative. The same increase is likely on a manufacturer’s production floor or a retailer’s sales floor or a service company’s staffing patterns. And, on the surface that makes sense. Where once you had five employees supporting $50,000 in sales, you might have 50 staffers handling $3 million.

But a true test of your productivity is the percentage of the cost of sales that your labor requires. On a direct basis — the actual cost to produce or provide your service/product — the number should remain about even, and go down as you gain efficiencies with increased size. Restaurants, for example, often have labor costs that run around 30 percent. Service businesses, on the other hand might exceed 40 percent.

After your best cost level has been established, you need to make sure you keep within your goal. If you don’t know the average for your business, check with your industry association. If you have historical records, compare your actual costs with industry averages.

You would then compare your cost of labor to your revenues. For example, if the 5 employees cost you $12,000 supporting $50,000 in sales you have a 24 percent cost of labor to sales (12/50). But then you added full-time staff, managers, production, sales help, etc., for a total of 50 employees for total payroll of $1.2 million to support the $3 million in sales. Your cost of labor to sales has risen to 40 percent (12/30). That increase from 24 percent to 40 percent is the area that should be analyzed. There may be good reasons for it, but the key thing is that you know and understand the facts and the reasons behind them.

The raw numbers can be misleading or masking a management decision that needs to be explored. We need to be comparing percentage of increase (or decrease) of expenses to sales and personnel expense is a critical area for small businesses to consider. If you decide that you must “retrench,” be sure that you are working with all the facts.

Marcia Bagnall is Director of the Chemeketa Small Business Development Center and instructor of Small Business Management Program . The Small-Business Adviser column is produced by the center and appears each Sunday. Questions can be submitted to Visit the SBDC at 626 High St. NE. in downtown Salem or call (503) 399-5088.

One negative employee can bring down others

By Chemeketa SBDC

A wealth of current research tells us that the most critical factor in controlling undesirable turnover and increasing retention of talented people are the skills of managers. People join companies but they leave managers. Satisfied employees are critical to the success of your business. If they’re not happy on the job, customers are not happy being with them.

So what do you do when you have an employee who is just not happy? Every business can have “the glass is half empty” person on the lookout for something to go wrong. You can recognize them: They spend the majority of the day in a negative slump and critical of everything from projects to people. And other people — once happy and motivated — are starting to gossip and criticize. Negativity is like the flu: It’s contagious. It’s also expensive. Negativity costs companies millions in terms of productivity.

So how do you deal with an employee whose negativity is starting to rub off on other people? Our first instinct may be that the person’s behavior is just about their “bad attitude” and try to ignore it. Not a great idea. This can actually fuel the fire by setting a culture of negativity. In fact, if we do nothing about the negativity, we are condoning the behavior and subsequently, endorsing it. You do need to take some action.

Often at the heart of a negative attitude are fear and uncertainty. Change is the biggest single cause of workplace negativity. Even if that new billing system is for the better, people will automatically ask themselves: What am I losing? For employees, change automatically equals the loss of something comfortable, and they will resist it.

Here are some simple steps for quelling the office critic, paraphrased from some great work by Chris Penttila, a freelance journalist.

1. Understand change from the employee’s perspective. Employees can put up with change as long as they can talk openly about it. Remember most negative people don’t know that they’re negative because no one ever tells them.

2. Find the fear, then focus on solutions. Teach negative employees to focus on offering solutions, not just criticism. Turning the griper into a solution provider gives them a genuine avenue to contribute.

3. Do some coaching. Work with the negative person on improving their attitude. Chances are, these people are complaining because they think they have good ideas that haven’t been heard.

Ultimately, employers can work too long and hard with some negative people when it’s better just to cut your losses, recognizing a bad fit. If there’s no improvement after three to six months, maybe it’s time to let them go (legally, documented, etc., of course). After you let a negative person go, talk with employees about the future of their workplace. It can be the perfect opportunity to take the pulse of your company culture.

Marcia Bagnall is Director of the Chemeketa Small Business Development Center and instructor of Small Business Management Program. The Small-Business Adviser column is produced by the center and appears each Sunday. Questions can be submitted to Visit the SBDC at 626 High Street NE. in downtown Salem or call (503) 399-5088.

Worker Classification

By Chemeketa SBDC

Worker Classification

Classifying a worker as an employee or independent contractor can be very confusing. However, misclassification can be costly to both the employer and employee. Learn the difference between the federal and state guidelines on what constitutes an employee versus an independent contractor, and the issues and legal ramifications that arise when employees are not correctly classified. Also learn about the resources available to help you in making the correct decision.

Date/Time: April 26, 10 am to 12 noon
Location: Chemeketa Center for Business & Industry, 626 High Street NE, Downtown Salem
Cost: No charge

How Does Gambling Affect Your Business?

By Chemeketa SBDC

Although often not recognized, problem gambling is a significant workforce issue.  The effects of a gambling problem almost always spill over into the workplace and can potentially disrupt the livelihood of your business.

The Marion County Health Department Prevention Services is offering free on-site training workshops for employees and supervisors for businesses in Marion County.  The training session will answer these questions and more:

Why is problem gambling a significant workforce issue?

What are the signs of problem gambling?

What causes a person to develop a gambling problem?

How will I know if one of my employees has a problem?

What can I do if I find out an employee has a problem?

How can I protect my business from the effects of problem gambling?

Training sessions can be tailored to business needs.  Visit the Marion County Health Department website at or contact Lisa Miller at 503-981-2461 or for more information.

Hiring Your Children

By Chemeketa SBDC

Marcia Bagnall, SBDC Director

It’s a long-standing tradition for business owning families to employ their children, especially in the summer months. There are plenty of excellent reasons to employ your children. It keeps them busy, teaches them important life skills about work and money, and provides you with an inexpensive labor source. Additionally it may confer tax benefits to you (check with your tax professional about your individual situation).

It’s legal to employ your children in Oregon, but you’ll need to pay attention to both state and federal laws that apply to hiring children, even your own. There are numerous federal laws, but many of them don’t apply when you are hiring your own child. State laws, however can be a different matter. In Oregon these are stricter than federal law.

When federal and state laws conflict, the law that is the most restrictive or protective is the one that must be complied with. In other words, you must apply the tougher of the two standards. How do you find out about those laws? Your first move is to go to the Bureau of Labor and Industries (BOLI) website ( and click on the links that pertain to child labor laws. There’s a Frequently Asked Questions section and also a phone number you can call to ask further questions.

Protecting children is the purpose of child labor laws. Generally speaking the laws pertain to two basic areas: the number of hours children can work, and the types of work they are allowed to do. Even though a young person is a member of your family, you don’t have unlimited decision making power as to what they can do in your company, so be sure to understand the laws prior to engaging your children as employees.

The laws also specify that the work you pay your children to do must be actual business tasks and they must be qualified to perform them. This means that you would be hiring someone else to perform these tasks if you didn’t hire your child. In other words, the job must be real.

Use the same tools with your children that you would use for other employees, have them fill out time sheets and pay them with checks attached to a pay stub. Create a written job description to substantiate your need for their services.

Vacation Time for Employees

By Chemeketa SBDC

Marcia Bagnall, SBDC Director

Summer is the season when vacation dreams are top of mind for everyone in your organization. As an employer, you aren’t required by law to provide vacation leave and you may be avoiding the topic in order to avoid the attending hassles. But consider the benefits that time off to your staff may bring to your business.

There have been many studies showing how time off is highly valued by employees, sometimes to the point of being more valued than pay. This means you have a perk at your disposal which you can use to both benefit employees (they come back energized and refreshed) and your business (time off is a benefit you can use as a carrot to recruit and retain employees).

Because vacation time is not required by law, you have flexibility on this issue and can offer what suits your business. Vacation leave can be paid or unpaid.

The best way to dive into this issue is with written policies. This is not an area you want to just wing it, responding to requests as they come in and deciding on a case by case basis. That’s neither fair to your employees nor strategic. Additionally, a clear plan makes it clear you are not making decisions for reasons that could be construed as discriminatory. You’ll need to generate a plan that has rules but allows you to be flexible for special cases.

Here are the bare minimum pieces that need to be in your plan:

  • A clear procedure by which employees request and are granted time off. This could be a form, it could be an email with specific points, but get this in writing and return it in writing. Stay away from verbal requests and approvals.
  • A system for deciding who gets priority when too many people want the same time off. Will you make that decision based on seniority? On a first come first served basis?
  • A policy about minimum and maximum increments of time. Can an employee take less than a full day? More than 3 weeks? Clarify what is disruptive to your business and what isn’t, and be up front about it. Consider too your need for covering the absent employee and what’s possible.
  • A policy on how far in advance the request must be made in order to be considered. Stress the difficulty of last minute requests.

If having employees gone one at a time is too disruptive to your business operations, consider closing your business down for short periods at certain times of the year (between Christmas and New Year’s Day, or the week of July 4th, etc.). Give everyone a break at the same time and you’ll all come back feeling energized. Remember that you too need downtime away from your business.

Working with Gen Y’s

By Chemeketa SBDC

Marcia Bagnall, Chemeketa SBDC Director

Are you starting to employ younger workers in your business? If so, you may be wondering who these young people are and how best to manage them. What you probably know for sure is they aren’t like you, but how can you turn that into an advantage?

The latest generation to join the workforce is the Next Generation, sometimes referred to as the Y-Generation (“Gen Y”) or “Echo Boomers.”  This group, born roughly between 1977 and 1997, is about 70 million strong. They are comfortable with technology and can create new trends overnight. They have short attention spans, but high social consciousness. They are the beneficiaries of “everyone gets a trophy” parenting and school systems. They seek meaning in the workplace and will give up financial and security rewards to get it.

So what’s an employer to do? Here are some smart strategies to turn the Gen-Y’s tendencies into a win-win situation for your business and for them.

  • Create feedback systems and work them regularly. Gen Y’s as a rule were raised with parenting techniques that were heavy on self-esteem. These young people believe in themselves, which can make them high performers. It can also make them high maintenance, as they crave continuous feedback and praise.
  • Allow for an open flow of communication, and respond quickly. Consider assigning the Gen-Y a mentor, which links him or her to a more experienced person and provides an additional avenue for feedback.
  • Lay out a plan of advancement (with a lot of small steps) to help them understand the realities of your workplace. Although they may expect a corner office and big salary right away, this won’t happen and they need to be clear on that (keep in mind the parenting their generation got praised someone just for showing up!) 
  • Discourage the use of a “control” style of management. This generation prefers to speak their minds and have input. A top-down, “my way or the highway” style doesn’t resonate with these young people. They’ll choose the highway every time.
  • Show them how their work makes a difference to your company, point out their contribution and its value. Gen-Yers seek meaning in what they do. This generation volunteers in their communities more than any other in American history. So capitalize on that by letting them know their work matters. You’ll benefit from their increased commitment to your business.
  • Harness their use of technology. Allow a Gen-Yer to show you how to build efficiencies into your workplace using technology (shorter meetings, more immediate communications, upgrades to your online marketing, etc.)
  • Offer flexibility. For Gen-Yers the line between work and home is blurred (thanks to technology) and they’re big believers in work-life balance. They’re also world champion multi-taskers. So allow for flexible work schedules and telecommute options. They’re high achievers; they’ll get the work done. And they’ll work harder if they get to choose how.

Protecting Your Trade Secrets

By Chemeketa SBDC

Marcia Bagnall



It’s common knowledge that patents, trademarks and copyrights are all forms of intellectual property that can be protected by the law. But there is another, less well understood category of intellectual property, and that’s trade secrets. What are they exactly and how can you protect yours?

Trade secrets can be recipes, procedures, customer lists, expansion plans; in short, anything giving you a leg up over the competition that you want to keep strictly to yourself. They are things that differentiate you from your competitors, and if leaked, could cause harm to your business.

Consider implementing these steps to protect your company.