Do you know exactly what actions you need to do today to be on track to reaching your big, long-term goals?Do you know which actions should be done first to make today a success?If not, don't worry about it right now. By the end of this article, you will have the tools and techniques you need to answer a confident YES to both these questions.By the way, most entrepreneurs and small business owners cannot answer Yes to both these questions. Many of them hop from task to task and work very hard at their businesses, but the results they desire don't happen.You may be wondering how these these people can work so hard, yet not achieve their long-term goals. One big reason is that hard work alone doesn't make a business successful. There are many other factors that come into play.Two of the most important factors are these:1) Using a daily task list2) Doing "Big Rock" priorities firstYou've probably heard of using a daily task list before, but do you do it? I used to overcomplicate things by writing down my tasks all over the place -- sometimes in my day planner, sometimes on post-it notes, sometimes on spare sheets of note paper, etc. By doing it that way it was easy for my mind to get distracted and not make much progress toward my big goals each day.What I've found works best for me is to keep my daily planning system as simple as possible. What I do now is keep one sheet of paper as my Master Task List and another
sheet of paper as my Daily Task List. And I carry both sheets of paper in my pocket at all times.Your Master Task List is a list of all the tasks that you want to do for your business. This list grows and grows as you think of new ideas and plan out the achievement of your long-term goals. Of course, when you finish a task, you cross it off the list.Your Daily Task List contains just your tasks listed for today. You should write out your daily list once a day, either just before going to bed or right when you wake up in the morning.But here's the critical part of this daily list. You only list the most important 3-5 tasks that you want to do today to move your business forward. Don't list all the little things -- just the big ones. Some people call these tasks the "Big Rock" items.The term "Big Rocks" comes from a demonstration that time management professionals have often done in front of a room. It goes something like this...Imagine you are sitting in the audience and in front of the room you see a large, clear crystal vase sitting on a table. The vase is empty and several rocks are sitting beside it. As you look closer at the rocks, you can see that they basically can be grouped into two
different sizes -- big and little.The presenter in front of the room tells you that the vase represents the amount of time you have each day and the rocks represent all the tasks you want to get done. He goes on to say that what most business owners do is to do the easy, smaller tasks first. And as he
says this, he puts most of the smaller rocks into the bottom of the vase.But when it comes time to get the big tasks done, they don't fit into your day anymore. And as he says this, he begins placing the big rocks into the vase, but none of them can fit.He then says, "Let's try it again, but this time with the big rocks first." He empties the contents of the vase and puts all three of the big rocks in. And they fit this time!Then he puts in the little rocks and they all fit too! The little rocks find resting places between and all around the big rocks. Even though this is a simple exercise, it has a profoundly important message for you and your business. And that is this...Focusing on doing your Big rocks first everyday is one of the keys to big results, more profits and more free time! As you plan out your day today (or tomorrow if you are reading this late in the day), make sure to pick your top one, two, or three big rocks and attack them as soon as you can during the day. If you can't do them right away, at least schedule the time to do them in your planner so you can set aside time today to get them done.In his bestselling books and seminars, Og Mandino has often said that one of your secrets to success is to live each day in a daytight compartment. This means to live your life focused on what you can accomplish in the 24 hours that are in front of you right now. Live today as if it's all you have and focus on the top priority tasks that you need to complete before the 24 hours is up.Og's discussion of daytight compartments also refers to not dwelling on mistakes of the past or worries about the future. Instead, focus your efforts on what you can do today and you'll see the results start pouring in for you as each productive day passes.The great Earl Nightingale once said that "Successful people form the habit of doing what failures don't like to do. They like the results they get by doing what they don't necessarily enjoy."Earl is saying that you'll often be faced with having to do unenjoyable tasks from time to time. And a lot of the time these unenjoyable tasks are your big rocks for the day. So instead of procrastinating, go out there and get it done!Tom Hopkins said it a little differently:
"Every evening, write down the six most important things that you must do the next day (for your business). Then while you sleep your subconscious will work on the best ways for you to accomplish them. Your next day will go much more smoothly."Take a tip from the experts like Og, Earl, and Tom and go out there and make it happen today. Take the time to write out your Daily Task List for the day and carry it with you everywhere. And when you complete one of your Big Rocks, cross it off the list with a smile!Matt Zembruski (aka "Mr. Momentum") is the author of this article and publisher of the Massive Momentum Now newsletter. Subscribe today to get your free audio special report called "The #1 Reason Why Businesses Fail and How You Can Avoid It!". You will also discover a proven step-by-step system that gets you results...guaranteed. Free subscription if you visit our site today. ($197 value) http://www.mrmomentum.com

The Internet is a fast growing medium, trancending the personal ,geographical, political and cultural barriers. Because of its popularity and diversity, for an ambitious and hard working person, it is the right medium to make unlimited wealth th the only thing is that you should know how to do it, the knack of doing it comes only with practice ,but a non-starter doesnt get any practice.In this short exposure i will be scraching some of the ways you can make cool money on the internet ,legally!!. the way you choose depends upon your skill , aptitude and taste.1. create your own website :Website creation is an easy task, provided you know it, there are many providers which provide you with space where you put your site.,and once you have a good site and the contents are intersting to others , people will start visiting your site. The internet also contains good advice as to increase traffic in your site. then you can place ads and links from other sites( affiliate links) and get money. Also if you build a site of interst to your local community, paid ads can be sought from the locality.2. write an ebook and sell it .If you have the slightest writing skills, the you can pack your ideas and experiences or even imaginations into an ebook, which can be downloaded by others and sell it. There are many sites offering the service of selling an ebook for you. By writing an ebook (any thing written in textfile format can be converted into an ebook),and 50 or 60 pages of your expressions can earn you an audience of thousands and good money.3. Paid Surveys.Abundant locations are availble in the internet which allows you to make money participating in survrys. these sites give you a questionnire and once you answer a fixed number of questionnires, you get paid!!
this is trading your time for money, and generally require not much skill.4. Share TradingInternet is a good medium, where you can practice online trading. many agencies allow you to open an account, buy and sell shares. only thing is that you should know the techniques of trading ,otherwise you will loose money like anything.5. For the lazy people:recieve emails and earn cashMany sites allow you to earn money by just simply. reading your email. inly thing is that if you are willing to spend four or five hours a day reading emails, you can earn a lot of money. the amount you earned will depend upon the number of mails you actually opened and readI just introduced some of the cool ways in which you can earn money on the internet!! I will like to hear your cooments and aquestions!! More in my next article.Kannan Balakrishnan is a faculty at department of computer applications Cochin University of Science and Technology ,Kerala, India.He can be contacted at

Have you put a lot of effort, time, and money into your site and are frustrated with low sales?
If you are like many professionals out there, you know your subject; you are excellent at your craft. You have a great service and maybe a great product to sell.
You may have hired a web master who didn't have a marketing background. You may have written home page copy about your mission and who you are. But when sales fall, you need to look at what's missing in your Web copywriting. You have only 10 seconds to impress your "to be" buyer.
Here's the top 10 ways to attract buyers, not just visitors to your web site:
1. Preplan and know your Web site's purpose.

"Vision is the spectacular that inspires us to carry out the mundane." -- Chris WidenerCan achievement be broken down into steps? Well, it isn't always that clean and easy, but I do know that those who achieve great things usually go through much of the same process, with many of the items listed below as part of that process. So if you have been struggling with achievement, look through the following and internalize the thoughts presented. Then begin to apply them. You will be on the road to achieving your dream!1. Dream it - Everything begins in the heart and mind. Every great achievement began in the mind of one person. They dared to dream, to believe that it was possible. Take some time to allow yourself to ask "What if?" Think big. Don't let negative thinking discourage you. You want to be a "dreamer." Dream of the possibilities for yourself, your family, and for others. If you had a dream that you let grow cold, re-ignite the dream! Fan the flames. Life is to short to let it go. (Also, check out my article "Dare to Dream Again," Which has been read by close to a million people in the last 4 months alone. You can see it at the website.)2. Believe it - Yes, your dream needs to be big. It needs to be something that is seemingly beyond your capabilities. But it also must be believable. You must be able to say that if certain things take place, if others help, if you work hard enough, though it is a big dream, it can still be done. Good example: A person with no college education can dream that he will build a 50 million-dollar a year company. That is big, but believable. Bad example: That a 90 year-old woman with arthritis will someday run a marathon in under 3 hours. It is big alright, but also impossible. She should instead focus on building a 50 million-dollar a year business! And she better get a move on!3. See it - The great achievers have a habit. They "see" things. They picture themselves walking around their CEO office in their new 25 million-dollar corporate headquarters, even while they are sitting on a folding chair in their garage "headquarters." Great free-throw shooters in the NBA picture the ball going through the basket. PGA golfers picture the ball going straight down the fairway. World-class speakers picture themselves speaking with energy and emotion. All of this grooms the mind to control the body to carry out the dream.4. Tell it - One reason many dreams never go anywhere is because the dreamer keeps it all to himself. It is a quiet dream that only lives inside of his mind. The one who wants to achieve their dream must tell that dream to many people. One reason: As we continually say it, we begin to believe it more and more. If we are talking about it then it must be possible. Another reason: It holds us accountable. When we have told others, it spurs us on to actually do it so we don't look foolish.5. Plan it - Every dream must take the form of a plan. The old saying that you "get what you plan for" is so true. Your dream won't just happen. You need to sit down, on a regular basis, and plan out your strategy for achieving the dream. Think through all of the details. Break the whole plan down into small, workable parts. Then set a time frame for accomplishing each task on your "dream plan."6. Work it - Boy, wouldn't life be grand if we could quit before this one! Unfortunately the successful are usually the hardest workers. While the rest of the world is sitting on their couch watching re-runs of Gilligan's Island, achievers are working on their goal - achieving their dream. I have an equation that I work with: Your short-term tasks, multiplied by time, equal your long-term accomplishments. If you work on it each day, eventually you will achieve your dream. War and Peace was written, in longhand, page by page.7. Enjoy it - When you have reached your goal and you are living your dream, be sure to enjoy it. In fact, enjoy the trip too. Give yourself some rewards along the way. Give yourself a huge reward when you get there. Help others enjoy it. Be gracious and generous. Use your dream to better others. Then go back to number 1. And dream a little bigger this time!About The Author:Chris Widener is a popular speaker and writer as well as the President of
Made for Success, a company helping individuals and organizations turn
their potential into performance, succeed in every area of their lives and
achieve their dreams.To see Chris "live" at the upcoming Jim Rohn Weekend Event as he speaks on
the subject of Secrets of Influence go to
http://Chris-Widener.InspiresYOU.com/ or call 800-929-0434.

If you are thinking of starting a new business, or if you are just about to take the plunge, you will know that there is a lot that you have to do. But where do you start? It is a good idea to get some of the groundwork done before you start, possibly this will often mean things that you hadn't thought about, things that most people do as a reaction to circumstances rather than as a planned activity. However, in practice you will almost certainly find that it is easier to set things up right at the beginning, so that systems grow with the business, rather than find yourself "firefighting" later on.Here are a few things to think about and do, before you dive straight into running your new business. Get the foundations right and you will be well on the way to a successful business.This is by no means an exhaustive list, but should be enough to start you off.1. Think about your goals. What are you setting out to achieve? Write them down.
Did you know that only 3% of people have written goals? ..and did you also know that these people earn up to TEN times more than people without written goals!2. Why are you setting up in business? What do you ultimately want from your business? Write down your exit strategy.
Do you want to sell eventually or pass on to your family? Are you aiming for big profits, to create a 'name' or just fulfil a need that you have identified?3. Find a good accountant, someone who is proactive and forward thinking. (See "10 Things To Ask Your Accountant")4. Find a mentor. Either your accountant or other business advisor, someone in the same field who has done it already or perhaps someone from the local enterprise agency.5. Research your market. Make sure there is demand, do people want what you have to sell?
Also check pricing and packaging options, what would people pay, how do they want it delivered and with what choices?6. Write your Business Plan. It may sound obvious, but lots of people don't do it. There are lots of places where you can find free help and advice, just do a search on the internet, or ask your business advisor.7. Decide where you are going to work. You have many choices ? at home, in an office, in a warehouse, near to customers, out of town?.. What is right for you and your business?8. Make sure you know how you are going to finance your new business. Have you plans to survive the first 3-6 months whatever happens?9. Open a bank account. Keep all your business transactions separate from your personal ones. You will find it much easier to manage ? your accountant will like it too!10. Read The E-Myth Revisited By Michael E Gerber. It has to be THE book for new business owners.As I said, this is not a comprehensive list, there are probably hundreds of other things that people might add. But this should give you a good base to start from.Julia McDaid is a business coach and author, specialising in helping business start ups. For more information on these issues or on coaching for new business owners, see http://www.startupright.co.uk or enrol on Julia's unique Start Up 101 ecourse, where you can go into each question in a lot more depth.
Julia also publishes a free ezine 'Secrets of the Successful Entrepreneur' ? to sign up just send an email to ezine@startupright.co.uk

The following tips are from an article we contributed to Compute magazine. These are ideas that we all should know, but many times forget. It constantly amazes us how quickly a basic tenent of business can be shoved by the wayside in the heat of daily transactions.If we all try to keep these simple principles in mind, they may keep us on the straight and narrow in our pursuit of home office bliss.1. Buy an answering machine. This will allow you to give your attention to a client and not the telephone. Be sure your message is done in a professional manner and includes business name, telephone number and hours of operation.2. Be sure to have a separate telephone line for business. This will avoid your family using the same line and busy signals to prospects and clients. Keep your personal calls separate and insure your business line is always answered in a professional manner.3. Read, read and read some more. You will constantly be learning about your business. Reading will allow for additional knowledge, change and growth.4. Buy a fax machine. This will allow you to give your clients prompt responses and in many cases save on postage and telephone costs. It will also avoid having to leave your office to go and fax something at $1.25 or more per page.5. Have an identity package professionally done. Your logo, letterhead, business card, envelope and brochure will be the first impression a prospect or client has of you. To insure the impression is a good one, have your business package done by a professional designer. The cost is worth it.6. If possible set up your office in a separate room of your home. This will allow you to close the door at the end of the business day and allow better separation of your personal and business life.7. To project a professional appearance be sure your home is always neat and clean-nothing lying about. In addition be sure your yard is well kept. Remember, first impressions count.8. Be sure your business name is descriptive of what you do. Business names that don't relate to your services can hurt a business. Avoid using just initials, that's fine when you get to be the size of AT&T, but remember, in the beginning no one knows you.9. Make up a business plan. This will help you research, define and outline your market. It also avoids starting a business in a field that may be overcrowded.10. If possible, be sure to have at least six months worth of living expenses in reserve. This will allow you to concentrate on getting your business up and running without worrying about paying the bills.11. If possible, buy a copy machine. This avoids having to go out every time you need to make a copy. Also, it allows you to give a client a copy on the spot. This can go a long way towards enhancing your image as a real business.Copyright DeFiore Enterprises 2002Interested in having your own successful, home based creative real estate investing business? Chuck and Sue have been helping folks start successful home based businesses for over 19 years, and we can help you too! To see how, visit http://www.homebusinesssolutions.com for the latest FREE tips and tricks, educational products and coaching in creative real estate investing and home based businesses. No time to visit the site? Subscribe to our "how to" Home Business Solutions Digest, it's like having your own personal coach: subscribeHBS@homebusinesssolutions.com

Here are a few ideas to get you started, all with low or no cost, which should especially help you in the early days of your business.This is by no means an exhaustive list, but is just a few ideas to start you off.1. Get a domain name in the name of your business or of what you do. Marketing is all about building others' perception of you and using hotmail, aol, blueyonder etc just screams "I'm a one man band working at home" ? even if you're not!2. Have some business cards printed. Keep them clear and concise ? and don't forget the back.3. Think about a logo and branding. This may just be a colour scheme to start with, but keep it consistent in everything. From business cards, to headed paper to your website.4. Ask people you know to introduce you to others who might benefit form your service or products.5. Collect testimonials and case studies from happy customers. Use them to provide evidence of how good you are.6. Run seminars and workshops for your target audience.7. Find out more about Public Relations. PR is free, and you get more exposure than if you advertise.8. Use good quality paper for your business stationery ? back to perceptions again.9. Write an executive summary about your business. Use it as the basis for leaflets, an email attachment, an appendix to letters or anywhere else where you need to define what you do as part of your marketing activity.10. Get out and network. Go to networking events and free seminars to meet others who might be able to help your business. You can also network on line through various discussion groups and networking sites. Don't forget to see how you can help others, don't just be a taker.Julia McDaid is a business coach and author, specialising in helping business start ups. . For more information on these issues or on coaching for new business owners, see http://www.startupright.co.uk or enrol on Julia's unique Start Up 101 ecourse, where you can go into each subject in a lot more depth.Julia also publishes a free ezine 'Secrets of the Successful Entrepreneur' ? to sign up just send an email to ezine@startupright.co.uk

How many of us have been in a position where we have more to do than can realistically fit into one day, or week. So we spend all of our time feeling rushed, being rushed, and wondering how on earth we are going to manage. If you are having that feeling of overwhelm in your business, it's time to take stock of what's going on.How well you manage yourself and the time you have, is crucial to your success. Wasted time equals lost opportunities. Lost opportunities equal lost business and profits.Time can't be "saved" ? it's an impossibility. You can't find more of it ? it's a fixed commodity. You can only manage your activities as time passes. So how are you spending the 60 seconds in each minute - the 60 minutes in each hour - the 1,440 minutes in each day?What you need is to achieve is working on your top priorities in the most effective way. Here are 10 great strategies for doing just that.Lesson 1: PrioritizeAside from just listing what needs to be done, rank them from most important to least important. And then complete them in that order. Too often we start with the easy stuff or the quick stuff, regardless of how important it is. Look at the list of things that need to be done. Hi-light the activities that you could put on hold if you had to. How much time could you free up if you put some of those activities on hold?Be realistic about the number of priorities you have. Most of the activities we are involved in are things we want to do. The problem with overwhelm is that there are many more things we want to do, than we physically have time for. So create some space by telling yourself that you are just putting some activities on hold for now. You are not giving them up forever, but you are giving yourself permission to put some activities on hold ? so you can focus on the most important priorities. This may force you to make some tough choices ? but it's a pretty empowering thing to do.|Lesson 2: Be ruthless with e-mailWhat a productivity killer email can be if misused. Use a private email address for clients and customers. Get everything else sent to a generic or alternate email address. That way you can deal with your client issues first, and the rest when you have time.Only respond to your emails at set times during the day. I personally do emails first thing in the morning, and between 2 and 3pm each day. There's no need to respond the instant that you receive an email. This approach simply means you get interrupted all the time, and your productivity remains low.Lesson 3: Restrict your use of the telephoneTry to devote a certain time of the day to both return and originate phone calls. Carrying a mobile telephone makes us feel as though we've got to be "connected" at all times ? but this is just plain crazy. And just because someone calls us doesn't mean we have to answer immediately. Some people I now work extremely effectively by restricting calls to two periods during the day - one period in the morning to make all their calls, and another in the afternoon to return calls and to followup. At all other times, voicemail takes any messages. This may not work for your business, but the idea of not answering the telephone unless it is at a good time for you can really help you with the continuity of your workLesson 4: If you don't have time for something, just say soThere is no need to listen politely if you've already decided the conversation is not of interest. Simply say ? "I am sorry to interrupt you, but I don't have time for this right now." Yes it's direct, but then you are not sitting there feeling frustrated about the time you are wasting.Lesson 5: Limit your availabilityThis is one of the keys to beating overwork. Unexpected and unplanned interruptions and distractions can "steal" your day. An "open door" policy is fine, but not if it has a negative impact on productivity and profitability. Actually schedule time when you can't be interrupted, and let everyone know about it. During that time you don't answer emails, you don't answer the phone and you don't talk to others ? you just do whatever it is you've got to do ? no interruptions.Lesson 6: Protect your productive timeEach of us knows if we are a morning person or a night owl. We know if our peak productivity times are at 7 am or at 11pm. So make sure you are free and uninterrupted at those times. Try and make this time just for you and devote the activities that need your brain the most at the times you are most productive.Lesson 7: Plan your day the night beforeI know - you've heard it before. But spending 5 minutes at the end of the day preparing for the next day helps to orient you in advance and mentally sets you up. So when you get up in the morning, you're ready to go!Do whatever works for you - make lists of activities, check your calendar, enter tasks into your electronic task list, schedule a couple of uninterrupted hours in your diary, tidy away your papers and get tomorrow's ones ready to go. Do whatever you need to to feel comfortable about the next day's work.Lesson 8: Don't get buried by paperWhen possible, try to "touch" each piece of paper only once. File it, act on it or toss it! (Periodically, every quarter, purge your files. If you haven't touched it in 3 months, you probably never will...so toss it!). As the saying goes: "Do it, ditch it, or delegate it!"Lesson 9: Group your appointmentsIf you have several appointments or errands, try to group them all in the same day so that all of your external travel and time is scheduled for one or two days in the week. That leaves you 3 full days in the office without the need to go out for meetings.Lesson 10: Confirm appointmentsNever assume that your 1 o'clock is on! The realization that you've been "stood up" is both frustrating and irritating. A simple phone call or e-mail message, saves time, energy and anxiety.Management expert Peter Drucker, once declared, "Time is the scarcest resource." Time really isn't scarce, it's uniform and constant. However, your ability to manage it is crucial to your success. If you can't get this part right, you may not need to not worry about cash management!Megan Tough - published writer, coach, facilitator and speaker - works with people to create outstandingly satisfying and truly successful professional lives. Make more money - have more fun! To learn more and to sign up for more FREE tips and articles like these, visit http://www.megantough.com

Many mistakes can be made in business and if you are able to avoid some of them by reading and taking note of these warnings, then the time taken to put these together will be worth while. Here are some business mistakes that are common to many entrepreneurs..
No plan
Many people go into business without any plan at all. The old saying that "if you don't have a plan you won't know when you've got there" still holds true today. You need to set up a business plan and that plan will contain other subsidiary plans such as a marketing plan, a finance plan, a sales plan, etc. Be flexible
If you have a business idea and you are looking at developing that into your business, then be prepared to change and be flexible. Sometimes the original idea needs some fine-tuning before it becomes commercially viable and profitable for you. By all means stay with your dreams, vision and ideas, but be flexible and allow yourself the luxury of discussing those ideas with professional advisers, as well as those who have already done it before. Make sure you know your customers
Every business must have customers. If you don't have customers you won't have sales. If you don't have sales, you won't have profits. If you don't have profits you won't have a business. Make sure you are aware of your customers as well as your competitors. You need to know your customer's preferences, as to the services you can provide. Unless you know your customers well, it is difficult for you to know what to supply.You need to know what their requirements are. You need to find a bit more about their buying patterns and you need to be aware of your competitors so they don't take your customers away from you. Also provide good customer service. The short answer to customers is, work hard to get them and when you've got them, keep them by providing quality products, service and good support so they won't consider going anywhere else. Watch your cash
Ensure your cash position at all times allows you to make decisions and pay for the requirements of the business. The saying that "cash is king" still holds true today because if you run out of cash your business will come to a "screaming halt". You always need to maintain sufficient cash in reserve to meet emergencies and to pay staff and to pay for goods and services.This means that the fact you have a lot of stock in the warehouse or a lot of equipment or other assets, does not guarantee you will not fail. If you don't have cash you will definitely fail because most people don't' look kindly on being paid for their goods and services with your stock or plant or equipment. People want cash. Work with good staff
Make sure you employ good people. Motivate and train them so they are happy in their work. The result will be increased productivity and work satisfaction. Be patient and persistent, and insist on a high standard of work from your staff. Motivate, encourage and coach if necessary, as well as pat them on the back when that's needed. Some psychologists go so far as to recommend that the staff need a cuddle now and then, but that is probably going a bit overboard!Make sure you have good morale in your workplace, because that will result in high productivity and high profits for the business. If the business is doing well, ensure that the staff know about it and praise them for it. The best confirmation of your satisfaction with your staff will be when you share some of that increased profit with them by way of bonuses and other benefits. Always seek advice
Listen to good advice. The person who thinks they know everything is headed for disaster. Being a lone ranger does not entitle you to a medal and you will find most people are prepared to talk and help you if you ask. Also be aware of the fact that you cannot do everything yourself, based on the knowledge you have. Others also have expertise and something that takes them five minutes to explain could take you a couple of days to figure out on your own. Be realistic
If you are in business, you need to live in the real world. You need to watch your business performance. Control your expenses. Look at ways of increasing your income. Continually monitor how the business is going and how the staff are performing. Have a reserve of cash in the bank for a rainy day and plan ahead all the time, rather than waiting for disaster to happen.
Copyright 2005 StartRunGrow
http://www.startrungrow.comStartRunGrow (http://www.startrungrow.com) is a global online information organization that specializes in creating, developing and marketing business help information specifically with the aim of "making business easier" for entrepreneurs around the world. The StartRunGrow objective is to become a dominant player in the business help arena providing end to end solutions for the millions of small and medium businesses worldwide who continue to struggle daily with the difficulties of starting, running and growing a successful business.

Almost daily, newspapers, business magazines, radio and television carry reports of corporations, large and small, that are downsizing. Their attention is chiefly focused on the impact to the employees, as they are the ones most acutely experiencing the immediate effects. But what are the effects on the companies? Downsizing, rightsizing or any of the number of synonyms for radically cutting expenses and employees, may provide a decrease in operating expenses in the near term, but how will they impact the longer term future?In my experience over several decades of business cycles, I have witnessed a succession of economic contractions and expansions and although at times the outlook has appeared bleak, in fact, far bleaker then our present circumstances, every decline has been followed by a subsequent period of growth. It was not that long ago that we awoke to "Black Friday" when the stock market appeared to teeter on the brink of a cataclysmic collapse. What followed however, was the beginning of what proved to be one of the longest lived economic booms in memory. The lesson here is that there will be a new economic tomorrow and we appear presently to be in the beginning stages of a new economic growth period.Therefore, it is with eyes wide open that business leaders need to carefully consider the long range effects their present cost cutting actions will have on their organizations. This is especially true as the nature of those cuts, especially where they concern personnel, are fundamentally different today from what they were in the past. Circa 1950's, 60's, 70's 80's and even much of the 90's, downturns in employment for the most part meant layoffs. Certainly, there were specific industries where structural decline resulted in large scale permanent job losses. However, in general, most cutbacks precipitated layoffs vs. permanent terminations. Not so today. The new order is that of permanent severance. For many the proverbial "pink slip" has turned to bright red.Moreover, the level of employee being severed has also changed dramatically. In previous decades, the cuts were heavily weighted toward production personnel and were therefore, first line, blue collar worker oriented. Today, with our heavy reliance upon technology to drive the economic engine, the cutbacks in both the manufacturing and service sectors are skewed toward white collar workers. Additionally, more senior workers in their 40's, 50's and 60's have borne the brunt of the reductions more heavily than ever before, as their higher cost compensation and benefit packages are targeted for maximum near term bottom-line savings.Conjointly these changes have set in motion what could become a veritable time-bomb for companies that decide to pursue cost reductions through massive staff cuts. The negative consequences will likely include:1. Lack of a recallable employee pool. Historically, layoffs inherently communicated at a minimum the possibility, if not the probability, of being recalled by the employer when economic conditions improved. Many furloughed employees expected to eventually return to their employers and, reacted to the layoff accordingly by taking interim and part-time jobs. Today many severed employees are not only informed that their release is final, they are provided outplacement services funded by their former employers. Thus, the employers themselves are ensuring that these people will, indeed, not remain available to them. Many of the more senior employees, finding new employment at their current compensation levels difficult if not impossible and having personal savings at their disposal, are choosing to become entrepreneurs, thereby, forever removing them from the available labor pool. We entered 2001 experiencing labor shortages across most industries, which were particularly acute for high skill and technology workers. At the moment this scarcity may have temporarily abated, but its root causes remain and the scenario is certain to revisit us as soon as the economy enters the next upturn.2. Poor morale & lack of trust among younger employees as terminations increasingly target older employees. Much has been exposited recently in the press about the disturbing loss of employee loyalty. Terminating large numbers of older, more senior and experienced employees who have faithfully served the corporation for many years, has a profound long term effect on younger, newer employees. Place yourself in their shoes for a moment. They have already been indoctrinated by friends, relatives, neighbors and the media that business, especially big business, is not to be trusted. Now they see their co-workers, supervisors, and mentors being fired because "cost cuts need to be made and these individuals represent higher per capita costs to the organization." The message is clear and they understand. The reward for loyalty is to be axed when you are over fifty and unlikely to find another comparable position. They may not bolt today, due to a tightening job market, but they will remember and when the economy improves they will seek a future where they feel more secure.3. Loss of knowledge and experience base. This is a frequently overlooked aspect of the cost of losing long term employees. Many companies and even industries are currently developing knowledge bases in order to capture and access organizational knowledge resources. Yet, no matter how effective these databases are, and they can be extremely beneficial, they will never be a substitute for the knowledge, experience and wisdom that rests in the veterans of the organization. Although this is true in terms of deductive knowledge, it is even more important regarding the organization's continuity and history. People need to feel a sense of belonging to more than just the present, the "now" of an organization. They also need a sense of past and future. Without this, there are no ties, no traditions, no continuity and often no shared ethics and values.4. Loss of corporate culture and available mentors for existing and new employees. This loss of continuity is also reflected in dispossession of the corporate culture. I am a great believer in change vs. the status quo. However, there are some things that should not change. "In this company we do thus and so, because we believe it to be fundamentally right." Every organization needs to have incontrovertible statements that transcend the fluctuating business climate and current trends. These values can and should be committed to pen and paper, but they are not passed on in this manner, at least not primarily. Rather, they are taught and lived and mentored from one person to the next. The fewer seasoned people the company has to pass these on, the less they will be able to maintain the soul of the organization.5. Loss of established customer service and customer contact points. It happens to all of us. One day you call your favorite supplier or vendor and ask for good ole' Joe who you have done business with for years and are shocked to learn he is no longer there. "Why? Has he died or contracted cancer?" you ask. "No," is the response. We have had a major reduction in staff due to the economy. In silence you ponder: "If after all these years Joe is gone, who's left? Will they even be in business tomorrow? Maybe, I should begin looking around for another supplier." No one is irreplaceable. However, long term customer and supplier/vendor relationships are invaluable; they also say something about the reliability and stability of your organization. Although the organization's investment in these relationships does not show as a line item on the asset portion of your balance sheet, do not underestimate their value, especially in a day when the global search for new suppliers and vendors is made instantaneous by the internet. Without relationships, price rules and the only price that matters today is the lowest one. Years spent in commodity businesses taught me this principle all too well.6. Employees may be needed again before termination savings are fully realized. If the economy does begin rebounding by mid 2002, then many of the anticipated savings of reducing the workforce will have not yet been fully realized before companies will need to begin replacing the terminated workers. The expense of replacement includes both the termination costs as well as the costs of training and integrating the new hires. Thus, in cases where terminations include substantial severance and outplacement costs, these plus the training and initial inefficiency costs of the new hires frequently equal one to several years of the terminated workers' cost to the organization.7. Possible need to bring employees back as independent contractors at higher total cost. The shrinking labor pool together with the fact that a high percentage of the middle-aged and older terminated employees are either beginning their own businesses or opting for early retirement will mean that many of those who remain and are willing to return to former employers will want to do so under their own conditions. A large number of these may choose to do so as independent contractors preferring to gain a greater degree of control over their own lives. Many companies initially prefer this approach believing that they may only require the services of the former employees for a limited period of time. Frequently, however, the weeks and months become years and the independent contractors, knowing the inner workings of the organization and where projects and sponsors may be found, remain costing the company significantly more than if they had stayed on the payroll.8. Hidden costs that are never fully accounted for such as declining morale, lost customer relationships and lost productivity due to over-stressing the remaining employees. There are very real costs associated with mass layoffs that in my experience are almost never fully assessed. Declining morale, disrupted customer relationships, a frequently steep decline in customer service and the frustration of remaining employees who cannot possibly absorb all of the responsibilities of their departed coworkers, results in an attitude of surrender to cutting corners wherever possible.9. Future sales may be lost due to the inability to ramp up delivery quickly as the economy improves. I have already addressed at some length the labor pool shortage that may well be just around the corner. An economy spurred by the tax cut, a weakened dollar propelling export sales and/or a drop in oil and gas prices could individually or in combination cause demand in many industries to grow rapidly. Where will they find sufficient personnel fast enough to meet that demand? Any failure to respond quickly to the increased demand will result in lost sales and possibly long term market share erosion.10. Diminished market position and status as market leader, innovator and corporate citizen. I am frequently amazed at the lengths that major corporations will go to and the investment they willingly incur during "good times" to build their image in the public's mind. However, as soon as the economy dips, the slashing begins with little thought as to the negative impact it can have within days upon years of careful work and millions of dollars invested to build that image.When cutting is absolutely necessary, do so with a scalpel rather than meat cleaver. Across-the-board percentage staff reductions are the most damaging variety and should only be used in those instances which demand the immediate and drastic cost reductions compelled by the imminence of business failure. The use of global reductions as a general cost reduction methodology is tantamount to an abdication of responsibility by the leadership and management.Whenever large scale reductions of any sort are made, they should be matched by reductions of a corresponding magnitude in senior executive compensation. Huge compensation packages for corporate executive leaders have been justified as necessary to attract and motivate the best talent available and as just rewards for their leading mega-corporations to unprecedented high profit levels and market valuations. This standard must also apply in the reverse and thus, significant drops in profit and worth, requiring deep cost cutting throughout the organization, should be equally reflected in deep cuts to the senior executive compensation levels.As an alternative to layoffs and terminations, corporate leaders and managers should look to rapidly redeploy corporate assets in order to bolster revenues and profits. In the case of people assets, this can often be done through the reassignment of personnel to those areas and functions of the organization offering the greatest potential for rapid internal innovation. Such action frequently results in innovative breakthroughs of enormous and immediate value to the company as people new to a given function approach it with a fresh perspective and a different experience and personal knowledge base from which to draw upon.Although severe cost cutting can increase the near term profitability of virtually any corporation, ultimately, the broad-based innovations of its committed and motivated employees is essential to restoring profitable long term growth, especially in periods of economic downturn. And its is sustainable growth, not temporary savings, that should be the primary goal of every corporate business leader.Copyright 2005 by John DiFrancesJohn Di Frances is an internationally
recognized organizational
legacy expert and professional
speaker. www.difrances.com