The Fine Art of Estate Equalization

Crafting an estate plan that satisfies all of your heirs can be challenging. An unequal estate could mean that your legacy is compromised, especially if you own a business. Consider every angle in advance for the fairest outcome.

One of the trickiest components of estate planning can be knowing how to divide assets among beneficiaries.

It’s wise to revisit your estate plan to ensure equalization. It’s not enough to focus on tax implications, especially if you have a large estate or a business to pass down the line. While creating a truly equal inheritance plan can be challenging—especially when only certain heirs can perform specific responsibilities for your estate or business—an approach like utilizing life insurance could be the answer.

What is estate equalization?

Estate equalization does not necessarily mean that all heirs receive the same amount of money or proportion of assets after you’re gone. It means that the value of what they receive after you die is equitable and equal in value.

Value can mean different things to different heirs. For example, some family members may care more about a property or possession for its emotional worth, not its monetary value. Of course, these values and priorities can be hard to measure, making it even more challenging to create an equal and fair estate plan.

Equalizing a business legacy with life insurance

If you run a business and hope that it continues in the family for generations to come, there are some special considerations when estate planning. The fact is, some of your heirs may not always want to be part of the company. When you are gone, it’s not as simple as dividing up what the business is worth. It is not a liquid asset.

You first need to create a succession plan that outlines who will take over and what roles and responsibilities other heirs will (or won’t) have.

When it comes to estate planning, you may think that your two options would be to leave the business to all heirs equally or leave it only to the children capable of running it. But these two options are not always equitable.

If specific children or family members are involved in your business, and others aren’t, one solution is creating equalization via life insurance. This means setting up a plan so that the heirs involved in the company will get equity passed down to them. Heirs who are not will be able to receive the same value of inheritance from life insurance benefits, as well as assets unrelated to the business.

It’s a delicate combination that must be planned with care, mainly because the non-business liquid assets will be unequally distributed to make up for the business inheritance.

Without ensuring that the inheritance plan is equal and fair, your legacy—and the future of the business you’ve created—will be uncertain. It’s crucial to plan ahead.

Primary goals are to protect the business after you’re gone with the right leadership and ensure your family members will not end up in conflict with each other.

Creating an estate equalization plan

These matters can be complicated and emotional. You may decide to involve your children or other family members in the planning process to understand their commitment to the business or the sentimental value of a particular property. To ensure that your family can peacefully uphold your legacy after you’re gone, it’s wise to understand their priorities and goals. You can then start understanding how to balance liquid and illiquid assets.

Other considerations are related to avoiding a significant tax burden for your family when you pass away. The professionals at Provident CPA and Business Advisors can help with the tax aspects of estate planning.

Contact the Provident team to learn more.

How to Optimize Tax Strategy for Retirement

It’s never too early to start preparing for retirement, including when it comes to taxes

Whether you’ve just entered the workforce or have recently retired, saving and planning for retirement is an ongoing process. Though 57 percent of Americans say that saving for retirement is their top financial priority, nearly 19 percent of people over age 65 are still working either part- or full-time. Many people start planning too late, or just don’t take the right steps to succeed once the time comes.

While taking any step toward retirement savings is important, one of the most significant components is learning the tax pros and cons for each of your options. Making the right moves can end up saving you a lot of money in the long run.

These suggestions will help you optimize your tax strategy:

Analyze tax brackets and expenses

A first step in optimizing taxes in retirement is understanding what tax bracket you’re in—or which one you plan to be in. Then, take a look at your expenses. What can you cut back on? Try to lower your costs to stay in a lower tax bracket, and you won’t need to withdraw larger sums from retirement savings accounts. Withdrawing less, of course, means that you’ll pay less tax.

Understand Social Security income tax

Social Security income tax is different than regular income tax. If your Social Security income is over $25,000, or $32,000 for married couples, it will be taxed. Up to half of this type of income could be taxed, and up to 85 percent, if your income is $34,000 or above ($44,000 or higher for married couples).

These numbers are calculated based on adding your other retirement income to half of your Social Security income. So, to avoid paying these taxes, make sure you know how to balance all of your retirement income effectively. Working with a tax professional can help you understand the requirements.

Medical expenses

If you have significant medical expenses in retirement, you may qualify for itemized deductions for the unreimbursed eligible medical expenses that are over 10 percent of your adjusted gross income. Eligible expenses could include necessary aids and equipment, visits to your doctor, testing, or Medicare premiums.

Take advantage of charity tax breaks

You’ll be required to pay income taxes on distributions from your traditional IRA. But if you can live without some of that income, you can opt to donate funds directly to a charity. These charitable contributions won’t count toward your income, so you won’t have to pay income taxes on them.

Another route is to donate securities to charity. You can then deduct the amount of the appreciated investment, which is more tax-advantageous than selling the investment and then giving a portion to charity.

Contribute to retirement accounts while in “retirement”

If you’re retirement-age but still working, you are likely still able to contribute to a 401(k) to save for later retirement years. You can make those contributions and defer paying taxes on them now.

Another option is to put money into a Roth IRA. You’ll have to pay taxes on contributions now, but this avoids paying them when you’re withdrawing from the account.

Required minimum distributions

Once you reach 70½, required minimum distributions from applicable retirement accounts begin. Make sure you’re withdrawing the right amount regularly. Otherwise, you’ll have to pay a steep penalty, which is 50 percent of the required withdrawal amount. This is a big mistake with expensive consequences.

Careful, long-term tax planning

It’s essential to not only analyze your current tax bracket but to make projections for the future based on how tax rates will change. Long-term tax planning allows you to manage your sources of income to save the most possible. You will better understand when to withdraw money from which accounts, and how to manage your investments to limit taxes.

Work with a tax professional

When you’re creating a tax strategy for retirement, an experienced professional who knows the rules can help you pay the least amount legally possible.

Provident CPA & Business Advisors offers tax minimization services that can help you devise an effective tax-minimization strategy. We also offer tips on retirement savings and succession planning strategies for your business.

Contact Provident today with questions and to learn more about our services.

How to Identify and Track the Critical Drivers in Your Business

Critical drivers are your business’s core items that maintain momentum and spur growth

The successful operation of your company depends on a set of critical drivers, those core items that keep a business moving and growing. Taking the time to identify these drivers helps you better manage your teams and your business while helping you evaluate the right metrics.

Start putting more time and energy into the most valuable areas. Also known as value drivers, critical drivers should be clearly identified and tracked to have more visibility into what’s happening.

Identifying critical drivers

Critical drivers are the processes that most impact value and efficiency. These are the behind-the-scenes gears that keep things functioning. So how do you identify these items?

There are generally three types that are directly related to value. Growth drivers are processes within the sales, marketing, and business development areas; efficiency drivers are those within operations, and financial drivers are finance processes.

To be considered a critical driver, these processes must be measurable and illustrate performance and progress. They also must be controllable. Here are two questions to ask when identifying critical drivers:

  • How much do changes in this process or component impact the business?
  • What factors can be controlled by management versus by the market?

Think of all the components of your business like a flow diagram, in which one concept breaks into two others, and so on. Thus, if priorities within your business are working toward growth and profit, start there. Then, outline each component that drives profit. Within those components, like sales, break it down further.

Once you identify the components of your business, you can define the critical drivers within those categories. What processes are most closely tied to your company’s core values and vision? Which processes have the most impact on profit and company value?

All organizations will be different, so there’s no one formula. To start, try to nail down three primary activities that drive your business.

Tracking critical drivers

Tracking key performance indicators (KPIs) is just as crucial across departments and processes. But these metrics are especially important for critical drivers and will help you isolate your main value drivers.

There may be many components that comprise a key process for your business. And while all relevant performance metrics should be tracked and monitored, set up additional measures for the most valuable drivers. Focus on ways to improve these metrics, and improvements to revenue, sales, or profit will follow.

For example, factors driving your sales numbers include KPIs like the number of new customers, the number of leads, the number of conversions, and the number of customers retained. These metrics are tracked over a given period so that changes, like new marketing strategies, can be evaluated. For example, focus on sales KPIs that have the most significant impact on moving sales numbers.

Set clear objectives and benchmarks for each critical driver you define. If you’re not hitting the goals, focus your energy on improving that element. It may take trial and error to see the results you want, but it’s a huge step to simply know where you should be focusing.

Give your time and money more value by prioritizing the core processes that have the biggest impacts on success.

A business advisor can help

One of the easiest ways to identify and track your critical drivers is to work with a professional advisor. These concepts can be challenging to grasp, especially for new or smaller businesses. An advisor can help you isolate value drivers and assist in putting methods in place to track and analyze the performance metrics.

The team at Provident CPA & Business Advisors can assist you in reviewing practices and performance numbers. We utilize the Entrepreneurial Operating System (EOS), which involves nailing down the six essential components of your business: Vision, People, Data, Issues, Processes, and Traction. We’ll make sure you’re tracking KPIs and focusing on critical drivers that can lead to long-term growth and success.

Get in touch with Provident today to learn more about our services.

How to Build a Better Business Budget

The rolling budget model allows you to actively respond to changes, assess strengths and weaknesses, and revise spending strategies.

Finding the right approach to budgeting is not always straightforward. There are several techniques that small to large businesses can integrate to plan for upcoming expenses and changes in revenue. Effective budgets not only provide essential visibility into cash flow and expenditures, but also show what continued growth, stability, and success will look like.

Traditionally, budgets are created in advance of a long-term period, such as a year, and they remain relatively unchanged until that same date rolls around again. While this does work for some businesses, there is a more flexible approach.

What is a rolling budget?

A rolling budget is updated regularly, as opposed to a static or traditional budget that’s set up in advance of the year ahead and not significantly altered for that period. The rolling budget model is continually updated for the next short-term period so that it is managed based on actual data and any business changes.

For example, a budget may be created for the next 12 months. But after each month or quarter completes, the budget is revised based on that period’s performance and new projections. The new budget still includes the next 12 months, but it has changed to make it more accurate and actionable.  The rolling budget allows for flexibility and month-by-month revisions based on a shifting market or updated priorities.

The benefits of a rolling budget

The biggest plus is that a regularly updated budget can help a company spend more wisely based on what’s actually happening, rather than adhering to a static projection during changing conditions. Strengths and weaknesses are more apparent, and that information can be used to improve approaches to expenditures.

Another benefit is added visibility. When spending and sales are analyzed regularly, whether monthly or quarterly, the business gains a much better sense of how their practices are working—or not. Trends are better assessed, and a more accurate budget can be put in place to reflect real insights. For example, if one season of the year has much different sales numbers than the others, this knowledge helps inform future years’ budgets and business practices.

A rolling budget also allows the entity to adapt to market changes or new technologies that must be implemented to improve efficiency or contribute to growth.

It’s important to note that this model does take extra time for team members. It’s more involved than a static budget, so some businesses aren’t willing to invest additional time and energy. However, it gives managers much more control over planning, which impacts both the short- and long-term success of budgeting and cash flow management.

Getting back to budgeting basics

While a rolling budget is a departure from the more traditional, static budget, there are still some basic practices that should be implemented for any plan.

1. Round up expenses

Planning for expenses isn’t a time to be modest. Unforeseen business costs are common, and the fees from vendors and other partners are always increasing. When projecting expenses, overestimate the costs so that you’re prepared. It’s better to overbudget than underbudget.

2. Include employee time

Estimating costs should involve assessing the time employees or contractors will spend on specific tasks, projects, or clients. Don’t forget to include these projections in the budget.

3. Involve other departments

Don’t approach the budget on your own. Depending on your business’s size, you’ll need to involve all departments in collecting data, such as marketing metrics that impact sales. Creating the budget should be a group effort so that everything is represented accurately, and everyone is on the same page about their portion of it and approved expenditures.

4. Research competitors and the industry

Research what your competitors’ spending looks like and any changes your industry sees, especially if you’re just starting out. This data can impact your spending and revenue, and keep you on top of what’s ultimately happening for consumers.

5. Cut back where you can

Ensure that each time you evaluate and update your budget, you’re looking for ways to cut back on expenses. A rolling budget allows you to respond to any months of poor performance by assessing what’s necessary and what isn’t.

6. Work with a professional

Hire a financial expert who can help you take a look at your cash flow and create a budget that is not only realistic, but that also ensures you’re on the path to growth.

Get in touch with the team at Provident CPA & Business Advisors today to meet with our experienced team. We provide entrepreneurs and small businesses with profit management services that promote growth, stability, and continued financial success.

Why Take a Proactive Approach to Management?

Many managers are too reactionary, only noticing an issue when it’s big enough to cause problems. But the right business metrics inform proactive decision-making.

There are many approaches to managing a business. But when you need a solution that will help you motivate your team, manage risks, and make better decisions, a proactive approach is a must.

Learn why being more hands-on and acting preemptively will not only inspire your team but also mitigate risks and give you greater visibility into your business. This is done by measuring key processes that help you understand what’s really going on.

Proactive versus reactive management styles

Reactive managers act when something concrete happens, triggering movement. They wait for an event to occur before finding a solution, instead of risking a wrong decision. They may see this approach as mitigating risk because they’re not making a change unless they know something is wrong.

Proactive managers, on the other hand, don’t wait. They act from the beginning to inform outcomes. In this way, a proactive approach allows you to have more control over both risks and results. You’re more prepared for what’s coming, instead of waiting to see what happens. And being proactive means that problems can be prevented, instead of merely managing their consequences.

More benefits of proactive management

The main advantages of proactive management revolve around risk. It’s an effective strategy to both reduce risk and better manage issues.

Key benefits include:

  • Assess and manage risks. Unlike a reactionary approach, proactive leadership means you’re thinking about risks before they happen, and preparing for them.
  • Minimize damage from these risks. Reactive managers may see a risk but won’t act unless an adverse incident occurs. Managing proactively means taking steps to address things before damage can happen.
  • Greater understanding of your business. By gauging risks and measuring business processes, managers have a better picture of what’s happening behind the scenes, helping them know which areas need work, and which are working well.

Proactive managers also inspire their teams to act instead of waiting. This effect is a major benefit—motivating and enabling employees by setting a solid example. Empower the entire team with a more hands-on attitude toward business challenges and risks.

Using metrics to be more proactive

So, how do you successfully implement your proactive management plan? It’s all about metrics. You’ll never know how to plan for the future and predict challenges without knowing concrete numbers about your business.

Financial metrics are likely the most important, informative things to track. They give you a full picture of ROI, sales, your business’s ability to meet goals, and potential growth.

However, they aren’t the only numbers you need to be measuring. Operational and marketing metrics are just as important to gauge the success of your organization and help you make the right decisions. Common operational metrics include numbers like staff response times and the time it takes to create or ship a product. These measurements give you an understanding of staff and process efficiency.

Marketing metrics will give you a better picture of where to spend promotional dollars. You’ll find out which outlets are the most successful and cost-effective in getting new clients and leads.

The main goal of tracking these items is to help you understand your business. Only then can you make better decisions, assess and manage risk, encourage employees to take a proactive approach, and effectively plan for the future.

Proactive management with Provident

At Provident CPA & Business Advisors, we believe that what is measured is better managed. Visibility is crucial to successful business growth and sustainability, and we give you the tools to collect these metrics.

Our Proactive Management Systems approach is made up of two key components:

  • Accounting. We start by overseeing your accounting process, making sure you’re gathering all the information you need, and doing it efficiently.
  • Greater visibility. We then help you understand what those accounting numbers mean in your business’s big picture. You’ll view your financial metrics in a simple, automated dashboard, so you know what’s going on and can plan ahead.

Provident is committed to helping you improve and streamline your business. Contact our team of professionals today to learn more about our Proactive Management Systems and growth and profit improvement services.

Why Vision Is Vital for Business Success

A good vision parallels and drives a company’s values, purpose, and mission

Any business owner knows the importance of consistent performance, efficiency, and steady growth. But just as important as these considerations is your business’s vision. Without a clearly defined vision, teams won’t be aligned around a common goal. You may not know what the future looks like. And purpose can get lost in the everyday shuffle.

Why is a vision statement so vital? And where do you begin? Here’s much of what you need to know about creating and sharing your vision.

Why your vision is important

A vision identifies your purpose, aligns the team on a collective goal, and helps you define future success. Without knowing where you’re headed, it will be challenging to set short-term (and long-term) goals that keep your business growing.

Creating a vision also helps you and the team nail down why you’re doing what you’re doing. Implementing one builds motivation, providing a core for what every single goal and desired outcome should be working towards. But remember—the vision statement shouldn’t include a detailed road map, nor every step that will make that vision come to life. A vision is the dream itself.

A clearly defined vision inspires, motivates, grounds, and unifies.

Defining your purpose

Your business vision identifies your why, your future, and why it matters.

Important questions to ask when creating your vision: What’s the purpose of the business and its products or services? What inspired you to start it in this industry? What problem does your business address? What are the future aspirations of the organization? Where do you envision the entity in three, five, and 10 years?

Make a list of the key values of your business and of the team members. Close your eyes and examine the mental picture that comes to mind for your future. What does success look like?

Thinking through these questions gets you on the right track to creating a clear vision that outlines where you’re going and why.

Aligning the team

Once you’ve set your vision, align your team. A clear vision means that all team members are 100 percent on the same page. They know where the business is going and how their role fits into the bigger picture.

Even better, involve your team members when you’re coming up with the vision statement. What do they view as their purpose? What do they find most important about the business? What does their picture of the future look like, both individually and as a team? Gathering this information opens a discussion about the company, and also where each group fits within the overall goals.

When hiring new team members, look for candidates who value the same ideas as your company. Share the vision with them in interviews and ask them how they approach their work—what their “why” is for what they’re doing.

Bringing your vision into hiring and recruiting helps you assemble a group of like-minded individuals who will be committed to your cause.

Communicating the vision

Next is finding a way to communicate your vision, both internally and externally. Engage the help of a writer and designer. Incorporate images on your website, newsletters, and marketing materials to better tell your story and share your purpose.

Every company communication and meeting should keep the vision in mind. The answer to the question “What are we working towards?” should govern decision-making sessions and strategy decisions. It will help you identify which areas to focus on the most within business operations.

A vision statement identifies the purpose of your business and where it’s headed. Involve your team members in nailing down the vision so that everyone is aligned. Make sure all materials and decisions keep this idea in mind, creating consistency for your audiences.

Helping you define your vision and align your team is part of the Entrepreneurial Operating System (EOS), which Provident CPAs incorporates into its business growth and profit management services. The EOS helps you strengthen your purpose and ensure that every team member is on board. The EOS model outlines Six Key Components of any business: Vision, People, Data, Issues, Processes, and Traction.

Contact the team at Provident CPA & Business Advisors to get started with improving your processes. We begin with a 90-minute meeting, which gives your leadership team an overview of the EOS model.

How Keeping Score Can Crush Poor Performance

Learn why keeping track of the numbers with scorecards will keep you on the path to growth

If your team is suffering from poor or dwindling performance, there may be a simple solution that just takes a little planning. Create a scorecard for your business so you can track the numbers and use them to monitor and improve performance.

How do you start? Nail down the core processes for your organization, involve each department and team member in planning and start holding everyone accountable with tangible measurement strategies.

These tips will help you focus your scorecards and implement a strategy that works for everyone.

Know how to define your measurables

While each aspect of the business, and each department, should be tracked and measured, don’t include too many numbers in the scorecards. With too much going on, metrics won’t be decipherable or valuable.

Focus on a handful of measurements. What are the few core processes and goals of your business? Start there.

Don’t overcomplicate the process. Measure actual indicators of performance, including revenue, new customers, customer satisfaction, marketing wins, and response times, just to name a few examples. Nail down benchmarks for each task and area of operations so that it’s clear when something or someone isn’t up to par.

Involve team members in planning

Keep in mind that some employees may be stressed out or anxious when they’re faced with analyzing their work metrics, or knowing that you’ll be examining them. Instead of improving motivation and performance, it could have the opposite effect.

To address this problem, involve workers in creating scorecards. Ask for their feedback about how they currently measure their performance or productivity. Take their answers seriously and come up with metrics that work for both their concerns and those of the company. Stay open and in communication about scorecards.

Workers will start to see how effective measurements are in improving their performance and the business’s success. When goals are set in numbers, outcomes are more transparent and attainable.

Create different scorecards for each team

Depending on the size of your business and the number of teams within it, it’s smart to create scorecards for each department. Start by thinking about what is driving the performance of each group. What work can be measured? Which outcomes are most important in this department to drive growth for the entire business?

Within every department, further outline scorecards for each team or each individual on the team, as applicable. Employees should have factual knowledge about what they’re working toward.

For example, consider a customer service team. Create a target for employees answering phone calls within a certain number of rings, or one limiting hold times, and give that goal a numbered rating. Anyone falling behind that goal, or making a customer wait more than two minutes, will receive a lower score for that interaction. Set numbered goals based on these measurements for each day, week, and month.

This helps individuals, teams, and the business track what’s actually happening. Metrics help you determine weak points. Identify areas or employees that need additional training and support, strengthening the team as a whole and filling in any gaps in productivity.

Improve accountability

Scorecards help you improve accountability for teams and individuals. By setting clear expectations, workers can reach goals, measure performance, and succeed. Numbers provide much-needed clarity to keep employees motivated and working toward the company’s collective vision and the path to growth. Deadlines, work completion rates, and time tracking are vital efficiency metrics for each employee and team.

Accountability requires that metrics are tracked on a regular, ongoing basis. This improves the likelihood that everyone will deliver consistently—and only then will performance keep moving forward.

Even if employees are keeping their own scorecard, their manager needs to host regular check-ins so that each worker has someone to hold them accountable. According to Gallup data, employees who believe that their supervisor holds them responsible for their performance are 2.5 times more likely to be engaged in their position.

Accountability motivates people. And motivation helps drive the business to continued growth.

These suggestions will help you create and launch scorecards across your business. Bringing in the actual numbers on performance and efficiency will help you monitor success and reach objectives as a team.

The Entrepreneurial Operating System® (EOS) is employed by the team at Provident CPA & Business Advisors. We help clients implement the EOS model, keeping teams on track and in alignment with the brand’s vision.

Get in touch with Provident today to learn more about our growth and profit-improvement services.

The Liberating Effect of Setting Time-Based Targets

The word deadline can cause stress and panic. But when a business masters the time-based target, teams unleash their potential to improve productivity and performance.

Many entrepreneurs know that they must create SMART goals: those that are Specific, Measurable, Achievable, Realistic, and Timely. Details must be clearly defined and attainable so that a goal is anything but vague. Otherwise, teams won’t be aligned and desired outcomes simply won’t be realized.

Making sure that goals are measurable and timely means that your team is setting a realistic deadline for each task or milestone, as well as the project as a whole. Even though deadlines can sometimes feel overwhelming, they actually free your mind and hone your focus to hit your targets. Here’s how.

Improve productivity

Without deadlines, projects can feel more overwhelming, impacting motivation. If there’s no end date, how much should be completed each day? What’s driving workers toward staying on task instead of procrastinating? A deadline can also be viewed as a challenge for a team member, which can inspire creativity and innovation.

Clearly defined deadlines and milestones help you better plan out what needs to be done and when. Otherwise, there will be too much freedom. It also helps to include deadlines for small steps within the timeline to keep momentum along the way.

Monitor progress

Milestones help you and the team monitor progress, which is especially crucial for long-term projects or initiatives. For example, hold a weekly check-in meeting to track and discuss where the project is currently and what’s left to be done. Just like checklists help us manage our thoughts and to-dos each day, milestones keep us focused on where we are and where we need to go.

Even top talent needs feedback and encouragement, and regular check-ins will provide that. These meetings also give the team deadlines to work toward throughout the week—they’ll want to be able to show something they’ve accomplished.

Hold the team accountable

Deadlines enable you to hold individuals accountable. When targets aren’t being met, it’s crucial to find out why and address the problem. If there are no end dates to projects—or milestones within them—it’s challenging even to identify the problem, much less nail down the cause.

With more information about where teams fall short, you can learn where you need to put your attention. You may discover the need to work closely with one particular employee who needs some extra guidance to stay on track.

While actual penalties aren’t always necessary or effective ways to motivate employees, it’s worth noting that you can still acknowledge how something could have gone better when a deadline isn’t met. And, of course, consistently missed deadlines call for a more serious conversation.

Generate better data

When you set measurable goals for your business, you’re giving yourself the ability to collect better data. This information can be used to make better business decisions based on facts and results. Milestones support consistency, which is another requirement for continually meeting goals.

For example, one measurable goal may be to grow your customer base by a certain number every month. Teams can check in to see which months have met this goal and which haven’t. What changed in the marketing strategy that could have made an impact? Was a new campaign launched that increased customer engagement?

Compare this measurable outcome to a vague goal where a company “wants to increase customer loyalty.” Without having clear milestones in the timeline, it’s just not possible to gather data that will lead to the results you want.

Be strategic and prioritize

Keep in mind that it’s not enough to start setting deadlines for each project without assessing what’s realistic for each milestone or goal. You have to be strategic in setting target dates.

Start by prioritizing tasks. When you sit down to create deadlines, you’re forced to think about what has to be done first so that the rest of the project can continue. Focus on only the most essential milestones here—don’t get too detailed in priorities; otherwise, you’ll have too many deadlines in your timeline.

Acknowledge accomplishments

Tracking deadlines for each milestone means that you and the team can celebrate when a task is completed on target. Make sure to acknowledge wins, not just failures. Reward workers for staying on track and working hard to meet a goal. Share positive changes in business data with the team and keep them involved in the continued planning and strategizing process.

The professionals at Provident CPA & Business Advisors work with a range of business owners to improve productivity and sustain long-term growth. We help implement the Entrepreneurial Operating System® (EOS) model, which helps entrepreneurs learn how to build the foundation of a successful business. Get in touch with Provident to learn more.

Who Is the “Right” Person for the Job?

Learn how to get the right person in the right seat with the accountability chart and “GWC”

Putting the right person in the right seat is one of the biggest challenges to overcome when you want to grow your business. Each individual on the team must be motivated, committed, and in alignment with the company’s vision—and they also must be assigned to the right role and have clarity about their responsibilities.

But how do you find that “right” person for each business position? And how do you clarify roles for the organization?

Start by creating an accountability chart and integrate the concept of “GWC:” uncover who gets it, wants it, and has the capacity to do it.

The accountability chart

When it’s unclear who is responsible for what within your organization, or when goals aren’t being met and time is being wasted, create an accountability chart.

This chart indicates the responsibilities of each employee, providing clarity about where each person fits within the organization. Without clearly delineating which worker owns each area, problems are often left unsolved.

First, define the major functions of your business. What makes your organization move? Then, assign each person to each role so that they own that function. Instead of getting caught up on job titles, focus on who’s accountable for what tasks and responsibilities. Don’t let ego get in the way of operations; focus on collectively reaching for goals and achieving what’s best for the business.

The accountability chart helps you compartmentalize who is doing what. You and your team will also better understand where one process ends, and another begins. This supports organizational clarity because knowing who’s accountable helps each problem get solved quickly—which, in turn, helps your business become more efficient.

Using the GWC to find the right people

Now that you understand the benefits of an accountability chart, how do you know where to put which people? Merely creating the chart doesn’t mean that the right individuals are assigned to the proper functions. You need to find out if your people “GWC” the role: Get it, Want it, and have the Capacity to do it.

Get it: The right person just “gets” it. This means fully understanding the role and its responsibilities, and how the position fits into the large organizational structure.

Want it: Some people love what they do, and it’s obvious. The right person will genuinely desire the position.

Capacity to do it: Capacity refers not just to skills and experience but to both the physical and emotional abilities to perform the responsibilities of the role. The right person must be willing and able to meet the requirements of the job.

All three elements of GWC must be present for the right person to sit in the right seat.

Tips for hiring the right people

When hiring new employees, keep these tips in mind to make sure you’re finding the right people for your organization.

1. Clearly define and clarify the role

You won’t get the right candidates applying or interviewing for the job unless you and your team have clearly defined the role. This helps you narrow down exactly what the most critical skillsets are for this person to have.

2. New hires must align with company values

Match up hires with the company culture and values. This involves asking questions that center around your values and mission. Tell candidates about a typical day at work, and ask them if they’re comfortable with that kind of environment. Ask them why they want to work for a business like yours and what their ideal workplace looks like.

3. Be open to hiring externally

It’s always tempting for companies to hire internal candidates for open positions. This often simply makes sense. It can save time and money on the recruiting and hiring process, and motivating internal employees to find their perfect fit within the company should always be encouraged.

However, this is not always the right way to go, and many companies end up with the wrong person for the job because they wanted to support current employees. Be open to interviewing external candidates, too.

4. Follow your instincts

The right person for the job may not fit into a specific box defined by skills and experience. In interviews, follow your instincts about a candidate. Don’t get hung up on checking off a list of qualifications on a resume. Instead, also consider whether their drive, personality, and commitment match up with the job’s needs that are defined on the accountability chart.

When you can create a clear accountability chart and use GWC to make sure the right person is in the right seat, your organization will be far likelier to fill positions effectively.

The team at Provident CPA & Business Advisors assists entrepreneurs and business owners with growth and development plans. Get in touch today to learn about how we help implement the Entrepreneurial Operating System (EOS).