Category: Expenses

Top 5 Reasons to Hire an Intern

Posted on by Dr. Steven Kirch

As your business grows, eventually you’ll want to start building a team. Having people in your corner means you don’t have to be the expert at everything, and you can spend more energy on the tasks and projects that truly require you to do them.

But there’s often a fuzzy gray area between recognizing that you could use extra help and actually having the resources to hire that help. Additionally, even established businesses can benefit from reducing their costs—and hiring a team can quickly become a major expense.

This is where I like to consider using an “internship” strategy.

Instead of hiring new personnel as you grow, consider offering an internship. Go to your local junior college, college, or university and offer an internship for the semester—or the year—to those seeking degrees or experience in a similar field or area of expertise as needed for your business.

But how do you know if offering an internship is the right approach?

Here are my top five reasons hiring an intern is a great move for the growing small business.

1. Internships can help cut down on labor costs

Labor costs make up a huge expense for any small business. Salary, benefits, social security taxes, unemployment insurance, worker’s compensation, and other costs really add up.

And yet, what can you do? You must​​ have the labor you need to operate your business, especially as your business grows.

Hiring an intern can help cut down on labor costs in a couple of ways. First, student interns are more likely to work part-time, since they usually have classes to attend in addition to the internship.

Second, their lack of experience means they can start at a lower salary than other prospective employees, and they don’t need a huge benefits package to make the job appealing. This is in part because most of the benefit for interns comes from the experience, which brings us to reason number two:

2. You are helping students gain real-world experience which makes them more competitive in the job market

Schools love​ it when a business offers internships because internships act as a value-add to their educational offerings by providing their students with real-world experience. Some schools even offer course credit for internships as an extra incentive. Many schools have a job placement office that will be happy to help you find the right candidate.

And the students love them, too!

Not only does an internship put some money in their pocket, but it also gives them practical, hands-on experience in their field.

This experience looks great on their resume. It gives them a jumpstart on their peers when they graduate, especially if the company providing the internship hires them upon graduation.

And given the state of the economy and the sparseness of the current job market, any competitive edge is a big deal.

3. Administrative help allows you to focus on the important things

Every business could use additional administrative help.

Offering an internship to a student majoring in business administration not only helps the student gain hands-on work experience, but this can also be a low-cost way to take some of the administrative tasks off your plate.

What could you get done in your business if you could pass off your admin tasks to someone who is actually interested in business administration?

Spending less time fretting over administrative details and more time working in your zone of genius can have major ripple effects that spread through your entire business.

4. Student interns are dedicated and enthusiastic

Just because interns work part-time, have less experience, or accept a lower starting pay doesn’t mean their work will be subpar.

Far from it: Interns are enthusiastic and eager to learn, and they’re highly motivated to produce quality work.

This is especially true if there is a possibility of being hired full-time after graduation, but even the promise of adding your glowing recommendation to their job materials can be an excellent motivator.

And since interns’ goals are often centered on learning how to work in a particular field, they tend to be especially open to critique and have a genuine desire to improve. Sometimes they even possess skills or a perspective that older, more experienced workers may not—consider their skill with social media or reaching that younger demographic.

5. Interns can fill the gaps as you grow

If you’re a micro-business or solopreneur, you probably don’t need a full-time employee. But as your business continues to grow, you may find having extra help to be a huge asset.

In this way, hiring an intern part-time can be a gap fill until your business grows enough that you need full-time help.

And by the time you’re ready for a full-time employee, then perhaps this intern will have graduated and will be ready for a full-time job—and they’ll already be trained and familiar with your processes. It’s a win-win!

Is offering an internship right for you?

Internships could potentially save small-business owners thousands of dollars each year, but as we’ve seen, that’s not the only reason to hire an intern.

Internships can provide enthusiastic help for the tasks you don’t need to do yourself, and can be an excellent stepping stone as your business continues to grow.

To decide if an internship approach is right for you, take a look at the administrative tasks you wish you didn’t have to do.

  • What would you pay a full-time professional or contract worker to do them?
  • Could an intern handle these tasks, or do they require professional expertise?
  • What would you pay an intern? How much would that save you?
  • What would it cost (in additional time or money) to train the intern as compared to a more seasoned worker in the areas where they lack experience? Would your hiring savings outweigh these costs?
  • Could the intern bring some additional skills or perspective that you don’t need to train (and maybe can’t)?

And perhaps even more importantly:

  • What would you focus on if you didn’t have to do those tasks?
  • How would the time you spend on your business look different?
  • What could you accomplish in a year by focusing on the aspects of your business that sit firmly in your zone of genius?

If you’d like to dig deeper on this and other strategies for increasing your profits, grab your free copy of my e-book, Mind Your Profits, at www.profitminds.net.

The Simple Way to Find More Money for Your Business

The Simple Way to Find More Money for Your Business

Posted on by Dr. Steven Kirch
man working with calculator to calculate numbers.
Saving money by reviewing your expenses

The current pandemic crisis has made things especially difficult for small businesses. Funds are low. For many, business has slowed to a crawl—if not halted entirely.

Many business owners are concerned that their businesses will fail. They worry that people will stop buying, and they’ll lose all of their customers.

But here’s the truth: no one goes out of business because they lack customers. Businesses fail because they run out of cash.

Every business owner should have 6 months of expenses in reserve, but most do not. Why is that?

Consider one of my clients (we’ll call her Amy). Her interior design business was growing, but her expenses were growing, too. Her business was making just barely enough to break-even.

Even in her best quarter she wasn’t able to bring much of that hard-earned money home—and she certainly wasn’t able to keep enough on reserve.

This wasn’t for lack of clients. In fact, Amy had more business coming in than she could handle all by herself. She needed to hire a junior designer to help relieve some of the workload, but didn’t think she could afford one.

The issue? Expenses.

Amy’s expenses were simply too high. And when expenses are high and growing as fast as revenue, it’s difficult to increase the bottom line, no matter how many customers are coming in.

This is why it’s so important to review your expenses. You may be leaving money on the table!

 

The simple way to audit your expenses:

Reviewing your expenses is a simple, straightforward way to figure out how to cut costs and improve your bottom line.

I recommend following the process laid out in Profit First, by Mike Michalowicz.

First, get out all of your bank and credit card statements. You may find it useful to print them out.

Next, categorize your expenses using the following metrics:

1. For anything that creates Profit, mark those expenses with a P.

This might include employee payroll, necessary software, and professional development resources.

For Amy, this included things like Quickbooks, her customer relationship management system, her project management software and her part-time office manager.

2. Label expenses with an R if they are Replaceable.

Are there expenses you might be able to switch to a cheaper option?

Now is a great time to review all of your expenses and see if there are better rates available. Some vendors may cut you a deal rather than to lose you as a customer.

For Amy, this meant looking at her internet and phone bill and asking a Technology Services Agent to review her service to see if she could get a better deal. We also reviewed her business insurance to see if she could reduce her costs there as well.

3. If expenses are Unnecessary, mark them with a U.

These are expenses you can do without entirely. For example, if you have a gym membership, are they still charging you even though they’re closed during the lockdown?

Amy had signed up with a credit card processing service, expecting clients to pay that way—but none had. She was able to cancel that $70/month contract.

She also discovered her 401(k) plan was costing her more money than she was saving in taxes, so that became another unnecessary expense.

 

Now it’s time to cut

Once you have marked all of the items in your statements, it’s easy to see where to cut expenses.

Eliminate anything marked with a U, and look into alternatives for anything marked with an R.

Keep the items marked with a P, since those are what actually create profit. Ideally, these goods or services should essentially pay for themselves.

This process also allows you to spot redundancies.

For example, Amy had switched project management software but had neglected to cancel the old one, so she was paying twice. We were also able to trim back marketing expenses by cutting out the services that were not bringing in new prospects.

Once we reviewed all of Amy’s expenses, she realized she actually could go out and hire that junior designer for at least 20 hours a week. Taking away some of her workload (and her stress!) will allow her to continue to grow her business—and continue to service her clients with the quality of attention they deserve.

 

Don’t leave money on the table

Many entrepreneurs think of increasing profits as solely increasing the revenue that comes in—but the expenses that come out of that income are just as important a part of the profit equation.

Furthermore, freeing up expenses allows business owners to put more money towards things that will actually lead to generating profit—like marketing, professional development, or hiring an assistant or a business coach.

What will reviewing your expenses make possible?