Stretching Your Dollars

How to get the most from your minimum-wage employees.
Magazine Contributor
11 min read

This story appears in the March 1998 issue of Entrepreneur. Subscribe »

Getting top-notch performances out of minimum- wage workers is a challenge--but it is possible, says Robert K. McIntosh, author and publisher of Minimum Wage, Maximum Results. He offers these tips for managing your minimum-wage employees:

  • Understand what motivates each employee. McIntosh calls it the "hot button concept"--if you know what makes someone perform, you can provide the appropriate inspiration.
  • Determine your expectations and communicate them clearly. People can't do what you want them to if they don't know what that is. Be sure you know what you expect from your employees, then be sure you've made that clear.
  • Create a positive environment. Provide positive feedback and incentives to build an environment where employees want to excel.
  • Hire the right people. Take the time to thoroughly evaluate and screen new employees.
  • Invest in training. This gives your employees the skills they need to do their jobs properly.
  • Develop employee retention programs. Strive to keep the people you have; it's less expensive and more efficient than replacing them.
  • Reward performance. Use tangible (money and prizes) and intangible (praise and recognition) rewards to reinforce positive behavior.

Jacquelyn Lynn is a business writer in Winter Park, Florida.

Hands On

Stay in touch with your business.

Your business may not be the size of a Fortune 500 company--but that doesn't mean running it is any less demanding. And as your company grows and you get even busier, you may find yourself losing touch with your customers and employees. It's a problem Stan Clark is well aware of. He and a partner were the only two employees when they opened Eskimo Joe's, a small bar in Stillwater, Oklahoma, in 1975. Today, the company is a multimillion-dollar conglomerate that employs about 600 people and includes three restaurants, several retail stores and a mail order operation.

Simple awareness of the risk of becoming insulated goes a long way toward preventing you from losing touch, says Clark. But he also advises owners to be pro-active and look for ways to eliminate barriers that may arise.

"There's no substitute for listening and interacting with customers and [employees]," Clark says. He visits all his company's departments and locations regularly, sometimes even pitching in to help, and personally conducts the new-hire orientation program.

"The leader-as-servant mentality is so right," says Clark. "The bigger you get, the harder it is to stay close to the people you depend on for your company's success. There's no magic, no trick to it--you just have to do it."

Too Much Information

Set parameters to avoid an overload.

The information age has spawned its own problem: information overload. Wes Kasbaum, president of Priority Management Systems, an organizational skills training franchise in Oklahoma City, offers these tips for managing today's information flood:

  • Schedule time to deal with incoming information. Kasbaum recommends setting aside time in the morning and afternoon to deal with your paper mail, e-mail and voice messages.
  • Keep your files thin. Don't retain copies of minutes, reports and correspondence if someone else in the office has a copy. Note a throw-out date on all paperwork before filing so it can be regularly cleaned out.
  • Set up a central location for maintaining reports and other research. It's not necessary for everyone in the organization to have a copy in their offices.
  • Purge your flow of inbound information. For one month, track every report, subscription and memo distribution list you are on. At the end of the month, go through the list and decide what you need to continue receiving, what should be discontinued and what should be routed to someone else.
  • Set policies to control duplication. Instruct employees to send material only to the appropriate people. Resist duplicating communications unless it's absolutely necessary. Finally, keep your communications brief and to-the-point, and be sure everyone in your organization follows your example.

Getting Personal

Looking to buy a company car? Check out these tips.

Buying vehicles for your company is getting easier and more efficient, thanks to General Motors' Business Vehicle Services (BVS) program. Now, instead of having to spend your valuable time at an automobile dealership, a representative will come to you with a complete package that includes not only the vehicle but also financing options, extras such as fuel programs, and even special deals for your employees when they purchase cars for their personal use.

It's a program that's long overdue, says Jack Griffin, manager of national fleet sales for General Motors' Oldsmobile Division in Lansing, Michigan. Small-business owners participating in GM focus groups were virtually unanimous in their desire to have a single contact person at a dealership with whom they could build a long-term relationship.

GM tested BVS with pilot programs in three major cities last year and has begun a national rollout that should be completed by fall. Dealers that opt to participate in the program will have a commercial manager who is thoroughly trained on the vehicles, lease and purchase programs, maintenance and repair, and related services; has a strong working knowledge of small business in general; and takes the time to get to know the operations of each customer to be able to offer customized service.

For business owners purchasing vehicles, Griffin offers this advice:

  • Look for an established dealer with a strong track record in your community.
  • Check out the dealer's customer satisfaction index (CSI). The dealer will tell you what its CSI is and will be able to document it.
  • Choose a dealer that has demonstrated a commitment to small businesses by establishing a commercial department or at least hiring a commercial manager to take care of your special needs.

To find out more about the BVS program, call (800) 521-0656 or visit

Watch Your Step

If your client goes bankrupt, you could be the one to lose.

Bob Bernstein, business bankruptcy specialist and managing partner of Pittsburgh-based Bernstein Bernstein and Strickland PC, calls it a double whammy: A customer just filed for bankruptcy and you're looking at writing off a sizable debt--and now the bankruptcy trustee informs you that you must return the customer's last payment. What's going on?

In bankruptcy language, it's called a preference payment--and while there are many situations in life where being preferred is a good thing, bankruptcy is not one of them. It means a debtor is paying bills so that some creditors are receiving a greater percentage of what is owed them than other similar creditors are. For example, a debtor might make preference payments to suppliers with whom it has personal relationships, then file bankruptcy, leaving the remaining creditors scrambling for their money. Sure, it sounds good if you're the creditor getting the extra cash, but under the Bankruptcy Code, that's illegal. Bernstein says preference payments undermine the intent of bankruptcy laws to treat creditors of similar status as equally as possible.

So should you respond to the trustee's letter with a check? "Absolutely not," says Bernstein. Just because the trustee says you've received a preference payment doesn't mean you actually have or that you'll have to pay it back. Bernstein says the initial burden of proof that the payment was indeed a preference payment falls on the trustee. In legal terms, the trustee must be able to show that the payment 1) was to or for the benefit of you, the creditor; 2) was for old debt; 3) was made while the customer was insolvent; 4) was made on or within 90 days of the date of the bankruptcy petition; and 5) would allow you to receive more than you would have received had there been a liquidation under Chapter 7 of the Bankruptcy Code.

Even if the trustee can prove these points, you may have a legal defense that would allow you to keep the money, or you may be able to negotiate a settlement that would reduce the amount you must repay. Before taking any action, Bernstein recommends consulting with an attorney who works in the area of creditors' rights and bankruptcy and who can assess the situation and give you a realistic picture of your options.

Tech Care

You'll need a bit of finesse to manage tech employees.

They go by a variety of labels, ranging from the reasonably respectful "technical staff member" to the more casual "techie." Whatever their title, if you find managing the techies on your staff a challenge, there's good reason for it.

"A technical professional is someone skilled in one or many technical disciplines--everything from software development, code writing and database design to automotive engineering and jet engine maintenance," says David Rubin, a training consultant with Princeton, New Jersey-based Blessing/White Inc. who specializes in training managers within technical environments. "Technical professionals are problem-solvers and fixers. In the proper environment, they are highly motivated--in fact, passionate--about their work. At the same time, they bring unique values and expectations to the workplace, and these need to be recognized and understood if you are to manage these professionals successfully."

Rubin says that as a group, technical professionals share some traits, including a desire for autonomy, a need for achievement, a fear of technical obsolescence, a need to participate in mission- and goal-setting; and a need for peer support, stimulation and sharing. "Traditional management principles meet with only minimal success when applied to technical professionals," says Rubin. To get the maximum performance out of your technical staff, Rubin offers these tips:

  • Include techies when setting goals. When you're establishing short- and long-term goals, bring your people in on the process in some way. "Involving your technical staff in goal-setting generates higher motivation and more job satisfaction," says Rubin. "Then, where possible, give them some autonomy over conditions, pace and work style."
  • Take maximum advantage of their abilities. "Design your operations in a way that allows each of your tech pros to operate at a level that challenges them," says Rubin.
  • Communicate how their work is important. Show them the big picture; explain to them how their individual efforts are a critical part of the whole.
  • Encourage them (and provide opportunities for them) to interact with each other to solve problems. "Being in a cubicle day after day is fine for some plants, but not for people," Rubin observes.
  • Provide recognition and rewards. "Reward them for their efforts, even if it's just with a mention in the company newsletter or a complimentary dinner once per quarter," Rubin advises. "Find a way to let them know their efforts are appreciated."

Finally, Rubin says, spend time with your technical staff, both on a formal and informal basis. "Talk with them. Ask questions and keep your ears open. Learn from them, and allow them to learn from you. Two-way communication is the key to making it all work."

Damage Control

Prepare yourself for an emergency cash crunch.

A cash flow crisis can be triggered by a variety of factors, including seasonal business fluctuations, customers that either pay late or don't pay at all, and major equipment breakdowns. "A cash crunch can cripple a small company," says Rob Hackley, executive vice president of Hotsy, a distributorship in Central Florida that sells industrial pressure cleaning equipment and detergents. "You can't prevent them, but if you're prepared for them, you can survive." He shares these tips:

  • Establish a rainy day fund. Set aside funds in an interest-bearing account that you can draw on in an emergency.
  • Review your cash management techniques. "Schedule your [payments] for the maximum advantage," Hackley advises. "Don't pay anything before you have to, but also watch for early-payment discounts--they can often mean substantial savings." Also, periodically ask your banker about various cash management products or services that may be available. One such service is a sweep account, which allows you to earn the maximum interest by automatically transfering funds to the appropriate accounts on a daily basis.
  • Control your overhead. Keep your fixed costs low and your variable expenses tied to revenue so if your income drops, so will your expenditures.
  • Negotiate with vendors. Consider requesting extended payment terms at the time of purchase, particularly if your business experiences seasonal fluctuations.
  • Establish and maintain good credit. If you have a track record for paying on time, creditors will be more willing to work with you during a crunch.

Contact Sources

Bernstein Bernstein and Strickland PC, (412) 456-8101,

Robert K. McIntosh, 5527 Cathedral Oaks, Santa Barbara, CA 93111,

Priority Management Systems, (405) 478-4545, fax: (405) 478-4477

Stan Clark Companies/ Eskimo Joe's, fax: (405) 377-0828,

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