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Reference Checking | The HBS Blog | Business Strategies
By Matt Cholerton Tuesday, September 18, 2012

You’ve found a great candidate and are ready to hire. Is it worthwhile to check references? Unfortunately, the answer is yes! It is a necessary evil, with a compelling purpose and if done well can protect the company and foster a healthy and productive employee relationship. Let’s dig in.

During the interview process, ask the candidate if you can call their references. Then, ask them what type of reference their former boss will give?  “What will they say when I ask them about the way you accept direction and feedback?” “What do you think they’ll say about your organizational skills and ability to make deadlines?”  This can force a bit of honest communication. Steve Penny, in his book Hiring the best People calls this the Truth Test. It can reveal useful information in the interview process, but also sets you up for a productive reference discussion.

Ensure the references you are talking to have worked directly with the candidate, and that they are familiar with their work. Dig in to clarify the working relationship.  If you aren’t satisfied ask the candidate to provide someone else.

Frankly, by the time we’re at the reference stage, everyone already likes the person. They want to hire them.  Therefore, the purpose of the reference process should be to;

Determine flags - Of course, if a reference speaks negatively or hesitates to address certain issues, warning bells should go off.  It’s also a flag if the references don’t make time to return your call in a timely manner.

Reconnaissance - Learn how the employee works best, where they might need assistance, and what management styles that work best for them. Use it as a tool to integrate and best manage your new hire.

There are 1000’s of questions available on-line, but here is a sample of questions I like and why:

What was your relationship to the candidate? Is this the right person to talk to? Were they in a position to see the output and quality of the candidate? Can they accurately assess how they got along with others?

What were the responsibilities in their last job? Is it similar to what the candidate told you? Does it prepare them for the role at your organization?

Tell the reference about the duties of the new job. Ask if the applicant will be able to perform those duties and which part of the job they might have the most trouble?

Is this person a team player or does he or she excel by working alone? Sometimes, independence is good. Regardless, this question can help elicit information that can be helpful in assigning work or assessing team fit. Regardless of the answer, probe to see how the reference got their opinions of the candidate.

What areas of development were communicated to the candidate and how did he or she respond? Was the candidate aware of their weaknesses and what did they do about it? This question is a good way to get information regarding performance weaknesses but also can give you things to focus on as the employee starts.

Please describe your management style. Learning from someone who has managed the employee can give you clues to help transition them smoothly and make them more effective and engaged. You might learn they are truly rewarded by public acknowledgement, value a hands-off approach with a weekly check-in, or respond well to direct feedback with idea for improvement, for example.

Can you tell me about the candidate’s work style? What was working with her like?

Build a list of questions to use for all your reference checks - you will get comfortable with the questions and get better at probing for useful information. Being the same questions across multiple checks will also give some perspective to the answers. Share relevant notes as appropriate on your team.

Do you do reference checks? Have you ever decided not to hire based on a call? What is your favorite question?

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Immigrant Entrepreneurs on the Rise
By Devin Scott Monday, September 17, 2012

The American dream of owning your own business is on the rise for many entrepreneurial immigrants.  And why not?  With the choice of working for someone else or building a business that will provide for them and their family, the choice is clear.  Of  all the new firms that were created last year, 28% were created by immigrants.  Immigrants are also two times as likely to create a new business than someone born in the Unites States.  Part of the trend comes from the economy.  Immigrants have statistically represented the lower wage occupations in recent years such as construction, and landscaping and manual labor jobs.  With the recession, a lot of these workers found  themselves without a job and wondering what to do. Starting a business for themselves seems like the logical choice. For many, it has also become a very profitable choice.

Here are some statistics about immigrant entrepreneurs from the U.S. Small Business Association:

• Immigrants are found to have higher business ownership and formation rates than non-immigrants. Roughly one out of ten immigrant workers owns a business and 620 of 100,000 immigrants?(0.62 percent) start a business each month.

• Immigrant-owned businesses start with higher levels of start up capital than non-immigrant-owned businesses. Nearly 20 percent of immigrant-owned businesses started with $50,000 or more in start up capital, compared with 15.9 percent ?of non-immigrant-owned businesses.

• Roughly two-thirds of immigrant-owned businesses report that the most common source of start up capital is personal or family savings. Other commonly reported sources of start up capital by immigrant businesses are credit cards, bank loans, personal or family assets, and home equity loans. Overall, the sources of start up capital used by? immigrant businesses do not differ substantially from those used by non-immigrant firms.

• Businesses owned by immigrants have an average sales level of $435,000, roughly 70 percent of the ?average sales level of non-immigrant firms.

• Immigrant-owned businesses are slightly more likely to hire employees than are non-immigrant-owned firms; however, they tend to hire fewer employees on average.

• Immigrant-owned businesses are more likely to export their goods and services. Among immigrant businesses, 7.1 percent export compared with only 4.4 percent for non-immigrant businesses.

• More generally, there is a U-shaped relationship between entrepreneurship and education. Entrepreneurship rates are lower for high school graduates than for high school dropouts, but? entrepreneurship rates are similar between those with some college and high school graduates. College graduates have higher rates of entrepreneurship, and those with graduate degrees have the highest rates of entrepreneurship.

• Among immigrants, 52.1 percent owned a home compared with 70.8 percent of non-immigrants.

The nature of business for immigrant-owned businesses vary across different parts of the world and economy.  They range from transportation, to entertainment, to wholesale and retail trade along with a broad range of other services.  Immigrants own businesses in the lowest and highest skill sectors and in various industries.

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Book Review: Mom, Inc.
By Carleigh Lowe Tuesday, September 11, 2012

As a new mom, I found Mom, Inc. to be very inspiring. It is so nice to read stories about how women are making it work as entrepreneurial moms. So many of us want to do it all and this book gives you insight on how to figure out the right business for you, write a business plan, create a product line, find clients, start a website and juggle everything. I especially loved the interviews with some very interesting ladies like wedding blogger Abby Larson of Style Me Pretty and photographer Bonnie Tsang.

Here are a few thoughts on what others are saying about Mom, Inc.

“More than just a pep talk, Mom, Inc. is brimming with resources and practical information. You'll be introduced to an array of enterprising mothers and will learn as much from their early mistakes and failures as from their eventual successes. —Carrie McBride, managing editor, Oh Dee Doh

"Mom, Inc. is a smart, realistic, and easy working mom’s guide. In an age when we all have so much to juggle, what a great companion book for starting or running a business!" —Christiane Lemieux, founder and creative director, DwellStudio



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Many Ways to Contact Us
By Frannie Esparza Monday, September 10, 2012

Here at Harvard Business Services we pride ourselves in our stellar customer service. We strive to be as accessible as possible for our valued clients. We know that the different processes and requirements involved with the formation of your business or company can be a bit overwhelming and confusing. That is why we are always standing by to assist you!

We will walk you through new formations, do our best to answer any and all general questions you may have and provide you with the best Registered Agent services for the life of your company and at the lowest price in the industry! We are the home of the $50 Registered Agent fee, guaranteed never to go up!

There are several ways to get in touch with us in order to get started, ask questions or make any changes to your already existing LLC or INC. You can reach us by Skype, online chat, email, phone, fax, mail and walk-in.

We have both English and Spanish speaking representatives for your convenience!

• Skype with us! – Through Skype you can communicate important information, questions and concerns by voice, video or instant messaging. As of September of 2011, Skype had over 600 million registered users!
(Skype: DelawareInc and Skype en Español: VentasHBS)

• Chat with us! – On Harvard Business Services’ home page, on the top right you have the option to reach us through our LIVE CHAT feature. Chat with us while you navigate our website. We are ready to assist!

• E-mail us! - This type of written communication is very convenient for many clients and often preferred due to being able to establish a “paper trail”.

• Make a phone call! - Phone communication is a vital means of business communication. Harvard Business Services offers the opportunity to call in and speak to a live Representative that is ready and willing to help. We promise you, NO voicemails, just friendly and attentive customer service.

• Send it by Fax! - This option is very beneficial when forwarding and/or receiving “hard copy” documents. If you do not have access to a computer, send it by fax.

• It’s in the mail! - You also have the option to correspond with us through mail. We have an excellent Mail Room Team that specializes in the handling of all the incoming and outgoing mail here at HBS. Often, clients like to mail in their Registered Agent payments and are not obligated to only choose from online or over the phone payment methods.

• Walk on in! - For those of you who like to do business in person we also welcome you to come on in to our office! We will meet with you face to face and shake your hand to congratulate you on the formation of your company!

No matter what method you prefer we guarantee you will receive excellent, knowledgeable and courteous customer service. Our goal is to provide you with the best answers and services for all your company’s formation needs!

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Starting Your Own U.S. Company as a Foreigner
By Carleigh Lowe Friday, September 7, 2012

We are excited to share this informative post from The World of High Tech Startups about starting your own U.S. company as a foreigner; below is an excerpt:

It is possible to create a US company if you are a foreigner, without ever flying to the US and to operate it from your own country. For instance, I have two US companies (browseye and iFlikeU) and I am not a US citizen (technically I am a non resident alien). In fact, the process is surprisingly simple, although there are caveats and gotchas that specifically apply to foreigners. Some of them can be fatal. The problem is that the company formation process is explained very well for US citizens (for instance read this book), but not for foreigners.

"[...] there are caveats and gotchas that specifically apply to foreigners"

I had to make many telephone calls to the IRS and to legal experts, as well as to post questions in legal forums such as FindLaw in order to discover what applies to foreigners and what doesn't.

I'd like to share with you my findings, so that if you are considering starting your own company in the US you  won't make the mistakes I almost made, or the ones I definitely made.

I'll try to keep it simple and focus on the things that only apply to foreigners. I'll also give you some personal recommendations on decisions I've made or services I've hired. Notice that they constitute no legal advice, it's just my personal non professional opinion on the matter.


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