The EntreLeadership Podcast Does My Employee Deserve a Raise?
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Jun 23, 2025 A business owner grapples with whether to grant a raise, diving into effective compensation strategies linked to performance and education. Insights on cash flow management illuminate the challenges of rapid growth and the importance of better payment terms. The discussion highlights the significance of promoting the right talent based on merit over seniority. Real estate decisions are also explored, weighing the pros and cons of leasing versus owning property in alignment with business growth.
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Stage-Gated Raise Strategy
- Create a clear multi-stage growth path for employees to move from trainee to manager with measurable goals.
- Tie raises and commission increases to completed education, store profitability, or hiring milestones to motivate progress.
Cash Flow Management Tips
- Manage cash flow by buying 25% more inventory than last order to cover growth and avoid shortages.
- Negotiate annual purchase contracts with vendors for discounts and extended payment terms to improve cash flow.
Promotions Based on Performance
- Base promotions on competency and performance, not tenure, to ensure best leadership selection.
- Set clear culture expectations that seniority alone doesn't guarantee advancement to avoid entitlement assumptions.
