Do I Deserve a Raise?

How to review your own performance; networking like a pro.

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While preparing year-end reviews, I realized that I wouldn't be getting one. It would be nice to do a 360-degree review with my 25 employees, but I'm concerned they might be afraid to be honest. I'd like to know how I'm doing. Basically, if I were working for me, would I give myself a raise?

Deb Weidenhamer
Auction Systems Auctioneers & Appraisers Phoenix

If only we could see ourselves as others see us. And for business owners, few "others" matter as much as employees. Hence the popularity of the "360," in which staffers rate their managers. After all, looking in the mirror generally tells you what you already know. Looking at two dozen portraits composed by the folks who labor alongside you every day reveals what you may have missed.

Erik Ahlgren, president of ShoreMaster, a Fergus Falls, Minn., boat-dock maker, learned a few hard truths when he went through his first 360-degree review recently. Ten top managers filled out an anonymous, 92-item questionnaire rating his leadership and management skills on a scale of 1 to 5. "It's very effective in showing you your blind spots," Ahlgren says. "I found out I need to do a better job of telling people thank you and acknowledging their contributions."

The first foray into 360-degree reviews tends to go one of two ways, says Verne Harnish, CEO of the Ashburn, Va., consulting firm Gazelles and founder of the Young Entrepreneurs' Organization. "There will be lots of pent-up frustration," he says, "or you'll get lots of sugar-coated responses." If the wine of love is flowing, tell employees you appreciate their feedback and would like more concrete suggestions for improving your performance. But if you encounter the grapes of wrath, "acknowledge their feedback," Harnish says, "and find a few things you can change, so people see that you are acting on their comments."

I run a small multimedia design firm. I have recently taken an interest in networking groups, but am not sure if they are an effective way to increase sales. More referrals can only help, but is this really the best use of my time?

Darrin Samaha
Blue Coda Inc., Cambridge, Mass.

There are thousands of networking groups and they are not interchangeable. If you offer a niche service, then industry-oriented groups, where by definition you're a potential partner or vendor, make sense. Generalists--in real estate, law, or health care, for example--may get more from regional- or demographic-based gatherings. Whatever your choice, be sure to try it on before leaving the store. Attend a few meetings, talk to members, check for nasty flaws in the fabric. "If they promise you x amount of referrals just for joining," it's probably a pyramid scheme, says Neil E. Hare, a vice president at the U.S. Chamber of Commerce.

Once you have signed up, prepare to commit, says Nancy Webb, CEO of an eponymous design firm in Oakland, Calif., who joined her first group in 1993. Today she participates in five, and credits group referrals for one-third of her business. "People who just show up and pepper the room with business cards don't get credible referrals," says Webb. And remember: Networking is not a euphemism for selling. You're there to make contacts and learn--not to close a deal. Teresa Moore, CEO of Seattle public relations firm Moore Ink.PR, says she has scored only 10% of her clients from her local Women Business Owners group. But she also met her florist, accountant, and graphic designer there. "If you go in with this attitude of 'get, get, get," says Moore, "you'll mask one of the true benefits of networking: giving business to people you trust."

I have an idea for a new product in the automotive detailing industry. How do I go about presenting my product to a company to set up some sort of licensing or royalty agreement?

Michael Dreisilker, Winfield, Ill.

First things first: No major company will even talk to you unless your product is patent pending. If that's the case, make contact with a potential partner's new-product development department. But bear in mind that large companies like Turtle Wax or Armor All generally prefer purchasing products outright to licensing them. If you're not willing to hand over the keys, then midsize outfits are a better bet, says Mike Burns, CEO of Banshee Products, a Sacramento toy company that licenses products. Licenses generally run the life of the patent and pay 3% to 4% royalties on sales.

You'll likely get a better deal if you walk in with the whole enchilada, not just the beans. In other words, build the product first, and a company around it. Entrepreneurs bearing market research, sales figures, and strategic plans have a lot more leverage than inventors with just gleams in their eyes. "A finished product with sales is much more valuable," says Burns.

LOOKING FOR ANSWERS? Stumped by a thorny business problem? Let Inc. help. Send your questions to AskInc@inc.com. We'll consult with experienced entrepreneurs and savvy advisers, folks who've been where you are and figured out what works and what doesn't. If you don't like what we have to say--well, you can tell us that, too.

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