Signs Your Employee Could Soon Be Your Competitor - February 15, 2018

As a small business owner, it can be one of your worst fears. As you launch your business, you are careful to hire the right superstar that can help your business grow. You train this person and get them personally invested in your vision. Momentum builds and your business grows. The next thing you know, this person has resigned, only to start a similar business that will directly compete against you and take some of your customers away.

Sound familiar? It's not a matter of if this will happen, but when it will happen.

In this issue of Promotional Consultant Today, we share these insights from Mike Michalowicz, author of The Pumpkin Plan, who posted these five warning signs to watch for on

1. Loss of productivity. An employee who is focused on starting a new company will be distracted. In other words, your company will no longer be their primary concern. If your normally high-performing employee seems to be slacking off or not fully focused, consider what may be diverting his attention.

2. A bad attitude. Michalowicz explains, "One of my former employees who ended up leaving to start his own business had always been super positive—until the end. He started finding fault with my goals and requirements. He nitpicked the work of other employees. It was almost like sabotage, but I realized after he left, that he felt a little guilty about what he was planning. He was probably just working through some conflicted emotions, knowing he was about to start trying to poach my customers."

3. Heightened interest in all aspects of your business. You might experience your employee having a sudden interest in all details of the business, even areas that don't affect their role. He might ask about how you manage the insurance, inquire about sales and marketing or express an interest in your vendors. This information-mining is a key sign that the employee may be looking to ramp up his own business.

4. Avoiding long-term projects. Another sign that an employee is striking out on his or her own is a tendency to decline projects that will extend past their intended leave date. Even though a staff member may be planning to become your competitor, he still might not want to leave you or your clients in the lurch. When an employee who would ordinarily be thrilled to pick up a project is suddenly reluctant, consider that he may be trying to move on.

5. Ramped-up networking. Another tip-off could be your employee's interest in making connections in your industry and with your customers and vendors. It's easy for him to connect when he's still with your business. If you see him collecting customer lists, reaching out to vendors and focusing more on networking than normal, then realize he might be looking to go out on his own.

Once you confirm your suspicions, what do you do about the situation? Michalowicz suggests having a straightforward and honest talk. "It's business," he says, "and I've found that the best practice is to be direct. In my case, I asked my employee, he owned up right away and I let him go. Neither of us was angry or upset, but you simply can't allow a competitor to stay in your midst. He ended up starting his own company, but in a slightly different niche than mine, so we've even collaborated a couple of times."

Source: Mike Michalowicz is a globally recognized entrepreneurial advocate and is the author of Profit First, The Pumpkin Plan and The Toilet Paper Entrepreneur. He can be seen as a segment host on MSNBC where he leads business makeovers and frequently on news channels as a small-business expert. He is a former small-business columnist for The Wall Street Journal, Entrepreneur and American Express Open Forum.

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