If your small business can’t afford external auditors, security cameras or other resources for spotting employee fraud, consider doing some detective work of your own. The effort could save your firm from a significant financial loss or worse—failure.

After all, a single heist could be fatal for a small business, says Richard Hollinger, a professor of criminology at the University of Florida. Small firms typically don’t have

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Employee fraud can take place right under a business owner’s nose. According to the Association of Certified Fraud Examiners, an anti-fraud trade group in Austin, Texas, such activities occur on average for as long as two years before the victim organization catches on.

The phone keeps ringing. Some corrupt workers will instruct friends to repeatedly call a business and ask if the owner is on site until the answer is no, says Mark R. Doyle, chief executive of Jack L. Hayes International Inc., a provider of workplace crime-prevention services in Wesley Chapel, Fla. Once they hear those “magic” words, the friend knows it’s safe to come by and swipe merchandise under the rogue employee’s watch, he explains.

The math doesn’t add up. Two years ago, ReShonda Young noticed a subordinate at her father’s transportation company, Alpha Express LLC, had turned in a weekly time sheet with more hours than he could’ve possibly worked. That prompted Ms. Young, a manager at the Waterloo, Iowa, company, to investigate further and she discovered that the employee had been stretching his hours for months, initially to a less-noticeable extent. “I guess it got to be a little easy,” she says. Now all supervisors must review and sign workers’ time cards before they can be processed, says Ms. Young.

Money problems surface. Financial pressures are a key motivator of occupational fraud, the ACFE reports. For this reason, business owners should take note of any excessive complaining by a worker about money burdens. And if such a person’s lifestyle suddenly improves dramatically, this could signal he or she has their hand in the company’s cookie jar.

Write to Sarah E. Needleman at sarah.needleman@wsj.com

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Thomas Friedman was onto something when he wrote his book, The World is Flat. Companies increasingly feel the need to expand their reach into new markets—both domestically and internationally—from a very early age.

One direct result of this expansion is that you may now be forced to manage multiple locations and oversee employees in distant offices—a fact that can cause quite a few challenges and headaches, says Eric Bloom, president of Manager Mechanics, a management-training firm based in Ashland, Massachusetts.

“No matter how widespread your organization becomes, you need to work hard to retain team cohesion and the philosophy that everyone is on the same team regardless of where they work,” he says.

Dig Deeper: Why You Should Expand

Managing Multiple Locations: 6 Challenges

1. Out-of-site-out-of-mind syndrome. When things get busy at your primary location, it can be hard to give your employees based at other locations the time they deserve.

2. Loss of spontaneous communications. Because you do not see your employees in the hallway or at meetings, there is very little natural or unplanned communication.

3. Attenuated logistics. Anything that cannot be sent electronically, must be mailed, which causes time delays and increased effort.

4. Complicated work assignments. It is harder to perform certain types of jobs or collaborate on them when employees are based in remote locations

5. Lack of team cohesiveness. Your team members will not know each other as well. This can easily lead to an “us-versus-them” mentality.

6. Concerns over general supervision. If you have a remote office that clients visit, it’s virtually impossible to see if your employees are arriving on time, working appropriate business hours or wearing proper business attire.

To tackle these and other challenges, then, organizational leaders need to focus on three key areas: systems, technology, and communication.

Managing Multiple Locations: Put Systems in Place

The old adage is that systems run businesses, and people run systems. “You must have systems in place to be able to standardize the quality of your communications, products and results,” says Bert Martinez, founder of Bert Martinez Communications, a business training and communications company with multiple locations. “Systems will allow you to duplicate offices and grow faster with reduce training times and supervision.”

The key is to establish clear responsibilities, boundaries, and authority, says Ann Latham, president of Uncommon Clarity, an organizational-behavior consulting firm in Easthampton, Massachusetts. “Vague responsibilities create the proverbial cracks into which everything drops,” she says. Muddy boundaries create disasters ranging from personnel problems to legal ones while insufficient authority can become a source of delay and demotivation. “An employee with everything needed to exercise good judgment except either the authority or sense of responsibility to do so is worth little,” says Lantham.

The point, then, is to make each employee’s responsibilities clear through an organizational structure combined with a system that measures each and every employee, and holds everyone accountable for delivering on their work responsibilities regardless of where they are based.

Dig Deeper: Building Systems to Manage Your Business

Managing Multiple Locations: Adopt New Technology

With the advent of the Internet, and the prolific surge in the number of collaborative tools that have spawned from it, technology has become an integral part of the backbone for any far-flung organization, says Bloom, particularly because it can help your organization cut down on business travel expenses.

While many organizations rely on custom-built software platforms and intranets as collaborative platforms, some of the most commonly-used tools by small businesses in particular are also either free, cheap or available as a software-as-a-service, which means you can access these tools over the web for a monthly fee. Some of the best and cost-effective options include:

• Google Documents, Gmail and Calendar for internal training and communication.
• Basecamp: An popular project management tool.
• Facebook : The now ubiquitous social networking tool is just as useful for business as it is for personal applications.
• Skype: The surge in VOIP technology and software means that you can communicate with remote employees cheaply and effectively.
• Salesforce.com: One of the most popular tools around, Salesforce.com allows remote sales team to collaborate in real-time on maintaining your company’s sales pipeline.

A new wrinkle in terms of technology is that many firms have begun to equip all of their employees with smart phones such as the iPhone as a way to enable them to access any web-based technology regardless of where they are, including many new applications.

Dig Deeper: The Latest Small Business Technology News

Managing Multiple Locations: Focus on Communication

Systems are a must, technology is important tool however, none of these will work with out real communication, says Martinez. “Communication is the key to collaboration with your offices, coworkers, and clients,” he says. If you neglect this aspect of running your business, you do so at your own risk, particularly in a business with multiple locations. That’s why Martinez also makes having his employees have time face-to-face a priority by having his offices take turns hosting each other once a year to enable communication between people on all levels.

Other tips for fostering communication between your employees based in the office and elsewhere include:

1. Establish full team weekly staff meetings via phone or webinar to get your whole group together.

2. If possible, have web cams so your team members can see each other.

3. Make each physical site responsible for a specific type of work, rather then assign random tasks associated with a central project.

4. When doable, have the CEO or management members personally visit each remote site on a scheduled basis, every month, for instance.

5. Establish weekly phone-based staff meetings individually with each remote group so that each physical location will get time with top management.

6. If possible, get your whole group together once or twice a year for staff meetings, brainstorming and team building.

Dig Deeper: How to Improve Your Communications Skills

Managing Multiple Locations: The Global Workforce

Managing multiple locations across the U.S. is hard enough. But when you add a new sales office or manufacturing plant overseas, says Bloom, you can actually run into a host of new challenges associated with cross-cultural communication that include:

1. Time zones. There is limited or no overlap in the standard workday.

2. Language. Even if everyone has a common language, English for example, differences in accents, language fluency, and the use of slang expressions can make communication extremely difficult, particularly on conference calls and speakerphones.

3. Social norms. Cultural differences from country to country can accidentally cause tension, embarrassment, and miscommunication.

3. Holiday schedules. Scheduled meetings, reporting deadlines, cash flows and standard business processes can be derailed or delayed based on local holiday schedules.

4. Technical connectivity. Not all countries have high-speed connectivity at all locations.

5. Labor laws. Laws regarding hiring, employee termination, hours worked, layoffs, sexual harassment differ from country to country.

6. Business-related laws, ethics, and practices. Business is conducted very differently from country to country.

7. Personal-privacy laws. In European Union member states, the laws regarding the personal use, storage, and transport of personal information are quite stringent compared with those in the U.S.

Dig Deeper: Building the Best Virtual Workforce

Managing Multiple Locations: Adapting to Different Cultures

Bloom suggests tackling these challenges by considering the following tips:

1. Find one key contact in each country that is very knowledgeable in local customs, business practices, and laws.

2. Learn to pronounce people’s names correctly.

3. Gain a basic understanding of country politics and current events.

4. Know the names of your managers and leaders in those countries and pronounce their names correctly.

5. Find ways to take advantage of the time zone differences.

6. Be respectful of the differences between people and cultures.

The bottom line in managing multiple locations, says Martinez, is to help make everyone in your company feel motivated and part of the team, regardless of where they do their work. “When your people feel good and that they matter, they will perform better,” he says.

Dig Deeper: How to Be a Lead Teams in Emerging Markets

Managing Multiple Locations: Additional Resources

Corporate Agility: A Revolutionary New Model for Competing in a Flat World, by Charles Grantham, James P. Ware and Cory Williamson (AMACOM, 2007.) This book will show you how to get your company to embrace new technology, understand the ever-changing workforce, and rethink the way you structure work environments to deal with the global economy.

Competing in a Flat World: Building Enterprises for a Borderless World, by Victor K. Fung, William K. Fung and Yoram (Jerry) Wind (Wharton School Publishing, 2007.) A book filled with solid tips to create a flexible organization capable of competing anywhere.

The Facility Management Handbook, by David G. Cotts Kathy O. Roper and Richard P. Payant (AMACOM, 2009.)
A great reference guide for understanding and implementing best practices for the modern workplace.

While traveling, vacationers typically gather more than just memories—snow globes, seashells, stacks of refrigerator magnets—but what about the things they leave behind? While many travelers believe their lost belongings are doomed to fade into a black hole, never to be heard from again, some are reunited with their possessions in unusual and inspiring ways.

Just this past February, we heard about a Spanish fisherman who netted a camera dropped off a cruise ship sailing near Ireland over two years earlier. The camera no longer worked, but the memory card inside was still filled with pictures (ever lost or found a camera? Check out I Found Your Camera, a blog that aims to reunite people with their memories). Miracles like this happen more often than you might think. Below are two tales of travelers who lost everything, only to be reunited later, and the story of one man on a mission to connect travelers with missing items. If you have a miraculous lost and found story of your own, tell us about it at TravelComments@aol.com.

A Man Without A Plan(ner)

Bert Martinez lost everything on the final night of his vacation in Hawaii. After enjoying his last meal, he left the restaurant and realized he left something very important behind: his day planner. This was in the days before PDAs and Smartphones kept track of daily routines, but inside was much more than just his schedule—the planner also contained his credit cards, identification, and most importantly, his airplane ticket. Martinez raced back to the restaurant, but it was too late, the planner was gone. He had no idea what he was going to do.

The next day Martinez arrived at the airport, hoping somehow everything would turn out for the best. He tentatively approached the ticket counter and explained what had happened. The clerk asked his name, went to the back room, and miraculously returned with his day planner intact. Martinez was blown away. The clerk explained that the manager at the restaurant where he lost his planner was married to an airline employee. Once the manager saw the plane ticket tucked inside, he gave it to his wife, who brought it to the ticket counter.

A Journal is Worth Far More Than A Thousand Words

While Martinez struggled to find the practical, others, like Emily Wolman, have lost items of a more sentimental nature.

Wolman, a commissioning editor at Lonely Planet, was driving around New Zealand when she spotted a picture-perfect scene: beautiful striated rock formations with flat tops, called Pancake Rocks, stretching along the coastline. She pulled over and hopped out of the car to snap a few quick pictures. While walking back to her car only a few minutes later, she realized her backpack was missing.

“The bag contained my life—my wallet, passport, traveler’s checks, laptop, airline ticket home, and most important to me, my travel journal.”

After lingering in the area for longer than she originally planned, just hoping her bag would turn up, she decided to continue on her trip to Queenstown.

After spending a month in Queenstown, Wolman journeyed back the way she came, passing a police station in the town where her backpack was stolen. She pulled over, and thought she’d give one last try to finding her bag. She explained her situation to the policeman, who told her no bags had been turned in during the last month, but that she should come back in a day or two, just in case.

The policeman’s words ignited an ember of hope and Wolman put the brakes on her journey once again. She ventured to the station every morning, looking for word on her bag, but nothing had changed. Finally, she decided it was a lost cause. She was going to press on, but only after one more try.

Wolman stopped by the station with low expectations. She started to thank the officers, who had been kind to her during her search, when an officer suddenly reached into a cabinet and plunked her bag down on the counter. Despite being soaking wet, Wolman knew it was her long lost bag.

It seems as though Wolman’s backpack had gone on quite a journey of its own over the past month. The back-story behind the sopping wet backpack goes as follows: a father and son were fishing on a river 125 miles away when they spotted a bag floating by. They grabbed it, and upon noticing the passport inside, realized it was probably stolen. The pair took the bag to a local police station, where it was eventually reunited with Wolman.

Upon seeing her bag, she tore into it, and found it mostly intact. Her money was gone, but her passport, laptop, and airline ticket were still there, despite having some water damage. Wolman kept digging, looking for her travel journal, a green leather covered account of a yearlong journey. While the cover was warped, and the pages swollen, nearly every word was still impressed upon the page.

“I still wish I could find those two fishermen and thank them somehow.”

Reuniting and It Feels So Good

David Stone, a metal-detector enthusiast and creator of www.ilostmyjewelry.com, finds joy in reuniting others with lost possessions.

Nearly seven years ago, Stone, a former nature photographer, began scanning beaches with a metal detector as a way to relax. Among the bottle caps, old batteries, and miscellaneous coins, Stone began finding more precious items, like custom designed jewelry, platinum set diamond wedding rings, and dozens of men’s wedding bands.

Knowing many of these items had value far greater than their cost, Stone sought out to reunite them with their owners. He began contacting hotels surrounding the areas where he made his discoveries, but found most of them to be unhelpful, asking him to leave the jewelry with them in the hopes someone came looking for it.

Stone felt uncomfortable leaving such meaningful property with any hotel, knowing that many people who lost things on the beach would consider them gone forever and would not likely report them missing. He decided to take matters into his own hands and started leaving his business cards at nearby resorts, directing people who have lost items to his website. Once there people could scan through pictures of his recent finds, or submit a description of a lost item, along with a location of where it might be.

Stone has found jewelry in six different locations, ranging from Cape Cod, Massachusetts to St. Martin, and updates his website with information on his current whereabouts. He has already reunited dozens of vacationers with lost possessions, and hopes to continue helping others.

“You don’t often find people in this world who are concerned so much for others and take the time to help their sorrows,” said Lee Glowacki, who was reunited with his wedding band after Stone found it in the ocean behind a beach resort. “Thanks to David Stone a miracle has taken place.”

Photo Courtesy of David Stone

Tip #1: Know the topic you are discussing. If you are giving a speech to a large group of people, be sure you are familiar with the subject. Or if you are sending an email to your boss, be sure to understand what you are asking or discussing. Your audience can easily pick up on a lack of knowledge and will not value your communication if detected.

Tip #2: Know the audience. There is a big difference speaking to a work friend in the break room and discussing a deal with a customer. You want to adapt to the situation and match your communication to the level that is needed. Not to say you should change who you are but understand that what you know and do not know about the audience. Are they knowledgeable on the topic? Do they have cultural differences? What are their expectations from you? How much do they know about you? These are the types of questions you want to ask yourself before deciding on a communication technique.

Tip #3: Use the right communication channel. These include face to face, telephone, video conference, and written (email, letter, memo, etc). If you are discussing a confidential topic, you would want to be sure you use a method that reaches only a qualified audience. If you are reporting on a long, in depth subject, a phone call might not allow proper interaction. Maybe graphs or displays would work better in a face to face meeting.

Tip #4: Be to the point, positive, and polite. Do not ramble on about unnecessary information or personal references when they are not needed because the audience will become distracted. Reflect the news, even if bad news, in a positive light. If you begin speaking negatively, people tend to get their back up or become worried about the topic. They will then pay less attention to whatever else you have to discuss. And, always remember your manners, they go a long way. An audience will become more receptive if they are treated well and feel respected. Being rude will create an instant barrier that is tough to get through.

Tip #5: Listen. Communication is not just about you talking, it is receiving information and feedback from others. Whether you ask a question and the audience is answering, you send an email and the recipient I responding, or you are getting the opinion of others in a team meeting, be sure to listen fully. If you do not comprehend what they say, ask questions or for them to repeat it. Listening will help you clearly understand your audience so that they will clearly understand you.

Communication skills can be learned overtime through your experiences or you can take part in a communication skills training. Many businesses or organizations offer training to their employees or members so that they can present themselves effectively.

Nowadays videos are all the rage and most people don’t mind posing for a video bite here and there. Assign a staff or two to take short videos, 1 minute or less, of the attendees and presenters having fun at the event. While they’re in this Intense Emotional Association (IEA) ask them to give a recommendation (sometimes referred to as a shout out or a sound bite) or testimony about the event, a workshop or a presenter, then ask if they would like a copy emailed to them, you know they all will.

Now you have intensified their emotions and created a lasting memory for them and your event. Be aware due to smartphones the videos would be uploaded every hour or so and emails sent to the individuals, if possible, if not, make it a priority right after the event. The videos will be seen and as always sent to coworkers, attendees, family and friends so now your event grows virally, also these videos can be used for future marketing of events and can be placed on your website as well.

Items you’ll need: A video camera, I recommend the Flip video camera they’re inexpensive and very easy to use and have all the software built right in the camera. Amazon has the Flip Video Cameras for about $100.00. High-speed internet access and a site to upload your videos like youtube.com or kyte.com. A note pad for collecting emails.

“I was interested in building a company,” says Mr. Madill, a first-time business owner in Portland, Ore. “I never thought through that it meant I would have to hire people, terminate people and do all of the things associated with being a boss.”

Cameron Madill

It’s common for first-time entrepreneurs to overlook responsibilities tied to managing people when starting out, says Edward P. Marram, a senior lecturer of entrepreneurship at Babson College in Wellesley, Mass. With all the focus on selling a new product or service, “most don’t think about being a boss,” he says.

But at some point, business owners typically need help to grow, Mr. Marram says, and that means hiring staff, delegating responsibilities, and learning to be effective managers. For the inexperienced, those management duties can be challenging, depressing and sometimes plain awkward.

For instance, entrepreneur Lisa Morris last year had to deal with an employee who accidentally copied her on a highly graphic email to a hotel sales manager. “He was saying he’d do certain things to the person’s body for good rates,” recalls Ms. Morris, owner of Road Concierge Inc., a travel- and concierge-services firm in New York. “We’re all about servicing our clients, but not actually servicing them.”

Ms. Morris, who started her business in 2006, says she felt “really uncomfortable” scolding the employee for his behavior because ruling with an iron fist isn’t her style. “I don’t like to be very corporate,” she says, adding that she runs a casual office where employees’ pets are welcome.

Still, while it was clear that the email exchange wasn’t serious, nor was the recipient offended, Ms. Morris says she needed to stress that a repeat performance would be unacceptable. “I hate having to act like a mom,” she says. “But there are times when you can’t be nice. You’re the boss and you have to enforce policy.”

Many first-time business owners struggle with laying down the law because they are in fact former corporate employees who became entrepreneurs in part to escape rigid work environments. The worst situation, however, is having to tell an employee you can no longer keep them on board.

Womenkind LLC

Sandy Sabean, co-owner of Womenkind, pictured center, meets with employees Lara Ngai, left, and Betsy Handwerker, right.

“You feel terrible,” says Sandy Sabean, co-owner of Womenkind LLC, a New York marketing-communications firm with five employees. Last year, she says, she laid off two workers for the first time after the company lost a bid. “When you have to let someone out on the street under those circumstances it’s hard,” she says. “It’s sad.”

Gary Hewing, co-owner of Bert Martinez Communications LLC, a sales- and business-training firm in Houston and Scottsdale, Ariz, says it’s just as rough to fire someone for poor performance. “You know they’ll have a tough time finding a job and that you’re giving this person the last check they may have for months,” he says. “It’s extremely difficult. I do not appreciate that aspect of the job.”

Some inexperienced entrepreneurs are caught off guard by just how significant a role a boss plays within a small company.

Mr. Madill, whose Web-design firm has eight employees, learned that lesson about three years ago when a worker who was hired to do miscellaneous tasks refused to take on a new assignment and subsequently offered her resignation.

A self-described pushover, Mr. Madill agree to let her stay on the company payroll for the next six weeks while she searched for a new employer. “She helped build the company,” he says. “You feel some loyalty to your first few hires.”

But the decision drew resentment from the rest of the company’s staff, says Mr. Madill, particularly because the uncompromising employee did little work from that point on. “It led to an unbelievably toxic atmosphere,” he says. And when the problem worker was finally gone, things changed dramatically. “Productivity suddenly increased,” he says. “You would’ve thought we hired a person the day she left.”

Mr. Madill says he since changed his outlook on business leadership thanks to the advice of counselors at Accelerator, a nationwide support organization for early-stage entrepreneurs. Other support groups small businesses can turn to for advice include Young Entrepreneur, Energizing Young Entrepreneurs and SCORE.

Now Mr. Madill believes that as a business owner, “you only have an obligation to make (your employees) successful to the extent that they give more back to the company,” he says. “And if someone doesn’t understand that, it’s not your responsibility to educate them.”

Write to Sarah E. Needleman at sarah.needleman@wsj.com

1) Be able to recognize strengths among your team members in order to work effectively with each one. Being able to see and utilize these strengths accordingly, allows a leader to motivate and delegate on a stronger level for better results.

2) Encourage suggestions and input on procedures from everyone. In order for people to feel motivated to make change or improve, they have to have some ownership of the process and believe their contributions are important.

3) Allow individuals to solve problems. A leader’s job is not to do everything but to grow confidence in others, to grow more leaders, allowing for others to grow through problem solving builds confidence and new leaders. The more people learn, the more they are inspired to learn, and the more they accomplish, the harder they will work toward future goals.

4) Understanding the personal goals of each of the people on my team. Everyone has their own motivations for doing things. By understanding what makes people work, we are better able to find ways to keep them engaged and moving ahead.

5) Provide consistent and appropriate rewards and praise. William James once said, “The deepest principle in human nature is the craving to be appreciated.” Here is a real human hunger, and the rare individual who honestly satisfies this great hunger will hold people in the palm of his hand. Even the undertaker will be sorry when he dies. Never forget to be truthful and kind. Remember, everyone needs to be recognized for their efforts and contributions.

6) Motivating the team While each individual’s efforts are invaluable, the team as a whole must learn to work together to make effective change.

7) It’s impossible for a leader to be invisible and make progress. In order to achieve accomplish goals, team members and individuals need a leader who can create a working environment that encourages communication, understanding, respect, and support among the people.

If you liked this article, tell all your friends about it. They’ll thank you for it. If you have a blog or website, you can link to it or even post it to your own site (mention www.bertmartinez.com as the original source – thank you).

In fact, networking is the best marketing device of even the most cash-strapped home-based entrepreneur. It is based on an inexpensive endeavor using a simple skill: talking. As a result, networking is also referred to as “word-of-mouth marketing” because it is based on talking to people about what you do and listening to find out how to serve them. The best networkers do not even know that they are networking – they are simply being good conversationalists; adept at becoming visible; talking and responding, and getting to know people.

However, many people are put-off with the idea of networking. Some view the practice akin to “politicking” requiring an extremely outgoing personality willing to approach anyone who would care to listen. Many start-up entrepreneurs also have a hard time approaching other people – particularly strangers – about their business. It may be the fear of speaking out to a total stranger, or the fear of coming on too strong or aggressive. Others let their insecurities take the better or them, while some people fail to network simply because of laziness. As a result, many formal gatherings and social situations become lost opportunities to spread the word about their business.

Everyone you meet is a potential customer or a valuable contact. Well, maybe not the old lady you met in the library if you are selling shaving cream. But then again, that old lady may have a husband, son or nephew who could use your product. Marketing is simply spreading the word around, and it is a big loss if you continuously pass up opportunities for networking.

Schmoozing pays. In fact, the growth of any business is directly correlated to the number of people who knows about it. Doing more of networking allows you to develop more contacts in your field and to exchange information with your prospects. It can help you find out the concerns of your prospects and who is fulfilling them; what’s happening in your industry; and who needs what and who offers what. It is basically an entrepreneur’s tool for relationship building.

Successful networking entails harnessing your people skills. But it doesn’t happen overnight, particularly for those who are not natural social butterflies. It requires careful orchestration and good manners, too. Here are several steps to help you become an effective networker:

1. Prepare a plan. Networking goes beyond greeting people. You need to prepare a step-by-step plan for how you’ll build relationships and how you can effectively tell your story. It entails getting to know people who will either do business with you or can introduce you to people who will. When people ask you what you do, make sure you have a clever opening line to introduce yourself and your business.

2. Use social networking sites. LinkedIn http://www.linkedin.com , Facebook http://www.facebook.com and even the microblogging site Twitter http://www.twitter.com are excellent venues for virtual networking. Whether you are looking for potential partners, web site or blog contributors, or strategic partnership opportunities, these social networking sites allow you to expand and nurture your network in the comfort of your computer screen. LinkedIn, in particular, is most suited for professional networking as you can easily see the work and business background of the person.

3. Learn to communicate more easily. To be a good networker, you need to work on your ability to make small talk. You need to be able to articulate what you do in clear, easily understandable, and memorable way. Imagine yourself in a cocktail party or industry luncheon full of potential prospects. Set a goal of meeting at least two people in one event, slowly increasing the number as you become more comfortable with the art of schmoozing. Once you are at an event, do not stand around with appetizers in hand waiting for other people to approach you. Go out, head straight to people you do not know, and start a conversation. This will help you gain the interpersonal communication skills that you need. You will defeat the purpose of networking if you continuously stick with familiar faces. Get interested in what others are offering or saying without being abrasive. Good networkers are good listeners, too.

4. Identify your prospects. Know your most likely market, and learn where you will find them. Research as much as you can from the ideal prospects for your business. How do they get their information? Do they live nearby? What activities do they participate in? What organizations do they belong to? The more you know about your customers, the easier you can reach them.

5. Start with people you know. Look at your roster of friends, colleagues, acquaintances, and people you have come across in your lifetime. From among your friends, identify whom you think might be able to help you the most.

6. Get involved. A key to successful networking is to get involved and grow your people skills. Participate in organizations, events, professional groups and social clubs that offer opportunities for you to meet and greet. Participate in numerous networking groups, join your chamber of commerce, and attend conferences and training seminars. With the advent of the Internet, you can also network in online newsgroups and discussion boards. The key is to list every opportunity to network and develop win-win relationships with your contacts.

7. Make networking a part of you. Make it a point to meet new people wherever you go – whether you are on the plane, waiting in line at the bank, or fetching your child from school. Be generous in giving away your business cards, it’s an effective selling technique.

An established business has the luxury of satisfied customers spreading the word about the business. Until your business is self-sustaining, you need to start opening your mouth, spreading the word about your venture to all your friends, relatives, acquaintances, then later on, even strangers.

by Isabel M. Isidro Brought to you by DLDESIGNSONLINE.COM

Last year, employers filled more than half of job openings with existing employees, a new study to be released Friday shows.

Internal transfers and promotions accounted for an average of 51% of all full-time positions filled in 2009, down from 39% in 2008 and 34% in 2007, reports CareerXroads, a staffing-strategy consulting firm in Kendall Park, N.J. Survey respondents included 41 companies that employ a combined 1.8 million U.S. workers. Last year these firms collectively filled 176,420 positions.

For the 49% of jobs that were filled with external recruits, referrals accounted for the most hires — 27% — and about the same number as in 2008. On average, these yielded one hire for every 15 referrals received. Meanwhile, company Web sites and job boards accounted for 22% and 13% of external hires, respectively.

What the findings indicate, says Mark Mehler, co-founder of CareerXroads, is that networking is the most effective strategy for landing employment. “Job seekers should use job board and corporate sites to find information about openings, but they should use their network to apply,” says Mark Mehler, co-founder of CareerXroads.

Among the job boards that respondents credited for netting outside talent, CareerBuilder.com came out on top, accounting for 42%, however one respondent claimed a significant portion of these. Monster.com netted 12% of external hires, while aggregate job sites, which advertise openings from multiple job boards, hooked 10%. Classifieds provider Craigslist.org accounted for 2.8% of external hires.

Survey respondents also said outside talent was found via job boards that specialize in advertising open positions in specific categories. For example, Dice.com, a job board for the technology sector, netted 0.8% of external hires, as did TheLadders.com, which lists only positions paying salaries of $100,000 or more. All other niche job sites that employers identified were collectively credited with bringing in 27% of external recruits.

Going forward, the survey found that 48% of respondents expect to increase hiring in 2010 compared with last year, while just 11% predicted they’d reduce hiring. The remainder said they expect to make no changes to their head counts.

Meanwhile, the Labor Department reported Thursday that there were 2.5 million job openings on the last business day of December 2009. The seasonally adjusted job openings rate increased just slightly to 1.9% from 1.8% the month prior.

Write to Sarah E. Needleman at sarah.needleman@wsj.com

Strong relationships are vital in landing financing. That’s why some small business owners have found luck with a group they already know well—their vendors.

Negotiating with vendors to secure better trade terms isn’t new. But research indicates that owners do so more aggressively when they can’t rely on lines of credit from traditional lenders.

According to semiannual surveys from the National Small Business Association in Washington, between 22% and 29% of business owners relied on vendor credit to meet their capital needs between August 2008 and December 2009. That number hovered at about 18% prior to the credit crunch, according to other surveys published by the advocacy group.

Vendors may be open to modifying contract terms, particularly if they are smaller and more flexible operations. To keep customers happy and paying on time, vendors have grown increasingly willing to extend interest-free pay cycles or provide trade credit, which discounts a promptly paid invoice These arrangements can improve cash flow and infuse a business with capital.

Justin Schaldone, chief financial officer of eFashion Solutions LLC, says his regular lender wasn’t willing to extend credit in early 2009, when the Secaucus, N.J., company needed it for more purchases.

In the past year, eFashion has been paying more of its vendors directly, negotiating terms along the way. While some have extended pay cycles to 60 days, Mr. Schaldone says, others offer discounts reaching 5% to 10% for a prepayment. “If we’re paying sooner to get discounts, we have to be careful because that doesn’t enhance cash flow, but we can generate more profit down the road because our margins will be better,” he explains.

Incentives to pay on time benefit both the business owner and the vendor. “We are put on top of their pile,” says Robert Trow, chief executive of Rocasuba Inc., a cosmetics firm based in Mashpee, Mass., that offers a 1% discount to the retail stores, salons and physicians that buy its products and pay the invoice within 15 days.

Not all are willing to negotiate. Unable to find more favorable discount terms with his vendors, Mark DiPasquale, co-founder of Archimedia Solutions Group LLC, a Danvers, Mass., print and copy management provider for architects and engineers, started using an American Express Co. Plum Card, which allows businesses to pay all their vendors on the card and receive across-the-board terms, including early-pay discounts of about 1.5%.

Mr. DiPasquale says his firm, which relies on the card to finance expensive machinery such as printers, plotters and copiers, is saving approximately $1,000 each month by paying early. “Ultimately, that helps our bottom line,” he says.

But spending may need to be significant to make such cards worthwhile. “If you are a first-timer and don’t know how to negotiate, the financial institution or credit card can be beneficial,” says Michelle Dunn, author of several books concerning credit and collecting money, including The Ultimate Credit and Collections Handbook. “But it may not be worth it based on what the fee for the service is.” The annual fee for the Plum card is $185.

One way to persuade vendors is by giving them more business. According to Alice Bredin, small business advisor to American Express’ OPEN division, which offers small business services, paring down vendors to a select few proves dedication and streamlines business operations. “Don’t put yourself with just one vendor, but if you are spread out among many, it makes sense to consolidate,” Ms. Bredin says.

Business owners can enhance their odds of scoring favorable terms by approaching vendors that already have a history of their payment records. “If you can get a discount, or [terms with] no interest, then you can go back to other vendors, and ask, ‘Can you do that for me?’” says Ms. Dunn.

Not all vendors are willing to take the risk of extending interest-free pay cycles to 60 or 90 days, but vendors are seeing that type of request more frequently. “Five years ago, this [negotiating] was an afterthought; now it’s a full time job,” says Mr. Trow.

As a vendor, Mr. Trow scrutinizes his customers’ credit scores and other metrics before extending such terms. “We look at their payment history with us and with other vendors, the number of years they’ve been in business, and our subjective assessment of whether we think they know what they are doing.”

Write to Emily Maltby at emily.maltby@wsj.com