EMPLOYEES.  Let’s face it, if it wasn’t for having them, business would be a lot easier, wouldn’t it?  But then, how much business could we create if we did everything solo?  Having a solid team of people is among the most important indicators of a successful business.    So you’ve interviewed someone you think would make a great team member….now what?

Sometimes when I am asked about my book Do As I Say, Not As I Did!:  Gaining Wisdom in Business Through the Mistakes of Highly Successful People I am asked what types of mistakes are made most frequently.  I believe the most common mistake we make is not doing enough research or reference checking.  Whether you are hiring an employee, contracting with a key supplier, or even going into a partnership, NOTHING TAKES THE PLACE OF THOROUGH REFERENCE CHECKING!

The most important thing you can do to create a top-notch staff is to flesh out the right people during the interview process.  Hiring the right people will save you tons of time, money, and heartache.  Just ask Susan Jones Knape, former owner of one of Dallas’ most successful advertising agencies, and the subject of a chapter in my book.

Susan hired “Mark” to take over all of her finance and accounting functions and the next thing she knew, he had gotten their company into such hot water that they owed the IRS almost $350,000 in back taxes and penalties.

The thing is, she had never checked Mark’s references!  Can you imagine turning virtually of the finances of your business over to someone whose references you had never checked?  I can’t – but apparently that sort of thing happens all the time.    Susan just ASSUMED that because he had worked for other advertising agencies he knew what he is doing. She admits she was “just too busy for details like that.   Later she learned that Mark had a track record of financial fiascos at all those agencies that once so impressed her. Not spending an hour or two doing her homework cost her big time.

One of the things I noticed while interviewing entrepreneurs for my book is that the types of mistakes women make often involve making assumptions about things and people because we want to trust people and think the best. While that is a great way to be in personal relationships, in business it doesn’t always work so well.  There’s a fine line to draw between being a positive, savvy businesswoman and leaving yourself vulnerable to expensive mistakes because you are too trusting and naive.

So how do you do thorough reference checking? 

I recently completed a wonderful consulting assignment to find a Vice President of Marketing for a prominent pet company.  During the process, it really hit home for me the value that having 25 years in the industry gives me when it came to vetting out candidates.  Checking their background and reference is easy when you are one phone call away from just about anyone who knows them or has worked with them.

But what if you don’t have the connections that 25 years in the industry can bring?  Think outside the box. In addition to contacting the references that the candidate gives you, also try to talk with someone who wasn’t listed as a reference by a potential vendor or employee.  Hire an agency or use an online service like Intelius to do a background check. One savvy businesswoman I know offers this unique practice that protects former employers: The woman calls deliberately after hours and leaves a voice mail for the prospective hire’s old employer. She says that she is considering hiring the person in question, and that if they can give the highest recommendation for the employee then would they please be sure to call back within 24 hours of the message. If not, call back after 24 hours, or don’t call at all.

She says this has not failed yet. Employers who respect a former employee will go out of their way to call back within the time window.