5 Ways to Delight Your Customers

Providing great service can make a huge difference in a small business.  For companies like Zappos, Nordstrom, and Southwest Airlines, customer service is a differentiator from their competitors.  Done right, good customer service can bring lots of referrals that lead to increased revenue.  Here are five tips to improve service to your customers.

  • “Welcome Home” Greeting

Consider your business as your home and your customers as invited guests.  No matter how they come to you, whether by phone, email, or in person, greet them like you would a guest.  If your business has a storefront and customers walk in, have your employees greet them immediately with a welcome message that ends in “Please, make yourself at home.”  If your prospect or customer calls you, greet them warmly with “I’m so glad you called.” If a customer or prospect emails you, personally email them back (no autoresponders) to let them know you received their message and when you will be replying.

A warm welcome every time your customer contacts you will make them feel important.

  • Throwback Thank You Cards

Be old-fashioned for a change and handwrite thank you cards to your top clients.  You can get blank folding cards with matching envelopes from your local printer or paper shop and have your company logo printed on them.  If you don’t have time for that, consider SendOutCards.com.

  • Apologize

Things are bound to go wrong. Be quick with a heartfelt apology whether it’s your fault or not.  If your customer struggled with anything – your website, shopping cart, store display, out-of-stock item, and so on – teach your employees to apologize first, then own the problem and get it fixed for all future clients.  You can also teach them the language, “thank you for giving us the opportunity to fix this for all future clients.”

  • Mystery Shop

Periodically hire a mystery shopper to evaluate the customer experience at your business.  These customer service experts will provide you with a list of suggestions, from your initial voice mail recording to paying your bill.  Everywhere your business touches a client should be streamlined, easy, and sealed with a smile.

  • Listen

Your customers can be the best source of ideas for your next new revenue stream.  Listen to their feedback and incorporate their ideas into your business.

Try these customer service tips to delight your customers, and watch your revenue grow.

 

How Pinterest and Instagram Can Make You Money

There’s a visual side to every business, and Pinterest and Instagram, which are social media applications, can show your customers and prospects what your business looks like form day to day. Plus, you can have some real fun with it.

Pinterest allows people to post graphics to online bulletin boards and share them with others. In Pinterest, graphics of all kinds are allowed, including photographs, screen prints, logos, and more. In Instagram, photos are posted and shared among users. Here are some tips you can implement in your business to take advantage of Pinterest and Instagram.

1. Take pictures of your work.

Even if you’re a plumber, work can be interesting and artistic at times. Take a picture of the child’s toy that was clogging the toilet, and you could have an entire pinboard of “Things that we’ve pulled out of toilets.” If you’re in personal service, you can photograph your client’s new manicure or hairdo (with their permission of course). If you’re in landscaping you can snap the cleanup job you just did. If you’re a webmaster, take screen prints of your clients’ new webpages and post them to Pinterest.

2. Take pictures of the happy client.

Before leaving your happy client, grab a photo of them showing their new product. With their permission you can post these to both Pinterest and Instagram. As an added plus, use the client’s testimonials or review as your caption, and if they are a small business owner, include their URL to help them out a bit with their marketing and social media.

3. Grab before and after shots.

Before and after photos are great for your portfolio and work well in both Pinterest and Instagram. They can show a future customer what’s possible with your service.

4. Shoot daily scenes at your office or place of work.

Do all your employees hangout in the morning before going their separate ways? Do you ever have all-hands staff meetings? If so, you can add these photos to your growing collection at Instagram.

5. Create topical pinboards.

Even if your job isn’t very funny, you can make funny pinboards about it. Accounting humor, attorney jokes, and engineering humor can make for a fun Pinterest board. Other ideas include:

• A pinboard of people you look up to or who have mentored you,
• Favorite books you’ve read or like,
• Inspirational quotes,
• Favorite places,
• Your team of employees, and
• Any of the categories mentioned above.

Go wild with photos and screen shots in your business, and your business will get noticed on social media.

Will 2016 Be Your Best Year Ever?

If you want 2016 to be better than 2015, you have to do something differently in 2016 than you did in 2015. It’s a simple but profound realization. Change brings the opportunity to make things better; it can be scary yet exciting at the same time.

Ask yourself what you are going to do differently to have your best year ever. Here are some questions and exercises to consider:

Clarify Your Vision

What does the world look like after it’s consumed your product or service? A vision statement for a company helps to keep everyone on track and seeing the bigger picture of what they’re accomplishing day after day. How is the world smarter, more beautiful, happier, healthier, or wealthier after they’ve left your business?

If you haven’t written your business vision and mission statement, consider this exercise for 2016.

Create New Habits

What habits are holding you back? Which ones are propelling you forward? Choose one habit that’s costing you the most and make a commitment to drop it from your 2016 repertoire. Conversely, identify the habit that is brining you happiness and wealth and multiply it.

Let Go

Sometimes we need to let go before we can move forward. What do you need to let go of? Are there customers or employees in your life that sap your energy or your bank account?

Build Your Support Structure

Are you short-staffed? The way you manage your time has everything to do with your success or the lack of it. If you are taking up your time with a lot of low-dollar tasks, it’s going to be hard to boost your income and get ahead. Surround yourself with support to do everything that can be delegated, including personal tasks such as grocery shopping, housekeeping, cooking, and lawn maintenance as well as tasks such as filing, bookkeeping, appointment scheduling, and routine customer service.

Make a list of areas where you could use support, and fill these gaps. In today’s world, you don’t need to hire full time people to fill these slots; you can simply get responsible contractors, other small businesses, and virtual assistants to build your support team.

Focus

What project or task would make a huge difference in 2016 if you could pull it off? Focus on the high payback projects and commit to one, even though it might be out of your comfort zone. Imagine the difference in your business once it’s completed, and get inspired to get started.

Choose just one of these areas to start your 2016 out with hope, intention, and excitement.

Do You Know Who Your Top Customers Are?

Recently, a client wanted to make some pretty significant business decisions around service offerings and pricing. He felt stuck in his analysis because he didn’t have a good sense of who his top customers were and what services they were typically purchasing. He wanted to answer two questions: 1) Who are my top customers, and 2) Which top customers are using the service I am looking to change?

It is amazing how we all work so hard in our businesses, but for whatever reason we never ask these simple questions or just don’t know how to find the answer. We spend so much time running the business that we don’t take a step back to understand what is really going on.

Most of the time when I speak to clients about their numbers, we are focused on their overall results and/or their potential tax liabilities. But deep in that financial information are the details that are integral to making key business decisions.

In the example above, we were able to pull detailed transactional level data out of his Xero account and use Excel functions to compile, sort, and summarize the data to answer his questions. The results were not what he expected. He was not only surprised by the names of his top 50 customers, he was shocked by his top 10.

We were able to show him which of his top 50 customers were using the service he was looking to change pricing on and the results helped steer his decision making.

A few takeaways from this – Take the time to analyze the data. Sometimes what we think we know about our business isn’t really the case. Look for the answers to these types of questions often. Know that there are many answers hidden deep in your financial data and we can help you understand.

The Best Payment Terms for Faster Cash Flow

A great way to speed up your cash flow is to get paid faster by customers who owe you money.  One way to do that is to examine your payment terms to see if you can accelerate them.  First let’s talk about what payment terms are common.  Then I’ll share a study that showed which payment terms generate the fastest payments.

English, Please

Traditional payment terms are spoken in the following format:

Percentage discount/(Days due from invoice date), “Net” (Days due before payment is past due)

An example is 2/10, Net 30.  It means to the customer that if they pay within ten days, they can take two percent off of the invoice due amount.  If they don’t want to do that, they need to pay the full invoice within 30 days of the invoice date.

You could write “2/10, Net 30” on your invoice, but you will get paid faster if you write it out in plain English.

Industry Standard

If your industry “has always done it that way,” I encourage you to challenge the status quo.  Getting your cash faster is important to all small businesses, so don’t let your industry hold you back.

Discounts

Most corporations are required to take discounts if they are offered, so offering an early pay discount might help you get paid faster.

Insights

There are several studies on how to get paid the fastest.  Of course they all have different conclusions!  FreshBooks advises that “due upon receipt” terms can work against you as most people decide that that can mean anything.  They suggest using wording that says “Please pay this invoice within 21 days of receiving it.”  Here is their blog post on the topic: http://www.freshbooks.com/blog/the-best-invoice-payment-terms-to-help-you-get-paid-faster-and-more-often

Xero produced a page on the topic as well. Their research suggests that debtors pay bills 2 weeks late on average.  They also suggest using terms of net 13 or less in order to get paid within 30 days. Here is their page on the topic:  https://www.xero.com/us/small-business-guides/invoicing/invoice-payment-terms/

Let us know if you would like some help looking at and possibly modifying your current payment terms.

 

 

The Short and the Long of It

The balance sheet is one of the main financial reports for any business. Among other things, it shows what a company owns, what they owe, and how much they and others have invested in the business. One of the characteristics of a balance sheet is how it separates what you own and what you owe into two categories based on timeframe.

Current and Long-Term

You may have seen the Assets section of your balance sheet divided into two sections: Current Assets and a list of long-term assets that might include Property, Plant, and Equipment, Intangibles, Long-Term Investments, and Other Assets.

Current Assets

Current Assets include all of the items the business owns that are liquid and can easily be converted to cash within a year’s time.   The most common types of current assets include the balances in the checking and savings accounts, receivables due from clients that haven’t paid their invoices, and inventory for sale.

Long-Term Assets

The remaining assets are long-term, or assets that cannot easily be converted to cash within a year. Property, Plant, and Equipment, also termed Fixed Assets, includes buildings, automobiles, and machinery that the business owns. You might also see an account called Accumulated Depreciation; it reflects the fact that fixed assets lose their value over time and adjusts the balance accordingly.

Intangible assets are assets that have value but no physical presence. The most common intangible assets are trademarks, patents, and Goodwill. Goodwill arises out of a company purchase. Investments that are not easily liquidated will also be listed under Long-Term Assets.

Current Liabilities

Similarly, liabilities are broken out into the two categories, current and long-term.

Current liabilities is made up of credit card balances, unpaid invoices due to vendors (also called accounts payable), and any unpaid wages and payroll taxes. If you have borrowed money from a bank or mortgage broker, the loan will show up in two places. The amount due within one year will show up in current liabilities and the amount due after one year will show up in long-term liabilities.

Long-Term Liabilities

The most common types of long-term liabilities are notes payable that are due after one year, lease obligations, mortgages, bonds payable, and pension obligations.

Why All the Fuss Over Current vs. Long Term?

Bankers and investors want to know how liquid a company is. Comparing current assets to current liabilities is a good indicator of that. Some small businesses have loan covenants requiring that they maintain a certain current ratio or their loan will be called. The current ratio of your business is equal to current assets divided by current liabilities. Bankers like this amount to meet or exceed 1.5 : 1, although this can vary by industry.

A Key Component that is Usually Missing for Small Businesses

There is a fundamental gap with most small business bookkeeping procedures where vendor bills are not entered anywhere until they are paid. Many businesses manage their Accounts Receivable well, but have a hard time managing cash.  A significant contributing factor to the issue is the void around Accounts Payable and the amount of cash in the bank that must be allocated to paying vendors. To get to a meaningful balance sheet, this key component must be included. These are your short term liabilities and are important in understanding the financial health of your business. To get to the next level of business management, implementing a more formalized Accounts Payable process may be the best next step.

Do you understand your balance sheet and do you have an Accounts Payable process?  Let us know if we can help.

 

 

 

Are Your Workers Contractors or Employees?

If you have workers in your business, you likely made a decision when you hired them as to whether they should be an employee or a contractor. If all you hire are employees, then you have nothing to worry about. But if you hire contractors, there may be some financial risk you are taking that you may not know about.

Any individual that you pay money to for services rendered is considered a contractor, even if that individual has established themselves as a business. The main difference between an employee and a contractor is that an employee receives a W-2 and a contractor receives a 1099.  With a W-2, the employer is withholding and paying payroll taxes on behalf of the employee.  With a 1099, the employee is responsible for all tax obligations.

One of the biggest mistakes when a business owner hires a worker is thinking that they can decide to classify the worker as a contractor if they simply want to. Unfortunately, it’s the IRS that decides on the classification, not the worker or the business owner.

What’s the Risk?

There is no risk from an IRS standpoint to classify a worker as an employee instead of a contractor. There is significant financial risk if you incorrectly classify a worker as a contractor when they should be classified as an employee. You can be liable for back employment taxes if the IRS re-classifies a worker from contractor to employee, and this can go back many years.

To calculate your risk, take roughly 20 percent of the payments you made to contractors. This amount plus late fees and penalties can add up to what you could owe the IRS if you are mis-classifying workers and the IRS finds out.

IRS’s Employee vs. Contractor Rules

The IRS focuses on three factors to determine whether a worker should be a contractor or an employee: behavioral control, financial control, and type of relationship.

If you control both what and how a task is to be done, you should probably classify your worker as an employee. If you can control only the results you want, you may be able to classify the worker as a contractor.

There is a 20-point checklist from the IRS that helps clarify this distinction. You can take a look at the points here:

http://blogs.findlaw.com/free_enterprise/2013/11/independent-contractor-irs-looks-at-20-factors.html

Having a successful business is all about taking calculated risks; however, you may not have known the risk you’ve been taking with contractors that you’ve employed. For the IRS, misclassifying workers is a “red flag” area, meaning they are paying extra attention to it. If you feel like you might be taking a risk that you don’t want to, please reach out and let us know and we can help you determine the best way to resolve.