Archive for the ‘ Blog’ Category

Ways to Hire Top Talent When You Can’t Afford to Pay Top Dollar

Thursday, January 6th, 2022

When faced with a choice between hiring an inexperienced employee and an award-winning superstar, most organizations would prefer to hire the superstar. The hitch is that the superstar’s compensation expectations may exceed what a smaller company can afford.

It may be possible to rationalize bringing them on board and cutting budgets in other areas to afford their high pay rate. Some companies have done this in order to tap into the skills and network of top salespeople, for example. The expectation there is that the employee will more than cover their elevated salary with all the new business they bring in. And in many cases, that is the case. The new hire effectively self-funds their compensation package.

However, with non-sales roles, it may not be possible to tie the employee’s pay to immediate revenue increases. In fact, their job may not be impacting revenue directly at all, if they are in an administrative or research position, for example. 

So, what can you do to attract and retain such high performers when your bottom line can’t afford a big payday right now?

While the annual report, The 2021 Voice of the Blue-Collar Worker,” conducted by EmployBridge, did confirm that pay is the number one factor hourly workers consider when accepting a job—32% claimed it was their top priority—there are a number of other considerations that impact that decision, and may prove equally important in recruiting and retaining workers:

Job security

Twelve percent of workers surveyed indicated that job security was important to them. So how can you convey that the company and their position, in particular, will be around long-term? Can you offer a year-long renewable contract? Can you share financial results company-wide so that all employees can see how the company is doing and what they can do to continue to fuel its success?

Schedule

Another 12% of respondents reported that their schedule was a big deciding factor. For some workers, that might mean that they want flexibility. During the pandemic, being able to work from home became essential for many employees with children who were being schooled remotely. Many want to continue to have that option. Can you provide it? Other workers may prefer certain shifts, whether that’s overnight or day. Can you offer any flexibility in choosing the timing of shifts?

Advancement opportunities

Some employees—6% in this study—indicated that opportunities to be promoted would impact their employment choice. So, can you design a clear career path or path to promotion for your employees? Your business may have ongoing advancement opportunities, but do your employees understand how to find out about them and be considered? Do you have any kind of mentoring program to help high potential employees get noticed?

Education and skill-building

Five percent of those surveyed reported that the opportunity to receive training, to add or enhance skills, was desirable in an employer. What kind of training can you offer? Can you provide each employee with an annual professional development budget to use for skill-building? Can you partner with a local community college to design a program or series of courses for your employees? Do you offer education reimbursement for employees who want to earn a degree? All of these offerings could tip the scales in your favor.

Other offerings that might also prove desirable could include:

Paid time off

What is your policy regarding vacation time or sick days? Are you liberal with days off? Adding personal days or extra vacation time to a new hire’s compensation package is the equivalent of giving them extra compensation, except that you didn’t need to write an additional check. Some companies even offer unlimited vacation, as long as the work gets done. 

Long-term incentives

Even if your business can’t afford to pay top dollar right now, how about identifying larger goals that could trigger a payout to employees. Sometimes referred to as “long-term incentive plans (LTIP),” these programs can be a way to retain skilled workers, with the promise of a big bonus when a milestone is reached. That milestone could be a sales target, a productivity goal, a corporate buyout, or something else. Make sure you’re prepared to write those checks, however, when the target is hit.

A voice in company decision-making

The more employees feel that they’re part of a company, or have a say in how it is run, the more likely they are to stay. So how about creating departmental advisory boards, to get employees involved in policy-setting? Or hold regular town hall meetings, where employees present recent successes, to raise the profile of your hard workers. Find ways to involve top performers in the company’s operations—it could be a useful way of identifying potential successors to current business leaders.

Social activities

Another big reason that employees stick around is that they like their boss and/or their coworkers. So, what can you do to foster bonding within your company? Even if you can’t afford a big off-site gathering in Europe, how about monthly fun events? Depending on where your company is based, you could have an evening of snow skiing or a day at a local amusement park. Or, even simpler, you could have a Friday night potluck dinner, or a chili or barbeque cook-off. Creating opportunities for employees to get to know each other as people, rather than colleagues, can pay off in terms of retention and loyalty.

If your goal is to attract top performers, brainstorm how to craft a compensation package that you can afford and that will give candidates what they value, even if it isn’t quite as much money as they had hoped for.

6 Ways to Show Gratitude to Your Clients that Cost Next to Nothing

Wednesday, December 22nd, 2021

It’s customary in many industries for companies to give their customers gifts of some kind during the holiday season. For example, beauty salons often give clients small samples of beauty products in appreciation for their business. Accounting firms sometimes mail out annual calendars for the coming year. Salespeople have been known to hand out jars full of candy, which they commit to refilling during the next year. And many firms mail out holiday greetings to let their best customers know their business is appreciated.

These are all great ideas and customers certainly appreciate signs that they are valued, but don’t feel that you need to spend lots of money to express your gratitude. Especially in business-to-business (B2B) relationships, there are many ways you can show appreciation today that won’t cost a dime, but that can reap rewards for your client that can be worth more than a gift basket or nice bottle of wine.

Leave a 5-star review

Leaving a 5-star review on Yelp, Google, Amazon, or wherever your client or supplier is visible can provide a boost to their business. Since many potential customers turn to online reviews for a sense of whether a company is reputable, the addition of a 5-star review may ultimately help sway a potential customer their way. 

For example, adding a 5-star review to a book on Amazon can help the author attract more attention and potentially sell more copies. The same with the caterer whose website you just redesigned, or the payroll provider your company uses. They would love to see a positive review on Yelp or Google. 

Not only does a positive review like that help with Google search rankings, it also adds credibility and legitimacy to a business. Positive reviews are like gold, and they cost you nothing to provide.

Give them a shout-out on social media

Another way to show appreciation is to share a post on social media dedicated to saying nice things about a client or supplier. 

You could take a photo of a product or memorable experience you had or witnessed, for example. Post it to Instagram, Snapchat, Facebook, LinkedIn, and/or Twitter, to spread the word that you were completely delighted with what your client provided in the way of goods or services.

Or create a post and mention how great the business is, and that you’re a fan. It can be as easy as that.

Refer them business

Of course, nothing beats sending other businesses new clients.

Whenever you spot an opportunity to refer clients to other clients, you demonstrate the value of doing business with you and your company. Some companies go so far as to create a list of recommended partners. For example, real estate agents keep lists of their go-to home stagers, gardeners, electricians, and inspectors, which they routinely share with potential clients. Commercial printers have lists of designers, copywriters, illustrators, and photographers they like working with.

Create your own list of preferred partners.

Enter an awards program

Ask for your client’s permission to enter your work together into an awards program or competition. Not only does this demonstrate how happy you are with the end result, but it creates an opportunity for the client to be recognized as well.

A graphic designer, for example, could enter a logo or brochure design into a marketing communications awards program. A public relations (PR) firm could enter a publicity campaign into a PR competition. And a painting or landscape contractor could enter photos of client buildings or grounds into programs that recognize top work in their industry.

Whether you win or not isn’t as important as demonstrating to your clients that you’re proud of the work you did, and signaling that they should be, too.

Send a personal note

Our heavy reliance on electronic communications means that snail mail is unexpected. Take a minute to handwrite a personal note of thanks, mentioning specific details of your work together with your client that you enjoyed or appreciated.

For example, if you’re a career coach, you could thank a client for the opportunity to assist them in finding a new career opportunity and for the chance to be part of their journey. If you’re a retailer, you could thank your clients for continuing to patronize your company during a pandemic year. Tell them you’re looking forward to serving them in the New Year as well.

The note doesn’t have to be more than a few sentences, but because no one else is sending out handwritten notes, yours will be noticed and appreciated. And all it costs is a first-class stamp.

Provide a complimentary service

If your business provides a range of products or services, consider giving away something small as a token of appreciation.

Although products cost cash, services will generally only cost your time, depending on what you provide. For example, photographers could send out a free print of a shot the client didn’t select as part of their photography package, as a holiday thank-you. Housecleaning services could clean an extra room in the house, or do a deep clean of the refrigerator at no extra charge during the holidays. And auto mechanics could top off all the fluids and check and fill the air in all the tires on client cars.

These extra steps don’t have to take a lot of time or cost much money, but going beyond what’s expected to express appreciation to your clients will be memorable.

How to Pitch Local Media Outlets

Thursday, December 16th, 2021

While your business may serve a national or even global customer base, your local news and broadcast outlets are likely to be the most interested in learning about your company. Since their purpose is reporting on local people, organizations, and events, news about you and your business fits right into what many area media outlets want to report on.

And the publicity that can result is one of the best and cheapest ways to promote your business. 

That’s because not only is the media coverage free (versus advertising or some other kind of promotion), but with each quote or mention comes the implied third-party endorsement of the media outlet. Assuming the article topic is positive, your company’s reputation can only be enhanced when readers see you’ve been interviewed in the local business magazine or in the daily newspaper. The natural assumption is that you’re successful, and that’s why the reporter interviewed you.

Local publicity can also be leveraged to pursue national or industry attention.

Believe it or not, catching the attention of local news and broadcast reporters isn’t as difficult as you might expect.

The key is coming up with article ideas that are related to your company, but that go beyond simply profiling you. Profiles are fantastic, but it’s typically harder to convince a reporter to write a piece only about your business. Better to come up with topics that also quote you, rather than being the sole focus.

Proposing Potential Articles

What you need to do is suggest article topics, also known as “pitching.” 

Pitching article ideas is a 4-step process that begins with studying the newspaper, magazine, or website you want to be featured in.

  1. Do your research. That means looking at the different sections of, say, the paper, to identify the type of news each section covers. Make a list of what you see as the different departments.

That might include business, sports, personal finance, home and real estate, national news, and/or other subjects. 

Then, read each section to identify the types of articles that are written. Are they profiles of a single person or organization? Are they how-to pieces? Do they tie local happenings to national trends? Do they quote experts or local residents?

  1. Brainstorm article ideas. Now that you’re more familiar with each section of your local paper (or magazine or website), it’s time to think up different topics that could fit within those sections.

Daily newspapers want topics that are timely, meaning happening now or in the next week. The same is generally true of websites, since they can update their content quickly. 

Magazines want pitches for topics relevant two to three months in advance; printing and distribution takes that long, so don’t bother pitching a magazine an idea for next month. You’re too late at that point.

Using what you observed from your read of your newspaper, magazine, or website, think about what articles might be of interest to your local community that have to do with your business—not just a write-up describing your company, but having to do with what you sell, how you sell, and who you sell to.

For example, let’s say you run a gift shop and you’re having a special artist demonstration next month. Given the timeframe, you know this is only appropriate for newspapers and websites. Some of the possible articles you could pitch around this one event include:

  • A piece about the event itself, offering to connect the arts reporter with the artist who will be in town, for an interview.
  • A calendar listing inviting members of the public to attend the demonstration.
  • A trends piece about the type of art being demonstrated and why it has caught on recently; why it has become increasingly popular in the last few months.
  • A round-up article about women artists, including the one coming in to provide the demonstration.
  • A business article about how effective in-store demonstrations are in generating sales.
  • A piece offering tips to other gift shops for scheduling effective demonstrations or events

These are just ideas to get you started, but think about your business and all the different angles that might be of interest to a reporter.

  1. Find your contact. Once you have a specific idea for an article you want to pitch, you need to track down the name and contact information for the editor who is responsible for that particular department. If you’re reading a print newspaper or magazine, there is usually a masthead—often a page or section of a page near the front—that lists all of the reporters and editors. 

If you can’t find that list in print, use Google to identify who the appropriate person is to connect with.

  1. Send a summary of your pitch. When you have an idea and you know who is most likely to be responsible for writing it, send an email summarizing your idea. In the subject line of your email, you could write “Article idea,” to make it clear why you’re getting in touch.

This should be a 3- to 4-paragraph summary of who you are, what your suggestion is for an article, with details regarding why that reporter would be interested (because it’s a local event, represents a local trend, or ties into a national news piece, for example), and an offer to share more information if they’re interested.

Keep in mind that you’re not offering to write the article, nor are you sending a draft of what you’d like to see in print. You’re sending an idea that would include quoting you as a resource.

Another Approach: Write a Press Release

Now, if you want to have a little more control over what is written, you could instead draft a press release and send it out to multiple media outlets at once in the hopes that they use will that information in an upcoming story. 

Press releases are designed to make announcements, primarily, so you could prepare one if you want to share information about:

  • An upcoming event
  • An honor or award your business received
  • A new location
  • A new product or service
  • A new partnership or joint venture
  • A new employee
  • An employee who was promoted

Press releases are not appropriate to pitch individual articles, however.

Hubspot has a useful article on how to format a press release, along with some free templates, if you decide you’d rather send something out en masse.

Pursuing media coverage in local newspapers, magazines, bulletins, and community gazettes is a great first step to landing national publicity, and a smart way to raise awareness of your company’s existence within your local community.

How to Improve Your Company’s Profitability

Tuesday, November 30th, 2021

Although many business owners focus on sales as the most important metric of success, profitability, or how much you have left after you pay all your bills, is actually a much better measure of how well you’re doing. Profits are what allow you to grow and expand. They also determine whether you can afford to stay in business. 

So, what, exactly, can you do to increase profitability in your business?

There are really two basic ways to boost profits: 1) Increase sales while holding costs steady or 2) Reduce costs associated with those sales. 

Fortunately, there are a number of steps you can take on either front to increase your profits.

Increase sales

Driving up the amount of top line revenue your company generates is one approach to increasing profitability. Some ways to do this include:

Increase the value of each sale. It’s always easier to sell more to your existing customers than to go out and find new customers. So, one way to boost profits is to get your current customer base to buy more from you. That could be by raising your prices, for example, or by giving them reason to buy a wider variety of products and services. If you own a beauty salon, for example, you might persuade your customers to buy their hair products from you, on top of the cut and style they normally pay you for. The goal is to increase the average amount each customer spends with you. 

Increase the volume of sales. Another approach is to get your customers to buy more frequently from you. The average sale remains the same, but you receive more payments than you usually do. You could do that by giving them an incentive to come in more often. Such as if you run a restaurant, you might give diners a reason to come back more than the typical once a month they usually do. Or if you run a doggy daycare, you might offer a temporary discount for bringing dogs in more than, say, once a week—to get clients in the habit of dropping their dogs off more frequently.

Increase your service area. Even without increasing costs or selling more to your existing clients, you can increase your potential market by expanding your geographic service area. That might entail announcing that you deliver to new zip codes, or by advertising in media that serve a broader market. The key is spreading the word that customers outside your current territory can now easily buy from you. One step you can take is creating a website to serve customers nationwide, or even globally. Furniture retailer IKEA used to only sell through its retail stores, making it difficult for customers who weren’t local to buy from the company. Creating a website and accepting online orders has greatly expanded its customer base. You can do the same.

Create new products or services. Another way to convince customers to spend their money with you is to give them other products and services to acquire. You may have customers who rely on you for one or two types of services, but who would gladly buy more if you offered it. For example, a restaurant could add more dessert offerings, a consultant could add an annual evaluation or assessment to track progress, and a personal trainer could begin to sell apparel or vitamins alongside their weekly workout sessions. Keep in mind that the products or services you add to your offerings don’t have to be things you personally create; you could explore affiliate relationships, where you sell products others have created in exchange for a small commission.

Reduce costs

The converse of increasing the topline revenue is looking at how to reduce cash outflow. Some tactics toward that end are to:

Negotiate with suppliers. Reducing the cost of your products and services begins with looking at what you’re paying your suppliers. Can you find a way to reduce your cost of goods sold by buying in larger quantities, for example? Can you negotiate for your supplier to pay freight costs? Or can you find a supplier who is closer to your operations or less expensive? Explore with your suppliers what kind of discounts they might offer you, or strategies they might recommend to drive down your costs.

Delegate to lower-cost suppliers. Sometimes it’s possible to find suppliers to take on the responsibility for managing parts of your business and that cost less than an employee’s salary. For example, using an outside bookkeeper might be less expensive than adding a full-time staffer. Or retaining a social media manager, content creator, or prototype designer on a contract basis, per project, might turn out to be less expensive than the ongoing expense of an employee, especially if there isn’t 40 hours of work to be done each and every week. 

Reduce direct costs. Sometimes the problem with expenses has to do with basic overhead, such as what you’re paying for office or warehouse space, what you’re spending on utilities, or on employee salaries. Could you save money by moving? By reducing the hours you’re open (without significantly impacting sales)? By installing solar panels to generate electricity? Reducing what you must pay each month, separate from anything related to production, can dramatically impact your profitability.

Improve productivity. Helping your employees do more in less time is another way to reduce indirect costs associated with serving customers. Offering training, for example, is a great way to help staff members learn how to complete tasks in less time, or with fewer errors, which can also drive up costs. In some cases, you may need to invest in tools and technology to enable productivity improvements, so confirm that the long-term benefit will more than pay for what you’re spending. Automating some tasks, for example, is another strategy for productivity improvements.

Look at both sides of the balance sheet—meaning cash coming in and going out—for clues to how you can increase your company’s profitability.

How to Set Up a Simple Loyalty Program

Thursday, October 14th, 2021

One big lesson that has come out of the pandemic is the value of customer loyalty. Loyal customers not only spend more, but they also serve as business ambassadors, attracting new customers to their favorite small businesses. 

An often-cited statistic for spending, which originated with Bain & Company in 1991, is that loyal customers spend 67% more than new ones. Not only that, but 56% of customers will spend more at a business they are loyal to, even when there are cheaper priced options elsewhere (that they likely know about), Yotpo reported. That percentage is up significantly from 2019, when only 34.5% were willing to spend more.

Loyal customers are also more profitable customers, according to a Harvard Business Review report that found increasing customer retention rates by 5% increases profits anywhere from 25% to 95%. That statistic is in line with the Pareto principle, which says that 20% of your customers are responsible for 80% of your profits. 

In the simplest terms, holding on to customers you already have will help you build your customer base faster, increase sales, and increase profits faster than trying to attract new customers.

So how can you foster loyalty? Creating a program that rewards shoppers is one easy way. Bond Brand Loyalty found that 80% of buyers say loyalty programs both make them more likely to keep buying from the company or brand, and 68% buy more to maximize their loyalty benefits.

Loyalty programs can drive sales and, fortunately, starting one doesn’t have to be complicated.

Encouraging Customer Behavior

The first step in creating a loyalty program is deciding what you want to encourage customers to do. For example:

  • Do you want them to come in more frequently? 
  • Do you want them to spend more on each visit? 
  • Do you want their help in attracting more customers? 
  • Do you want them to help promote certain products or brands?

Once you’re clear on what you want them to do, you can start to think about what you can offer that will entice them to take the action you want.

Choosing a Reward

There are probably hundreds of ways you could reward customers, but it’s important to think about what they want.

You could offer a gift certificate after customers spend a certain amount. Kohl’s does this with its Kohl’s Cash, which customers earn after spending in $50 increments. However, shoppers have to come back during the redemption period, which is typically a week or so after the cash is earned, rather than being able to spend it immediately. This boosts spending and return visits.

You could offer a discount on-the-spot for checking in on social media. Or a special prize for sharing a photo of a product purchase. This may be useful if your goal is to increase social media engagement or followers.

Many small service businesses offer cards cards that track each visit and reward the customer with a free product or a discount once the card has been filled in. That encourages repeat visits, without having to track dollar amounts spent.

You could offer free products for purchases made during a certain timeframe, like Clinique does with its bonuses. A pioneer of the free sample gift-with-purchase, cosmetic brand Clinique offers a special pack of several mini products when customers spend over a certain amount. Not only does this entice customers to spend the minimum amount to qualify, but they receive samples of other Clinique products to try that they may opt to buy next time.

Some loyalty programs offer regular benefits to regular customers, such as a percentage rebate on each purchase.

Others allow their loyalty program participants early access to sales or events, like American Express does when it offers cardholders early access to concerts and live event ticket sales.

Be sure to keep in mind that the reward needs to be something customers want in order to have any impact on your bottom line. Offering a 1% discount after spending $100, for example, is unlikely to make a difference (or the tiny amount may actually irritate customers).

Picking a Platform

When it comes to managing your rewards program, it’s best to keep it as simple as possible. Don’t invest in expensive tracking programs until you’re sure it will be worth it.

A physical punch card is a simple option that requires no tracking on your part. Design, print, and copy it yourself or use a service like Vistaprint to create something.

A software program tied to your cash register is an option for tracking amounts spent, or specific products purchased.

Sign up with an easy-to-use text-based loyalty program, such as Social Spiral, which has customers enter their cell phone number to participate. There’s no app to download and they can check their rewards via text. 

Or if you want an app, try CandyBar, which is a digital loyalty program that helps businesses track customer purchases and reward them.

With both software programs, businesses can also communicate with loyalty program members, sending them special alerts about sales or limited time offers.

Since retail loyalty program members generate between 12% and 18% more revenue for retailers than customers who aren’t program members, according to Accenture, investing a little time and money to create your own could result in a big boost to your sales.

Beyond Banks: Financing Options for Women Entrepreneurs and Business Owners

Sunday, October 3rd, 2021

Many entrepreneurs are disappointed to find that banks generally won’t lend money to startups and early-stage ventures unless the business owner already has funds available, collateral, a solid business plan, and a solid credit rating. When you’re just starting out, there aren’t many women business owners who can check all the boxes that banks frequently require.

For many women, that can mean the end of trying to start or grow a business.

However, there are several options—some appropriate for startups and others for existing businesses—that don’t involve banks or credit unions and that may be able to provide business financing.

Startups

True startups are in the first year of operation, or are in the process of opening their doors. That means the company doesn’t have much of a track record of sales or a solid client base yet, in most cases, at least. But there are a couple of potential sources of capital.

Grants. In addition to the Amber Grant, there are other companies, government agencies, and nonprofit foundations that have grants that can be used to start and run a business. A few are specifically focused on helping small businesses recover from the impact of the pandemic.

Microloans. The US Small Business Administration has a program that guarantees loans of up to $50,000 to companies (meaning the bank lends the money but the SBA assumes the risk of repayment. The SBA backing makes banks more likely to lend.). These smaller loans are termed microloans and are typically easier to qualify for than traditional business loans.

Existing Businesses

If you have a business history, meaning you’ve been up-and-running for a while, you have a few more options for securing funding. These can include:

Factoring. If you have unpaid invoices that are squeezing your cash flow, factoring, or invoice financing, is one option. Granted, it’s expensive, because you essentially sell your unpaid invoices to a lender, which gives you a percentage of what you’re owed in cash today. As clients pay, the lender gets to keep most or all of it. It’s a solid option if you need money now, however.

Merchant cash advance.

If you accept credit cards from customers, who pay through a merchant services service you use, you may be able to get a cash advance based on your customers’ buying habits. For example, if you borrow $10,000, a portion of that debt is paid off daily based on your credit card sales. The amount you pay back each day is based on a percentage of your daily sales, so when things are slow your merchant provider takes a small percentage, and on busy days, it takes a larger chunk. Businesses with customers that typically pay via credit card, like restaurants, may find this is a convenient solution.

PayPal Working Capital loan.

Businesses that rely on PayPal for online payment processing may qualify for a working capital loan, which PayPal makes based on the amount of business you do on its platform. Like a merchant cash advance, PayPal makes loans based on the amount of business that is processed on the platform and structures repayment with that in mind as well.

Line of credit. Much like a credit card, which allows you to charge up to a certain amount and then pay it back over time, a line of credit provides the same flexibility. You have a maximum amount you need to stay below, but you can pay for things you need using your line of credit, paying it down as you’re paid.

Private investors. Also known as “hard money lenders,” these investors are willing to provide loans that are backed by hard assets, such as real estate, equipment, vehicles, etc. The expected payback is quick, however, and typically ranges from 18 to 24 months. This should not be a long-term strategy simply because it’s very expensive.

Leases. When you don’t have the cash or credit to purchase something you need outright, consider applying for a lease, which will allow you to effectively rent it. However, rather than having to come up with a large lump sum, you’ll pay a fixed monthly fee in order to use it. When the lease is up, you can renew for a set period of time, opt to lease something else, or put the money down and buy it outright.

It can be very discouraging to be told “no” by potential lenders or investors, but if you can find out what’s holding them back from giving you what you need, you can put together a game plan to improve your odds next time. For example, it it’s your credit score that’s knocking you out of qualifying, spend a few months getting that score up. Or if it’s your business revenue, put together a plan to dramatically increase your sales over the next 90 days, and then try again.

Outside financing can be a turbo boost to business growth, but it is certainly very possible to continue to grow your business on your own, with the resources you have now. Don’t get discouraged. Just keep trying.

How to Take a Day Off from Work

Friday, September 3rd, 2021

As we slide into the fall season, many entrepreneurs may be wondering what happened to summer. When was that break we were supposed to take?

The reality is that after too many months of an ongoing pandemic, we all need a break. Even a day. Just some time for self-care and relaxation, when we stop doing work.

For some women entrepreneurs, this concept of a day without work may be almost inconceivable, which is a sure sign that you’re in need of one. No business can function well forever with an owner who is obsessing 24/7 about it. It’s just not sustainable, and it sure isn’t healthy.

So what, exactly, can you do to take a day off from work? Several entrepreneurs shared their strategies for taking some time away.

Understand your business cycles. Before choosing when to take a day to yourself, look at when your business is typically quieter. That way, your being away will be less disruptive, says Jennifer LaPointe, founder of Traverse Bay Farms. “ LaPointe explains that their business is in a tourist town and “most of the tourists leave to go back home on Sunday and, looking at our numbers from previous years indicates, Mondays and Tuesdays are consistently slower days,” so she decided to close the company’s retail stores on those days to get a break.

Explain the “why” to employees. To feel confident that your company can survive without you, even for a little while, you need to feel secure that your employees will make decisions the way you would. The only way for that to happen is for you to share how and why you do things the way you do. “Talk with employees frequently about the ‘why’ behind doing things and making decisions, so they feel more empowered to respond to situations when you, the primary decision-maker are not in the office, versus requiring that they always get direction from you,” recommends Cylient CEO Dianna Anderson, MCC. Sharing the “why” will also help reduce their reliance on you even when you’re at work.

Plan ahead. Jordan Bishop, founder and CEO of Yore Oyster, says the first step is planning days off. “It’s important to recognize that a business owner shouldn’t plan these days when they’re already feeling burned out, but, rather, when they think they’ll start feeling that way in the future.” For example, if you know you always feel overwhelmed around Labor Day, or really need a break once the days get shorter, look ahead on your calendar and choose a day in September and/or October when you’re not going to work.

Delegate. Next, says Bishop, “after the date has been set, it’s important to let employees know and delegate all tasks needed. If, for example, you have a business partner or manager, that person should be in charge while you’re away. “If all employees know when the business owner will be away, and they know what to do, then that business is set not to be disrupted during that time off.” Of course, you can set up a way to reach you in an emergency, but it’s important to make it clear that that’s the only situation when you should be texted, emailed, or called

Put someone in charge. Says Renee Fry, CEO of Gentreo, “It is often hard to choose one person to put in charge, but you need to pick one person who you trust who can make decisions. If no one is in charge, or no one has the authority to make decisions, decisions will not get made,” she cautions.

Block off time. Another approach is to build in slower days to your schedule. Stephanie Desaulniers, business strategist and course creator with Business by Dezign, has one day a week that is a client-free day, she says. “This day is blocked off so that no one can schedule calls or appointments with me. While I typically use this day to catch up on administrative tasks, occasionally I use it for a self-care day.”

Enforce boundaries. Perhaps the biggest obstacle to getting that day off is setting and enforcing boundaries. Alexis Haselberger, a time management and productivity consultant, says, “I set boundaries around work. I don’t work evenings and weekends, and if I’m taking a day off, I plan not to do any work at all. I set an out-of-office reply that lets my clients know where I am and when I’ll reply.”

Send a reminder. After you’ve decided when you’re taking a day off, you’ve prepped your team, and you’ve alerted your clients, it’s still a good idea to remind everyone. Rym Benchaar, a business coach and marketing strategist, says, “When I take a day off, I also ensure to set expectations with my clients, to avoid any bad surprises. Something as simple as a heads up through an email will do the trick.”

Entrepreneurs who overwork themselves are more prone to burnout, which is bad for business and can damage your company’s overall productivity. So, instead, carve out time for yourself, starting with a day off.

What You Can Do to Improve Cash Flow

Friday, August 20th, 2021

Ask entrepreneurs what the life blood of their business is and many would probably say sales.

And they’re not wrong.

Sales, or paying customers, are essential for a company to stay in business. Without sales revenue, the business closes its doors.

But the truth is that cash flow, which is the speed with which cash flows into and out of the company, is even more important. That is, it doesn’t matter how high your sales are if your expenses are even higher. It also doesn’t matter how high your sales are if your customers are super slow to pay.

To be successful, your business needs to consistently have more money coming in, through revenue, than is have going out, to pay expenses like salaries, rent, utilities, and cost of goods sold. 

There are a number of ways to improve your cash flow and your financial position. One is to get money from customers faster and the other is to slow and/or minimize the exodus of cash from your business bank account.

Require prepayment. Stacy Caprio, founder of Her.ceo, recommends requiring payment before you ever start work. She requires at least 50 percent payment up front for phone consultations, or she uses Clarity.fm so payment is required. “Think about how you can structure your offers and payment plans so the majority or full payment is required up front to reduce cash flow issues, or having to chase down payments after the fact.”

Incentivize quicker payment. One way you can often persuade customers to pay quickly, or in advance, is with either a discount or “gifting any item or service your customer would value,” says Stephanie Ng, CPA, author of How to Pass the CPA Exam, “especially if the cost to you is very low.”

Bill faster. If you can’t get payment in advance, invoice immediately on delivery of services. (With products, you should expect to get paid on delivery.) 

“When you want people to pay you faster, the key is to make the payment process as frictionless as possible,” says Zach Reece, owner and chief operating officer of Colony Roofers LLC. “That means having as few barriers as possible between the person and the final payment.” To do that, Reece recommends using online billing systems. He cites Freshbooks, which reports that electronic payments are made eight days faster than offline payment methods, and Intuit, which found that businesses using its platform were typically paid within 10 days of sending an invoice. “All other methods took and average of 27 days,” he says.

Follow your customers’ payment instructions. In many cases, especially when billing larger organizations, there are established processes in place that vendors need to follow in order to be paid promptly. “The number one mistake that causes invoices to age out is companies not following their customer’s invoicing process/instructions. You must know and follow your customer’s exact requirements for invoicing, as businesses have varied procedures that must be followed in order for them to timely process your invoice,” explains Farrah Vargas, CAEF, senior vice president of business development for Allied Affiliate Funding, a division of Axiom Bank, N.A.

“Ensure that you invoice your customer exactly how they have instructed, know who approves your invoice, and know who the person is in accounts payable (A/P) that handles the processing and payment of your invoice,” Vargas says. “If A/P doesn’t have your invoice for processing, it will not be paid.”

Offer a payment plan to create recurring revenue. Although payment plans introduce the risk of not being paid in full, an air-tight contract often addresses that issue. And stretching payment over several months is one way to generate recurring revenue, explains business coach Danielle Hu, founder of The Wanderlover. “Instead of having all clients pay up front, monthly recurring revenue (MRR) is your friend, so you are always starting the month with cash coming in,” Hu says. “MRR is another way you can earn money, work alongside your clients in a friendly setting, and improve cash flow!”

Set up a line of credit. Before you find yourself strapped for cash, apply for access to a line of credit, says Jennifer Harder, founder and CEO of Jennifer Harder Mortgage Brokers. A line of credit can be “a backup plan,” she says, though she strongly advises applying for the line of credit before you “are in desperate need,” because you’re less likely to be approved at that point. “It’s preferable to set up the line of credit when you have good cash flow and your company is performing well, rather than attempting to solve the issue at the last minute.”

Use accounts receivable financing. “This can be done with your bank if your credit is good and you have a strong relationship,” says Katharine Earhart, partner and co-founder of Fairlight Advisors. Accounts receivable financing involves getting a loan using your payments owed as collateral. Your bank “may do a short-term loan for a percentage of the A/R—70% to 80% of the value,” says Earhart. Although you’re taking on a debt, this type of financing is generally less expensive than factoring.

Turn to factoring. Similar to A/R financing, factoring “is the sale of your company’s receivables to generate cash for your business quickly, while you wait for the customer to pay the invoice (typically 30-60-day terms),” Earhart explains. Although factoring is one way to get cash fast, it can cost anywhere from 5% to 10% per month, she says, so “think carefully and strategically before pursuing this route.”

Maximize time to pay your bills. Says Ng, “if you have a large accounts payable balance, be sure you aren’t paying bills ahead of time. It’s not uncommon for a large vendor to offer terms that will provide a 3 percent discount if you pay by a specific date, so prioritize paying that vendor early and find comfort in paying other vendors by their due date,” she says. You can also reach out to vendors and request longer payment terms, too.

Lease, don’t buy. If you anticipate a cash shortage in the coming months, don’t spend all of your available cash on equipment if you can, instead lease it. The total cost will be higher over the term of the lease, yes, but by spreading payments out over multiple years, you may also avoid the need to rely on expensive accounts receivable financing tools. Leasing also gives you the flexibility to regularly update your equipment or technology at the end of your lease term, without having to sell what you currently have.

Liquidate old inventory. Product-based businesses frequently find themselves with inventory that just isn’t selling and is sitting around taking up shelf space. One way to convert that inventory into cash is to liquidate it, either through a big sale with deep discounts, to move it all out, or through the use of a liquidation firm that will buy it all for pennies on the dollar. Granted, taking a loss on your inventory may not be appealing, however, holding onto products that are declining in value is really only tying up cash you could be using for other purposes.

Successful cash flow management requires paying close attention to where your money is coming from, and where it’s going. Keeping money in your account as long as possible, with a steady stream of deposits, helps to avoid cash shortfalls.

The First 9 Things to Do During Startup

Thursday, July 15th, 2021

Starting a new business is both an exciting and a nerve-wracking time. Exciting because of all the possibilities ahead of you and nerve-wracking because of all you don’t yet know. 

The good news is that you can learn as you go. Everyone does, in fact. However, the more you know in advance, the faster success will come.

There are probably 100 or more steps involved in starting and running a new business. That number can also vary by industry and company size. However, there are some universal steps that all entrepreneurs should consider taking. They can get you on the fastest path to success and help you avoid trouble down the line, when you’re up-and-running.

Here are the top nine things just about everyone should do during startup:

Prepare a business plan

Whether you need outside financing or not, taking the time to think through and put on paper a roadmap for your business is critical. Your business plan is a document that contains the details of what you’re selling, who your target customer is, what makes your business better than the competition, what you’ll charge, and how you’ll grow the company. It’s where you can think through where you’re headed and track your progress.

Make it official

Set up your business entity. That means choosing between a sole proprietorship, which is also referred to as a DBA because of the “Doing Business As” paperwork filed for that purpose. With a DBA, you are the business. However, if you choose to set up a limited liability company (LLC), subchapter S corporation, or partnership, those require a separate entity to be established—meaning an organization that is separate from you but which employs you. This option is often chosen for liability protection, though you should consult an attorney before making that choice.

Get a business bank account

Setting up a bank account separate from your personal checking or savings accounts is important for several reasons, not the least of which is being able to fill out your taxes more accurately. It also makes it possible to see whether your business is growing or not. Before you can take this step, however, you need to have your business officially formed, with the paperwork to prove it (the bank will ask).

Check whether you need permits

Depending on the type of business you’ve started, your local town or county may require you to fill out more paperwork. You may need a permit or license to operate your business, for example. Call your local Small Business Development Center (SBDC) to find out what you need to be legit.

Get insurance

Nearly every business needs to have Workers’ Compensation Insurance in place, but you may also want more than that, such as liability insurance (if you’ll have customers or employees on your premises), business interruption insurance (to cover you if your business has to close suddenly), or general coverage for your property and equipment.

Request an employer identification number (EIN).

An employer identification number (EIN) is a tax identification number and is a smart idea whether you intend to ever have employees or not. Once you have an EIN, you can use it in place of your social security number on things like invoices, loan applications, and other official documentation, which will help prevent identity theft.

Claim your domain name.

Before you design a website, stake your claim to your business domain name. Ideally, you’ll find your business name is still available as a URL with a .com suffix. If it’s already taken, try variations, such as by adding the city or state you operate in. GoDaddy is one of the biggest domain name sellers.

Create a website.

No matter what business you’re in, the majority of potential customers today are likely to head online to Google you before heading over to your store or buying from you online. They may want to find out where you’re located, what your hours are, what products or services you sell, or to straight up shop. You need to give them all that in one place—your website.

Start selling.

Sure, you may not have everything all figured out, but one of the first things you should be doing is selling, selling, selling. That’s the only way you’ll make any money in business. Let people know what you do, who your ideal customer is, who can benefit from your products or services—spread the word far and wide! Don’t put off marketing and promoting your business until everything is perfect, because it won’t ever be. 

Start where you are and keep improving as you go.

Women Business Owners, Do You Need Business Insurance?

Thursday, June 17th, 2021

In a word, yes. You need insurance of some type to keep your company up-and-running long-term. Insurance is a tool to help mitigate some of the risks associated with running a business and having employees, both of which open you up to liability.

“If you have a business and hope to survive, you’ll want to protect against losses like property damage and liability claims against your business, says Fran Majidi of SmartFinancial Insurance. “Otherwise, you may have to pay for losses out of pocket or have no assistance if your business becomes inoperable.” 

Majidi points out that states each have their own specific laws and requirements regarding business insurance that you’ll want to check. However, in most states, workers compensation, unemployment, and disability insurance are required of employers.

Workers’ Comp Insurance

“Workers’ compensation will cover the costs associated with job-related injuries and illnesses,” explains Majidi. “When your employees experience work-related injuries, the company will be spared from paying their medical expenses because the insurance will cover, if not all, most of it,” says Nick Schrader, an insurance agent with Texas General Insurance.

Unemployment Insurance

Employers are often required to carry unemployment insurance, which helps support workers who lose their jobs “for reasons beyond their control,” Majidi says.

Liability Insurance

“It doesn’t matter what type of business you own; liability insurance can protect you from any customer accidents in your store. Liability insurance can help provide coverage from bodily injury or property damage,” explains Jim Pendergast, senior vice president of altLINE Sobanco, a business advisory firm.

Commercial Umbrella Insurance

Another type to consider is commercial umbrella insurance, which “is an added insurance that extends coverage. If you live in a place prone to break-ins or property damage, umbrella insurance is worth its weight in gold,” Pendergast says.

Property Insurance

If your company has a physical presence that employees and/or customers visit, you’ll want to consider liability insurance and property insurance. “You wouldn’t want to throw away your hard-earning money by not making your establishment, tools, and equipment insured,” says Schrader. “Having property insurance ensures that whatever unfortunate events may happen in your establishment, everything will not be wasted because you can file a claim for it.” Meaning, you can be reimbursed for your losses.

Data Breach Insurance

With the exponential rise in computer hackers stealing business data, or holding it hostage, data breach insurance may be something to consider, especially if a large portion of your intellectual property or assets reside online. Pendergast explains that “any costs you must pay when data is stolen can come from data breach insurance.”

Key Man Insurance

Lyle Deitch, an insurance professional and CEO of Parachute360, says, “I always recommend that small business owners have key man insurance….[it] can be invaluable in buying your business, investors and family the time it needs to sort out the business, so that it can continue operations.”

Business Interruption

“Business interruption insurance, or BII, can be bought separately from a BOP policy, but it’ll cost more,” Majidi explains. “BII isn’t just lost income insurance, either. In the event of a covered catastrophe, BII may help pay mortgages and leases, taxes, relocation costs (this is especially important if this determines whether or not a business can get back on track), payroll costs and more.”

Business Owner’s Policy (BOP)

“Most small businesses would do well to purchase a small business owner’s policy (BOP), which combines business property, business liability and business income in one affordable policy,” says Majidi. “With this policy, your business would be covered if there were damages done to the building, equipment, furniture, documents, and all other contents. You’d also be covered if your business operations came to a halt due to a covered catastrophe,” she says.

“Often, the difference between a business that overcomes a disaster and one that shuts down is the right business insurance policy,” says Majidi.

Heather Burns of Hutcheson Reynolds & Caswell Insurance in Ontario, Canada, points out that business insurance can help protect all the assets associated with a business and can help “absorb the financial burden of a loss to their business.”

Big picture, she says, business insurance “is designed to give all business owners peace of mind knowing their investment is protected.”

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