The waiting room experience can be either a deal breaker or a first step toward long-term customer loyalty. If you subject your clients to stressful and uncomfortable delays in an unpleasant environment, you may lose them forever. On the other hand, a few carefully chosen amenities and consistently applied practices can keep them coming back — even when waiting is unavoidable.
Take these customer-focused waiting room ideas into consideration:
Offer free Wi-Fi. Customers expect to stay connected, whether to chat on social media, answer emails or create spreadsheets. Talk to your internet provider about setting up a guest network that’s separate from your secure internal system. If necessary, increase bandwidth to make internet browsing faster. Post the guest network name and password in plain sight.
Make seating comfortable and clean. Sit in your waiting room chairs for half an hour. Do you feel pain? If so, it’s time to shop for replacements. Ditto if the chairs are stained and shabby. Provide smaller chairs for children and leave plenty of space between chairs so customers don’t feel hemmed in.
Take care with television. Depending on your clientele, consider limited programming that fits your customers’ interests. A hair salon, for example, might offer channels featuring beauty tips. An accounting office might program market updates and world news. If children will be present, keep programming lighthearted. And use closed captioning to reduce noise.
Make it pleasant and efficient. Create a stress-reducing environment by using green plants, natural lighting and landscape artwork. Set tables at an appropriate height for filling out paperwork.
Communicate expectations. When the hostess at your local restaurant says the wait will be an hour, you’re provided with options. You can leave your name, shop at a nearby store, and return later. Provide a similar experience for your customers. If the wait will be longer than originally expected, apologize.
Your time is valuable. Let customers know that you respect their time, too.
You’ve probably encountered your share of challenging clients. They nitpick. They haggle endlessly about prices and hourly rates. They fuss and fume about every aspect of your work. When the project is over and the goods are delivered, they pay late — or not at all.
How do you screen out time-wasters and garner good clients for your business?
Clarify what a “good client” looks like. Although each business will establish its own parameters, at a minimum you’ll want to consider the range of client budgets you’re willing to accept. Say, for example, you run a roofing business. You may decide that projects under a certain budget aren’t worth your time and that projects above a certain size exceed your firm’s level of expertise. Or, if you’re in the business of website design, you might specify the minimum level of technical knowledge you’ll require.
Communicate parameters clearly. Use your business website to explain the types of customers you’re looking for. If you plainly state, for example, that you only service clients in a particular geographical area, folks outside your region will tend to filter themselves out. Of course, you can always make exceptions. But the more details you can spell out, including specifics about your pricing, the more likely you’ll narrow the field to the best potential clients.
Consider a potential customer’s reputation. Depending on your industry and long-term expectations, you may want to check out a prospective client before taking on a project. Make discreet inquiries of others in your industry group. You may find it helpful to know if the client has been willing to take feedback on past projects, if they respond in a timely manner, or if other businesses have complaints about them.
Good clients form the backbone of any successful business. Be diligent to find and keep the best ones.
Business clients often prefer to be billed for purchases rather than paying upfront. That means you may need to establish receivable accounts for most business-to-business transactions. Unfortunately, it also means cash flow complications or worse if you take on commercial clients who don’t pay on time, or at all.
Luckily, you can minimize the risk of delinquent accounts by creating strong payment and credit policies. Consider these four methods:
Credit eligibility standards. Research new clients by purchasing business credit reports or contacting credit departments in your industry. Before extending credit, confirm that they have made good on previous obligations.
Credit terms. Consider industry practices and the creditworthiness of individual customers when crafting your policy. In some industries, new customers might start with a “net 30” standard, allowing them 30 days before payments become delinquent. But one size doesn’t necessarily fit all. Your best customers may warrant longer payment terms, such as 60 to 90 days. Some industries have their own billing practices, such as the construction industry, where customers are usually billed with a series of invoices.
Clear documentation. Requirements for purchase orders, contracts, credit applications, sales agreements and invoices should all be documented and made clear to the client. The policy should include examples of each type of form, and specify the circumstances under which each would be appropriate and/or mandatory. Having formal procedures in place will make clear to your clients that you are diligent about the payment process and expect timely payment.
Collections. Your policy guidelines should explain in clear language the steps you’ll take if an account becomes delinquent. You should provide information on late fees, charges, overdue notifications and when delinquent accounts will be reported to credit agencies and/or turned over to a collection agency.
A good credit policy will help you start to get a handle on your cash flow. Questions? Give Carl Heinemann, your Chattanooga CPA, a call.
You’ve launched a business website, but customers aren’t flocking to purchase your online offerings. Why not? For some companies, tweaking an already inviting webpage may be sufficient. Other business websites may require a complete overhaul. If traffic to your homepage isn’t trending upward, consider the following tried-and-true guidelines:
Keep it simple. Flashing fonts, animated gifs, lengthy product videos — website designers may love them, but customers don’t. Bells and whistles tend to distract. And your webpage shouldn’t drone on with large blocks of text. Use short paragraphs, easily scanned bullet points and a few strategically placed and relevant images. Assume that your visitors are always in a hurry. Don’t give them a reason to leave.
Make the site accurate, fresh and easy to navigate. Before launching your website, fix all grammar and spelling errors. Confirm that each statement is correct. Update content frequently. Use a handful of clearly labeled tabs in your top-level menu. If the site contains several pages, make sure visitors can always get back to the homepage. Don’t make them search for what they need or want.
Don’t forget mobile device users. According to a survey by marketing data company SessionM, more than 90 percent of shoppers use smartphones to compare prices and check product reviews. This is a great reason to make sure your mobile website experience is a good one. That means making sure your website is responsive (AKA works well on all devices) and relevant for users on the go.
Focus on the customer. It’s great that your company has won the latest-and-greatest awards. Do online visitors care? Tie your awards to product quality. Link sales data to testimonials of satisfied customers. To encourage trust, include a professional photo of your team. Help visitors connect with your company by making contact information easy to find.
Minimize loading times. If you’re searching for a product or service, how long are you willing to wait for a webpage to load? Three seconds? Five? Your customers are busy, too. Accelerate loading times by updating software regularly, optimizing graphics and employing hosting services that cater to your bandwidth needs.
The internet is where people go to discuss their favorite sports teams, politicians, recipes — you name it. This is especially true for customers. You can find out how much people love or hate your business by what you see via Facebook, Instagram, Pinterest, Twitter and other social media platforms.
More and more of your customers will be tech-savvy folks who expect businesses to engage with them using these platforms. But when your company steps into the no-holds-barred world of social media, be sure to avoid three common blunders:
Setting up too many accounts. Don’t assume your target customers will be trolling every available social media site. Identify two or three platforms that your most-sought-after clients favor, then learn the strengths and weaknesses of each platform.
Blending personal and business accounts. Once in a while, your customers may enjoy a personal photo. But your politics may offend. They may go elsewhere when you post comments about a recent Hawaiian vacation, or your favorite politicians. To avoid appearing unprofessional or trivial, keep your company’s social media site separate from your personal account.
Using social media for the hard sell (right away). Think of these internet gathering places as a casual party. You don’t walk in, immediately hand out business cards and grab the microphone from the host to advertise your latest product. Take it slowly. Get to know the attendees first. Educate, entertain and add value. Then talk about your business in response to a customer’s expressed needs.
Expect to spend at least three months of concerted effort to see tangible business results using social media platforms. The more time you dedicate to getting to know your clients and potential customers, the better you’ll be at providing them the products and services they want.
If your company’s revenue starts to falter, payroll may be a place you look for spending cuts. But before opting for layoffs as a quick and easy means of recovering profitability, consider this: the decision to lay off employees carries its own set of costs.
For example, the more people who are laid off, the more remaining employees may find reasons to seek employment elsewhere. If skilled and productive workers leave the company, product quality and customer service may suffer. Those left behind may feel overworked and suffer from diminished morale, which can lead to production errors. Certain direct costs, such as severance pay and unemployment insurance rates, may actually increase. And when business picks up again, your company may incur additional costs to hire and train new employees. In the long run, layoffs may actually hurt profitability.
So before taking steps to reduce the size of your workforce, consider these five alternatives for reducing payroll and overhead expenses:
Curtail nonessentials. Temporarily suspend company-provided meals and transit subsidies. Reduce travel and overtime as much as possible. Postpone buying the state-of-the-art equipment you’d like.
Reduce work hours. Go from a five-day workweek to a four-day workweek to cut payroll costs by 20 percent. Give employees unpaid leave time, especially during school holidays.
Hire interns. Some students may need to complete an internship to graduate from college. In exchange for college credit, they may be willing to work for minimal pay.
Offer sabbaticals. Challenge your established employees to step away from the office for a period of time at reduced pay to attend training.
Consider a virtual office policy. Perhaps some of your employees can work from home, enabling you to free up office space and the associated leasing costs.
Above all, keep your staff in the loop. Let them know why you’re making changes. Communicate the benefits of any short-term cuts, and stress your desire to avoid layoffs whenever possible.
As any entrepreneur will tell you, financing a business is no small undertaking. Pulling funds from personal bank accounts, liquidating assets, talking to friends and relatives about your venture — these are all actions you might take to get your business up and running. Banks and other financial institutions could also play a role.
In fact, for many small businesses, some form of debt is essential. According to a recent study by the Harvard Business School, about 48 percent of business owners reported a major bank as their primary financing relationship. Another 34 percent identified a regional or community bank as their main capital financing partner.
Understanding the following factors — fundamentals that loan officers scrutinize — could increase your chances of getting a small business loan:
Cash flow. Lenders want assurance that your business will pay back the loan without fail. Your job? Convincing them that your company won’t default. Calculate cash flow at least quarterly and try to optimize those numbers before applying for the loan. Understand the support for your financial statements and be able to defend any projections.
Collateral. This is the asset or group of assets a lender can recover to offset loan losses. In the case of a mortgage, it’s the market value of the property underlying a home loan. To bolster your case to a loan officer, consider getting independent appraisals of major assets to be used as collateral. Those assets might include inventory or company-owned real estate.
Credit history. Any competent loan officer will examine your credit history before approving a loan. Sometimes otherwise strong businesses face financial troubles due to problems beyond the owner’s control. But know that if your credit is less than stellar, banks may be reluctant to lend. So plan early and make every effort to fortify your credit report. Paying off old loans or renegotiating supplier contracts may lift your credit score and increase the likelihood of loan approval.
Expert advice. Lenders want assurance that you’re serious about the future of your business. Let the bank know that you’re seeking financial guidance from your accountant and other knowledgeable advisors.
Scrutinize your operating budget and you may discover that shipping expenses — ever present and necessary for obtaining inventory and delivering products to customers — are squeezing your bottom line and cutting into profit margins. Taking some time to trim those costs may offer significant opportunities for savings.
Comparison shop and negotiate
The biggest names in the shipping industry — UPS, FedEx, DHL, and the U.S. Postal Service — aren’t the only games in town. And because they all compete with each other, it’s wise to shop around for the best price. If you ship large volumes of merchandise, you may find that some shippers are willing to lower your costs. Generally speaking, pricing schedules are based on volume. The more you ship, the lower your rate.
Shipping account number
Ask suppliers to use your shipping account number. This approach has two major advantages. First, it tends to increase the shipping volume on your account, which can lower your overall rate. Secondly, it can also keep vendors honest. For example, if you ship via FedEx, request that the supplier use your FedEx account number, so you can check online to verify actual shipping expenses. Include this requirement with each purchase order and your suppliers may not be tempted to pad their delivery invoices.
Shipping is expensive. Fuel surcharges, recipient signature fees, and extra charges for Saturday deliveries are common. Your pricing should reflect those costs. If you’re selling online and can’t afford to offer free shipping, consider increasing the price of your products to cover delivery expenses. Buyers may balk at paying $8 to ship a $15 item, but may be willing to spend $3 for shipping to obtain a $20 product. Your company garners the same sales revenue either way.
Slash packaging expenses
Your customers will gladly inform you that shipped items were damaged in transit, as they should. But ensuring that your products arrive in pristine condition requires well-designed and costly packaging. How can you reduce packaging costs? Consider using packages provided by your carrier. You won’t run afoul of their size regulations or end up paying “dimensional fees.” Order several boxes of each size to determine the optimal packaging for your needs. Other options that may work for you include recycling previously used containers or shopping online auction sites for inexpensive packaging materials.
Shipping costs will likely always be a part of your company’s expenses, but implementing a few of these ideas may reduce your bottom line. Please call Carl Heinemann, your Chattanooga CPA, for more information.
According to the Small Business Administration, about half of all newly established businesses last five years or more. Only a third survive to the ten-year mark. For a variety of reasons, companies that possess the stamina and skill to endure the early years of growth sometimes flounder as the business matures. Why? In all too many cases, business owners disregard four warning signs.
Core business distraction
You start a business with a great idea. It catches on. Orders start rolling in and profits climb. But somewhere along the line you get distracted. You start diverting resources and time to other pursuits. An example of a company diverting resources comes with the history of the Boeing Company, one of the world’s largest aircraft manufacturers. In the aftermath of World War I, Boeing built furniture and watercraft to bolster its bottom line. What if, during that season of dwindling revenues, the company had diverted all its limited resources toward sideboards and sailboats? Maybe we wouldn’t be boarding Boeing jetliners today.
Excessive employee turnover
If you’re routinely replacing and training new staff, you may be headed for trouble. Besides the added cost of recruiting, interviewing, and educating new employees, high staff turnover can adversely impact customer service and sales. Too many unhappy customers and your once-thriving business may begin to falter.
Cash flow setbacks
It’s great that your profit-and-loss statement shows an upward trend in net income. But that’s not the whole story. The cash flow statement is often a better tool to diagnose your company’s overall financial health. It shows how much money is coming into the business and where the funds are being spent. For example, you might have an aggressive sales staff that racks up orders. But if customers aren’t paying their invoices in a timely fashion, you may struggle to cover payroll and accounts payable. As the old saying goes, “Cash is king.” Uncollected accounts receivable won’t pay the bills.
Technologies come and go. Customer needs fluctuate. Today’s hot-selling product becomes tomorrow’s obsolete inventory. It’s true that determination and drive are crucial to the success of any business. But if those traits lead to inflexibility in the face of changing conditions, the company may be headed toward bankruptcy.
If you have further questions about strengthening your company’s long-term prospects, call Carl Heinemann, your Chattanooga CPA and let’s have a conversation.
For many companies, the decision to lease or buy office equipment bears directly on cash flows and profits. Copiers, phones, computers, printers, and networking software all must be either purchased or rented. How do you decide which is the best option for your business?
Pros and cons of leasing. When you lease your equipment, you sign the lease agreement and start making payments. It’s simple. The company that leases equipment to you (the lessor) generally promises to maintain it. The lessor may even cover insurance and other costs during the lease term. With a lease, your business won’t need to take out a loan or make a down payment to use the equipment. Lease terms often roughly coincide with the expected service life of the leased assets. So by the time the equipment is returned to the leasing company, it may be fully depreciated. When the technology becomes obsolete, your firm won’t be stuck with equipment you can no longer use. You can return it.
Nevertheless, over the long run, leasing is often more expensive than buying. For example, you can buy desktop computers today for $1,000 each. Leasing the same equipment for three years at $50 per month will cost $1,800. Keep in mind, too, that your lease contract will likely require lease payments even if you stop using the equipment. (Breaking the lease may be an option, but often an expensive one.) Moreover, unless you establish the right to buy the equipment at a bargain price when the lease expires, your company won’t have equity in the leased items.
Pros and cons of buying. When purchasing a piece of equipment outright, you’re responsible for maintenance, insurance, loan payments and associated costs. But if the equipment retains its value, you can continue using it after any loans have been paid off. You don’t have to continue making lease payments and there’s no penalty for breaking a lease contract. When you no longer need the equipment, you may recover a portion of the cost by selling it to the highest bidder.
However, purchasing equipment requires cash today. To buy a telephone system, for example, you may need to deplete cash accounts or divert revenue to cover loan payments. That’s money that won’t be available for advertising, salaries, utilities, and all the other costs of operating your business.
The best way to determine if leasing or buying is right for your company is to determine the approximate net cost of the equipment, carefully including tax breaks and resale value. After this, consider other possibilities, like the product becoming obsolete or your need for the assets expiring before the lease does. If you would like to discuss the details, Carl Heinemann, your Chattanooga CPA, is here to help.