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Recently, I had quite an ‘interesting’ experience with customer service. I was on a call – including being put on hold – for more than 25 minutes trying to get one simple piece of information from my bank. In the time I was put on hold, I swear I could have written an entire blog post on customer service (or in this case, the total lack of it). While it seems I keyed in the ‘correct’ selection, their internal system was busy and sent me through to a different department. However, I wasn’t informed of this until 15 minutes into the conversation. When it came to light, I was transferred back to the correct department, forced to give my security details again and repeat my issue. Imagine my frustration at then having to be put through to a third department, at which point my patience began to dissolve. It’s not the first time this has happened, and it made me think about changing banks. When it comes to customer service, most people can reel out a list of complaints I’m sure most of us have experienced. What are the simple things you can do to improve your customer service?
Whether your business is growing or struggling, managing your cash flow effectively is absolutely essential, and for many, the very key to business survival. You've probably heard the statistic that over 60% of businesses that go bust are still profitable, but just ran out of cash. From a cash point of view, a business is like a sponge—it sucks in ever increasing amounts of cash, and, to get it back out again, you have to give it a good squeeze. If the business is growing rapidly or badly managed, squeezing hard won’t help, as the sponge will just get bigger and bigger! Understanding and accepting the amount of working capital a business needs to operate is the first step. How much inventory do you hold? How far behind in invoicing are you, or how much cash is tied up in work in progress? What do your customers owe you? How long does it take from paying your suppliers for the materials to extracting cash from your customers? All these will soak up your cash like rain in a desert. Next, ensure your business has enough cash to fund your working capital needs. They used to say to keep three months worth of outgoings in the bank for a rainy day. That may be a thing of the past, but if that’s the case with you, make sure you have a buffer of some sort, either personal funds available or an overdraft or revolving credit facility. Or maybe cut your drawings, as retained profits are by far the best and cheapest source of working capital. Then, plan ahead. It’s no good finding out in your down season that you can’t survive until things pick up when you've already reviewed and agreed your borrowing facilities with your bankers at your annual review some months ago. Prepare some cash flow forecasts for the coming year. If you find it difficult to predict your sales, complete all the outgoings first, and then see what sales you need to cover your outgoings. At least then you have a known target. Plan month by month, too. An excellent client of mine uses a monthly spreadsheet template to predict whether their business can pay the bills on the 20th. This works well—they had a shortfall in August and couldn't pay their Provisional tax. But, because they knew in advance, they consulted me, and I arranged Tax Pooling to cover the tax. Problem sorted, and no last minute panic and stress! Review your systems, which are so commonly poor in SMEs. Do you forget to invoice customers? Do you invoice as you go or just at the month end? How quickly do you collect your accounts receivables? Many do not even know how much is owed to them by their customers or how much they owe to suppliers. Do you capture all time, costs or disbursements to invoice? When was the last time you checked suppliers costs to ensure you haven’t been overcharged or been billed for items you haven’t received? Speed up your cash conversion cycle, which measures the time span between a business disbursing and collecting cash. 180 days or more is very common, especially in manufacturing or businesses with inventory. Ask for a deposit, put customers on retainers or get them to pay monthly. Cut your inventory levels, maybe by arranging for your suppliers to deliver the same or next day, or negotiate longer payment terms. They say that Dell and Amazon have negative cash conversion cycles—how neat is that? Make it as easy as possible for your customers to pay you. Always quote your bank account number on your invoices, and ask for direct credits or automated payments. Accept Eftpos and credit cards, and set up a PayPal account on your website. Why wait for a cheque to be posted in this day and age? Always be on the lookout for ways to cut costs or improve revenue. If something or someone doesn't save money or boost income, do something about it. Review your suppliers, phase out products or service lines that don’t fully contribute, fire your ten worst customers (oh what bliss!) and bite the bullet with difficult or unproductive team members. As the name suggests, cash management is all about managing your cash flow by understanding how a business works, having access to adequate working capital and adopting a planned and proactive approach. Running out of cash is stressful, embarrassing and not good for one’s well being, not counting the additional costs and finance charges that generally follow! Nick Roberts | Owner | Accountancy + Business Advice Centre – Empower Your Business
Are you one of the many small business owners or other professionals who find it a challenge to make sales appointments with prospective customers? If so, you're not alone. And if like me you are not a “born salesperson” who loves the game of sales, even the thought of calling to set up a sales appointment with someone you haven't met can be daunting. If your budget will allow it, you might hire sales people to do this for you and maybe even to handle the whole sales process from start to finish. For others of us, the choice will be to get those appointments ourselves, or miss out on the revenue from sales we don't make. Here are five key steps that I've found work well for getting sales appointments with decision makers: Research the company or organisation. Understand key concerns of the industry. Find out who the real decision makers are. Use your network. Make the gatekeeper your friend.
Are you self-employed and a contractor? You can still be classified as an employee. Anyone signed on for a job as a contractor needs to know what that means from an accounting and tax point of view, or what difference being self-employed will make for meeting your accounting and tax obligations. The status of your engagement is an important distinction—whether you are being put on as an employee or as an independent contractor—and can have consequences for both yourself and your new boss.
In a recent post on challenges in running a business from home, I included as one of the key challenges the risks of stress, ill health and strained relationships from working excessive hours. I realise now I could have added the risk of working in a home office space that has not been set up to be ergonomically helpful—in other words, with everything arranged so you can interact with that environment efficiently and safely. So what would that involve?
When it comes to marketing, there is always a cost. It will cost you time, or it will cost you money. If you don't have the time to invest yourself, then the choice is simple—don't do it, or pay for it. Think about it ... how many emails, conversations or pitches have you had from people in the last week? How much time and energy did you invest in thinking, deciding or acting upon it? I generally receive at least one interesting pitch per day. The rest are usually caught by my email spam filter, but one or two slip through and catch my attention. In most cases, I simply delete them from my inbox, but sometimes if the subject line is intriguing enough or if I confuse the name of the sender with someone that I know, then I will open and read. Very rarely does it go beyond this, for a very simple reason—priorities.
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