Embrace Customer Perspectives
Seeing things from the customers’ perspective may be the most important thing you do. Sometimes we are so busy managing our business that we may overlook the customer. We think of them in terms of buying our products or services but may forget to really consider things from our customers’ point of view. When planning anything that involves customers, it’s important to find out what specific needs and expectations they have.

What should you do to accomplish this customer orientation?
First, you can consider your own expectations as a customer. What are the most important factors in your own decision making? Make sure others outside and inside the company do the same exercise. Also, continually solicit feedback from your customers. Thank your customers for their input, follow up on suggestions and keep track of the information in some sort of database.

Networking remains an important key to business success. Five networking ideas are:
  • Choose your networking groups/events selectively. Find the right tradeshows, conferences and membership associations that put you in touch with potential customers and others who could help you get to those customers.
  • Second, you should focus on quality not quantity. You want to make a real connection with people. Don’t look at how many business cards you can pass out.
  • Third, make a meaningful impression. You only have one chance to make a good first impression. Ask them about themselves before you talk about you and then listen.
  • Fourth, you want to develop a compelling way to introduce what you do. Have a brief description that says what you do and for whom.
  • Finally, don’t drop the ball. The day after your meeting send a handwritten note and express an interest in staying connected.

Form Strategic Alliances
Strategic alliances are a way for businesses to work together toward a common goal. Strategic alliances can extend the company’s reach without expensive internal expansion. Alliances can be between vendors or between a vendor and the customer. When looking for a strategic alliance:
  • First, establish the objectives you have for a mutually beneficial alliance.
  • Second, identify the business and personal criteria you have for an ideal alliance. Company culture and personal chemistry are as important as business measurements in this analysis.
  • Third, network among industry and professional organizations to find appropriate candidates.

There’s a big difference between managing and leading and a business owner needs the ability to lead through understanding and inspiring people. Managers are crucial; management skills provide systems, rules, and operating procedures for successful growth. Leadership skills provide direction and the ability to communicate it. Most successful business owners need to have both management and leadership skills. Unless a business owner has the wherewithal to hire managers, management will remain an important task for that owner. But leadership is more important because only the chief executive of the company can set the vision and the direction. So, establish a vision and mission statement that supports the company’s values and culture. Then communicate those elements to your clients, vendors, and staff. Keep hold of the big picture and reinforce your company’s values and culture every day.

Show Gratitude
As businesspeople we often find ourselves multi-tasking and rushing to meet deadlines and we may forget to express our thanks for a job well done. An expression of appreciation increases the likelihood the behavior and attitude of the recipient will be reinforced and repeated. Consistent hard work, a good attitude and positive results should be recognized. Too little of a response might seem ungrateful or perhaps even insulting. The right amount will almost guarantee that the good behavior will continue. Never forget the impact of the word “Good Job” will have on someone who truly is deserving. It is a positive remark to both the sender and the receiver.

Offer Quality Products
If you are struggling with the profitability of your organization, consider looking at such things as the product mix, pricing, overhead, debt and cash flow.

One big key to profitability is offering quality products that fill a need of high demand by your target market customer. When you have a product, you should:
  • Ensure proper pricing. Customers are becoming more and more price sensitive, so pricing can make or break the sale of your product.
  • Next, conduct strategic marketing and plan how you can go about growing your business.
  • Review your promotional practices and eliminate those that provide small returns.
  • Control your expenses.

Protect Your Company Identity/Image
Every aspect of your company can have an impact on your image. Some ways to improve a company’s image include:
  • Look at every point of contact you have with your customers. Do they convey the image you want to convey?
  • Does the level of your company’s community activity provide recognition for the business?
  • Examine how employees add or detract from the image that you hope to convey.
  • Finally, take what you learn and sharpen your activities in these areas.

Conduct Financial Planning
Financial planning is a big key to prosperity for your business. You should evaluate your current financial situation, and then look at ways to improve upon what you have. Set specific financial goals such as revenue growth and profitability. Forecast your sales, expenses and new income and the resources necessary to implement the plan. Finally, revise and rework because planning is a continuous process.

Maintain Good Records
Record keeping is important and can provide timeliness and reliability of information. Recording of transactions, receipts, disbursements, sales, purchases, and multi-financial reports on income, cash flow, receivables and payables and balance sheets is required. Most business owners have bank accounts and ledgers that track transactions and information on customers and employees. However, the tough thing for most businesses is managing the number of records. A method that works is a master calendar with critical deadlines that affect the business. Another important piece is the well-organized online filing system. Store only what you need and make the files as accessible as you can, so they are useful when you need them.

Tap Into Useful Technologies
There are technologies in banking that can mean significant cost savings for business. First State Bank and Trust’s remote deposit allows clients to electronically deposit checks to their FSBT accounts via online or mobile banking without leaving their place of business. Some features include:
  • Cost reduction through fewer trips to the bank.
  • Time savings when managing your account.
  • Process streamlining which reduces fraud and posting errors on your account.
  • Improved deposit collections and decreased charge backs.
  • Convenience as deposits can be submitted 24 hours a day, 7 days a week.

Manage Working Capital
Working capital is a key indicator of financial health. Therefore, managing working capital is essential. You must constantly be alert to changes in your working capital position to ensure it remains strong. Make adjustments, as follows, when needed:
  • Cash and Equivalents – Keep your cash levels adequate to cover expenses but employ your excess cash to reduce borrowings if you are using a revolving line of credit.
  • Accounts Receivable – Ensure your receivables are being collected on a timely basis. Managing collections maximizes liquidity and reduces the risk of a significant bad debt.
  • Inventories – Consider quantity and mix. Excess and obsolete inventory can absorb valuable liquidity.
  • Accounts Payable – Manage the money owed to suppliers within terms. If you find yourself falling behind, effective communication with suppliers is important.

Form an Advisory Board
Every business can benefit from an Advisory Board. Board members from different disciplines can complement and enhance the expertise and talents of the business owner and other managers in the company. They can help create and maintain your company’s business plan while providing guidance, direction, and honest feedback through good times and bad. A strong board helps protect and enhance a business’ long-term value by bringing their unique perspective and valuable, unbiased insights. They can also have a positive impact on your business’ bottom line by sharing their network of experts, referral sources and potential customers. Share the challenges of leadership with a dynamic and qualified Board and you will enjoy many tangible benefits.

Execute Change When Needed
Though conventional wisdom has its place, an unknown author wrote “If all you ever do is all you’ve ever done, then all you’ll ever get is all you ever got.” In an economy where so many organizations chase after too few dollars, it is also time to challenge conventional wisdom regarding how to operate your organization and to innovate and adapt in an era that presents new types of difficulties and obstacles.

To remain viable, you must be a driving force that moves your organization forward. So, test conventional wisdom and institute conventional best practices that help your organization, but also become an agent of change in areas that separate your organization from the competition and build competitive advantages.

Examples of change agent innovations include:
  • Eliminate your organization’s non-core activities that drain management time and money.
  • Discover how other industries handle issues your organization is facing. Ideas or methods routinely used in one industry can be groundbreaking in another industry.
  • Improve your customers’ experience with your organization. Make it easy, meaningful, and rewarding for your customers to do business with you.
  • Form strategic partnerships with organizations that share your philosophies and objectives to work toward a common goal. These alliances extend your reach without expensive internal expansion.
  • Implement new technological solutions that increase your organization’s efficiency.
  • Marketing your organization to current and future generations of customers via inexpensive online and social media methods.
  • Lobby your interests with local, state, and federal governments.
  • Work with a banker who understands your organization, can introduce you to strategic partners, and offers innovative ideas and solutions.

Establish Internal Controls
The goal of internal controls is to provide checks and balances that help produce or eliminate errors and fraud in financial reporting. In large companies, financial reporting is divided among several departments and many people. With businesses, it’s very common to find one person in charge of making deposits and completing financial records. This amount of control by one person can increase the risk of a problem occurring.

To be safe, don’t let one person control an entire process, whether it’s accounts payable, purchasing, receiving or check signings. Secondly, owners should frequently review major areas of risk. Some suggestions are:
  • Periodically check orders for quality, quantity, and accuracy
  • Sign each check and company paperwork.
  • Monitor other areas, such as travel and entertainment and make sure the expenses are in line.

Create a Positive Work Environment
Operating a business has its share of challenges, but it should also be fun. Infusing fun into the operation should be a key part of the business. It’s been shown that having fun at work increases productivity. Happy people are going to bring a better attitude to their interactions with customers and co-workers and that’s always good for the bottom line.

How can you go about having fun at work?
  • First, involve your staff to look at ways to infuse fun in your workplace.
  • Second, consider loosening up on your office décor. You need to have professional spaces but allow employees latitude for personal expression in their work areas, in the break room and in informal meeting rooms.
  • Third, you or an employee can take on the responsibility of a daily email with an uplifting thought or joke for the day.
  • Finally, remember to smile and encourage laughter. Meetings that have a lighthearted side are probably a lot more productive and meaningful than terribly serious meetings.

Be Prepared
If a disaster strikes, businesses without the right resources or knowledge are vulnerable. Businesses need to assess disaster risks and develop a comprehensive risk reduction recovery plan.

To be prepared, your first line of defense is to define your risks. Determine what emergencies could affect your business. Next, determine what operations and facilities needs are essential, both internal and external for your company. Then, design a disaster plan with your staff and assign areas of responsibility. Be sure to review the plan annually to make sure it evolves with your needs. Practicing will help you prepare if a disaster strikes.

Speed Up Accounts Receivables
Cash is the lifeblood of business, and collecting receivables quickly is important to its health. A soft “collection” call five days after invoicing can reduce payment delays. More of a customer service than a collection call, this is the time to ask, “Have you received the product?”; “Were you happy with the service?”; “Have you received the invoice?” Problems (or excuses) surface immediately with these questions versus later, when the invoice may already be past due. If there are legitimate issues, this is your opportunity to address them and get payment back on track. A customer’s use of these issues as excuses is circumvented and you’ve gently put the customer on notice that you expect payment in a timely manner. This is a simple strategy that can improve cash flow and show your customers you care about their experience with your company. The best collection call is one you don’t have to make.

Collect Overdue Accounts
Collecting overdue accounts is important to the health of your business and to a steady cash flow. There are techniques to help with collection efforts.
  1. Create policies and procedures that establish how you will extend credit, bill, and follow up on past due services.
  2. Obtain credit references on new customers prior to providing products or services.
  3. Always send an accompanying invoice when performing a service or shipping merchandise.
  4. Mail monthly statements communicating what is still owed, stamp past due and handwrite a friendly note requesting payment.
  5. Aggressively manage your receivables after mailing the statement by politely asking when you may expect payment.
  6. Keep steady, friendly contact with your customer until paid.
  7. After 60 days inquire why the customer hasn’t paid and what can be done to speed up payment.
  8. Prevent a reputation for bargaining on your bills or you may end the year without full payment on invoices.

Establish Reserves
There is not a simple answer to the size of reserve you may need. The size of reserve needed is often a function of external events such as economic cycles, industry cycles and consumer demand. Your business cycle, inventories, cash flow, insurance coverage, and access to capital and credit also come into play.

Your banker may be able to help you with this question. One of the positive aspects of a relationship with your bank is that your bank has a stake in the success of your business and wants you to succeed. Therefore, your banker is your ally and should know almost as much about your business as you do, enabling them to offer you valuable ideas and insights.

Pick the Right Bank/Banker
There are many financial institutions to choose from. Selecting the right one for your business can seem daunting. While it is tempting to base your decision solely on the interest rate you receive, interest rate alone could land you in a bank that offers little else. Therefore, it is important to use other criteria based on your needs, objectives, and preferences.

Other possible considerations you could use include looking for a bank that:
  • Is financially sound with the strength to build its relationship with you, to hold your deposits and lend to you.
  • Makes decisions in the context of medium- and long-term strategic goals, versus short term profits.
  • Has the vision to help you seize opportunities.
  • Understands your business and has experience working with your industry, your size and track record.
  • Offers the consistency of an experienced team of bankers with in-depth knowledge and experience finding solutions to a business’ financial needs.
  • Has flexible lending practices and participates in special loan programs for the benefit of customers.
  • Provides a full range of financial products and services for your convenience.

After selecting the right bank, choose the right banker from the organization. Look for a banker who:
  • Is experienced.
  • Will take the time to listen to your goals, your vision, your concerns.
  • Understands your business.
  • Is responsive, credible and has integrity.

Communicate with Your Banker
One of the positive, almost hidden, aspects of credit is that your bank has a stake in the success of your business and wants you to succeed. Therefore, your banker is your ally and should know almost as much as you do about your business to offer you valuable ideas, insights, and solutions to problems, as well as help create possible business development opportunities for you.

Providing your banker with your business’ financial information frequently, as well as having regular, open communication is very important to building trust and credibility. Particularly if your business is encountering problems. No one likes surprises. So don’t wait until your company has encountered a tough issue (e.g. difficulty making payroll, loss of sales, bankruptcy of a key client, etc.) to let your banker know about problems. Especially if you need additional financing. Notifying the bank early builds trust and gives your banker the flexibility to possibly make concessions that might not be available down the road.

To negotiate with your bank from a position of strength and enhance your creditability, it is essential that you identify the problem you are having and propose a reasonable solution. You can also ask your banker for ideas on how to resolve an issue you are grappling with. Many bankers have the in-depth knowledge and experience to provide helpful solutions. Taking this approach will impress your banker and help build the trust necessary for your bank to consider modifying the terms of your banking arrangement to give your business some breathing room when needed.

Protect Your Business Against Crime
Crimes are not only conducted by professional thieves, but by dishonest customers and employees as well. And the impact to your bottom line can be very costly.

There are ways to protect your business from crime. But first you must identify and understand your vulnerabilities. Local law enforcement and your Chamber of Commerce can assist with this and can often provide techniques to help mitigate your exposure.

After you have identified where your business may be at risk, consider developing a thorough crime prevention plan. Executing this plan could protect you from substantial loss. Here are some commonsense action steps that can be a part of this plan:
  • Provide great customer service. By being attentive, you take good care of your customers and help prevent shoplifting or the casing of your business.
  • Install strong locks, good lighting, and security systems.
  • Create unobstructed views enabling you to monitor customer traffic and eliminate hiding spaces.
  • Maintain a record of your inventory and know where it is located.
  • Keep small and valuable objects in locked cabinets and/or displays.
  • Keep cash, blank checks and inventory locked up. Implement dual control over these items. Make bank deposits often and during business hours.
  • Conduct thorough background checks on prospective employees before hiring them.
  • Provide security training for all employees to build their security awareness, etc.
  • Avoid labeling keys with the name of your business and change locks if keys are lost.
  • Ensure there is no sensitive information on a piece of paper before thrown into the trash.
  • Install firewalls and antivirus protection on your computer systems.
  • Organize a “Business Watch” with neighboring businesses.
  • Work with public agencies and other organizations on problem solving. Be active in your communities.


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