The Impact of COVID-19 on Small Businesses Small businesses nationwide are already feeling the effects of the unprecedented coronavirus pandemic. With many states issuing shelter-in-place or stay-at-home orders, the closure of non-essential businesses has led to major financial interruptions. While some businesses, like restaurants, were able to modify services by providing take-out or delivery orders to meet regulations, other businesses are cutting hours, moving operations entirely online or closing altogether. Currently, there is no set time when social distancing bans will be lifted, and until we have an effective strategy for COVID-19 testing and research, we could see more waves of social distancing in the future until a vaccine is available to the public. So what does this mean for your business? How do you manage operations and keep your business afloat during a global health and financial crisis? This short guide will help you create a business management plan of action, to help you manage today, and prepare for a future of unknowns. Your First Step: Create a COVID-19 Plan The very first step for your small business during the coronavirus outbreak is to create a plan by taking inventory of your services, your expenses, and your community of customers. Here are some basic financial and social steps to take in 2020. Assess Your Financial Situation What worked well for your business prior to the COVID-19 social distancing orders may no longer be reasonable. The first thing you should do as a small business owner is to assess your current finances. Get a clear picture of your current inventory, expenses and staffing. Review money coming in and going out. Prioritize immediate needs and mitigate waste or unnecessary expenses now. Take this time to review your financial resources and emergency funds, and assess your insurance policies to see if you qualify for additional support or benefits. File Your 2019 Taxes If you haven't already filed your taxes this year, the IRS has now extended the 2019 filing deadline from April 15 to July 15. The Treasury Department is hoping this extension will offer some relief for small businesses and individuals who may owe money upon filing. The deadline also applies to quarterly taxes that would have been due on April 15. However, if you can do them now, go ahead and file your taxes sooner rather than later. You may receive a refund that could provide some relief for your small business now. Be sure to check your state's deadline requirements for filing, as not all states have followed these extended federal deadlines. Develop a Marketing Plan to Retain Customers Creating an adaptable marketing plan as part of your management strategy will be vital to how you retain existing customers and find new customers as well. Social media posts, blogging, and email newsletters are just a few ways to reinforce ongoing dialogue with your customers. How to Interact With Customers During COVID-19 When communicating digitally with your customers, it’s important to be genuine. Be honest and transparent in your posts and messaging about what services or products you can offer at this time. Make customers aware of how to make purchases. Provide realistic expectations and explain what steps you're taking to guarantee the safety and health of your employees and customers. Remember to preserve sensitivity and be careful with your messaging, as some people may be directly affected by this crisis. Sending too many emails, using fear or hard-sell tactics can come across as opportunistic and insincere. Finally, remember to remind customers why they are important to your business and how much you appreciate them. Right now, people want to support local, small businesses. Tell your story while offering your customers reassurance that you’re open and here to stay. Tune Up Your Online Presence If you don't already have a website (or if yours is outdated), now is a great time to create one that represents your small business digitally. Keep operating hours, contact information, shipping or service delays and other critical messaging up to date and accurate. Along with posting updates about your business, your strategy may include ways for customers to make purchases online or over the phone. Think outside the box to discover what services or work products you can sell online. For example, a home repair company may consider providing “how-to” videos or guides to help people DIY. If it makes sense, allow customers to purchase gift cards for future services. Event planners can provide virtual tours and meetings to plan future events. If you haven't already, consider moving all purchasing and invoice paperwork, customer reports, and other paper management systems to a digital platform you can access remotely. Mobile invoicing solutions not only streamline your business to save you time and money, but allow you to better function and operate remotely. Remember, business will pick up again once this is over. All of these strategies can help you stay at the forefront of your customers’ minds, once they are able and ready to purchase. Set Your Company's Tone Setting the tone for your brand is just as important as having a modified marketing plan - and both go hand in hand. When talking about COVID-19, it's recommended you focus on facts and continuing developments that are relevant to your company, and within your control. Keeping an appropriate and calm tone that reflects your customers' needs will help humanize your brand and deepen connections with your consumers and followers. Model your tone for other employees and stay consistent in communication with both employees and clients. Seek Out Assistance You are not alone. Many businesses are fighting to stay open. Forbes estimates that 30 million small businesses are struggling all over the U.S. Fortunately, resources are offering financial support during this temporary period. What Resources are Available for Small Businesses? From loans to relief funds to grant programs, there are many resources available to small businesses right now. While some resources assist businesses in their direct communities, such as Amazon's fund to support Seattle businesses, other similar funds are available nationwide. GoFundMe's Small Business Relief Initiative is just one example. The U.S. Small Business Administration is also offering disaster assistance and providing low-interest rate loans to small business owners who need financial support for staffing, health insurance and more. Be sure to research additional fund programs in your home state and city. U.S. Chamber of Commerce Coronavirus Response Toolkit The U.S. Chamber of Commerce has compiled a coronavirus response toolkit with information and links to emergency loan applications, sample graphics to use on your social media pages, and sample messaging for workplace best practices. The toolkit also provides information about state and local government policies, as well as a digital form that helps you create a custom flyer for your small business. How to Keep Your Business Running Day-to-Day Even if you're no longer able to offer your full range of services, there are steps you can still take to keep your small business active and operational. Your plan will need to be personalized based on your company's size, structure, the products and services you offer, and whether your business is deemed essential by your state's government. Here's our advice for running your business during a pandemic. Set New COVID-19 Company Policies Along with setting an appropriate tone, you should issue new policies and protocols specific to the coronavirus outbreak, especially for your employees. You should include the steps you're actively taking to mitigate the spread of the virus and follow all local and federal social distancing recommendations. Be clear about work from home policies, sick leave, traveling to and from work, hygiene and sanitation best practices, and any additional measures that may require adjustments. Expand Your Sick-Leave Policy Remember, this is a global pandemic which means your employees might fall ill. Support sick employees who are self-isolating at home or sick in the hospital, by expanding upon your current sick-leave policy. If an employee contracts COVID-19, they will not be able to return to work until they've fully recovered and have been cleared by medical personnel, which is a minimum of 14 days. Some workers may require even more recovery time. If Possible, Work Remotely We know not everyone will be able to take their small business completely online, but if you can do so, now is the time to work remotely. Remote work might mean employees work from home and hold meetings virtually, or it might involve reaching customers online instead of at your physical business location. If your staff is working from home, create a new routine, set clear expectations and check in on their progress and stress levels. Give employees time to adjust and find ways to connect and establish a sense of normalcy. Limit or Eliminate In-Person Meetings and Travel Any required in-person meetings should be done remotely, even if your small business isn't working from home full-time. Set up video conferences in place of any regular in-person meetings to help minimize contact and adhere to guidelines set by the CDC. Almost all industry conventions and other work-related events have been canceled or postponed at this time, but if you do need to travel, be prepared with sanitation supplies and any necessary gear to stay hygienic and safe while traveling. Be Flexible with Your Employees A key theme here is to remember why we're all here in the first place. Be flexible and understanding of the individual situations your employees are facing at this time, especially with employees who are considered high-risk or who are caring for someone at home who is high-risk. Reevaluate any policies for individuals who may require special accommodations. Make Long-Term Plans COVID-19 is an ongoing situation that's currently without a definite end date. Though we may experience times in the future where social distancing guidelines are relaxed, we'll likely see new waves of cases throughout the year. Take this time not only to create a short-term plan but also to get procedures ready for quick shelter-in-place orders at a moment's notice. What If You Can't Operate Remotely? Remote work will not be an option for every small business. For essential businesses, many companies are still providing services face to face or in-home. Take these steps to protect both employees and customers and mitigate the spread of the COVID-19. Sanitize Your Workspace Frequently Stay updated on workplace sanitation guidelines released by the CDC and know how often items need to be wiped down and cleaned. Sanitize frequent-touch items, like door handles, tablets, registers, computers, and counters throughout the day, and well as employee break rooms and offices. Promote Positive Hygiene Protocols Again, along with having a business management plan for sanitation, you should provide multiple stations for self-sanitizing. Create cleaning protocols, wear gloves and masks when necessary, limit patrons inside your building, and create floor markers to mark appropriate spacing, six feet apart. Set up visual reminders for increased hand-washing to improve the hygiene habits of your employees and customers, while also making everyone who interacts with your small business feel safer. If you're a home contractor, advertise and practice any sanitation changes you've implemented to keep customers safe while you work in their home. Proper hygiene and sanitation routines will play a critical role in your ability to keep your small business running. Check with your state and local guidelines for recommendations about providing gloves and masks for employees, and whether customers are required to wear a non-medical mask. Encourage Employees to Stay Home If Sick Because coronavirus spreads from person to person, it is crucial for employees who feel sick to stay at home and self-quarantine until they are symptom-free and able to determine that they do not have COVID-19. This is tricky because of the high volume of asymptomatic carriers with this particular virus. If you have multiple office locations, consider keeping people separate to avoid your staff from all getting infected at a central location. Make sure employees know it’s safe to stay home and don’t feel pressured to work while ill. Have a Backup Plan When Employees are Out Your COVID-19 business plan should account for time employees may be out sick. Create a list of your employees who can cover shifts beyond their typical work schedule. Establish a clear communication line to reach those staff members who would need to come in and cover for the person who is out. If the backup staff member is working a different shift for the first time, or taking on new duties, be prepared with instructions and expectations for that person to jump in and help. Start cross-training employees in different roles now in anticipation of sick time. If an employee feels okay but can't work because of a doctor-ordered self-quarantine, consider ways to allow this person to work remotely. Connect Daily and Offer Positive Reassurance As a manager, you should actively check in with your employees to get the latest updates about their circumstances, as well as physical and mental health. Your staff should feel comfortable reaching out to you. Make employees feel reassured during this stressful time. Offer support, thank employees daily, and remind them of why their work is valued and important. While this is an unprecedented time with policies and guidelines that are rapidly and constantly changing, remind yourself that this is temporary. It can feel overwhelming, but it's essential to stay positive for yourself, your employees, and your customers because your attitude and outlook will affect others who work directly with you. How InvoiceASAP Keeps Your Business Going As a small business owner, this global health crisis could be one of the toughest, most challenging obstacles your company faces during this lifetime. How you prepare now can impact your transition with employees and customers during periodic times of lockdowns, and even once this is over. Right now is the ideal time to get your technology in order and focus on the small details that have been holding your business back. From inefficient accounting and billing systems to lacking overall customer management, implementing a single solution can help streamline the critical functions of your business while saving you money. InvoiceASAP offers a multi-platform app and dashboard to help you easily manage invoicing, accounting, estimates, payments, sales, customers and more. Here’s how it works. Real-Time Business Insights Online reporting helps you know exactly how your business is doing at all times. Get daily, weekly, and monthly reports to forecast expenses and inform better business decisions. Types of Online Reports Available Invoice Reports Payment Reports Customer Reports User Reports Sales Reports Item Reports Profitability Reports Jobs/Location Reports Tax Reports Automated Accounting and Finance Records Unlike most invoicing platforms, InvoiceASAP is designed to fully integrate with QuickBooks Desktop. No need to start over or retrain employees on new accounting software. Just integrate your existing data for seamless processing and accounts management. Save time and money with a view of all paid and unpaid invoices and customer management summaries. Easy Online and In-Person Business Transactions Many of our clients work in the field and need access to clean and simple estimation and invoicing creation-software. You can easily create a professional-looking invoice, attach photos, and capture customer signatures. You get paid faster by accepting credit cards and allowing customers to pay in-person from your phone or tablet. Integrate all this data with your accounting software for clean and seamless day-to-day operations. Online Training Tools Take advantage of this time to dig deep into platform functionality and ensure employees are fully versed in best practices. Review our resource library and get help integrating your current systems with InvoiceASAP’s platform. Future-Proof Your Small Business With InvoiceASAP As you create COVID-19 company policies, business backup plans, and online marketing strategies, remember to reevaluate inefficiencies and get your invoicing and accounting technology up to speed. Save money, make employees’ lives easier, and attract customers with streamlined technology built for small businesses. Find out how InvoiceASAP can help you manage your business during stressful times. Sign up to create a free account today!
With the spread of COVID-19, many small businesses are taking a hit, making cash flow harder to come by. If you have a small business, your company is likely being impacted by it and you may be worried what would happen if your company was to run out of money. This is the reality a lot of businesses are facing, so what you do with your money can be the difference in keeping your company going and running out of money. Whether you are dealing with the impact of COVID-19, or dealing with a cash flow crisis due to another event, there are steps you can take to get you through. Here are some steps that any entrepreneur should consider ahead of a cash flow crisis: Plan it out Consider Accounts Receivable and Payables Cut Costs Sell Equity Make More Money! Sign Up for InvoiceASAP Make a Plan! Being prepared with a plan of action will mean you will have a better chance of survival and will be able to act strategically when the clock is ticking. Create a cash flow projection and develop a plan based on this. This will give you a clear view of when the money is coming in, going out and help you to anticipate any pitfalls in the months ahead. In your plan you should devise useful strategies for increasing cash flow and paying off debt. If you want to secure a loan, you’ll also need to share a document like this with your lender and provide them with a financial forecast, proving your ability to make loan repayments– another good reason to create this plan. Look At Your Accounts Receivable and Payables Before you start cutting costs, chase up the money that is owed and find ways to speed up the payment cycle. Here are some options to consider: Send invoices out quicker Offer customers more payment options such as credit card so you get paid faster If you or your team are on the road a lot, consider a mobile invoicing solution. Look into reducing your payment terms to 30 days or less Offer incentives to customers who pay quicker Charge fees to late payers (this should always be agreed with clients in advance of carrying out the work) Request a down payment upfront or agree a payment plan with your client On the accounts payable side of things, try renegotiating contracts with vendors and lenders. Seek extensions on the timeframe of your payments – do this before payments become an issue. Cut Non-Essential Costs If you are low on cash, the last thing you want to do is pay for things you don’t need. A cash flow crisis usually involves cutting costs, but make sure you do this carefully. Star by cutting things that are considered non-essential. Do an audit across your company to see where the money is going, what is good to have, and what can be scrapped. Sometimes, cutting costs means pay cuts. If you have to cut pay, don’t start with the lowest employees. Instead, begin at the top of the ladder. This will show good leadership and loyalty to your employees. Pay cuts to your staff should be the last item on your list. If layoffs are really necessary, consider reducing full-time employees to temporary, part-time or freelance positions first. However, do bear in mind part-time and freelance employees will probably need to look for work elsewhere to make up for lost income, so do not take this step unless it is absolutely necessary. There are a ton of savings that could be made whilst also proving to help slow the spread of the Coronavirus. Consider e-conferences to reduce travel costs, better regulation of your thermostat or switching to more digital business solutions, ditching the paper and printing costs. If your entire team is able to work remotely, you can even save on the cost of having an office. For many companies, this can be a large expense and can save you a lot of money. Sell Company Equity or Assets If you are in need of cash, consider selling part of your business to an investor. This is someone who will take on part-ownership of your company. This can give you some quick cash, but you should be careful who you sell it to and how much of your company you are handing off. The investor you choose will be someone you will be doing business with and may potentially have a say in decisions about your company. Another option is to sell off company assets that you are not using or are no longer needed. If you have equipment, real estate, or cars that are not essential to your business, consider selling them. Get a Quick Cash Flow Going Getting more money is easier said than done, otherwise you wouldn’t need to plan for a cash flow crisis. However, there are some methods you can apply to get a quick cash flow going, but you wouldn't want to make it permanent. It may be necessary in times of crisis to reduce product costs and offer huge discounts in order to attract more customers. This is a short-term solution and you should make it clear to customers that the prices will not remain this low. Liquidating the inventory will temporarily increase the cash flow, but it is important to have a strategy for replenishing the inventory. In the end, profits may be lower, but you will have money coming in. Another quick fix to improve cash flow is last resort borrowing. Cash advances on credit cards are an option, and so is taking cash distribution from an IRA. Both of these actions can have serious consequences if there is no way to pay them back in a timely manner. Cash advances usually incur higher interest rates, and the IRA is only tax-free for 60 days. If times are desperate consider taking loans from family and friends or bringing in new investors. The situation may not be ideal, but most companies have to sacrifice to survive a cash flow crisis. If you are having a cash flow crisis due to being impacted by COVID-19, there are some resources available to help small businesses through this time. Visit our Small Business Guide to Negotiating COVID-19 to learn more about some of these available resources. Let InvoiceASAP Help You Through the Hard Times Small businesses all over the world are being impacted by COVID-19, and this impact is expected to end over 15,000 businesses nationwide. With the right planning for a cash flow crisis, and the right actions taken, your business doesn’t have to be one of them. With InvoiceASAP, we help small businesses plan for the future through online reports, while making it easy to send and pay invoices. Our services easily integrate with Quickbooks and is the only service that integrates with Quickbooks Desktop. Create your free account today to take advantage of our financial services today!
Many businesses don’t realize just how important it is to have an online presence. As of 2020, 97% of search engine users search online to find a local business and 28% of local searches result in a purchase. In this post, I’d like to discuss the four steps that have become mandatory for any business to get online in 2020. I recommend reading the entire post to understand how these steps work together to build your online presence. 1. Get your own domain and custom email address. Photo Credit Email addresses behind your own domain allow your customers to build confidence in your business. Which seems more trustworthy: firstname.lastname@example.org or email@example.com? If you’re like most consumers, you will prefer firstname.lastname@example.org. In fact, 77% of customers trust businesses that have their own domain, and 64% of customers have little to no trust in businesses that use free email addresses. That is an absolutely massive percentage of potential business you’re losing if your email comes from Gmail or Yahoo. Getting your own domain is simple. There are many online services that allow you to register a domain. Google Domains offers a quick and easy domain registration and allows you to use Gmail as your email interface. GoDaddy NameCheap Domains are extremely affordable and typically cost between $10 and $20 a year. 2. Get a simple business website. Photo Credit It’s important to have a website that potential customers can use to discover your business and get valuable information about your services. There are a number of services available that make creating a website simple: Squarespace Weebly Wix WordPress If you already have your own domain (from step 1 above), these services will allow you to use your own domain for your website. If you don’t have your own domain yet, many of these services allow you to register your domain while you are building your website. This can make the process very easy. Your website does not need to be complex; a single page often does the job. While you are making your website, keep in mind that there are a few pieces of data that you must have in order to help your customers: Business Name - Make sure your customers know what business they are looking at and make sure they see it often. Contact information - Having an email address and phone number is critical. Many potential customers will want to ask questions before choosing to hire you or purchase from you. Address - If a customer needs to visit your business, be sure to list your address on your website. According to Search Engine Land, address information is the #1 piece of information sought by local searchers. Explanation of services - Customers often evaluate and compare the services offered by multiple businesses before making their decision. Positive reviews - This piece of information is often overlooked by businesses but is one of the most important. 88% of consumers trust online reviews as much as personal recommendations, making reviews one of your most valuable marketing tools. 3. Claim your business on Yelp & Google Photo Credit Claiming your business on Yelp is quick and easy, and 56% of local retailers have not claimed their Google My Business listing. The Boston Consulting Group has found that business owners see an average of $8,000 annual revenue from being on Yelp. That should be the only reason you need to add your business to Yelp. However, if you’re looking for additional reasons, here are a few: You will be found by potential customers who use Yelp to search for local businesses. You might already be on Yelp. Many business listings on Yelp are first created by a reviewer and not the business owner. Claiming your business allows you to control the information that displays. You can add photos of your business and the services or products you offer. You can respond publicly to reviews. If someone leaves an unfounded negative review for your business, you can make sure that future Yelpers understand exactly why that review was unfounded. You will get notified when someone leaves a new review of your business, allowing you to be aware of what information other potential customers can see. 4. List your business on Google Maps and Apple Maps. Photo Credit Much like adding your business to Yelp, adding your business to Google Maps or Apple Maps provides additional visibility. BrightLocal’s recent consumer survey found that the vast majority of consumers search for local businesses online, many performing this search from their phones. Only 44% of businesses have claimed their business listing on Google, which means that claiming your listing can give you a significant advantage over your competition. Follow these links to claim your business on Google and Apple now.
Working out in the field can make teamwork tough. In the absence of face-to-face interaction there’s a lot that can be missed. Thankfully, we live in a world now where mobile and cloud-based technology can help to bridge the gaps in communication and support greater collaboration. In this post we’ll run through a few essential tools that will help managers overcome the physical limitations of mobile working, helping team members feel more connected and productive than ever. 1. Get the right devices If your team is on the go a lot, they’re not going to be particularly productive if all they have to hand is a cell to make calls and a desktop computer sitting back at the office. We’re in the 21st century guys! Technology means that we can bring our office with us, wherever we are. Whether you decide to provide employees with the devices they need or operate a BYOD (bring your own device) kind of deal, make sure that every employee has a device that suits their work pattern – whether it’s a tablet, smartphone, laptop or all of the above. 2. Arm your team with mobile collaboration tools Now having the right device is great but it means nothing if your team in the field can’t access the important work tools and information they need to do their job. It’s important to keep the flow of information transparent so that members of the team know what’s going on at an individual level, at a team level and at a company level. Having a central platform that each member of the team can check into, no matter what device they’re using, will enable employees to collaborate and keep track of tasks and schedules wherever they are. Trello and Yammer are two industry-leading platforms that help to support great project management and team collaboration. For more day-to-day communication with colleagues, also check out Slack and HipChat. 3. Keep your team connected with regular virtual meetings It’s a known fact that with any kind of teamwork, good communication is absolutely key. If your team is remote or regularly working out in the field, you miss out on a lot of the behavioral cues that you get with regular face-to-face interactions. It’s for this reason that you really need to up the ante on communication and make sure crucial information isn’t lost between colleagues because they’re not in the office. It’s often best in these circumstances to over-communicate rather than under-communicate and discover that your team are misinterpreting or missing out on updates. If it’s not easy to bring your team together for regular in-person meetings, there are a ton of tools out there that help to support virtual meetings. Google Hangouts, Appear.in or Skype are a few that support video calls on mobile (as well as web) and can help to inject that feeling of connectedness that’s often lost in your standard voice calls or phone conferences. 4. Speed up your sales with mobile invoicing and payments For mobile teams, paperwork is the worst. It’s messy and it slows things down. And when it comes to invoicing, slowing things down is the last thing you want. If your team in the field are responsible for taking payments from customers, a mobile invoicing and payments app will be central to speeding up your sales cycle and improving your cashflow. InvoiceASAP is a mobile app designed specifically for businesses on the go. You can send and pay invoices and easily access all your customers, products and services in the cloud, wherever you are and with any device. If you already use an accounting platform like QuickBooks or Xero, it syncs your invoices and payments across too. RIP paperwork! Summary Unlike office-based teams, mobile teams have their own unique set of challenges which can make teamwork harder, but not impossible. Managing a mobile team requires a digital toolset that will help to support the team rather than hold it back. By selecting business tools that work across multiple devices, you will ensure that you can cater to the needs of both your field-based employees as well as those back at the office. Photo credit: © gpointstudio
If you’re in competition with bigger companies who are able to offer a greater selection of products or services at lower prices, great customer service may well be your secret sauce. Your customers are at the very core of your business – without them there is no business. It’s therefore in your best interests to keep their best interests front of mind. There are a lot of really simple but effective ways to improve customer service – read on to learn more… 1. Make it easy for customers to contact you If a customer can’t get hold of you when they need to, you could lose them forever. Provide a range of different contact options – from phone to email, social media or Skype – and make sure they always have someone they can reach when they need to. Being flexible to your customer’s needs not only means that you will be able to respond to them quicker, it also shows that you care, and that is what will keep them coming back. 2. Overcompensate for mistakes It’s a fact of life – we all make mistakes. Most are small and easily resolved if gone about the right way. Some are small and can cost you your customer, if gone about the wrong way. In an ideal customer service world, every customer should walk away from a transaction happy. If you or a member of staff makes a mistake, the customer should still walk away satisfied. The ability to swallow one’s pride, resist the urge to act defensive and accept blame or negative feedback is crucial. Many customers want nothing more than to vent their frustrations. Listen patiently and offer sincere apologies. 3. Allow customers to get to know you If you don’t have much face-to-face interaction with your customers, it can be hard not to come across as anonymous. Allow your customers to get to know you by adding more of a human face to your interactions with them. Share staff bios on your website, tell them who made the product that they just bought, include a handwritten note with your delivery or offer to contact them in ways other than just email, such as social media. Not only will customers feel like they’re dealing with real people (rather than a faceless company), it could also minimize any concerns of trust or accessibility. 4. Offer knowledge Offer more than just your product or service – arm customers with knowledge too. Whether it’s explaining how to take the best photograph or telling them about the history behind the antiquated plumbing system they have, if you know a lot about your trade or the products that you sell, use this to your advantage to demonstrate your expertise and help you build stronger relationships with customers. 5. Ask for feedback and follow-up If you’re looking for ways to improve your service, the first place you should turn to for answers should be your customers. Customer feedback will help you to understand what their needs and interests are so that you can better cater to them. Ask customers what is and isn’t working for them – their responses might actually surprise you! What’s more, customers like providing feedback, it lets them know that you care about their experience and are looking for ways to improve it. Put in place a simple process, for example, a personalized follow-up email with a few questions that they might receive after they’ve used your services or received a product. Try to be as personal as possible in your outreach and ensure you acknowledge their response. If the feedback is negative, outline some definitive solutions/actions. And don’t forget – if the customer is willing to complain to you they’ll have no problem complaining to their friends and family who could be potential customers. Photo credit: © Carsthets istockphoto.com
Invoicing correctly isn’t all just about what’s written on the invoice. A large part of getting it right comes down to effective communication and relationship management. Here we run through our top 10 invoicing tips to help you not only get paid faster but also keep those customers coming back! 1. Get a contract First things first, get a contract and get it signed. Starting off on the right foot, with everyone on the same page will go a long way towards setting the tone for the remainder of the project. It’s in both party’s interest to get a contract signed. Without one, you’re at risk of being left in the lurch with no payment and they’re at risk of being overcharged or being left with an incomplete or inadequate end product. Now that’s no fun for anyone! 2. Be really specific Before you provide an estimate, make sure you uncover any unknowns so that you can be as accurate as possible with your figure. Make it really clear on your invoice what you are charging for. For a customer, it can be really frustrating receiving an invoice for which the charges are unclear. 3. If you’re out and about regularly, consider a mobile invoicing solution Getting paid quickly is largely due to getting your invoices out quickly. If you work in the field or you’re on the road a lot, consider a mobile invoicing solution to enable you to send invoices on the go. InvoiceASAP is a great tool that does exactly what it says on the tin. It also allows you to attach voice memos and photos to all your invoices and estimates which is great if you need to show before and after photos or proof of work. 4. Set your own payment terms This includes your invoicing dates and due dates. Take into account that there will, inevitably, be late payers and adjust your payment terms accordingly. Consider charging a percentage of the overall amount upfront, or setting payment milestones so that you get a steady flow of cash whilst carrying out the work. Be clear with your customers about your payment terms. For example, you may require a signature on estimates, and include due dates in every written piece of communication with your customer. 5. Keep communication with your client open, especially if the scope of work creeps Often you start working on a project with a client and realize, after you draw back the curtains, the full scope of the project was greater than anticipated when you initially provided your estimate. If you think you will go over the estimated amount, make sure you communicate this clearly to your client as soon as possible. No one likes being stung with an unexpected hike in price. So, rather than giving them a nasty surprise at the end of the project, or worse, undercharging, be completely open and explain exactly what you’re charging for and why. It is also worth addressing scope creep in the initial contract with a client. Many clients may require a Change Order to be signed which is essentially a secondary contract listing the additional hours, work, products or services required to complete the job. This way you will avoid leaving clients with a sour feeling at the end of a job and maintain a positive relationship with them. 6. Get a secondary contact for your invoices in case the primary contact is on vacation There’s nothing worse than receiving an out-of-office message from a client letting you know that they’re on vacation for the next few weeks, just after you’ve emailed them an invoice. Rather than waiting it out, make sure you have a secondary point of contact who you can call on to get the payment processed. Also, if you can be clear on invoicing dates from the start, you should get the heads up from clients if they will be away during those dates and ask for an additional contact during those periods. 7. Invoice as soon as possible after, or as products and services are supplied The sooner you submit your invoice, the sooner you’ll get paid. Honor your commitments too – if you deliver on time, you’re more likely to get paid on time. 8. Broaden your payment solutions Make it easy for customers to do business with you and they’ll be more likely to come back. By increasing your payment options, your client will not only be happier, you’re also more likely to get paid faster. 9. Keep on top of cash flow, track which invoices have been paid and which haven’t Always be on top of what’s been paid and what’s owed and have a timely system of reminders, monthly statements and phone follow-ups to lessen the risk of running into cash flow problems. 10. Consider using late-payment fees or prompt-payment discounts. If late payment is a common occurrence, consider dishing out penalties to those who don’t stick to your payment terms or offering discounts to those who pay up early. Do make sure this is included in your contract so that they are aware of the implications and so that you have something to refer back to if they take issue with paying a fee. Finally, when it comes to getting paid on time, it may feel like the majority of control is with the client. But by taking the lead, being organized, open and clear you will have more influence over when you’ll get paid. Photo credit: © XiXinXing istockphoto.com
A holiday card can be a great way to show your customers how much you value them. It’s more than just a formality, especially when crafted in a way that seems personal and dedicated. It can be an expression of gratitude and value. In the realm of conducting business and creating lasting relationships with customers, gratitude and personal connections are sometimes undervalued. This creates the need for customer appreciation that transcends the simple ‘thank you’ at the end of a receipt. In such an environment, you need to make each customer feel valued and remembered, no matter the size and scale of your company. And by far the best way to do so is remembering the customer on auspicious days, when everyone appreciates being remembered. If you own or work at a business and are thinking about sending out holiday cards this year, here are three great ways you can send holiday cards this year. 1. Email Holiday Cards There are many online companies that you can use to send out holiday cards. Paperless Post is our personal favorite website. Paperless Post has a gorgeous selection of holiday cards. You can customize your card with specialized fonts, suggested greetings, and upload corporate logos or staff photos. Photo Credit Photo Credit 2. Mail Your Holiday Cards Mailing out holiday cards is a great way to add a personal touch to your holiday cards. For a company that wants to mail cards to their customers, the best route to take is adding personalization; where each card and envelope is personalized with a unique message and accompanied with the name of the customer. Customizing your mailing address is a great way to stand out. Check out some of the designs on Fallfordesign. Photo Credit 3. Mail Handwritten Cards Handwritten cards are the most effective way of showing your customers your appreciation and value for them. Although the crème de la crème of personalized cards, they are also the most time consuming of the three options. However, we have found a cost effective and time saving way to send out these cards. Paperloveme will create handwritten personalized cards for you. Photo Credit These are few easy ways to show your customers that you care. Send them a holiday card today!
Getting paid. It’s wonderful, right? Then why is pricing work one of the trickiest parts of the job? Charge too little and you feel cheated. Charge too much and you may price yourself out of the market. Well, the truth is… it doesn’t have to be all that tricky. Whatever you sell – be it products or services – when it comes to pricing, you need to think strategically. In this post we’ll take a look at some of the key things to consider before you set your prices to help you avoid the pitfalls of just ‘winging it’. Let’s begin… Step 1: Determine your annual salary First off, you need to work out how much you want to get paid. If you’ve done a similar role before as an employee or know how much others earn doing the same work, use that as a guide. Whatever salary you choose to set for yourself, make sure it’s reasonable and reflective of your skills and experience. You’re clients will quickly realize if it’s not! Step 2: Calculate your overheads Now you need to calculate how much it costs to operate your business. Take stock of all your outgoings and work out how much they total on an annual basis. This includes things like: Accounting and bank charges Office or workspace costs Company car/van costs and insurance, fuel, servicing Work wear (if it’s necessary to wear protective/safety gear or a uniform) Equipment and tools Third party software, services and subscriptions Website running costs Marketing and advertising Stationery (pens, paper, stamps, business cards) Business insurance costs … And anything else you can think of! If you’re just starting out, you may have to estimate some of these expenses or ask other contractors in the same field what they pay in overhead, then use that amount in your calculations. Note: A lot of the costs associated with the day to day running of your business should be tax deductible. This means that you won’t have to pay tax on the money you earn to pay for these costs. Step 3: Choose a profit margin You’re fully entitled to earn a profit on top of your salary and overhead expenses. Your salary is one of the necessary costs of running a business. Profit, however, is the reward you get for taking the risks of being in business for yourself and it provides you with money to expand and develop your business. Profit is usually expressed as a percentage of total costs for each job. There is no standard profit percentage, but a 10% to 20% profit is common. Step 4: Determine billable hours How many days you will you be working over the course of a year? Although there are 52 weeks in the year, bear in mind that – unless you’re superhuman – you will need to take time off! Also, not all of your ‘breaks’ will be planned. Contracts may end unexpectedly and there could be periods where you struggle to find new work. Give yourself at least 20 days holiday – you may not take this all in the first few years of starting your business, but it’s good to err on the side of caution and not underestimate this as it will have an impact on your day/hourly rate. Based on this example, 20 days holiday takes your working weeks to 48 per year which equates to 240 working days per financial year, or 1,920 billable hours. Step 5: Calculate your day/hourly rate Now let’s work out how much you can charge by the day and by the hour. Use the following calculations to determine your rates: Add your chosen salary and overhead costs together. For example: $70,000 (salary) + $20,000 (overheads) = $90,000. Multiply this total by your profit margin. For example: 10% of $90,000 = $9,000; $90,000 + $9,000 = $99,000. Divide the total by your annual billable hours to arrive at your hourly rate: $99,000 ÷ 1,920 = $51.56. You may then want to round your hourly rate off to the nearest whole number (i.e. $52 in this case) Finally, multiply your hourly rate by 8 to reach your day rate. For example: 52 x 8 = $416 Now you have your rates! Awesome! But wait – it doesn’t end there… Step 6: Do some market research Before you dive in, it’s always wise to do a little market research to see what others in the industry are charging for their services. There are a few places to gather this information: Contact a professional organization or trade association for your field. They may be able to give you good information on what other Independent Contractors are charging in your area. Ask other Independent Contractors what they charge. Talk to potential clients – attend trade shows and business conventions, speak to your existing network. Whilst you’re weighing yourself up to others in the industry, make sure you factor in things like experience, and the quality of service offered. You may find you are charging more than others but that you produce more value for the client. Many potential clients are willing to pay more for quality, so don’t be scared to charge more if you feel it is justified and you can offer this. Step 7: Get a grasp of the entire job So you’ve worked out your rates and you’re starting to bring in customers. The next step is making sure you price each job correctly. For every piece of work you enter into, it’s super important to study up and get a good grasp on all the work involved. This will help you to provide your client with the most accurate estimate and you’ll be less likely to hit them with an unexpected hike in price because of unforeseen extras. Obviously this will happen from time to time, but it’s always best to get as much clarity as possible from the start. Read more: 10 Invoicing Tips for Small Businesses Step 8: Lather, rinse, repeat The fact is, not everyone gets it right the first time around. Make sure you keep evaluating your approach and try not to settle on any long-term commitments until you’ve found the right mix of pricing and strategy. As your business develops you may find that you’re in a position to offer greater value to clients. Adjust your price accordingly and if you begin to see price resistance you will start to get a sense of what costs are adequate for your services. Image credit: © studiogstock
This is a guest post by Chris Baskerville from his response to a question on Quora – What are the most common mistakes made by small to medium business owners? Follow Chris on Twitter @ChrisBaskervil A: Speaking from my experience as a Chartered Accountant with 11+ years experience in business reconstruction, insolvency, bankruptcy and liquidation, I can say that there are some common recurring mistakes made by Small to Medium Enterprises (SME). The most common mistakes I see are… 1. Undercapitalization This is like building a Boeing 747 airplane and leaving the tail off. You may not leave the ground on takeoff, or you may crash and burn shortly after achieving flight. I see too many businesses begin with very little capital and fall heavily reliant on debt with no alternate sources of equity. Without sufficient capital behind your business, you will fail. 2. Not reinvesting early year profits to achieve stabilization Another observation I have seen over many years is that all too soon, after a business starts to gain momentum, business owners want to upgrade their personal lifestyles (bigger cars, bigger houses, bigger holidays etc.) and not take those profits and reinvest them in the business to secure its long-term performance. In effect, business owners strip away the businesses’ precious resources that could be used for vital operations, or expansion. 3. Expanding too soon This concept took me a while to understand as to why expanding a business could be a bad idea. I mean, is this not what the nature of business ought to be? What I have found is that expanding your business before it has the key resources (cash, access to equity, access to credit) or key structure in place (i.e., key staff or management, well entrenched business systems, secured supply lines in place) can lead to disaster. Don’t underestimate organic growth. It may appear slow at first, but it is solid growth. 4. Chasing turnover at the expense of profits I have seen this many times in industries that are highly competitive (i.e., construction). Businesses that chase turnover “just to keep the boys employed” can lead to business failure, unless you are properly capitalized to weather the shortfall in work until more profitable contacts emerge. Take for instance employee costs; what some SMEs fail to realize is that employing staff incurs many costs that are not obvious (accrued annual leave, accrued long services leave, leave loading (extra money when you take holidays), workplace injury insurance, payroll tax, to name a few. Such costs can be overlooked when pricing a job. 5. Failure to seek (and listen to) proper advice Many SMEs subscribe to the lyrics in Frank Sinatra’s song (My Way) of “…I did it my way”. This concept has merit and is an obvious driver of commerce in an economy, but not seeking advice from someone with a different perspective, or someone that is very knowledgeable in business transactions (accountants, lawyers, financial planners, strategy experts) can be deadly. Good business owners that I see, always seek counsel from someone with a bigger perspective and surround themselves with the right people and advisers. 6. Failure to deal with people If people don’t like you, they won’t do business with you. Regardless of your personality type, it is a must to learn basic people skills. Without it, you can be “Hung by the Tongue”. This goes the same for dealing with your staff (who are your biggest asset) as they perform the tasks that business owners don’t want to do, or shouldn’t do on the quest to grow your business. 7. Not setting up the structure of the business correctly from inception This is an extension of not “beginning with the end in mind” Stephen Covey author of “The Seven Habits of Highly Effective People” and of failing to seek proper advice. A good accountant or lawyer will be able to advise you of the best way to structure your business to achieve your business goals. It may initially cost a few thousand to get this right, but it is one of the best insurance policies you will take. Understanding the pros and cons of being a sole trader, company, trading trust, limited liability partnership is vital to know at he beginning of a business’ life. Good accountants and lawyers know this and will guide you here. 8. Failing to adapt to change I have seen many multi-generational companies (i.e., companies that were handed down from father to son, or grandfather to son to grandson), with the newer generation failing to adapt to the changes in their industry. Instead, they adopted the thinking of the previous generation which is: “that is how we always did things”. Now with the rise of the digital age, businesses that fail to embrace technology or to see how to exploit it in their business are falling behind. 9. Taking on too much Some major corporate failures have occurred as a result of taking on too much work. This is liken to promising too much and delivering too little. It may seem weird that taking on more work than you can handle can be a bad thing, but this can get you into trouble. You may have a short term win when you eventually complete the work, but at the expense of long term repeat, referral work. Not to mention the impact on staff working under high stress demand to complete work. I have seen some restructuring occur where we had to strip the business back to its core offering in order to survive, which did mean reducing the amount of work taken on. 10. Reliance on one key customer This can be deadly, especially if that one key client is the government. This is because a change of government or government policy can mean the end of your business. Outside of government, if your one key customer fails in their business dealings, it is almost inevitably mean that you too will fail. Not to mention that business analysts see reliance on one key customer as ‘high risk’. 11. Greed You could just about paint a brush across many business failures as being attributable to greed. Greed could be encompassed in a number of forms; treating the business as a personal piggy bank; fraud by officers; avoiding a low-flying life; or simply, shooting for a project, job or file that is well outside the capability and available resources of the business. Over extension due to greed places undue stress on the business assets which may lead to ultimate failure. 12. Loggerheads at management A lot of business failure can be put down to a breakdown of relationships between the key managers of an organisation. This can include disputes between family members, disputes between partners, disputes between the relevant spouses of the directors of a business, the list goes on. Good businesses have agreements between the directors and shareholders (particularly in the SME space) as to how the relationship should work. I have always advised that agreements are not there for the good times, they are there for the bad times. 13. Failure to prepare a business plan Again this comes back to the teachings of Stephen Covey in not “beginning with the end in mind”. A business plan prepared prior to starting up a business makes you think about all the areas of the business and plan for those outcomes. Planning and mapping out the process will provide clarity and a sense of urgency to achieve your business goals. We don’t plan to fail, but we do fail to plan. There is a direct nexus and correlation between businesses that fail and the lack of business planning. 14. Failure to manage cash flow Cash flow is vital for all business operations. I liken cash to blood within our bodies. When you run out of blood, you die. It is all very good to appear profitable in your accounts, but it is not good if those profits don’t convert to cash in your bank account. 15. Inexperienced business people operating a business I have often thought that putting potential directors of a company through a training and assessment system before entering into business would be a good idea. There is a ‘Grand Canyon sized gap’ between being an employee, mastering your trade craft and becoming a business owner. Those skills are mutually exclusive. You could almost be better off putting an experienced business person in charge of a plumbing business, rather than having an experienced plumber in charge of that same business. Source: Small Business Failure Rate: 9 out of 10? Poor management is the number one reason for most SME failure. The economy has certainly added its contribution to failed businesses. Sadly, with most SMEs, the fate of the business is directly tied to the fate of the business owners’ family’s wealth, meaning that a collapse of the business almost inevitably leads to a loss of a family’s hard earned wealth. This also has knock on effects on domestic relationships. Another sad observation is the SMEs can be reluctant to seek proper advice early when the signs of failure rear their ugly head, meaning that by the time advice is sought, it is almost inevitably too late. I call this “ostrich syndrome” (bury the head in the sand, hoping the problem will go away). About the Author Chris Baskerville is a Partner at Jirsch Sutherland who has over 11 years in Corporate Reconstruction and Bankruptcy. Chris Baskerville has assisted many companies and people reconstruct their financial affairs which has seen those entities remaining successful today. Chris Baskerville is a Chartered Accountant, Justice of the Peace (Qualified), a member of the Institute of Chartered Accountants and a member of the Australian Restructuring Insolvency & Turnaround Association. Photo credit: iStockPhoto.com © ChristinLola