Month: July 2017

How to spend your startup funds is the most important decision a business faces at this crucial stage. That being said, fiscal responsibility isn’t something great leaders are born with—it’s often learned through trial and error.

Looking for some shortcuts in the capital spending learning curve? We’ve compiled five do’s and don’ts that every business owner should follow.

1. Don’t go on an (unplanned) buying spree

It can be incredibly irresistible, once funding comes through, to go on a buying spree for everything from company tech to office chairs. You must fight these urges, though, and only spend on what you truly need to get started.

Take a moment and step back to review the business plan that you worked so hard on. The details within those pages will remind you of the spending strategy you outlined to get your business off the ground. Look closely at your cash flow forecast so that you can spend accordingly.

Areas to avoid spending funds:

Before making the following purchases, go back to that business plan and determine if they fit in the parameters that you set for your budget and financing.

• Fancy office space and furniture
• Expensive equipment
• Unnecessarily overpriced clothing
• Pricey business trips and lunches
• Expensive printing costs

Are these essential to your business? If you’re looking to be cost-effective in this arena, try using a spare bedroom within your home as a makeshift office; instead of buying expensive copy machines and printers, take advantage of print services at a local library; in the event a suit is absolutely required to impress prospective clients, simply rent or borrow a smart blazer from a local tailor or a friend.

If you need a physical location for customers to visit, look for a creative spot that has a smaller price tag. You can always upgrade all of these items as your business starts to bring in revenue.

2. Create a must-have list

One of the most common mistakes a failed business can make is operating with either insufficient funds or poor fiscal management overall. To combat this fatal error, try to create a list of absolute must-haves your business cannot live without.

Here is a list of undeniably essential expenses most successful businesses should budget for during their first year:

• A competent CFO or accountant
• Legal advice/tech support
• Customer service/branding

You don’t need to pay top dollar for these items—but keep in mind that paying for quality in these areas is essential.

3. Evaluate technology needs

When it comes to investments at the startup level, really assess your technology needs. There are a lot of software and upgrades available, but make sure you measure these purchases against your actual needs to run your business.

Spending money unnecessarily on elaborate computer systems and hardware prove to be fatal mistakes for fledgling companies. While being able to answer emails on a large tablet-sized screen may be convenient, it can be done just as easily on a smartphone you already own.

That being said, intelligent spending on technology that promotes future marketing and sales campaign successes is always a good idea. It is in these small decisions that financially responsible business owners are born and truly thrive.

4. Invest in minimal staff

The backbone of any great business is a strong support staff. Most businesses only require one or two essential members on staff to start, and some need no one other than the owner.

Outsourcing to experts or knowledgeable friends and family at the get-go frees capital that would go toward salaries, and can provide a buffer for unexpected expenses. It may become essential to hire new staff members as a company grows, but it is important to remember to proceed only if it makes financial sense to do so.

5. Create a backup plan

It is the goal of any new company to reach, at the very least, the break-even point in the first fiscal year. This important measure signifies that profits are equal to expenses and up front capital investment.

When allocating profits and funding, always be prepared. In the event that a company doesn’t break-even by the end of the year, having access to some savings or backup funds can be critical. Some corporations don’t reach break-even until their second or third year of operation, so be prepared for this.

Warren Buffet once famously said, “Do not save what is left after spending, but spend what is left after saving,” and this advice still rings true. Smart fiscal choices bring success in the long run.

Remember that your business plan is your blueprint and your path to profitability; referencing it will help you figure out whether you can afford to take on more debt for the long-term health of your business. Using your business plan as a living document can help guide financial and staffing decisions based on your own data and profit and loss projections.

Financial forethought can truly be the deciding factor between failing quickly or building a successful business that is around for years to come. Obtaining funding for your business is an exciting accomplishment; spend wisely and always be prepared for the unexpected.

If you’re thinking about starting up a small business or you’ve just recently launched, fantastic customer service is undoubtedly on your radar.

You want your customers to come away from an experience with your company having seen you in the best possible light. In an optimal situation, the majority of them would not only become repeat customers but would also enthusiastically recommend your product or service to others.

This, however, is easier said than done. Handling customer complaints can be difficult, especially right when you start a new business. However hard it may be to take criticism, it’s extremely important to the growth of your small business. Even if a customer doesn’t necessarily give you easy-to-swallow feedback, learning to see past harsh words and hear valid complaints and suggestions for improvement is vital.

Don’t fret! Here’s what you need to know to handle customer complaints with ease.

How to look past negativity

Starting a new business can be scary. Investing your time, effort, and finances into a venture that might not be a sure thing can be intimidating.

However, customer complaints shouldn’t add any stress. Fear of failure is high on the list of reasons why people sometimes choose not to pursue great ideas. For some, criticism or complaints can be viewed as a failure—but they aren’t. They’re actually just the opposite; they are an opportunity to improve.

Maybe you’ve heard horror stories from other business owners about “their worst customer ever,” but you should know that these types of scenarios are rare, though memorable.

No matter what happens, remember, even when delivered unskillfully, your complaining customers are providing a treasure trove of information on how you improve your business and your customer service approach. If you view complaints this way, you’ll be able to better prepare yourself and your team for any challenging conversations.

Sit down with your team and make a list of realistic questions or complaints that you might receive or that you have already fielded. Brainstorm ways to respectfully resolve the most challenging scenarios. This way, you’ll all be ready when a really difficult one comes your way.

Working in customer service for over ten years, I can’t tell you how many awkward interactions I’ve had. I’ve had customers yell, use bad language, and attack me personally. Although, if I think back to exact instances where this type of thing occurred, I can really only think of a handful of times where I left the interaction truly upset. For the most part, I felt that I had the tools and experience necessary to handle difficult calls. Though, for some escalated instances, I felt completely lost. Looking back, the times when I wasn’t sure what to do generally came up when I hadn’t been properly trained. As the leader of a growing business, talking through the top one percent of toughest calls, even though they are few and far between, will make all the difference in your staff’s confidence.

For example, I was once on a call with a woman who was using just about every tool that she had to break me down and get what she wanted. I remember physically shaking because I had no idea how to calm her down; I simply hadn’t been taught how to handle this type of call.

At the time, I was working as a manager for a direct selling company. The customer felt that she had been cheated because she received alternate products to what was pictured in our starter kit—but the kit stated that products may vary. As I saw it, there was nothing I could do. Our product listing made it clear that it was possible that she would receive equal (but different) products in her kit and those of us in customer service had been told by our supervisors that we weren’t to bend on this subject. No matter how effectively I felt like I communicated this information to her, she couldn’t have cared less. I had to step away from the call for a couple of minutes to calm down. After about an hour of back and forth with this woman, I went to my supervisor and was told to give her what she wanted.

I was shocked and upset and felt like a fool when I got back on the phone with my customer. We had been told that we should be able to handle these types of calls and I wasn’t able to. I hadn’t been trained on what to do if a customer wouldn’t take no for an answer, but another part of the problem was my own stubbornness. I should have gone to my leadership team and brought the problem to their attention well before I (and the customer) became so distressed.

The reason I mention this is to point out the fact that it is imperative to have a plan in place when the one percent of truly aggravated and unimaginably persistent customers come your way. If the plan at the highest level is to give the customer what they want, think about implementing this at the foundation level of customer service—during training.

Empowering your employees is the absolute best thing you can do to stop negativity in its tracks. No matter how the call starts, if your employees have the power to solve the issue themselves, they will walk away feeling positive, empowered, successful, and ready to take on the next problem immediately, and you as the supervisor and owner of your business will also leave feeling like you’ve trained trustworthy and capable individuals to do the important work of caring for customers, even the difficult ones.

Finding the right balance

Sometimes, you’ll want to focus on the positive comments you receive, which likely far outweigh the negative. What I mean is that positive comments can have a greater impact on your team, so don’t gloss over them.

Often, satisfied customers are quiet about their feelings. You might not receive a flood of positive comments, so amplify and celebrate them. It’s easy for a company to get lost in trying to eliminate every single negative comment, but it’s just not realistic. Of course, that doesn’t mean that you won’t try your best to help each customer have the best experience possible, it just means that you understand that not 100 percent of customers will walk away delighted. Most will, but any successful company will tell you that sadly, you just can’t please them all.

An easy mistake to make is constantly showing your customer complaints team every single negative comment. Maybe it seems like a good approach, a way to help them see faults and get better (and sometimes that’s true). However, consistently focusing on negative comments can break down your team’s morale over time, especially if they’re presented simply as evidence of failure.

There’s nothing wrong with discussing negative feedback as a learning opportunity, but your team needs to feel like they have the tools to be successful in their positions, so make sure that you’re helping them use negative feedback to grow. This sense of empowerment is crucial when dealing with a difficult customer.

The last thing you want is for your team to essentially transfer negativity from past complaints on to future interactions with customers—you’ll begin to see morale issues that can escalate into even more complaints. If you’d like issues to be resolved on their first interaction, train your employees and empower them so that they have the tools and confidence to do their job well.

Take this opportunity to put an improvement plan into place. Don’t ignore the complaints; embrace them and study them. When you start to see a trend, make sure to track it. A pattern of similar complaints should tell you that there is an issue that you and your team need to look into. Be sure you also track positives and the improvement that your team makes over time. Share that information with the rest of your organization to help open a company-wide dialogue that can generate insight and new ideas that you would have otherwise missed.

The key to handling customer complaints is empowerment. If you create a plan for your company that works for your employees—not against them—you’re bound to be successful. Focusing on and rewarding positive achievements will only add to your employees’ ability to skillfully handle negative interactions.

by: Trisha Miller